Amazon continues to dive further into e-commerce with the release of its new pricing feature “Make an Offer”.
The new “Make an Offer” tool allows Amazon to compete with online auctioneer eBay, by enabling customers to negotiate lower prices on products listed on Amazon. Sellers and buyers can negotiate through email until the deal is complete.
According to the company, “Make an Offer” is an opt-in feature for retailers, which means they will have the flexibility to decide which items they want to be enabled with the “Make an Offer” experience.
“We hear from sellers that there are items they are flexible with on price and are excited to negotiate with interested customers, and there are other items that they will not enable with the ‘Make an Offer’ experience, so it’s only for sale at the fixed price,” an Amazon spokesperson tells ClickZ.
Currently the only items enabled with the “Make an Offer” feature are sports and entertainment collectibles, collectible coins, and fine art. Amazon declined to disclose whether it will roll out this feature to other less expensive categories like electronics and books in the future.
“It’s interesting that Amazon is taking on categories like sports and entertainment collectibles where eBay has a dominance,” says Scot Wingo, co-founder and chief executive (CEO) of ChannelAdvisor, a provider of cloud-based e-commerce solutions. “eBay has been offering a similar feature called ‘Best Offer’ for a while, and it’s very popular.”
Gregg Aamoth, co-founder and CEO of POPcodes, a company that enables online payment and pick-up in-store, thinks this move indicates Amazon is considering consumer interaction to be a critical part of the shopping experience. “‘Make an Offer’ is one example of Amazon’s push to better connect with its customers. It adds another touch point in the shopping experience,” he says, adding that brick-and-mortar retailers will also be impacted by Amazon’s name-your-price model, because at large retail stores like Macy’s, consumers don’t have the bargaining power.
“I’d like to see if there will be more consumers expecting to negotiate prices in-store,” he notes.
With this move Amazon will likely give eBay a run for its money. But eBay doesn’t seem daunted. On the same day that Amazon introduced the “Make an Offer” tool, eBay debuted its new iPad app design, which aims to deliver a better shopping experience for buyers and better merchandising capabilities for sellers. The company plans to officially release the design in the first quarter of 2015.
“eBay has been struggling in the past two years. It would be interesting to see how eBay will reverse the slide and combat Amazon,” says Wingo, referring to his company’s data, which shows that in November of this year, Amazon saw much stronger sales in the U.S. than eBay, whose growth was just below the e-commerce growth rate.
Aamoth agrees that in terms of sales, Amazon has a competitive edge. “[But] in terms of facilitating the consumer-merchant interaction and having more price and product quality, eBay has been a strong leader for quite some time,” he says. “eBay is built around price negotiation and because it sells both new and used products, it has to have more of a buyer-seller dialogue.”
It’s hard to say whether Amazon or eBay will win the global e-commerce war. But one thing is for sure – Amazon is making efforts to improve its e-commerce business. In addition to the “Make an Offer” feature, the company initiated an ad training program called Trusted Creative Partner Program this week, where six select ad agencies – Leo Burnett’s Arc Worldwide, DDB California, Epsilon-Ryan, Possible, Rockfish, and TeaLab – will deliver creative advertising on Amazon’s sites and devices, including the Fire tablet, with special offers and e-commerce ads.