Amazon started out as an online bookstore, but has since expanded into selling almost any physical goods you can think of. But the company believes a lot of the stuff people buy on Amazon are things they could actually use help assembling, installing, or learning to enjoy. "We have 85 million Amazon customers who have shopped for products this past year that often require a service afterwards," said Peter Faricy, vice president for Amazon Marketplace. "Things like TVs, toilets, and sinks." Today, the company is launching a new section in the US, Home Services, where customers can shop for professional help. It's launching with 700 different services, from the ordinary to the esoteric, everything from installing a garbage disposal to renting you a goat herd that will graze away the unwanted vegetation on your property.
85 million potential customers a year
A big part of the sales pitch from Amazon is that they are doing the hard work of figuring out who you can trust. "We’re very excited to see if we can solve what today is a real pain point. It’s tough to quickly find someone who is qualified," says Faricy. Amazon says it accepts an average of three out of every 100 service professionals in each metro area. It makes sure each business is licensed, insured, and passes a five-point background check, with a further six-point background check for each technician. You will never need to worry about hiring a sub-par goat grazer again.
The second half of Amazon's promise is speed and transparency. The marketing materials claim it takes 60 seconds to buy a service, regardless of whether that is deck repair, house cleaning, or hedge trimming. "We really make something transparent for customers which is difficult today," says Faricy. "We have standardized and prepackaged all of our service offerings. So you know exactly what is going to be done and how much it’s going to cost you, up front, no surprises."
Don't hire a sub par goat grazer
That sounds nice, although it seems likely that many of these services won't be so easy to fit into just a few multiple choice questions. "They’re shoehorning local services into the same way they treat other products," Thumbtack CEO Marco Zappacosta told Forbes."But what about building a deck? Your deck is going to be different than my deck and your backyard is going to be different than my backyard."
One thing that Home Services hopes to help customers avoid is the up-selling and haggling over price that can come with a lot of service work. Faricy says that all the billing will run through Amazon, and that the provider only gets paid after the finished job has been confirmed. During the beta test, there were reports of customers who had issues with a surprise charge on their bill, which Amazon eventually resolved after a lengthy back and forth. Amazon takes a cut of each service fee, and while they wouldn't share exactly what the split is, language from the beta version of the website shows Amazon taking 20 percent on standard services, 15 percent on custom, and 10 percent on recurring.
Faricy says that the majority of the labor available on the market will be small, local providers, but Home Services is also integrating with startups like TaskRabbit as well as national chains like Pep Boys. Before today, Amazon was beta testing this offering in Seattle, New York, San Francisco, and Los Angeles. As of today, it will be available in 41 states, with the goal of providing strong coverage across the thirty biggest metro areas in the US. As for how big this business could be, Faricy points out that independent research shows consumers typically spend four times as much on services as physical goods, meaning a major new revenue stream for Amazon if Home Services is a success.
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