What Amazon’s Entry Into The Home Services Business Means For Local Marketing
Columnist Chris Marentis discusses Amazon's new professional services marketplace, explaining how it works and what its implications are for local businesses.
Amazon recently launched Amazon Home Services, a new marketplace for local businesses to sell professional services to customers. Using this new service, customers can purchase and schedule professional services, from electricians to landscapers to yoga instructors.
So, why is Amazon getting involved in selling home services? The better question might be, why wouldn’t they?
According to data provided to us by ERSI, consumers spent over $600 billion on local service providers in 2014 — including home maintenance, housekeeping services, lawn and garden care, and more. There is clearly money to be made — especially when you factor in the 85 million customers who purchase a product on Amazon which requires some sort of professional service (according to Amazon’s internal data). This market is huge, and Amazon is primed to take advantage of it.
Amazon Home Services has a business model that could be extremely disruptive and will almost certainly impact businesses such as Angie’s List and Yelp. Amazon will not charge an annual membership fee and won’t have to rely on advertising to account for a majority of its revenue. A strong business model coupled with a vast community of loyal customers could spell danger for all who try to compete.
Home service professionals themselves can offer everything they provide on Amazon — from installation and assembly to diagnostics and repair — and will be able to set price estimates, receive custom requests, and sell directly to Amazon customers.
How Can SMBs Get Involved?
[blockquote]Because Amazon is positioning the service as a trustworthy, vetted platform, it’s invite-only: Amazon says it accepts, on average, three out of every 100 service professionals in each metro area and that greenlit pro services have an average customer rating of 4.7 stars.[/blockquote]
Small businesses interested in joining this marketplace from the ground floor can click here to apply. Note that Amazon requires each business to be licensed (if applicable) and insured, and providers (including individual technicians) must pass a five-point background check in order to gain acceptance.
How This Benefits SMBs
Can you imagine being exposed to potentially 85 million new customers?
“In less than 60 seconds, customers can now browse, purchase and schedule hundreds of professional services directly on Amazon.com,” Amazon said in a press release.
What makes this so beneficial is the vast ecosystem Amazon has behind it. Amazon Home Services will join in on an already vast community – Amazon Prime. With this, Amazon gives its customers yet another reason to stay within their ecosystem rather than visit a third-party site. Last September, RBC Capital estimated that Amazon has 50 million Prime members worldwide, up from 20 million confirmed members last January. Will more now be tempted to become a Prime member with this added service?
Many (perhaps most) buyers search for products to buy on Amazon rather than Google. Amazon ranks services in terms of, “What product is the searcher most likely to buy?” whereas Google asks, “What results most accurately answer the searcher’s query?” In general, ranking in Amazon is more straightforward than ranking in Google, making it potentially easier on small businesses.
If you’re a home services business, you should definitely check out Amazon Home Services and apply for admission. As it rolls out, it will be interesting to find out how this platforms helps small businesses get more leads. There are certainly other providers who offer what Amazon Home Services will, but the crucial advantage for Amazon is that they are reaching customers at the moment they make relevant purchases.
Amazon hasn’t shared many details on how local business can make the cut, but I’m betting that local marketers are going to want to focus the efforts on the following:
- Web Presence. While it’s true this service is by invitation only, businesses with a strong web presence and well-known branding have a solid chance of being accepted since they are already easy to find.
- Content Marketing. Providers that already have a firm strategy in place to provide information about their services (as well as other information that their customers are looking for) have a good head start — not only with services like Amazon, but directly gaining customers as well.
- Credibility. Reputation management is key here, and this is important for all businesses as customers are constantly looking at the credibility of a business from other sites before they make a purchase. Amazon will be doing the background check of all businesses themselves and provide what they’re calling a “Happiness Guarantee.”
- Customer Reviews & Testimonials. Using automated review tools, small businesses can help ensure their customers provide testimonials and reviews for their work in a simple and easy way.
If you’d like to learn more about what Amazon Home Services has to offer, again check out their site (http://services.amazon.com/selling-services).
And it just so happens that the day after Amazon made its announcement, Google decided to come forth with its own plans about entering the home services industry. Digital Trends and Search Engine Land both have excellent pieces covering Google’s side of the story.