In Latest Strategy Shift, Amazon Is Offering a Home to Retailers
At Amazon.com Inc., a new strategy is taking root: The world's biggest online retailer is trying to transform itself into a shopping mall.
This week, Amazon opened a sporting-goods department where retailers such as Golfsmith International Inc. can sell golf clubs, baseball bats and other athletic gear. Lands' End and online luggage retailer eBags.com Inc. have already set up stores in the apparel section. And Amazon hopes to roll out a gourmet-food store and health-and-beauty shop in time for the holidays, according to people familiar with the matter.
Amazon processes the orders for these departments, but the retailers fill the orders from their own warehouses. Amazon gets a cut of the sales -- and can expand into different businesses without making a big investment in inventory. The retailers receive access to Amazon's most important assets: its customer traffic, $1 billion investment in technology and Internet know-how.
But becoming a shopping mall is creating new tensions in Amazon's business. Even as Amazon successfully recruits retailers to sell on the site, some popular manufacturers are worried Amazon's emphasis on discounts might cheapen their brands. Nike Inc. is trying to get retailers to remove its products from the site, and Callaway Golf Co. has asked retailers not to sell its new golf equipment there.
At the same time, Amazon has to worry about risking its own reputation by putting the delivery of products into the hands of outsiders. And as it expands its stable of partners, Amazon finds itself managing relationships with hundreds of retailers, most of them with their own demands about how their blue jeans, shoes and other goods are presented on the site. Gap Inc. and other retailers, for example, have clamored for bigger, sharper pictures of their products on the site or for special features such as monogramming
Amazon is "kind of like the United Nations," says Bill Bass, the senior vice president of e-commerce at Sears, Roebuck & Co.'s Lands' End. "We're not the easiest people in the world to work with and neither are some other retailers."
The strategy is another example of Amazon's hunt for the perfect business model. The company, guided by its restless founder and Chief Executive Jeff Bezos, has reinvented itself many times, changing from an online book seller with mostly virtual operations to an operator of huge warehouses stocked with electronics and kitchen appliances to a technology provider for other merchants, including individual sellers and big retailers.
Amazon's mall approach is different than other online retail partnerships. Yahoo Inc., AOL Time Warner Inc.'s America Online and other Web portals operate shopping sites that send visitors to the Web sites of online retailers in exchange for commissions. EBay Inc. is a forum for merchants, big and small, to sell goods. Several years ago, Amazon itself got big payments from a handful of merchants, such as car-seller Greenlight.com Inc. and online pharmacy Drugstore.com Inc., to provide little more than links to their Web sites.
Few, though, have incorporated the products of other big retailers as deeply into their sites as Amazon is doing now. "Other portals aren't shopping sites" like Amazon is, says Mr. Bass of Lands' End. "They would send traffic to you, but they'd send it to your sites."
Amazon has a lot riding on the mall strategy. The sales commissions from its retail partners are emerging as a crucial plank in the Seattle company's effort to show consistent earnings.
Amazon doesn't disclose its revenue from the sale of other retailers' goods, but it says 20% of items ordered through its site last quarter were goods sold by third parties, including individual sellers of used goods, up from 14% of items sold a year earlier. Amazon's commissions on such sales typically range from 10% to 15% and are mostly profit, with gross margins of more than 70%, estimates Deutsche Bank analyst Jeetil Patel. In contrast, books, DVDs and other goods that Amazon warehouses carry gross margins -- profit after subtracting the cost of goods and shipping expenses, but before operational costs -- of about 22%, Mr. Patel estimates.
The commissions have helped Amazon sharply stem the flow of red ink at the company. It showed a loss of $149 million last year, but that was a fraction of the $1.41 billion it lost in 2000. Revenue at the company jumped 42% to $3.93 billion last year from $2.76 billion in 2000.
The glory days of December 1999, when Amazon's shares traded at a split-adjusted high of $106.69, haven't returned. But as the company's strategy for growth has started to click, Amazon has become an investor favorite again. Its shares have more than doubled this year on the Nasdaq Stock Market to about $50, including a big surge Tuesday after the new sporting-goods store was introduced.
When Mr. Bezos opened Amazon for business on the Web in 1995, it carried little inventory, relying on book wholesalers and distributors to ship many orders. This was part of the great promise of Internet retailers, who disparaged the heavy overhead of "bricks and mortar" retailers.
As it quickly expanded and money from investors gushed into the company, Amazon began loading up on supply. It built a network of warehouses across the country to handle its burgeoning selection of products and to ship orders more quickly to customers.
Amazon sometimes stumbled as it ventured farther away from the businesses it knew best -- selling media products such as books, music and videos. During the holiday quarter of 1999, shortly after introducing toys and electronics products on its site, Amazon took a charge of nearly $40 million to cover excess merchandise that didn't sell.
So Amazon tried a different approach. In 2000, it cut a deal with Toys "R" Us Inc. under which the Paramus, N.J., retailer selects and buys the toys sold on Amazon. Amazon runs the toy Web site and handles packaging of products for delivery. Toys "R" Us says it had sales of $340 million through Amazon last year.
Later, Amazon expanded its electronics selection by getting Circuit City Stores Inc., J&R Music & Computer World and others to list their products for sale on the Amazon site, helping it to minimize its own stock of electronics.
Teaming up with other merchants eliminated inventory risk for Amazon and reduced the amount of expertise it needed to accurately forecast hot products in unfamiliar categories. It was a more practical strategy for Amazon following the bursting of the dot-com bubble, as the flow of funding for more expansion was shut off. The arrangement also suited retailers, which no longer fantasized about taking their Internet divisions public and realized they were better off focusing on their main bricks-and-mortar businesses.
Last November, Amazon launched a huge apparel department -- the first time Amazon created an entirely new department on its site in which almost all of the products were sold by third parties. The company didn't even consider keeping its own inventory of clothing. "It's fair to say Nordstrom is doing better determining what style of Diesel jeans will sell this Christmas than we would," says Jason Kilar, Amazon's senior vice president for world-wide application software.
Amazon is applying the same thinking to sporting goods. Rather than reconfigure its warehouses to handle hundreds of thousands of different types of products -- a number that would have multiplied to millions of goods when different sizes, colors and other variations were added -- Amazon has gone looking for experts in the business.
It found several takers, including Golfsmith, a chain of golf superstores, who were eager to sell their goods to Amazon's 35 million users. It also ran into a problem: Some golf-equipment makers don't want to see their goods in the Amazon shopping mall.
Golfsmith, for one, was told by the makers of Titleist, Callaway and Ping goods not to sell their clubs and other gear through Amazon, even though Golfsmith is authorized to sell those same brands through its own Web site, according to Jim Thompson, CEO of Golfsmith, of Austin, Texas.
Pat Loftus, vice president of sales for Ping Inc. of Phoenix, Ariz., says the company isn't yet convinced that the process of buying golf equipment "can be done justice over the Internet." Customers must choose from a number of complicated options, such as selecting a club's shaft stiffness and loft, the angle of the club's face relative to the shaft of the club.
Although Ping has allowed four specialty golf retailers to sell Ping equipment through their Web sites, Mr. Loftus says, "We're not going to extend that through a mall-type environment like Amazon. Currently we're being very cautious on the Internet."
Callaway Golf Co., Carlsbad, Calif., reached a compromise: While it asked retailers not to sell new Callaway equipment through Amazon, it gave the go-ahead to Callaway Golf Pre-Owned, a separate company owned by Trade Up Commerce Inc., to sell used Callaway clubs there.
Sam Sheagren, director of world-wide sales at Callaway Golf Co., says the company doesn't want to see its products listed on Amazon next to discounted goods. "Our concern is for the brand. We don't want to see ... a Callaway Great Big Bertha II next to something on sale for $100," says Mr. Sheagren, referring to a titanium Callaway club that typically sells for upward of $400. "We try to convey a premium brand image."
Mr. Sheagren says Callaway Golf Co. might authorize its retailers to sell through Amazon in the future after the company's sporting-goods department has a longer track record.
A spokesman for Titleist, which is owned by Fortune Brands Inc., declines to comment on its relationship with its retailers.
Other big brands are fighting the sale of their goods through Amazon. "Nike has said, 'We don't want to have our products shown on Amazon,' " says Peter Cobb, vice president of marketing at eBags, which sells Nike products on its own site. "That's really Nike's call."
People familiar with the thinking of Nike of Beaverton, Ore., say the sporting-goods manufacturer is "actively" discouraging its retailers from selling through Amazon, in large part because it thinks Amazon's emphasis on discounting isn't a good fit for its sneakers and other products. Amazon is "not a venue that we think is appropriate for our brand now," says Nike spokeswoman Joani Komlos.
In any event, Nike's efforts haven't been very successful: Many Nike products are still widely available through Amazon, listed by Foot Locker Inc., Nordstrom Inc. and others. Ms. Komlos declines to comment on conversations Nike has had with its retail partners. A handful of Titleist and Ping items, some of them used, are also listed on Amazon.
Amazon executives say there's still a huge selection of sporting goods on its site, even without the support of those brands, and that it will win over detractors. The company says it has partnerships with "hundreds" of retailers overall, and more than 50 retailers in its new sporting goods store alone.
Amazon has overcome resistance from retailers before. Book publishers initially complained because Amazon allowed customers to post their own reviews of books. Sony Corp. refused for years to authorize Amazon to sell most Sony products in its electronics department. Amazon went ahead and got Sony products through other sources, including retailers, and eventually the Japanese company made Amazon an authorized seller of its products.
"It's our job to earn the respect over time of vendors in any new category and to work hard to present their products appropriately," says Diego Piacentini, senior vice president of world-wide retail and marketing at Amazon.
Today the response among retailers is mixed. Some, such as Mr. Cobb of eBags, say Amazon delivers "kind of decent performance but nothing extraordinary." But Target Corp. recently extended an agreement under which Amazon handles its online operations and others say they're happy with their partnerships. And Rachelle Friedman, co-founder of J&R Music & Computer World, says, "We're getting a lot of new customers."
Amazon's web of partnerships is putting new demands on the company. Before its apparel department launched, for instance, Amazon thought it had designed the area with space for enough images to show blue jeans, jackets and other clothing. But apparel partners such as Gap insisted on more images and in bigger sizes so shoppers could better see details. "Amazon was taken aback by how every retailer would have their own request," says Dave Fry, chief executive of Fry Inc., a consulting firm in Ann Arbor, Mich., that has helped almost a dozen retailers get running on Amazon.
Amazon says it wasn't at all surprised by the amount of requests for changes by its retail partners and that it valued their feedback. Amazon rides its partners, too, to make sure they're not falling down on delivering orders to customers. The company's Mr. Kilar says he spends several hours a week closely reviewing its partners' performance, from the number of refunds retailers provide on orders to the amount of communications they're having with customers.
亚马逊全力筹建网上商城
在亚马逊公司(Amazon.com Inc., AMZN)，一项新战略正在展开：这个世界最大的网上零售商要变成一家购物中心。
亚马逊本周新开了一家运动品商店，Golfsmith International Inc.等零售商可以在这里销售高尔夫球及棒球球具，还有其他一些运动用品。Lands' End及网上箱包零售商eBags.com Inc.也已经在衣饰区开张了。据知情人士透露，亚马逊还计划再设立一家美食店和化妆品店。
亚马逊只为这些商店处理订单，供货还是由各零售商的仓库自行准备。亚马逊可以从销售额中提成，而且无需大量库存投资就可以将销售面扩展至不同领域。各个零售商也可以利用亚马逊最重要的资产：顾客访问量、价值10亿美元的技术投资以及互联网专业知识。
但这种转变也会给亚马逊带来一些不稳定因素。尽管已经实现成功招商，但一些产品颇受欢迎的制造商担心亚马逊的折扣会削弱其品牌价值。耐克(Nike Inc.)正在试图让其经销商不要到亚马逊网站上进行销售；Callaway Golf Co.也要求其经销商不要在这个网站上出售其最新的高尔夫设备。
与此同时，由于将交货环节移交给网站以外的第三方，亚马逊还担心此举会影响公司的声誉。随著合作伙伴数量的增加，亚马逊必须与数百名零售商打交道，而多数零售商对其牛仔服、鞋及其他商品在亚马逊网站上如何摆放都各有要求。例如，Gap Inc.等零售商就要求他们的产品在网站上的图片要更大、更亮。
亚马逊的角色“就像联合国”，西尔斯(Sears Roebuck & Co., S)Lands' End负责电子商务的高级副总裁巴斯(Bill Bass)说，“亚马逊和我们做生意可不容易，其他零售商也一样不好对付”。
这一战略是亚马逊不断寻找最佳经营模式的又一次尝试。在网站创始人兼首席执行长杰夫?贝索斯(Jeff Bezos)的带领下，亚马逊进行了多次尝试，刚开始只是一家网络书商，业务多在虚拟环境下进行；后来开始销售电子设备和厨房用品，网站自己还有了一个大仓库储备各种商品；现在又转变为向其他商家提供技术，服务对象既有个人商贩也有大型零售商。
亚马逊的购物中心经营模式有别于其他网络零售合作。雅虎公司(Yahoo Inc.)、美国在线时代华纳(AOL Time Warner Inc.)旗下的美国在线(America Online)及其他一些互联网门户网站是通过将访问者推荐到零售商的网站来获取佣金。EBay Inc.是提供一个市场，大小商家都去那里卖东西。亚马逊几年前也通过添加链接将访问者介绍到零售商的网站获得了大量收入。
但几乎没有哪个网站能像亚马逊现在所要做的这样，将其他零售商的产品拿到亚马逊来卖。“其他门户网站不是购物场所”，巴斯说，“它们只是把客户带到零售商的网站上来”。
这个购物中心战略对亚马逊的压力也是很大的。从零售合作伙伴手中获得的佣金对公司争取持续盈利至关重要。
亚马逊没有透露销售第三方产品可以获得多少收入，只说上个季度通过其网站下单购买的商品中有20%是由第三方经销的，高于上年同期的14%，其中二手用品也包括在内。德意志银行(Deutsche Bank)分析师帕特尔(Jeetil Patel)估计，亚马逊从这些交易中提取的佣金比例应当在10%-15%，这部分交易是最有利可图的，网站的毛利润率超过70%。相比之下，书籍、DVDs及其他亚马逊仓库中的商品的毛利润率可能只有大约22%。
销售佣金收入使亚马逊的亏损趋势得到有效控制。该公司去年亏损1.49亿美元，但与2000年14.1亿美元的亏损相比，形势已经大有好转。公司去年的收入也从2000年的27.6亿美元增长42%至39.3亿美元。
与其他零售商合作可以消除亚马逊的库存风险，使其不必为了准确预测未来的流行商品而去掌握很多不熟悉领域的专业知识。互联网泡沫破灭后，用于扩张的资金流出现断流，这种新战略可以说是新形势下亚马逊更加实际的选择。而且，这也对零售商的胃口，他们不必再花心思想著在互联网上建立自己的销售网站，而只要关注于把自己传统模式下的生意做好就行了。
亚马逊去年11月推出了一个大型服饰店，这是网站上第一个几乎所有商品都是由第三方在经销的商店。亚马逊甚至根本就不想为这个服饰店的商品储备库存。亚马逊负责全球应用软件的高级副总裁克里(Jason Kilar)表示，“坦率地说，要判断圣诞节哪种款式的牛仔裤销量最好，Nordstrom可比我们在行得多”。
亚马逊对运动商品也如法炮制，它并没有费力改建仓库去堆放成百上千种运动品，有很多产品还要细分不同的大小、颜色和型号等等，而是将这些事交给这个领域专门的经营者去做。
亚马逊现在已经招揽了一些商家进驻网站，其中包括专门出售高尔夫运动品的超级市场Golfsmith。后者急欲向亚马逊的3,500万用户销售自己的商品。但双方的合作有些问题：有的高尔夫设备生产商不愿意看见自己的商品在亚马逊的购物中心销售。
Golfsmith首席执行长吉姆?汤普森(Jim Thompson)说，虽然Titleist、卡拉威(Callaway)以及Ping等品牌产品的生产商允许Golfsmith的网站销售他们的产品，但却告诫Golfsmith不要将这些产品拿到亚马逊去卖。
Ping Inc.销售副总裁劳福特斯(Pat Loftus)说，公司认为购买高尔夫设备的过程不能仅在互联网上完成。
虽然Ping允许四家产品特许经销商在其各自的网站上销售Ping的设备，但劳福特斯说，'我们还不打算将这种网上销售推广到像亚马逊这样的互联网购物中心去。我们现在对进行网络销售是很谨慎的'。
很多其他大品牌也反对在亚马逊销售其产品。eBags营销副总裁卡博(Peter Cobb)说，'耐克就说过，他们不希望其产品出现在亚马逊的网站上'。eBags在其自己的网站上出售耐克的产品。
据熟悉耐克的人士称，该公司不断呼吁经销商不要在亚马逊网站上销售其产品，很大程度上是由于耐克认为亚马逊一贯强调商品折扣，这很不适合耐克的产品。公司发言人孔洛斯(Joani Komlos)说，'我们认为亚马逊目前不是销售耐克品牌产品的合适场所'。
但不管怎样，耐克的努力并不成功：很多耐克产品还是在亚马逊网站上出现了，Foot Locker Inc.、Nordstrom Inc.及其他经销商还是把这些产品摆了出来。很多Titleist和Ping产品，包括一些二手货，一样可以在亚马逊网站上看到。
亚马逊管理人士说，虽然得不到有些大品牌的支持，但还是有很多运动商品可供他们选择。网站已经与数百家零售商建立合作关系，50多家已经进驻新开张的运动品商店。
在此之前，亚马逊已经克服了来自很多零售商的阻力。一开始，书籍出版商抱怨亚马逊允许消费者发表自己的书评。很多年以来，索尼(Sony Corp.)一直都拒绝授权亚马逊电子商店出售其大多数产品。亚马逊并不气馁，通过其他渠道获得了索尼的产品，并最终获得了这家日本公司的产品经销授权。
直到目前，来自零售商的反响依然各异。有些零售商，如eBags的卡博说，'亚马逊干得不错，但没有什么特别之处'。但最近刚刚与亚马逊签约的一些公司，如Target Corp.却认为双方的合作很愉快。J&R Music & Computer World的联合创始人Rachelle Friedman说，'与亚马逊的合作使我们有了很多新客户'。
这种新型合作关系对亚马逊也提出更高要求。比如在服饰店开张前，亚马逊认为已经设计了足够空间来摆设牛仔裤、夹克等各类衣物。但Gap等合作伙伴非要有更多图像空间，而且图像要更大，这样才能让购物者看清楚细节。咨询公司Fry Inc.的首席执行长弗赖(Dave Fry)说，'亚马逊大吃一惊，它没有想到每家零售商都有自己的要求'。该公司协助10多家零售商开始了在亚马逊网站的经营。
但亚马逊表示，零售商们提出很多改变设计的要求是在他们意料之中的，他们对这些意见非常重视。同时，亚马逊也要求其合作伙伴严格遵守与购物者达成的交货协议。克里说，他每周都要花上几个小时密切关注与其零售商合作伙伴的表现，从订单退货情况到商家与购物者的沟通情况，全部都要留意。
