News Feature | April 7, 2015

Amazon To Close Webstore, E-Commerce Platform For SMBs

Source: Innovative Retail Technologies

By Brianna Ahearn, contributing writer

Shopping retailer Amazon not only lets merchants sell items on, it also let merchants set up their own webstore with a program called Amazon Webstore. The retailer has offered the e-commerce platform since 2010, but now the retailer will phase out the program. Re/Code and reported the news on the shutdown. Amazon Webstore works in a model similar to Shopify, allowing small to midsize retailers to set up and manage an online store for $79 monthly. The program includes all of the tools a retailer needs to have an online store with fraud protection, secure payment processing, website design and more. Now the program will be phased out, as reports say Amazon has been telling their online merchants via letter.

Merchants began posting about their letters on the Seller Central message board run by Amazon. The letter, according to posters, features the following: We are writing to let you know that, effective July 1, 2016, we will discontinue the Amazon Webstore service. Your ability to sell on and your Selling on Amazon account will not be impacted by this change.” The letter includes a promise that the Webstore service will be supported until July 1, 2016, to give participants enough time to migrate effectively to new platforms. Amazon Webstore will let its merchants export data up to this point as well.

The marketplace for merchant services has changed, and Amazon Webstore has faced increased competition from heavyweights such as Big Commerce and Shopify, which sees $7 billion in merchandise processed on its system. The company launched in 2009, and now has over 80,000 storefronts created. Amazon Webstore closing makes financial sense for Amazon, as Big Commerce and Shopify continue expanding their tools to improve business and gain new cusomers. Auction retailer eBay once offered an online software platform, Magneto Go, for small e-commerce retailers, and it too closed, with eBay shuttering the program in summer 2014. In the gap left behind by Amazon Webstore, the stage is set for Big Commerce and Shopify to receive increased business. In November 2014, Big Commerce raised $50 million in Series D funding for further development of their platform, marketing initiatives and market expansion. Shopify too has received capital, and in 2013, they raised $100 million in Series C funding.

Luckily for Amazon Webstore merchants, there will be no shortage of platforms to which they can migrate. There's no word yet on whether Webstore's development team members will be integrated into other facets of Amazon's business. Amazon has been the subject of several high profile stories including their continuing attempts to secure permission to use delivery drones,  and place 3D printers on delivery trucks. Amazon also has a program Login and Pay with Amazon that let online merchants use Amazon's payment system rather than Paypal or other credit card merchants for one-stop shopping for consumers. Amazon Login and Pay will exist after Amazon Webstore, and the retailer will continue expanding the business to new merchants, providing a decent competitor to Paypal.