Conclusion: Continuous Change at Amazon
There is always something new being introduced at Amazon. The IT people are continuously working in the background to stay ahead of the latest technology. If you look on the Web Services solutions page, there are always betas being tested.
Shoppers can use their cell phone to reach an Amazon store and text message for a comparison of any item name, UPC code, or ISBN number. If the price is right, the customer can order it from Amazon via replying to the text message. It also sends a link to the product page, so the user can browse more details. The response comes back within seconds. This is a great way for your customers to see if they can save a few dollars by buying a product online from you versus at a brick-and-mortar business.
New widgets are regularly being added. For retailers, there is the Amazon Flexible Payment Service (FPS) marketplace widget that offers Web site developers the ability to transfer money between two other parties, with complete control of fees paid to the developer. The new widget helps developers create shopping carts, e-commerce platforms, and marketplaces. E-commerce service providers, shopping cart providers, or marketplace application developers can use this widget to facilitate payments between buyers and sellers.
The “Pay Now” widget, a quick way to accept payments on your Web site, is enhanced. These widgets, with their easy-to-use HTML function, allow you to copy and paste in the FPS. This can be the only payment or one of the alternative payment methods on your site. The “static button” can easily get you started. You use this button to create a Web page that requests payment when you already know the amount customers are going to be charged for an item. After a payment is processed, Amazon returns the reference ID, an Amazon payments transaction ID, and the payment status to your Web site. Also, all the information related to your transactions is available at your payments account. After processing a transaction, Amazon payments sends notification e-mails to you and your customers.
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You can upgrade your static button to the “dynamic button” at any time, if necessary. This dynamic widget can be used when you may want to alter the price on a regular basis. For instance, you sell a number of different items, and the customer is charged based on the product(s) selected or you charge different shipping rates based on the customer’s choice. Use the dynamic button when selling a number of different products and not wanting to use the widget creation form to make a button for each product. You can create a button once and customize it each time you display it on your site.
The “alternative payment method” widget is used when you want to offer Amazon payments as a choice in addition to an existing payment option on your site. For instance, you want to offer Amazon payments as well as your credit card offering or other payment method. Third-party developers such as e-commerce solution and shopping cart providers and marketplace application developers can use this widget to facilitate payments between buyers and sellers. You can also use the widget to charge a marketplace fee to your sellers for using your Web site/application.
The “video” widget gives Associates commissions from Amazon product links embedded in the videos. You can create new videos to promote specific products or use ones you already have produced and incorporate them into the Amazon widget tool. After watching your video, people will have the option of adding your video to their own site. Associates have an option of showing straight product information, something new about the theme of the Web site, or anything that is just plain nonsensical or serious. With this widget, Associates can earn money when viewers follow the links and purchase products. They can also easily add pop-ups to existing videos and have price and product information appear anywhere in the video.
The service health dashboard, on Amazon’s back end, provides access to current status and historical data about Amazon Web Services offerings. This gives developers and users a means to determine how well the Amazon platform is operating. If there is a problem with a service, you can expand the appropriate line in the details section.
The Mechanical Turk enables developers at different companies to programmatically access an on-demand workforce. They are able to rely on the feature to build human intelligence right into different applications. Computing technology may be always improving, but many things still can be done better by humans rather than computers, such as identification of objects in a photograph or video, carrying out data duplication, transcription of audio recordings, and conducting research on data specifics. Over the years, companies have hired temporary workforces to finish these types of tasks. The goal of the Mechanical Turk is to easily and cost-effectively access human intelligence.
The name Mechanical Turk stems back a couple of hundred years. In 1769, Hungarian nobleman Wolfgang von Kempelen amazed Europe by constructing a mechanical chess-playing automaton that beat almost every player. In the display, a life-sized wooden mannequin, adorned in fur-garnished clothing and turban, sat on a wooden cabinet to represent the automaton. The device toured Europe and bested such intelligent competitors as Benjamin Franklin and Napoleon Bonaparte. To respond to people who were skeptical, Kempelen revealed complicated workings that powered his mechanized chess player. He made everyone believe that he had developed a machine that could apply artificial intelligence. No one knew that a chess master was cleverly concealed inside.
Companies are using the Amazon Mechanical Turk service, which consists of the brain power of actual people around the world, for a variety of services. For instance, this service lets companies ensure the high quality of its work. When many people offer the same answer, a function can be approved. Other organizations rely on the Mechanical Turk to find duplicate entries in directories or catalogues and verify item details, such as phone numbers and hours of operation. They are also relying on this service to gather a wide variety and extent of information that would not be possible otherwise, such as letting individuals ask questions from a computer or mobile device about a specific topic and allowing people to respond with their results, complete survey data on numerous subjects, complete reviews, descriptions, and blog entries for Web sites, and find specific fields of data elements in huge private and public documents. Some companies are leveraging the power of the Mechanical Turk to complete podcast editing and transcription, translations and rate the accuracy of search engine results.
With the Mechanical Turk, companies define “HITs,” or the specific information that they are seeking at the lowest price. The clearer the guidance given the user to accomplish the HIT, the better the outcome, and the more people will complete the work at a faster pace. The best HITs explain specifically how a query should be answered and what needs to be done for the accurate response. In most cases, workers are qualified before being permitted to complete tasks. These can consist of finishing a brief series of questions or simple duties that must be done. In some cases, workers need to answer a minimum number of their submitted HITs correctly before taking on additional assignments. Qualifying workers allows companies to choose a particular demographic of workers and/or to train the workforce in what type of response is required. Payment for the HITs is handled through Amazon Payments.
Although the work is quite mechanical and pays only cents to a few dollars, thousands of people from the United States and other countries worldwide have completed tasks on www.mturk.com. Some of the tasks include tagging a variety of images with labels to help with searches in a database and pairing a company with its industry, such as information technology, human resources, or health care. This does not command much mind power, nor take long, but people find it fun and interesting and a good way of learning more about how the online system works. Companies get thousands of workers at a low cost doing the work in a short period of time.
The Online World to Come
Despite the ups and downs of the marketplace, a number of trends bode well for those who now get on the online e-commerce bandwagon. An Art Technology Group survey found that many of the most well-known Web stores plan on maintaining or growing e-commerce investments in the coming years. Changes in consumer spending do not greatly influence their e-commerce business, or may even have a beneficial impact resulting in this expansion. The survey acquired information from 50 global brands in industries including a broad spectrum of retail, media and entertainment, financial services and insurance, telecommunications, consumer product manufacturing, health care, and technology consulting. Although all respondents had a minimum of $10 million in Web sales, most, or 58 percent of participants, reported annual Web sales of at least $100 million, and 26 percent of these said annual Web sales were at least $1 billion.
Specifically, the research showed that:
- 96 percent of respondents plan on either maintaining or increasing their level of investment in e-commerce or ways to improve the customers’ Web buying experiences.
- Of all those who responded, 4 percent reported they would invest less in e-commerce so they could focus on other marketing and sales channels.
- It is reported that 48 percent of those surveyed state that any slowing of U.S. economy would not significantly impact e-commerce business.
- 22 percent of respondents believed the slowing U.S. economy may lead to a positive impact on Web business, which results in e-commerce expansion.
- Sellers report tools as improved search strategies as essential for gaining digital dollars with an emphasis on building loyalty, as consumers have fewer dollars in general to spend. The overall conclusion was that consumers are looking for bargains and ways to save gas and thus are turning to the Web. “…so the time is now to take advantage of the opportunity to delight new customers and turn them into repeat buyers.”
Such findings are indicative of other studies that say the sales growth, although not continuing at such a major rise as today, will still bring in billions of dollars. In June 2008, the e-commerce research source eMarketer® published the following based on Department of Commerce statistics: U.S. retail e-commerce sales, except for travel, reached $146 billion in 2008, an increase of 14.3 percent over 2007, which totaled $127.7 billion. Other reports state that this increase will be even larger, and e-commerce in Europe is expected to be up 27 percent from 2007 to 2008.
From 2007 to 2012, sales in the U.S. will increase at an 11.3 percent average annual growth rate. In 2007, almost four-fifths of American Internet users, or 133 million individuals, shopped online. By 2012, an additional 25 million people will join them, raising the amount to 158 million, or nearly 83 percent of Internet users.
Amazon has separate international sites that allow about 25 countries worldwide to buy goods and services. Global sales need to be pursued by Amazon and its affiliates to maximize growth and expansion. In 2005, for example, Amazon entered China through an entity called Joyo.com®. In 2008, Joyo.com opened up a new operations center in Beijing. Although in the past, Chinese have placed an emphasis on saving and been reluctant to use credit or buy online, this is changing with the younger population. The China Market Research Group conducted interviews with 500 young adults between 18 and 32 years of age across China, and nearly 80 percent said they made an online purchase in the last six months. The vast majority expected to buy again in the next quarter. 70 percent said they would use a credit card for online purchases if they had one. They said as long as they trust the seller, they will buy items online. Surveys also show that more than eight out of ten Japanese and South Koreans used the Internet to buy items, and China is expected to surpass these numbers within a few years. In other words, the world is open to those individuals who have the determination and fortitude and decide to spend the needed time, energy, and resources to establish and grow an online business.
Case Study: Andy and Debbie Mowery
Andy and Debbie Mowery
Debnroo, Inc.
Ft. Collins, Colorado
970-416-6300
Andy and Debbie Mowery, who own two Amazon stores for pet supplies, as well as another online business on their own for home and garden merchandise, made the move from eBay, where they were highly successful, to Amazon in 2007 to grow their business even more. Since then, they have had a “good, solid revenue stream” of income. “I wish I had taken this step even earlier,” said Andy Mowery.
The Mowerys are examples of e-commerce entrepreneurs of the future who look at every angle possible for growth and presently see Amazon as the right avenue for their efforts. Not only are they Amazon Associates and WebStore owners, but they also are suppliers to Amazon for some of their pet items. In addition, they participate in “Clickriver,” an Amazon pay-for-click program that allows advertisers to purchase sponsored links alongside Amazon products.
Andy Mowery calls Amazon “the best mousetrap to capture today’s online buyers.” He adds that yesterday was the time to jump onto Amazon. There are some categories that are already saturated and closed for new store owners, but that should not discourage anyone. “You need to be open to new ideas and realize there are many other ways to succeed.” The goal should be, he said, “getting into Amazon any way that you can.”