At the end of April, Amazon had an announcement: a new marketplace model for furniture is afoot. Starting later this year (allegedly in Q3) Amazon will no longer demand third-party furniture retailers ship their products nationwide. Instead, retailers who sell furniture on Amazon can now decide for themselves if they want to choose specific regions for listing and shipping their furnishings. Sellers will also be able to offer local services, such as white glove delivery, set-up, and haul away. Amazon will take a $39.99 monthly fee for an unlimited number of listings. Plus, 15% on the product sale and 20% on the services.
Location, Location, Location
What’s interesting here is that Amazon has recognized the importance of being local when it comes to furniture and décor. Amazon hasn’t changed their third party seller program for anyone except the furniture category. With the introduction of local listing, shipping, and services, they’ve acknowledged the importance of the local retailer.
Remember, Amazon also recently hinted that they might be opening their own brick and mortar appliance and furniture stores. They wouldn’t be considering this if they didn’t understand the absolute importance of the omnichannel experience when it comes to home items. It’s clear they’re coming around to the conclusion that this category requires both an online and in-store experience, and in-store can offer a tremendous advantage.
A Plus if You want To sell Furniture on Amazon
So what does this mean for retailers? It could be a great thing. The new furniture selling program could be a major plus if you want to sell furniture on Amazon. The program lifts a lot of the restrictions that may have dissuaded retailers before, such as having to charge ridiculously high shipping rates to ship across the country. And with 55% of customers starting their search for products on Amazon, it’s an attractive sales channel. Do keep in mind that they take a nice chunk of change as commission for every sale. This extra visibility comes at a cost…
What about Amazon and that Brick & Mortar rumor?
Despite that the new seller program may be a big win for the local guy, rumors about Amazon’s own potential entry into brick & mortar selling are disconcerting. It appears nothing is official, but if Amazon moves forward with the venture then there will of course be a new, heavily-funded competitor playing the in-store game. Thus far, most leaders in the industry haven’t voiced much concern. Perhaps that’s because Amazon’s potential appliance and furniture stores pose a much bigger threat to much bigger retailers. According to the Street, already-struggling Sears, Best buy, J.C. Penney, Williams-Sonoma, and Bed Bath & Beyond are the stores first in line to suffer if this does occur. That of course doesn’t mean a Brick & Mortar Amazon wouldn’t pose various challenges for smaller retailers, but that’s a bridge yet to be confirmed or crossed.