2020 may not have been the “Year of the Third Party Seller”, but their impact on retail can’t be denied. Last year, eCommerce represented 14 percent of all retail sales in the US with an unprecedented $791.7 Billion in revenue—an estimated $295 Billion of which came from third party Amazon sellers alone.
The $120 Billion reported in global sales by the Shopify in 2020 may seem relatively minor next to the nearly 50 percent command of the domestic eCommerce market share Amazon currently maintains. But Shopify’s been around for thirteen years, with an 86 percent growth in sales since 2019. By comparison, Amazon didn’t even report a profit until 2002; at which point it was not only a sixteen year old company, but one of the few online retail outlets then available.
There’s a world of difference between the two, of course. Namely, Shopify doesn’t actually sell any items online. By its own admission, it’s an eCommerce solution enabling sellers to develop, manage and use Shopify’s own payment processing tools to establish storefronts across multiple channels—including offline and social media. It’s user focused. It’s versatile. And it’s one of the most visible hosted solutions available to sellers worldwide, prompting formal partnerships in 2020 with Facebook and one of Amazon’s chief rivals: Walmart.
Amazon may have a wide history of acquisitions, with well over 100 dating back to 1998. But in recent years, they’ve turned their seller focus on enhancing current proprietary solutions as witnessed by their estimated $26 Billion advertising division. Could their recent acquisition of solution host Selz be a preemptive threat against what Shopify has playfully referred to as “arming the rebels?”
Selz and Shopify: A Tale of Two Hosts
Formed in 2013, Selz is a relative newcomer compared to other commerce solution hosts. And at first glance, their seller focused model doesn’t appear all that different. For example, both Shopify and Selz provide solutions enabling merchants to sell via social, mobile, offsite platforms and in-store purchases using point of sale processing. Both integrate with Amazon, both accept multiple currencies and both provide cart recovery solutions to help mitigate the estimated 69.8 percent abandonment rate.
But Selz is a different beast altogether. Where Selz has emphasized agility and strategization for smaller businesses, Shopify’s sheer visibility alone has made it increasingly more attractive to Fortune 500 entities including Heinz, Red Bull, Hasbro and Tesla—a market reportedly accounting for 24 percent of their business through their Shopify Plus line of solutions. It’s also a market few new sellers can realistically hope to compete with, particularly on Walmart. And while Shopify can boast of hosting over one million businesses in 2020, they’ve also been lambasted for everything from aggressive, “get rich quick” affiliate marketing schemes to overcharges, seller fraud and potential federal securities law violations over the past four years.
Available Features From Selz
Scalable monthly cost.
Fraud protection and tax invoices.
Custom domain names.
Customizable templates and dashboards.
Payment processing and gateways for over 70 different currencies.
Image editing, embedding and optimization tools.
Automatic integration with Facebook and Instagram.
Unlimited storage and bandwidth.
Managed advertising and support, including PPC optimization.
Customer profiling and communication tools.
Amazon and Selz: A Renewed Focus on Sellers?
Amazon’s acquisition of Selz in January isn’t the first time they’ve delved into hosting multi channel development suites for sellers. As early as 2010, they launched a similar solution using proprietary tools known as Amazon WebStore only to phase out the service some five years later; ironically as a result of what many believe to be increased competition from the likes of Shopify.
But Amazon also knows that cultivating their trademark customer-centric focus can seem like a disadvantage for many sellers at times. And that third party sales have consistently overshadowed first party vendors on Amazon for five consecutive years, they can’t afford to marginalize an overwhelmingly large percentage of their revenue source. Selz may not be the right solution for every seller. And it may not be an accurate prediction of things to come from Amazon in 2021. But it is an indicator of a need for increased attention on seller optimization. And it’s a need that’s been unanswered for far too long.
Color More Lines provides white glove, global account management of your eCommerce platforms so mission-driven companies can focus on new product development, branding and growth strategies. Find out more atColor More Lines.