Amazon has acquired Selz, a 7-year-old startup that helps entrepreneurs sell products online. The deal signals Amazon’s continued focus on third-party sellers as it faces potential competition from Shopify.
The acquisition was first noted in a blog post published last month by Selz CEO and founder Martin Rushe that recently surfaced on Twitter.
“We have signed an agreement to be acquired by Amazon and are looking forward to working with them as we continue to build easy-to-use tools for entrepreneurs,” wrote Rushe. “Nothing is changing for our customers at this time, and we’ll be in touch with customers as and when we have further updates.”
An Amazon spokesperson confirmed to GeekWire that the deal has now closed.
Selz, founded in Sydney, employs less than 50 people with total funding at $11 million, according to Crunchbase. It is one of many online services that provide technology to help small businesses operate e-commerce sites and process payments. It’s a market dominated by Canada-based Shopify, which has seen its stock soar amid the pandemic with the acceleration of e-commerce and more people launching online businesses. Shopify saw revenues climb to $767 million in the third quarter of 2020, up 96%, and its market capitalization is now approximately $177 billion.
Shopify helps power more than one million businesses across 175 countries, including large brands such as Allbirds, Heinz, and Staples Canada. It also has a bevy of partnerships with other large platforms and retailers; last week it launched its payment processing system Shop Pay on Facebook and Instagram. And in 2019 it launched a Shopify Fulfilment Network to help customers store and ship goods.
Shopify and Amazon are different — customers don’t buy products on Shopify.com, for example — but in many ways they are competitors as both cater to small businesses and online merchants.
“The story of Shopify’s rise, then, is in many ways a reaction to Amazon’s,” New York Times contributor Yiren Lu wrote in November. “It’s about a new generation of e-commerce merchants who want a shot at securing control by going out on their own. If the key to Amazon’s success has been to put the customer first, for Shopify the key has been to put the merchant first.”
Third-party sellers help Amazon offer a wide selection of products to customers on its marketplace, beyond items sold by Amazon itself. Those sellers are responsible for more than 50% of the tech giant’s “total paid units,” a percentage that has steadily increased over the past decade. That number reached a record high 55% in the fourth quarter. Revenue from Amazon’s third-party seller services spiked 57% in the holiday quarter to $27.3 billion, making up 21% of the company’s total revenue.
Amazon previously ran a Shopify-like service called Webstore but shut it down in 2015.
It’s not crazy to view this Amazon acquisition, however small, as an acknowledgment of the long-term threat Shopify could pose to Amazon.
Shopify has huge base of small and midsized merchants, the beginnings of an online marketplace in the Shop app, & young fulfillment network https://t.co/mD6bsf8MWf
— Jason Del Rey (@DelRey) February 16, 2021
Asked in 2019 about the potential rivalry between the two companies, Shopify CEO Tobi Lutke dismissed that notion but noted that “Amazon is trying to build an empire, and Shopify is trying to arm the rebels.”
Q: #asktobi people are starting to characterize Shopify as the next Amazon. Is that the right lens to view your strategy?
– @jwangARK— Tobi Lutke ???????????????? (@tobi) October 11, 2019
