Amazon unveils the mysterious Vitamin C – Webstore 2

March 3, 2010

ChannelAdvisor ChannelAdvisor By ChannelAdvisor


When we first launched this blog, we pointed out there was some chatter around about a top-secret Amazon project code-named Vitamin C.  Today Amazon announced they are officially in beta and they revealed the name and more specifics about the offering on their services blog.

Here are some highlights:

  • Amazon is calling this offering Webstore – we are hearing it called Webstore2 to avoid confusion with the existing very primitive offering called, well, Webstore.
  • Webstore2 is described as: Amazon WebStore is a comprehensive, full-featured ecommerce product that enables companies of all sizes to build and operate an ecommerce business. Amazon WebStore provides capabilities for managing every aspect from design and merchandising, to catalogueueue and inventory management, to checkout and payment processing with fraud protection.
  • While Amazon hasn’t announced pricing yet, we’re hearing Webstore2 has a fee structure that is anywhere in the 4-8% range.

We did some investigative work and it appears that one store that is a decent-sized name and is running the new Webstore is



What does this mean for other e-commerce store providers?

It’s early days, but all indications are that Amazon appears to be getting serious about an e-commerce platform initiative that is de-coupled from Amazon and the third-party marketplace.

At last count there are over 100 e-commerce platform vendors. They roughly segment into the following buckets:

  • Enterprise software – Top 200 retailers tend to want to own the experience from hosting to the consumer. ATG, Broadvision and IBM Websphere are the big players here.
  • Enterprise services – Some retailers need a great deal more functionality than software provides such as fulfilment, call-centre, etc.  GSI Commerce and Digital River are big players in this space.
  • Cart software – This is the biggest category with a ton of solutions available.  Everything from Java-based, to .NET-based and even some popular open-source offerings.  
  • SaaS solutions -SaaS stands for Software as a Service and unlike Enterprise or Cart software,  SaaS solutions include hosting and a full soup to nuts package.  Yahoo! Stores is the leader in this category, but long in the tooth.  Other solutions are eBay’s Prostores and next-generation offerings from DemandWare and Venda.  As full disclosure – ChannelAdvisor also has an offering in this category that we call StoreAdvisor.

Based on what we know about Amazon Webstore2, it seems that the offering fits into the SaaS category. With literally millions of e-commerce sites, it is a very big space.

It will be interesting to see which areas Amazon targets with this new offering.  The Timex win points to helping manufacturers come on-line and of course Amazon has an arsenal of other services they can add to the mix like FBA, 3P, etc.  Y! Stores is hobbling along without much attention from Y! (they tried to sell it unsuccessfully earlier this year) and eBay’s ProStores is widely criticized by merchants, so I suspect Amazon can take some share from those two players in the SMB space pretty quickly.

The big question

The real question, as with many of Amazon’s offerings, is how will retailers feel about partnering with a company for an e-commerce SaaS solution that is actually the largest e-commerce retailer.  I’d enjoy hearing your thoughts and questions in comments.

SeekingAlpha Disclosure – I am long Amazon and Google. eBay is an investor in ChannelAdvisor where I am CEO.