On the recent Piper call with Gene Munster, I started to think about a generalized framework for helping to describe and articulate how Amazon seems to develop new offerings.
- Beta – Offering is not announced, available to a very closed, NDA list of partners/customers.
- 1.0 product – Offering is available either in a closed program or somewhat hidden/not promoted on the site. Generally the offering is under the radar.
- 2.0 product – The offering is available in an open fashion, easily found on the site, but still not heavily promoted.
- 3.0 product – At this point the offering is tested, works and is ready to ‘ramp’. Ramp in the Amazon world can mean a variety of things such as:
- Increased site ‘customer’ exposure
- Increased site ‘buyer traffic’ exposure
- Increased category adoption (e.g. started in Cat1 and is now in Cat1-X)
- Actual promotional exposure
- 4.0 product/ platform – This is the most recent, and in my mind most interesting, stage where Amazon is starting to take on-site offerings, technologies, etc. and then opening them up as a platform.
The last phase is very interesting because it allows Amazon to not only open up the technology to outside developers who can inject a ton of innovation, but also Amazon frequently ‘unbundles’ the technology to off-Amazon companies as well.
- Amazon S3 – Simple Storage Service – S3 essentially takes Amazon’s internal digital asset storage mechanism and opens it up to any third party. Thus the same Amazon technology that hosts their product images and what-not is open to the World.
- Amazon EC2 – Elastic Computing – Amazon has some amazing cloud/datacentre technology and they have opened this up to the World. We are starting to use this at ChannelAdvisor with some great results.
- What if Amazon platform-ized Prime? Any retailer could offer prime to their buyers and there could be scheme for rewarding retailers/associates that drive Prime signups. Prime could go from a great Amazon idea, to a near-internet-wide free shipping subscription program.
- Amazon payments – What if Amazon decouples payments in a more meaningful way? Over night they could have the number 2 payment system behind PayPal and take a serious run at those guys.
- What about the review and recommendation systems? Retailers would LOVE to be able to integrate those systems, and maybe even the content, onto their sites.
Ok enough dreaming for now, now that we’ve established the AOF let’s review the offerings we’re tracking on the blog here and put a stake in the ground of where we think these offerings are today.
|Vitamin C||Beta Product||Not announced/available – rumored at this point|
|Payments/Checkout||1.0 Product||Very under the radar|
|Private Label products||1.0 Product||Definitely under the radar|
|Trade-In (post coming soon)||1.5 Product||Exapnding categories, not quite a 2.0 offering yet, but heading there|
|FBA – fulfilment by Amazon||2.0 Product||Ramping nicely|
|ProductAds||2.0 Product||Starting to really ramp thanks to increased on-Amazon exposure|
|Prime||2.5 Product||Starting to promote – (blog post coming)|
|Pro merchants / Merchants@||3.0 product||Mature – on Amazon only – offering|