May 11, 2016: Amazon is a B2C powerhouse, but has recently added business services that some SMBs may find compelling. Amazon Business Services is growing rapidly, according to Amazon.com’s recent financial reports; right now, 300,000 businesses have signed up.
What kind of small businesses are using it?
Right now, Amazon offers a bunch of pre-packaged services designed to cater to local tradespeople such as carpet cleaners, plumbers, electricians, home organizers, and computer techs.
Currently, Amazon’s pre-packaged service categories include:
— Home Improvement (electrical wiring, appliance repair and installation, plumbing, etc.)
— Home Services (painting, home cleaning, general repair, etc.)
— Computer & Electronics (virus removal, TV wall mounting, PC tech support)
— Yard & Outdoors (gutter cleaning, repair, equipment assembly)
— Automotive (tire/battery installation)
— Assembly (bed, dining set, outdoor equipment assembly)
— Business & Commercial (software, content, marketing services)
— Customized requests
How do Amazon’s shoppers discover your business?
Amazon’s shoppers need to use the “Home and Business Services” tab to find services offered in their areas (if they search “All” they’ll see books and other media about the service, but not those offering these services). In this example, I searched for “painting” contractors, and was delivered to the master page listing a variety of painting services offered (interior, exterior, fence painting, etc.).
In this instance I chose the “Wall and Ceiling Painting Project.” Once there, one can enter in requirements for the job, a description of the project, and other details. By clicking “Get Free Estimate,” my job will be transmitted to contractors who’ve signed up for the service, who will provide bids.
How does Amazon make money on this service?
Amazon becomes both the booking agent and the financial intermediary between the shopper and the business (direct payments are forbidden), and its fee structure varies per type of service. For pre-packaged services. Amazon will keep 20% of the service price up to $1,000, and 15% above that; for custom services, Amazon keeps 15% of the service price up to $1,000, and 10 percent above that. Additional fees (including the fee for a background check) may apply.
How do businesses get on board?
You have to apply and be accepted in order to have your business listed on Amazon Business Services. Amazon takes care to make sure that businesses who can bid on consumer jobs are vetted, so applicants are subject to a rigorous background check process. The business’ registration, bankruptcy, lien, insurance, and license status are examined, as well as other public records. Obviously, you should make sure that your public records are clean before applying.
Is Amazon Business Services for you? It depends on your situation. If your small business already has a presence on Angie’s List, and you’re getting more business than you can handle, it’s probably not worth the trouble. If your business isn’t likely to fit into one of Amazon’s pre-existing categories (which are based on demand), you’re probably not going to get much traction on Amazon. Some SMBs might also consider Amazon’s fee structure onerous, especially if they can reach consumers in other ways that are cheaper (Angie’s flat fees are very low).
At the same time, however, there’s no question that Amazon’s shoppers are affluent, free-spending, and may feel comfortable knowing that Amazon will “go to bat for them” in case there’s a dispute with a contractor. Getting access to these people through Amazon’s program is likely an experiment that many will want to undertake.
Services are available in Atlanta, Austin, Baltimore, Boston, Charlotte, Chicago, Cincinnati, Dallas, Denver, Detroit, Houston, Los Angeles, Miami, Minneapolis, Nashville, New York, Orlando, Philadelphia, Phoenix, Pittsburgh, Portland, Riverside, Sacramento, San Diego, San Francisco, Seattle, San Jose, St. Louis, Tampa, and Washington DC.
For more information on the program, visit:
http://www.amazon.com/Amazon-Home-Services/b?ie=UTF8&node=10192820011
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