Google announced today that it will eliminate fees it charges retailers for its Google Shopping service to attract merchants on rival Amazon. Google Shopping, a comparison service owned by Google, pays Google if retailers want consumers to buy their goods directly through Google Shopping.
Google announced today that it will cancel the fee. The move is the latest in a series of similar moves by Google to make it easier and cheaper for retailers to sell products to the millions of consumers who use Google’s search engine every day.
Google is the world’s dominant search engine, but almost half of Americans are looking for something to buy on Amazon, while only 22 percent look for google, according to a survey last year by Civic Science, a research firm.
Google Shopping has been around for years, but so far retailers have had to list their products by buying ads. If people buy directly on Google, sellers also have to pay a commission of up to 12% on the transaction.
Now, Google is removing these two obstacles and starting to display a list of free products directly in the main search results.
In terms of the online marketplace, Google is nowhere near as good as Amazon’. By the end of 2019, Google Shopping had about 3,700 stores and other merchants, compared with 3 million active sellers on Amazon, according to Marketplace Pulse, an e-commerce research firm. Without these merchants, Google would not have enough product lists to drive it into a leading e-commerce destination.
Google’s move to cancel Google Shopping comes as a growing number of small businesses complain that Amazon is squeezing them up more. Data show that up to 40 percent of every dollar of sales generated by third-party merchants on Amazon goes to Amazon, including warehouse spending and advertising costs that drive up product locations in product search results.
Bill Ready, Google’s president of commerce, said the department is bringing the changes to market so that businesses can use them as quickly as possible.
Reddy would not comment on competition with Amazon, but said Google’s vision was to make it easier and cheaper for merchants to sell their products to consumers. In addition, Google announced that it will integrate with Shopify and PayPal to help merchants manage inventory and sell products directly on Google. Reddy also revealed that there will be more business consolidation in the future.