Google has unveiled its plan to compete with Amazon in the online marketplace through commission-free shopping.
With the changes to its online marketplace, Google hopes to gain a competitive advantage following an 18 percent growth in e-commerce sales during the coronavirus pandemic.
The first change is that Google is no longer taking a commission fee when customers buy their products on Google Shopping.
“By removing our commission fees, we’re lowering the cost of doing business and making it even easier for retailers of all sizes to sell directly on Google, starting with a pilot that we’ll expand to all eligible sellers in the U.S. over the coming months,” says Bill Ready, Google’s President of Commerce.
The new zero commission service will begin as a pilot program but eventually, expand to all eligible retailers.
Not only will the change lower the cost of business, but it will also allow retailers to use their own payment provider, more effectively manage their customer service, and manage more of their processes, like returns.
Amazon still charges a commission for retailers to sell on its platform. Individual items have a fee of 99 cents per item, or retailers who sell larger volumes can sign onto a “professional plan” for $39.99 a month.
Google will also allow retailers to use third-party providers. This new development will enable retailers to use their preferred services for payment processing, inventory, and order management.
In his announcement of the new third-party system, Ready said, “we’ve heard from retailers that they want the ability to choose their preferred services for things like payment processing, inventory, and order management. That’s why we’re opening our platform to more digital commerce providers, beginning with Shopify for inventory and order management and PayPal and Shopify for payment processing.”
Alongside these two significant developments, Google is enabling commonly-used product feed formats.
By doing this, Google is allowing its retailers to upload products in the same format as Amazon. This new development will save retailers time as they will not have to reformat their data to sell on Google Shopping.
The elimination of fees and streamlining services are all part of Google’s plan to entice retailers to put market products to Google’s massive user base.
The new changes to the platform come after Google made listing products on the shopping tab free in April of 2020. Then in June of 2020, Google announced that free listings were coming soon to the search tab.
According to the New York Times, “Google is usually the starting point for finding information on the internet, but that is often not the case when consumers are searching for a product to buy. More consumers in the United States are turning first to Amazon to find products that they plan to purchase.”
The new developments will begin in the U.S. before expanding to the rest of the globe in 2021.
All of these new developments come ahead of the highly anticipated hearing before the House Antitrust Subcommittee set for Wednesday, July 29.
Amazon CEO Jeff Bezos, Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg, and Alphabet and Google CEO Sundar Pichai are all set to appear before the subcommittee in what The New York Times is calling the tech industry’s “Big Tobacco moment.”
The antitrust subcommittee hearing will cap a 13-month inquisition into accusations that the four tech giants have harmed consumers and wiped out their smaller rivals.
Consumer’s Research will be offering coverage of the subcommittee hearing on twitter @ConsumersFirst.