There was a common theme in 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 efforts to become a universal e-commerce infrastructure provider. It’s the same playbook that made Amazon Web Services a major cloud infrastructure provider under Andy Jassy, who appointed Amazon founder Jeff Bezos as Amazon CEO last year.
The key question is whether sellers will see enough value in Amazon’s services to justify trade-ins by increasing their reliance on the e-commerce giant and giving the company more exposure.
Amazon’s influence over third-party sellers is the focus of a new lawsuit from the state of California, which claims that its terms prohibit them from offering products at lower prices on other websites. Amazon disputes the claims, saying the lawsuit filed by California Attorney General Rob Bonta forces it to offer higher-priced products.
At the Amazon Accelerator conference in Seattle on Thursday morning, Amazon CEO Doug Herrington discussed the company’s broader strategy. Dave Clark made his first public appearance since being named CEO of Amazon’s global stores in June after stepping down as the company’s top consumer expert.
Herrington described warehousing and distribution as a response to requests from sellers to move up warehousing and distribution independently of Amazon’s fulfillment centers. Before taking on his new role, Herrington led acquisitions at Prime’s launch, and said Thursday that he continues to work closely with the Prime Buy team.
“When we announced this, people were scratching their heads,” he said. “Oh shit, doesn’t buying on Amazon make some people buy from Amazon? And the answer is, maybe. But we know it will be a better customer experience for our Prime members.
And that adds value to Amazon and third-party sellers, Herrington said.
The company described similar questions at Amazon as it integrated third-party sellers into its main e-commerce platform, following a failed attempt to create an auction site and a separate third-party marketplace. That move eventually created the pillars of Amazon’s business. Third-party sales consistently account for more than half of the units sold on Amazon.com, according to the company.
Herrington has been with Amazon for 17 years, working on businesses and initiatives including Amazon Grocery, Subscribe & Save, Amazon Fresh, Amazon Private Brands and Amazon Pharmacy.
Amazon VP Dharmesh Mehta, who spoke with Herrington on stage, described him as a “positive catalyst,” “helping teams see the vision of where we’re going,” helping them focus their efforts on innovation and change.