How will Amazon’s ‘Make an Offer’ impact marketplace management?

Industry Insight

When one used to think of the term “marketplace,” images of bustling tents and booths may come to mind, with merchants and shoppers haggling over prices like in the old days. As of 2014, however, the word “marketplace” is more commonly used to refer to online retail platforms that feature other merchants’ wares, such as Amazon or eBay.

However, it seems Amazon is looking to harken back to those traditional marketplaces with a newly announced “Make an Offer” feature. While the program will be limited in its implementation – it only applies to products in categories such as sports collectibles, coins and fine arts – it allows people to haggle with sellers and negotiate with them directly.

‘Make an Offer’ only applies to products in categories such as sports collectibles, coins and fine arts

Internet Retailer reports that shoppers will be able to shop normally through marketplace offerings. After finding items in one of the special categories, such as a signed movie poster, they can choose to either add the items to their carts and purchase them or click a button that allows them to propose their own prices. The price is then sent via email to the seller, allowing merchants to accept or reject the offer. They can also choose to make a counteroffer if they want to compromise.

“The new ‘Make an Offer’ experience is a game-changer for Amazon customers looking for great prices on one-of-a-kind items, and for sellers looking to communicate and negotiate directly with customers in an online marketplace environment just like they do normally in their own physical store or gallery,” says Peter Faricy, vice president for Amazon Marketplace.

“In a recent survey of our sellers, nearly half of the respondents told us that the ability to negotiate prices with customers would be important to drive more sales on Amazon. ‘Make an Offer’ delivers that functionality and makes customers feel confident they are getting an item they want at the lowest price possible,” Faricy added.

What does ‘Make an Offer’ mean for marketplace sellers?

The quick answer to that question depends on what kind of products retailers sell. For most merchants, “Make an Offer” may not wind up meaning much unless Amazon expands the categories the service can be used with.

“In a recent survey of our sellers, nearly half of the respondents told us that the ability to negotiate prices with customers would be important to drive more sales on Amazon.

However, for collectible and antiques seller, it could very well add another variable that complicates the management of marketplace listings. Managing product information and listings across myriad marketplaces is already a complex task, requiring merchants to use product information management and other solutions to expedite the listing process and help maintain a consistent shopping experience across all channels.

“Make an Offer” adds yet another complexity in that merchants will need to be more hands-on with the selling process as they negotiate prices with buyers. Yet at the same time, it may also help retailers secure more sales. Customers will not feel as if they are getting ripped off and will be more likely to try to negotiate than simply start looking for another vendor.