When reports emerged earlier this month that the Amazon Webstore would shut down, it revealed a lot about the state of B2B eCommerce market, and how the underdogs facilitating the sector beat out one of the world’s largest, and most successful, digital commerce platforms.
According to Motley Fool’s perspective, Amazon’s decision to shutter its Webstore is an indication that the corporation aimed to focus on building its own brand, rather than aid online sales for other companies. And that, experts say, is where eCommerce startups swooped in to grab the market.
Amazon remains the world’s largest digital retailer, having seen $29.3 billion in net revenue in the most recent fourth quarter. The majority of that, $23.1 billion, came from its direct-to-consumer services, but the rest was generated from the fees taken from merchants using Amazon to sell their products through the company’s platform. While they do not represent the majority of cash flow for Amazon, those fees led to a nearly 38 percent spike in revenue compared to the year prior.
The corporation’s fourth quarter results revealed that sales through Amazon Marketplace, which facilitates other merchants’ sales, made up more than one-fifth of Amazon’s sales during that time.
So why did Amazon decide to close its doors to these merchants? It’s not the first to do so. EBay similarly ended its Magento Go SaaS aimed at small- and medium-sized merchants, the Motley Fool pointed out. The move, some experts said, represents the decision among major online retailers to focus on their own business and begin to pivot away from the B2B sector.
Instead, startups like Bigcommerce and Shopify have filled the gap for smaller online retailers. According to reports, when eBay nixed its software service, it recommended that the retailers migrate operations to Bigcommerce. The Shopify platform, however, is the lead eCommerce platform provider in the industry, reports said, facilitating digital sales for more than 150,000 companies across the globe.
And while these startups are great for SMEs, reports noted that major corporations like Google and Tesla Motors similarly use the service.