May 19, 2024

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Specialists in technology

Google drops commission fees for retailers, aiming to take on Amazon


Google headquarters in Mountain View, California. 

Stephen Shankland/CNET

Google on Thursday said it’s nixing commission fees for retailers selling products on the company’s shopping platform, as the search giant tries to catch up to Amazon and its dominant ecommerce operation.

Previously, Google charged merchants to list items with the company’s Buy with Google program, which lets people buy items directly through Google’s website instead of being sent to an outside digital store. The fee was about 10 to 15% of the sale, comparable to Amazon’s rates. The pilot is starting in the US before expanding internationally. 

The apparent goal is to build up Google’s shopping service by luring sellers to list their items there in addition to other platforms, instead of skipping Google because of extra fees. 

“This removes a major barrier for marketplaces to participate because the duplicate commission has gone,” Bill Ready, president of Google’s commerce division, said in an interview. “Now they can more easily participate.”

For consumers, the change could mean seeing a bigger selection of products when they search on Google. The company could then try to persuade sellers to run more paid product ads on its platform. As it stands now, Google isn’t a major ecommerce player. In the US, Amazon is the undisputed leader in online sales, with 38% of the share, according to research firm eMarketer. Walmart is a distant second, with just shy of 6%, followed by eBay’s 4.5%. Google doesn’t crack the top 10.  

Google also said it will let sellers import their inventory data to Google’s service from other ecommerce platforms, including Amazon. The company is also partnering with PayPal and Shopify, which helps people create online stores, for payment processing and order management. 

The changes intensify an already fierce rivalry with Amazon. The two tech giants have been warring on multiple fronts, including smart home technology. Google’s Home smart speaker and Assistant voice software have been sprinting to catch up to Amazon’s Echo and Alexa.

Ready wouldn’t address Google’s competition with Amazon. Google also declined to disclose how many merchants it has in its Buy with Google program, or how much revenue the company has generated through commission fees in the past year. 

Thursday’s updates come as Google makes a bigger push into ecommerce. In April, the company brought free retail listings to its search engine’s shopping tab. Last month, Google expanded the listings to be shown directly in the company’s search results, some of the most prized real estate on the internet.

Google has drawn blowback in the past for its shopping efforts. Two years ago, Google was hit with a $1.7 billion fine from the EU for what the commission called “abusive” ad practices, especially when it came to the placement of Google’s shopping ads.

Next week, Google CEO Sundar Pichai will join the heads of Facebook, Amazon and Apple at an antitrust hearing as part of an investigation by a House Judiciary subcommittee. Google is expected to address questions about its digital ad business, as well as accusations the company’s platforms give preferential treatment to its own products. 

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