Pando

Amazon offers inventors the logical follow-up to a successful crowdfunding campaign

By Nathaniel Mott , written on March 11, 2015

From The News Desk

Amazon has announced a new storefront dedicated to products which found life on Kickstarter, "Shark Tank," and presumably other places where inventors panhandle to turn their idle concepts into mass-market goods.

The storefront is called Amazon Exclusives. And while the products will still be available directly from their manufacturers, Amazon claims it will be the only third-party marketplace from which consumers can purchase these gadgets and gizmos.

Rumblings about Amazon Exclusives started in January, when Re/code reported that the company was working on a new, inventor-focused platform. This is a little different from what was expected -- Amazon is merely selling these products, not helping them along the development process -- but it's still an interesting move.

As I wrote when Amazon's plans were first hinted at:

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. That aspect of Amazon Exclusives hasn't changed. It still allows the company to take advantage of the attention crowdfunded products receive, and even if it offers companies a sweetheart deal to get exclusivity, it can still keep its healthy margins.

The storefront also provides crowdfunded companies another way to keep the orders coming after their projects have ended. Kickstarter, and other tools, are stores, but they're only open for a limited amount of time. Amazon is always open.

Amazon's own hardware efforts have stumbled as often as not. The company is at its best when selling others' products, and so taking advantage of that strength to offer exclusive selling rights to crowdfunded projects is a no-brainer.

[illustration by Brad Jonas]