Amazon has made it almost effortless to purchase a book, an iPad, or thousands of other physical products. You find the product you want online and order with one click, and it shows up at your door a few days later.
Now Amazon is trying to do the same thing for personal services like plumbing, lawn mowing, and music lessons. Amazon Home Services, which has been under development for the past year but officially launches today, promises to let people order personal services in much the same way that they've always ordered physical goods, complete with customer reviews and a money-back guarantee.
But it won't be easy to make ordering services online as effortless as ordering physical goods. While iPads come in a few well-defined models, every plumbing job is different. A lot of companies have tried to sell services online, and so far none of them has figured out how to make the process as easy as ordering a book online.
Amazon is entering a crowded market
In the past, when you needed to hire someone to trim your trees or change your oil, you'd pull out the Yellow Pages and make a call. The internet has changed this process in some respects — you're more likely to use Google or Craigslist rather than the phone book — but the customer is still forced to do a lot of the work himself. Customers need to check a provider's references, verify that they're properly licensed and insured, and negotiate a fair price. For many customers, it's a stressful and intimidating experience.
A number of technology companies have been trying to make this process easier. Angie's List started out as a Yelp-style review site for services, but in recent years it's increasingly acted as a middleman, matching customers with service providers directly. Amazon competitor eBay launched a service called eBayHire in 2013, though it seems to have abandoned the product since then.
There are also newer startups, including TaskRabbit and Thumbtack, that help customers order services online.
Amazon brings two big assets to this already crowded market. One is its brand. As the nation's largest online retailer, Amazon has earned the trust of millions of American consumers. In a market where customers are nervous about getting subpar services, the Amazon brand could help put skeptical customers at ease.
Second, Amazon has a lot of experience partnering with third-party providers. While Amazon's original business model was to sell products it owned from its own warehouse, much of the company's recent growth has been from listing products from third-party providers on its site. So Amazon knows how to recruit third-party providers, vet them for quality, field customer complaints, and make the entire process seamless for users.
According to TechCrunch, Amazon is working with some of these smaller service startups, such as TaskRabbit, to help deliver services to customers.
Why selling services online is hard
There are a lot of successful startups that sell physical products like shoes and sunglasses. But the services market seems to be a tougher nut to crack.
A big reason for this is standardization. When you sell physical products, you often have to keep track of a lot of different variations — a single line of shoes, for example, can come in many colors and sizes — but they're still well-defined and standardized. So when you order shoes online, you can tell exactly what you're getting.
But services are performed by individual human beings, which makes them inherently difficult to standardize. The fact that a plumbing company did a good job on my neighbor's toilet last week doesn't guarantee that it will do a good job on mine this week, since it might not send out the same guy.
"They’re shoehorning local services into the same way they treat other products," Thumbtack CEO Marco Zappacosta told Forbes. "What about building a deck? Your deck is going to be different than my deck and your backyard is going to be different than my backyard."
A lot of services have this character: it's impossible to say exactly what a professional can do and how much the service will cost without a personalized evaluation. And that runs against the grain of Amazon's business model, which is all about using technology to streamline the purchasing process.
Still, there are probably some services that can be standardized. For example, Amazon's move into services began with a pilot program that was focused on installation of products customers had bought. If you bought a flat-screen TV, Amazon would offer to connect customers with a professional who would mount it on the wall. That's a simple enough service that it probably is possible to offer uniform pricing. The big question is whether this is the norm or a rare exception.