Amazon’s New Payment And Logistics Offering Will Revolutionize E-Commerce In India

While Flipkart, Snapdeal, and other e-commerce brands are making great progress in India, their biggest global competitor may have just launched what could prove to be the most important e-commerce solution for the Indian market in recent memory. Amazon has launched a new integrated payments and logistics offering that will allow small businesses to leverage upon Amazon’s incredible infrastructure and by selling their products through their own websites.

What is the significance of this new offering from Amazon?

At first glance this may not sound like a big deal, but when a small business decides to enter the e-commerce space for the purpose of giving its product visibility it realizes that an efficient e-commerce business requires a lot more than marketing your product to the right audience. The bigger challenges present themselves after SMBs have identified the right audience for their products. Perhaps the two biggest challenges in this space are providing the right payment methods to their customers based on the acceptability and availability of certain payment methods to customers in certain regions and the huge logistical challenge.

Amazon has decided that it will empower all ambitious brands to make use of Amazon’s already existing digital and physical infrastructure and allow them to sell through their own websites.

To make this possible Amazon has launched two services that allow SMBs to leverage upon Amazon’s infrastructure in the payment and logistics verticals namely the Pay with Amazon and the Amazon Easy Ship offerings.

How will Amazon empower brands and businesses with this integrated offering?

Pay with Amazon will act as an order management service that will allow brands to sell through their own websites. Amazon Easy Ship, on the other hand, will be used for delivery and fulfillment.

“Brands and businesses are looking to convert their static websites into digital storefronts and tap into the growing base of online shoppers in the country. We have made it simple and easy for them to outsource their payments and fulfillment processes and enabled them focus on their core business.”

– Amit Agarwal, Amazon India Vice President and Country Manager.

As Mr. Agarwal points out in his statement brands and businesses will benefit by using this integrated solution from Amazon in more than one ways. Not only will this give them the required infrastructure to sell their products, it will also allow them to focus on their core business instead of having to worry about underlying e-commerce requirements that are not central to their business. If you run an online business the last thing on your mind should be focusing on infrastructural issues that are beyond your budget and scope. This is why Amazon’s new service could prove to be revolutionary for Indian businesses.

While Pay with Amazon has previously existed as a standalone offering from Amazon, it is the integration of a delivery and fulfillment offering with this payment offering that makes Amazon’s latest solution an absolute clincher for small businesses in India.

“With Amazon Easy Ship, after order confirmation, sellers pick and pack the shipment, confirm to Amazon that they are ready to ship and Amazon collects the shipment and ensures that the product is delivered to the customer. Sellers benefit from low shipping rates, COD and pre-paid orders, scheduled pickups, faster delivery and automated shipment tracking. Customers get track-able shipments, COD and pre-paid orders and faster and predictable delivery time.

– Amazon’s official statement.

How could this effect pricing of products for customers?

At iSpyPrice we are always trying to understand the pricing cycle of commodities across industries because this allows us to build better price comparison metrics for our consumers. This is why we analyse the variance in price of products across a wide range of e-commerce portals and it is this understanding of variance in price that has led us to believe that there are a variety of ways the pricing of products could get effected if, and when, brand and businesses take a liking to Amazon’s latest integrated offering.

When a brand decides to enlist its product on an e-commerce website, the eventual price that an e-commerce portal charges the brand depends on a wide variety of factors such as subscription fee, listing fee, commission, shipping, packaging, et cetera. The seller is charged for a multitude of services and rightly so, after all the e-commerce portal is helping the seller take their product to a much wider audience than what may have been possible for the seller to reach on their own.

However, when brands start selling through their own website and have an integrated solution, such as Pay with Amazon and Amazon Easy Ship, they are paying for a service that is all inclusive. So the seller will have more power to control the pricing of their product. But as Peter Parker famously remarked in the movie Spiderman – “With great power comes great responsibility”, the sellers would do well to not confuse strategic pricing with foolish pricing.

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In short, buying directly from the product owner/manufacturer’s website could mean that customers may have to pay a higher price and they may be willing to if the product is exclusive to the website. On the other hand if the product is not exclusive and is already being sold through multiple channels, the seller may decide to use a more competitive price that may be more inciting to the customer.

Either way, this offering from Amazon has all the makings of a great integrated e-commerce solution for small businesses and brands.