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There’s a common theme running through some of Amazon’s announcements at its annual conference for sellers in Seattle this week: a growing focus on e-commerce sites and distribution channels beyond Amazon.com.
These and other initiatives reflect Amazon’s effort to become a universal provider of e-commerce infrastructure. It’s a similar playbook to the one that made Amazon Web Services the dominant provider of cloud infrastructure under Andy Jassy, who last year succeeded Amazon founder Jeff Bezos as Amazon’s CEO.
The key question is whether sellers will see enough value in Amazon’s services to justify the trade-off of increasing their reliance on the e-commerce giant, and giving the company even more insights into their businesses.
Amazon’s influence over third-party sellers is the focus of a new lawsuit from the state of California, alleging that the conditions it imposes prevent them from offering products at lower prices on other sites. Amazon disputes the claims and says the suit by California Attorney General Rob Bonta would force it to feature higher-priced products.
At the Amazon Accelerate conference Thursday morning in Seattle, Amazon executive Doug Herrington addressed the company’s broader strategy. It was his first public appearance since he was named the new CEO of Amazon Worldwide Stores in June, following Dave Clark’s exit as Amazon’s top consumer exec.
Herrington described Warehousing & Distribution as a response to demand from sellers for upstream warehousing, independent of Amazon fulfillment centers. Herrington also led the Buy with Prime launch prior to taking on his new role, and said Thursday that he has continued to work closely with the Buy with Prime team.
“There was some head-scratching by people when we announced this,” he said. “They said, ‘Oh, gosh, isn’t that going to cause some people who would shop on Amazon to shop off of Amazon?’ And the answer is, maybe. But what we know is it’s going to be a better customer experience for our Prime members.”
That, in turn, will accrue value to both Amazon and third-party sellers, he said.
He described similar questions inside Amazon when the company integrated third-party sellers into its primary e-commerce platform, following ill-fated attempts to create an auction site and a separate third-party marketplace. That move ultimately created one of the main pillars of Amazon’s business. Third-party sales consistently account for more than half of all units sold on Amazon.com.
Herrington has been with Amazon for 17 years, working on businesses and initiatives including Amazon Grocery, Subscribe and Save, Amazon Fresh, Amazon private brands, and Amazon Pharmacy.
Amazon VP Dharmesh Mehta, who spoke with Herrington on stage, described him as a “positive agitator,” bringing about change by “helping teams see the vision for where we’re going,” helping to focus their efforts to innovate.
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