Update: Amazon readies fulfillment service for SMBs

Amazon targets SMBs with two new services for handling online stores

Amazon.com Inc. is now offering to host small and medium-size businesses' (SMBs) online stores and handle their order fulfillment process.

The two new services, called Fulfillment by Amazon and WebStore by Amazon, are now available in test, or beta, form, the Seattle e-commerce giant announced Tuesday.

Amazon has provided services such as these to large retailers for years, but it is now targeting SMBs that lack the time and resources to handle these tasks.

Retailers that sign up for the fulfillment service send their products to an Amazon depot. When customers place orders, Amazon will pack and ship products and provide post-sales customer service support like returns and refunds.

Fulfillment by Amazon's handling fees start at US$0.50 per item plus $0.40 per pound and a storage fee of $0.45 per cubic foot per month. Retailers can also extend to their shoppers special shipping options from Amazon, like free shipping on certain orders.

Meanwhile, WebStore by Amazon handles the hosting of an online store, including bandwidth allotment based on traffic patterns and payment processing. Amazon charges a 7 percent commission on each product purchased, plus a monthly fee of $59.95. Retailers can choose from various layout options and post their own photos and logo to customize the site.

To sign up for either service, companies must be registered as an Amazon Pro Merchant seller. That merchant program for selling products on Amazon's Web site costs $39.95 per month.

Amazon currently has almost 1.1 million sellers in its Pro Merchant program, and these new hosted services are tailored for them, said Tim Mirick, director of Amazon's Business Solutions Group.

"This is focused on helping them extend their business from our channels to their own Web site," Mirick said.

One of them is Kathy Wojtczak, owner of Element Jewelry & Accessories in Seattle, at http://www.elementjewelry.com, who has been testing the WebStore service for about a year and selling on Amazon for about two years.

"If it weren't for this Amazon WebStore program, I wouldn't be able to handle having my own Web site," she said, adding that she lacks the time and technical knowledge to run an online store. "It would be overwhelming for me."

Until now, she has been trying out the service for free, but she finds the proposed fees to be very reasonable. "I would probably spend four times or more that amount to hire a Web designer and someone to manage the site," she said.

Other providers offer this type of service, but she sees value in having a well-known, trusted brand such as Amazon host her site and process her transactions. "Customers know the credit card transactions are going to be securely processed and their information kept private," Wojtczak said.

Wojtczak hasn't tested the fulfillment service but will seek more information about it, although she's not sure she needs it at this point.

More information is available here.