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Wednesday, September 29, 1999 Published at 16:49 GMT 17:49 UK


Business: The Company File

Amazon to become online shopping mall

Amazon has invested heavily in distribution

Amazon.com, the US-based online bookseller, is to become the "supermarket of the web."

From Thursday, it will open its website to thousands of traders, ranging from companies to individuals, to allow them to sell direct to the public.

The company says that over 500,000 items of merchandise, ranging from holidays to clothes, will be available on its website under the so-called zSHOPS programme.

Shares in Amazon shot up by 15%, or $9.75, when the news was announced, adding $3bn to the value of the company.

"The number one complaint with e-commerce today is that people can't find what they are looking for. But we want customers to find anything online," said Jeff Bezos, the founder and chief executive of Amazon.

zSHOPS galore

Under Amazon's plan, sellers pay the company a fixed fee of $9.99 a month for webspace to list up to 3,000 items. Smaller individual sellers can list an item for 2 weeks for ten cents.

Amazon also gains a fixed fee of between 5% and 1.25% of anything sold.

Sellers are responsible for stocking and delivery of the items offered, but Amazon says it will guarantee refunds of up to $250 on any item that is broken or not as expected.

Analysts say the move will allow Amazon to expand the traffic on its site while generating more revenue, and without huge start-up costs.

Since it was launched in 1995, Amazon has become the biggest online retailer with a customer base of 12m. It has expanded from selling books to music CDs, videos, toys and electronic equipment, and now boasts an online auction site.

It has made heavy losses, however, investing in distribution systems and buying up other websites, such as drugstore.com and pets.com.

"Amazon has said all along that their goal was to provide people with access to every product they could possibly want. This is getting them closer to that goal," said Ken Cassar at Jupiter Communications.

Rivals advance

Meanwhile, in Europe Amazon.com's main rival, Bertelsmann Online (BOL) has launched its sixth internet site this year in a bid to overtake the US company as market leader in Europe.

Bertelsmann's Swiss site adds to its bookselling services already available in Spain, the UK, Germany, France, and the Netherlands. In November it will add music CDs to the latter four sites.

"Europe is running two years behind the U.S. but we are sure Europe will grow quicker than the U.S.," said KlausEierhoff, Bertelsmann's head of multimedia.

The company wanted to be the leading pan-European e-commerce site and in the medium-term the leading international site, he added.





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