Beginning April 27, U.S. businesses will be able to list products for sale on Google Shopping for free, without paying for an ad, the company has announced. Free listings will be rolled out globally over the next few months. The change had been in the works for some time but was moved up because of increased online shopping due to the coronavirus, Google president of commerce Bill Ready told The Verge. Google will still charge companies for top placement as promoted products, as it has in the past.
The move is clearly intended to lure retailers, especially small retailers, away from Amazon -- the undisputed leader among online marketplaces -- as well as from such platforms as eBay and Etsy. Amazon does not charge sellers to list items, although it takes a cut of every sale. Amazon normally offers shipping services to merchants, but it's suspended that service for non-essential items because of the current pandemic. That means Google's timing is good. But will it be good enough to lure small businesses to Google Shopping in significant numbers?
The company has been trying for a while to re-invigorate Google Shopping, for example with a redesign last fall. According to a Reuters report, Google executives discussed for months how to challenge Amazon's dominance of online shopping -- without spending billions to completely recreate Google Shopping, and without getting into the shipping business. One former Google exec told Reuters that offering shipping would be a daunting and hugely expensive prospect and it might still leave Google trailing Amazon's lead. As an alternative, some executives last year discussed possible partnerships with shipping companies that could have helped Google compete against Amazon's lightning-fast shipping. But, according to Reuters, top executives did not approve going forward with such a deal.
No more Fulfilled by Amazon for non-essential items.
Google is making its move at a time when many small retailers and direct-to-consumer vendors may be fed up with Amazon. In January, Amazon angered some sellers with a new policy disallowing free shipping based on a minimum purchase, such as $25. And in mid-March, as the company struggled with a surge in demand brought on by the coronavirus, Amazon said it would stop fulfilling orders on non-essential items on behalf of third-party vendors. Sellers had previously been able to ship items in bulk to Amazon's warehouse and then have Amazon send them on to consumers under its "Fulfilled by Amazon" program. Many vendors had to scramble to find alternate ways to get their products to purchasers.
But most sellers expect the Fulfilled by Amazon service will return once the ecommerce giant, which is hiring 100,000 additional workers, gets a handle on its logistics. And, although it's free to list on Google Shopping, if sellers allow consumers to make their purchases through the convenient Buy on Google feature, Google will take a cut. Then there's the fact that most online shoppers today begin their searches for products on Amazon, which offers a huge selection, a large number of user reviews, and in many cases, the convenience and reliability of Prime shipping.
Will Google letting sellers list their items for free overcome all of that? My guess is no. If Google wants to become a leader in the online shopping space, it will have to do much, much more.