Pando

Amazon reportedly plans a new platform for inventors

By Nathaniel Mott , written on January 7, 2015

From The News Desk

Amazon is currently working on a new platform to help inventors develop and sell their products, according to a Re/code report based on job listings and anonymous sources.

The platform would put Amazon in conflict with Kickstarter, Indiegogo, and other tools purporting to make it easier for tinkerers to fund, market, and sell their product ideas. (Amazon is not currently funding projects, to my knowledge, but could in the future.)

It would also make Amazon something like the App Store, which is used by developers small and large to release software products, with the hope of finding success that might have eluded them if they tried to release their applications through other distributors.

Guiding small companies and independent inventors through the process of marketing a product, shipping it to consumers, and otherwise using Amazon's resources to evolve from a small operation to a bona fide business would also serve Amazon's own interests.

The company claims to have shipped roughly 5 billion items in 2014, and many of them -- 40 percent, or 2 billion -- were purchased from third-party sellers through Amazon's marketplace. The Wall Street Journal reports that some analysts suspect Amazon has a better margin on these items than those it stores, ships, and sells directly to consumers.

Encouraging more companies to sell through its marketplace could then give Amazon even better margins, and it might even allow the company to get an exclusive hold on products which eventually become very popular, depending on the platform's terms.

It would also allow Amazon to continue profiting from the rise of crowdfunded products now that Kickstarter, the premier community-based funding platform, has abandoned Amazon's payment service in favor of Stripe. (Michael Carney has more on that here.)

The App Store became popular because it provided to developers the best tools for reaching the most people to some of the most popular smartphones around. Amazon could do the same with this platform -- if it provides the right tools to inventors and offers them good marketing deals, its best-in-class online marketplace can do the rest.

Amazon has made some strange decisions lately, especially where its Fire Phone is concerned. But unless it makes a series of disastrous mistakes, creating a platform like the one Re/code describes wouldn't be one of them.

[illustration by Brad Jonas]