Google Drops Some Commissions, Launches Recommendation Engine

Google has been busy on the ecommerce front lately, announcing a plan to drop commission fees for sellers who use its Buy on Google checkout service, while making its pilot-tested product recommendation engine publicly available to let sellers display more personalized offers.

In addition to eliminating the commission fees for sellers, Google has opened up its Google Shopping platform to third-party providers, starting with PayPal and Shopify. Google is banking on these moves drawing sellers to its platform from Amazon, eBay and newer platform entrant Facebook.

“These changes are about providing all businesses—from small stores to national chains and online marketplaces—the best place to connect with customers, regardless of where a purchase eventually occurs,” said Bill Ready, president of commerce for Google, in a blog post. “With more products and stores available for discovery and the option to buy directly on Google or on a retailer’s site, shoppers will have more choice across the board.”

The commission-free program is launching with a pilot in August, and eligible sellers can sign up to be put on a wait list. Google Shopping commissions normally range from 5% to 15%.

By comparison, an individual seller plan on Amazon costs 99 cents per unit sold, and an unlimited professional plan is $39.99 per month. Amazon sellers also pay a referral fee ranging from 5% to 20% per item, depending on the category.

Facebook Shops, which launched in May, charges a 5% commission for transactions above $8 or 40 cents per order for those under $8. Sellers with a basic eBay account pay a 10% commission on most items, up to $750 maximum, according to The Balance Small Business; those with a store subscription plan are charged lower fees.

Google’s Recommendation AI, available in public beta, draws on a consumer’s search and buying history using deep learning and metadata to serve up personalized recommendations. Using similar or shared patterns across customer attributes and behavioral data, it creates models to determine likely next clicks or purchases to make its recommendations.

Qubit, a provider of AI-powered merchandising and personalization, is an early partner with Google, making Recommendation AI available to its customers, which include Estee Lauder, Kurt Geiger, Shiseido and Tailored Brands.

One response to “Google Drops Some Commissions, Launches Recommendation Engine

  1. Amazon shot themselves in the foot by screwing amazon associates (affiliates) by drastically reducing their commissions. Now all google needs to do is offer a better affiliate structure to drive all the SEO traffic to their sellers. Take that Amazon

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