Is Amazon slowly making some progress with Checkout By Amazon (CBA)

August 10, 2009

ChannelAdvisor ChannelAdvisor By ChannelAdvisor

I’ve been talking to lots of reporters and Wall St’ers about Amazon lately and one of the things that seems to frustrate them (yet also make them that much more interested) is that Amazon doesn’t really say much about their business.  The answer to these questions:

  • How many Kindles have you shipped?
  • How many Prime buyers are there?
  • How is EC2 going?

is usually a benign: ‘we are pleased with the progress, but have more to do’.

Refresher: How Amazon develops products
In a past post, I talked about, from a partner’s perspective at-least, how it appears that Amazon develop ‘products’ or ‘offerings.  If you didn’t get a chance to read it, the summary is that Amazon seems to go through this product lifecycle:
  • 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.  

 

What’s up with CBA?
Back in July of 08, we broke the Checkout By Amazon (CBA) story over on sister site, eBay Strategies and here we are a year later and there hasn’t been a lot of notice to what Amazon is up to.  With the recent rumors of Facebook, Apple and Twitter all entering the payments battle with Paypal, I thought it would be interesting to ‘check back in’ with CBA and see what’s new.  Also, we’re hearing more and more SMB retailers talk about the program and see it show up with various ecommerce platform providers and some bigger name retailers.
Three public CBA resources to keep an eye on.
Since Amazon isn’t out issuing press releases or talking about CBA on their quarterly earnings conference calls, you have to dig a little more to find out what is going on.
  1. Official CBA home page – This is the official landing page for CBA.  You can monitor here to see any news related to product features and any webinars coming up.  For example, there is a webinar on August 25th that maybe of interest to readers.
  2. Partners page – You have to dig around a bit, but here’s where Amazon lists all of the carts and ecommerce partners they have for the program.
  3. Retailers list – This one is very hard to find and I have to spend a good bit of time digging to find it as it’s kind of buried in here.  Now you don’t have to as I’ve linked right to it for you. This page lists the retailers that accept CBA.
  4. Ok this is a bonus – Job postings – It’s always interesting to see where Amazon is hiring and CBA seems quite active which is a signal that this effort isn’t just ‘coasting’.
Let’s explore where CBA is with the commerce providers and then retailers based on this information.
CBA and the ecommerce platform providers
Amazon seems to have made the most progress with what I call the ‘open source carts’: zencart, magento and oscommerce seem to all support CBA with some community effort.
Probably the biggest commercial carts/platforms to support CBA are Miva Merchant and cardinal commerce.
All of these players really hit the very smallest of small and in many cases ‘brand new to ecommerce’ merchants, so while CBA is getting some traction here, it’s not likely to result in a ton of TPV (transaction processing volume).
 
CBA and retailers
Regardless of platform, retailers are free to directly integrate with CBA.  The retailer page shows that CBA is offered by about 322 retailers.  I don’t have my IR500 list handy, but from memory, there are three of interest that are strong brands/top online retailers:
  • Toolking.com –  An IR500 company that does some great work with social networking and has some innovative micro sites like Tooliday.com
  • Patagonia –  A manufacturer that sells direct and via retailers like REI, Dick’s Sporting Goods, etc.
  • Jockey –  A manufacturer that sells direct.
 
It’s interesting to look at each CBA implementation of these brands to see specifics of how they have implemented CBA.
Cba_toolking
Cba_patagonia
Cba_jockey
Toolking has PayPal above CBA.  Patagonia only has CBA and Jockey has both PayPal and Amazon, on the same horizontal line with PayPal to the left of CBA.
One interesting trend is that you see two manufacturers adopting CBA. Amazon has lots of manufacturer relationships and there are lots of manufacturers that want to sell direct to consumers.   I wonder if Amazon could somehow pressure/reward vendors/manufacturers that add CBA – that’s one angle they have that nobody else in the space does.
Where is CBA in the Amazon product lifecycle?
Based upon these findings, my best guess is thatCBA is getting some ‘behind the scenes’ traction, but Amazon certainly isn’t pushing it super-hard.  Thus I’d say it is in the 2.0 phase or more like 1.5 – it’s not a closed program, but Amazon isn’t actively promoting it that hard in a public-facing way.
CBA is having some early success in the first year with providers, over 300 retailers/manufacturers and they are methodically adding some interesting new features.  We’ll continue to keep a close eye on CBA and report their progress on a quarterly basis.
SeekingAlpha Disclosure – I am long Google and Amazon. eBay is an investor in ChannelAdvisor