In 2015, Amazon launched Home Services. The venture was designed to establish a network of independent home contractors so people could buy a computer or faucet on Amazon and arrange for installation during the checkout process. They included automotive repair services into the mix almost as an afterthought. Two years later, Amazon Home Services has not taken the world by storm like most of Amazon’s ventures. To anyone who has worked at a shop or a parts store, this is not a surprise.
Home Services ignores the complexity of a late-model vehicle — even for the simplest of repairs. For example, if you try to order tires, it does not ask if the vehicle has TPMS. Also, services like timing belt replacement are not model-specific. This type of ambiguity can result in shops giving estimates that wildly vary.
Even in test market cities like Seattle, Los Angeles and Chicago, the shops listed are few and far between when you look at certain ZIP codes. In cities like Cleveland and Detroit, there are almost no shops participating. Part of the reason for this, according to some shops, is that Amazon wants a 10-percent commission for reoccurring repairs and a 20-percent commission for one-time-only repairs.
Also, there are no real qualifications for becoming a service provider for Amazon Home Services. The only piece of third-party information they want is a link to a Facebook, Yelp or other online review website as part of a background check. I managed to get approved in less than 24 hours. I am not licensed or insured. They do offer consumers a “Happiness Guarantee” that is vague at best and allows customers the ability to “return” your services for a refund.
If I had to make a bet, Home Services automotive offering will be phased out within two years. But, I am sure someone at Amazon will come up with something that is bigger and better.
Should You Be Worried?
Amazon claims there are 80 million Prime members using their services. Your shop might even have a Prime membership. Some technicians even make the majority of their tool purchases on Amazon. In short, it is difficult to ignore this tech goliath.
What has made Amazon successful is it has made transactions on the Internet “frictionless” for consumers. They have also lowered the anxiety for consumers by offering easy returns and a secure place to shop. One click or swipe and your items are ordered. There is a lesson to be learned here.
What really troubles me is that some parts manufacturers and warehouses have made deals to sell directly to consumers on Amazon. This has already caused problems for shops because prices for some specialty and fast-turning parts are far below jobber price sheets and even the big three retailers. These prices on their website are public and available to your customers.
There are other questions about Amazon’s ability to enter the auto care space, namely centered around same-day parts delivery and their ability to cut down on current lag times. While Amazon might not have vehicle repair figured out quite yet, one bet is for sure: If Amazon is able to make vehicle repairs easier and more convenient, the industry will find a place for them.