Most people go to Amazon.com for books, music and movies, but soon you may be logging onto the popular website to find someone to patch that hole in your roof and hook up your cable.
That’s right: Amazon is breaking into the home improvement industry. Preparations began two years ago, when Amazon employees in the company’s hometown of Seattle started shadowing home repair workers, taking notes and gauging interest from providers and potential customers. They’ve since expanded test programs to New York and LA, according to six service providers who worked with Amazon, and more locations are coming soon.
The home improvement service industry is fragmented but has been bouncing back in recent years, estimated to be about worth $400 billion. It’s no wonder that Amazon’s looking to cash in, especially since it’s one of the last industries without a significant online counterpart. Though the exact numbers may change, Amazon plans to start taking a cut of as much as 20% from services brokered on its new web service as soon as mid-august.
“This could be an exciting new direction to put potential clients in touch with home services companies,” says Gregg Buffington,President of Buff Exteriors LLC
. “We would gladly welcome anything in our industry that raises the bar across the board on quality and customer service!”
The new development is worrying to investors, who’ve already begun to cite concerns about how much the company is spending on new and speculative business ventures. Only a few weeks ago, Amazon broke into the POS industry as well.Similar initiatives to draw home improvement services and small businesses online haven’t been met with much success. Yelp and Craigslist advertise and often rate available services, but potential clients still usually have to pick up the phone and call for services.
Angie’s List would be the closest competitor to Amazon’s new initiative, and it doesn’t exactly offer a blueprint for success either. So much money has been spent on advertising for the site that the company is constantly in the red, and small businesses remain notoriously difficult to rope in.
Amazon’s team on the ground hopes to reach out to well-regarded service industry contractors and capitalize on customer loyalty, even including a money-back guarantee in some trials for unsatisfied customers. Participating contractors are required to reply to calls within 24 hours and submit to annual background checks to ensure quality.
While some trial participants are worried about having to overcharge to make up for Amazon’s cut, others are satisfied with the influx of new clients, even before advertising made the program widely known.