Google close to launching marketplace says WSJ

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Scot Wingo, CEO of ChannelAdvisor, broke the news today on the Amazon Strategies Blog that Google are considering the launch of a Google Marketplace.

The Wall Street Journal directly compares a possible Google Marketplace with Amazon Prime (which costs $79 in the US to access free next day delivery). The WSJ says that the Google Marketplace would enable major retailers and shippers to create a service that lets consumers shop for goods on the Web and receive orders within a day for a low fee.

Scot Wingo points out that Google have the four main constituents needed for a marketplace – Buyers, Sellers, Catalog (Google Product Search) and a Payment system. If they do go ahead the WSJ suggests it would begin with a trial in the San Francisco Bay area in conjunction with retailers such as Macy’s, Gap and OfficeMax.

The Google Marketplace would join the dots between Google Shopping, Retailers Inventory and available shipping options to determine if the product could be delivered next day. This suggests technology similar to eBay’s Milo which brings local retailers inventory availability onto the web. However Scot Wingo also points out that retailers aren’t set up to accept orders over the web (a technology issue) and that also local retailers “typically have a) terrible inventory systems and b) little to no outbound shipping capabilities”.

It’s very doubtful that in the immediate future a Google Marketplace would embrace small retailers or be available outside of the US. However if trials are successful then undoubtedly it would be rolled out in more countries.

The big question has to be whether smaller retailers would ever be included or if it would be limited to larger retailers with stock held in multiple locations across the US. Having multiple locations is a very different requirement in the US to the UK – in the UK pretty much anything can be shipped anywhere in the country within 24 hours so long as it’s in stock. In the US shipping coast to coast within 24 hours across six time zones isn’t quite as simple.

However this pans out it’s going to send an electric shock through Amazon and eBay management. A Google marketplace is possibly the biggest threat to the incumbent marketplaces, although the threat may be tempered if the offer is limited to large retailers with multiple locations.

If smaller retailers can cut a slice of the action I’d predict that they’ll leave the incumbent marketplaces in droves. I’d recommend against this though, regardless how much business you gain from Goodle why would you cut off the income from existing marketplaces? If you do get the opportunity to add Google as a marketplace look at it as an addition, not a replacement for eBay and Amazon.

16 Responses

  1. This potential move by Google may cause eBay to embrace smaller sellers as I imagine big retailers are more likely to be drawn to Google Marketplace and abandon eBay.

  2. The first question will be where do they set the boundary between Small and Large? We saw recently the UK Government call Small as being with a turnover less than £50 million. I would have thought that a turnover of a £1million per week(£50million a year) was very definitely Large).

    As ebay has been bending over backwards to cater for the Larger end of the market they might be very happy if the limit was set at £50million per annum. However if the limit was set at say £5 million per annum I would imagine that ebay management would be in total panic.

    Just think they would have to fill the gap left by all the larger sellers as I can imagine a mass migration to Google. In which case for the first time in years perhaps ebay would have to cater for the needs of the smaller end of the market.

    Of course it would not only be ebay itself. Paypal would also find itself in trouble. Its volumes and turnover would drop dramatically. So perhaps ebay and Paypal would be looking at all sorts of ways to try to regenerate their business and the only place would be from amongst us mere mortals.

  3. There won’t be a mass migration to Google. It will just be another marketplace open to large sellers.

    I would expect some dilution of ebays market share though.

    The real question is will google search give a higher ranking to sellers on the google marketplace than on ebays?

    Now that would be unfortunate for ebay.

  4. Then there Alibaba thinking of buy Yahoo, who used to do selling anyway.

    Bigger threat to small ebay sellers, as all the far east sellers will have access to global markets & all the imported stuff from HK, etc, will be offered cheaper than UK sellers can sell at.

  5. How ironic it would be if ebay complained that Google were higher ranking sellers on the google marketplace than on ebays?

    Google could call it Best Match 5 perhaps

  6. I think Google should stick to what it does best (used to do best) ie Search.

    They keep trying all these silly diversions and often end up closing them.

    I mean Google Checkout is not yet world-wide.

    Arn’t they happy with billions in the bank already ?

    Competing against your customers is not a good look really.

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