by Steve Weber

#81, 6 November 2006

The Case of
the Shrinking Online Bookstore

Selling on Amazon

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eBay infuriated booksellers in August when it raised listing fees for eBay Stores. Many booksellers shut down their eBay Stores in response, saying they couldn't afford the fee hikes.

Now Amazon has dealt booksellers a comparable kick in the teeth, just as sellers are preparing for the all-important holiday season: Amazon has literally crippled the storefronts it provides its Pro-Merchant sellers.

Just when you think you've got online bookselling figured out, everything changes again. Are Web-based storefronts a thing of the past already? Or is there a better solution just around the corner?

The changes at Amazon are being driven by its decision to shutter zShops October 24. Since 1999, Amazon sellers who paid the $39.99 monthly Pro-Merchant fee received a zShop storefront, which they could customize with special offers, featured items, bulk deals, and customized browse paths. zShop sellers could also invoice buyers for extra fees, such as shipping upgrades for domestic overnight or overseas airmail delivery when customers requested it.

Amazon steadily reduced zShops' profile after it launched Marketplace in 2000. Sellers on Marketplace pay a 15-percent commission, while zShops carried a 5-percent closing fee for sales under $25.

Now zShops has been replaced by Marketplace storefronts. The Marketplace stores are cookie-cutter simple with virtually no features - no categories, no browse paths, and no sorting ability.

Here's what a Marketplace store looks like.

The phase out of zShops has been particularly irritating for Amazon's sellers who deal in rare and out-of-print books. Over the past two years, Amazon has been developing a system for Pro-Merchants to enter pre-ISBN books into its catalog so they can be sold on Marketplace. But dealers complain they weren't given enough time to make the tedious switch to Marketplace for thousands of their old zShops listings.

In response, Amazon relented a bit, and extended the deadline for conversion to Marketplace by six weeks, from October 24 to December 5. The reprieve allows sellers to access their zShop listings, although buyers can no longer view them.

Here's Amazon's help page for migrating from zShops to Marketplace.

Now that Amazon sellers have no category headings in their stores, it's extremely unlikely that buyers will browse through hundreds or thousands of miscellaneous seller listings in search of something they're interested in. To add insult to injury, buyers who click on one of your storefront listings aren't taken to their shopping cart, they're taken to Amazon's main product page for the book. This will confuse buyers, and virtually ensure that no sale occurs, even when buyers manage to find something they want in your store.

It's a slightly different story for sellers participating in Fulfillment by Amazon.

These sellers do have some sorting ability on their storefronts.

At Fulfillment by Amazon stores, buyers can sort listings by bestselling, newest arrivals, featured items, "on sale" and by price, but there are still no categories.

Amazon says it will add categories for Marketplace stores sometime later. It's unclear when this will happen or whether sellers will be able to customize their categories.

Serving Customers

The switch to Marketplace storefronts may create some friction between sellers and buyers on Amazon. In particular, there may be some misunderstandings about shipping fees. For example, if a buyer purchases 20 books from the same seller, it results in 20 shipping fees. Since standard shipping is $3.49, a buyer purchasing 20 books from the same seller is billed $69.80 for shipping. Even though actual shipping costs may be only a fraction of that, there's no way for the seller to adjust it. But buyers don't blame Amazon for "overcharging" on shipping, they blame the seller.

In the past, Marketplace sellers were able to create a special listing in zShops for these bulk buyers, and charge the actual shipping cost. With Marketplace stores, it will still be possible for sellers to refund buyers for part of the shipping fee, but refunds are discouraged by Amazon. The company monitors refund rates to grade performance. High refund rates can lead Amazon to suspend or close seller accounts.

Adjusting Your Marketplace Store

The URLs for Amazon's new Marketplace storefronts still works the same as they did for zShops.

One of the biggest issues for Amazon sellers adjusting to the new stores is the seller name displayed on their storefront. Instead of seller nicknames being displayed by default, it's the seller's actual name, or first name. Physical addresses are also shown in many cases. For brick-and-mortar book dealers operating on Amazon, there's no problem with this information being listed. But quite a few home-based sellers have been unhappy to see their personal information such as names and addresses being displayed on Amazon. They don't want curious buyers stopping by their home unannounced, asking to browse "the bookstore."

And there is a way to change the Marketplace storefront name: From your Seller Account on Amazon's site, go to:

>Edit Your Marketplace Seller Profile

There, you can change the name of your storefront by typing in the "business name" box. If the "business name" is left completely blank, your seller nickname will appear on your storefront. You can also upload a logo for your store here.

>>>>>Click here for page two>>>>

Questions or comments?
Contact the editor, Craig Stark

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