Amazon Launches Amazon Vehicles
Posted on October 31, 2016
Do you remember Amazon’s infancy when they only sold books and CDs? If you do, welcome to you, our middle-aged friend!
Nowadays, there doesn’t seem to be any product beyond Amazon’s reach – the company has even put its name in the hat to compete with supermarkets on non-perishable goods with Amazon Pantry. Their latest commercial venture is Amazon Vehicles, a car comparison website which enables people to research car prices and read reviews.
Currently, the website very much works like Autotrader and is a direct competitor to them and other companies offering advice and information on vehicles. People can read professional reviews on thousands of vehicles, as well as see pictures, videos, specifications, prices, or post their own reviews.
Although Amazon Vehicles is about information at present, it is likely that it is the stepping stone to launching a fully-fledged sales service at some point in the future. And they are indeed in a fantastic position to do so, as Amazon Your Garage, which allows people to look for spare parts and accessories, has grown into a 300-million strong community of active users since its inception in 2006.
Although Amazon Vehicles was launched only recently, about 35 million users have already registered their vehicles in the US. In comparison, TrueCar, a leading car website in America, ‘only’ has 7 million visitors. With such a huge advantage, Amazon Vehicles is a force to reckon with in the automobile world and may well steal away customers’ of the websites that currently dominate the market.
Amazon is also savvy when it comes to offering services that may not have a huge financial value to them or their customers but encourages their loyalty. Think about Amazon Prime, for example. In a very impatient society, offering unlimited next-day delivery may be the single reason why a consumer will decide to buy from Amazon rather than another retailer. In the same vein, Amazon has negotiated a test-drive partnership with Hyundai whereby cars are brought to potential buyers’ homes for them to try out, before recommending a local car dealership where they can finalise a purchase.
With the power that comes with a captive audience of 35 million users, you could see why Amazon is in a strong position to negotiate similar deals with other car brands.
Amazon Vehicles may also give a voice to niche car manufacturers which wouldn’t otherwise be able to break through for a lack of a network of physical stores. By-passing the middle men to reach markets directly has proved an effective strategy for ‘independents’ in other industries, as iTunes and YouTube have proved, with their platforms allowing musicians to do without the big machinery of recording companies to rise to fame; or Amazon themselves which provides publishing services to authors.
While the initial response to Amazon vehicles is promising, nobody can predict whether it will be lasting and have an impact on the automotive industry, but it could well be an unprecedented chance for small vehicle manufacturers to get access to markets. Electric vehicles, solar vehicles and driverless vehicles come to mind, and Amazon could prove to be the channel small start-ups need to succeed.
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