Amazon is telling all online merchants using its Webstore e-Commerce platform that it will be shut down starting July 1, 2016, according to posts on an Amazon forum. Although the e-Commerce giant has not confirmed the shutdown, it indicated on the Webstore site that the service will not be available to new sellers. Retailers using Webstore have 15 months to migrate to another web hosting service.
Webstore is the latest web hosting service to shut down. In February 2015, eBay discontinued its Magento Go offering, leaving SMBs scrambling to find another e-Commerce solution. Yahoo, meanwhile, announced its plan to spin off its Small Business platform into an independent company, called SpinCo in Q4 2015.
“It’s really difficult to start an online business once it’s live,” said Tim Schulz, Chief Product Officer at Bigcommerce. “You have to put a lot of work into the brand and the shopping experience. You have to configure payment gateways and accounting software, and the e-Commerce platform is really the heart and soul of a merchant — especially an SMB.”
Did Limitations And Lack Of Focus Set Amazon Webstore Up For Failure?
When solutions and services like Webstore fill such a significant market need and still fail, industry players can’t help but wonder: What went wrong?
A lack of customer focus and the need to tailor solutions and services to too many businesses may have been the root of the problem, according to Leah Anathan, CMO at PrestaShop, an open source e-Commerce platform provider. Webstore and Magento Go worked with thousands of businesses, which means they had to adapt to the needs of every end-user, a difficult task for even the largest organizations.
“The issue for these companies that are trying to serve the e-Commerce needs of everyone — from the largest vendors to the smallest vendors — is that you can’t really serve the needs of the small business without really focusing in on what the small business needs,” Anathan said in an interview with Retail TouchPoints. “A small e-Commerce business is oftentimes started by an entrepreneur that could be a first-time business owner. It’s not just providing them with a technology solution. You as a business have to provide them with the software and the guidance for marketing, payment and shipping, search and even product photography.”
After all, the e-Commerce needs of a top 100 retailer and a business just launching an e-Commerce site are vastly different, which makes the relationship building, solution development and management process extremely complex for service providers.
“If one of your clients is a major retailer, the business model and needs around that client are going to be much more people-intensive and personalized,” Anathan explained. “They’re expecting technology solutions and they have full-time experts in-house dedicated to their e-Commerce store. What they need from you is totally different from an SMB because they have legal, marketing, shipping and fulfillment people. They have people for everything, because it’s a multimillion dollar business all by itself.”
Additionally, the e-Commerce platforms that are closing have limitations, so many merchants invest extra time and money to find loopholes such as custom APIs or spreadsheet hacks to work around them, according to Schulz. Eventually, some sophisticated retailers will decide to take that investment and move to a platform that can handle more complex needs. When Magento Go announced its shutdown in July 2014, it had a built-in transition plan including timelines to ensure that its retail users could transition to Bigcommerce smoothly.
“My hope is that Amazon, Yahoo and some other providers choose to go down this road too, because it’s a real knock on their brand if they don’t take care of these people,” Schulz said in an interview with Retail TouchPoints. “They’re not just using a product that’s outside Amazon’s core business; a lot of them are listing on Amazon and they use this product in what ends up augmenting Amazon’s business. It would be good if they invested in a smooth migration plan with a trusted partner.”
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