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With New Launches, Amazon Plans for Day When Product Sales No Longer Lead to Growth

The launch of Amazon Destinations and Amazon Home Services point toward a new approach for the e-commerce giant.

Asa Mathat
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

As Amazon sees growth slip in the number of items it moves each quarter, the Seattle retail giant is increasingly looking to sell something new: services rather than products.

In the last few months, Amazon launched two initiatives that suggest the company is laying the groundwork for the day when it’s no longer relying on product sales for growth. Earlier this week, the company announced Amazon Destinations, a marketplace for booking local hotel getaways. And last month, the business formally introduced Amazon Home Services, which lets shoppers book plumbers, home cleaners or TV installers through Amazon.

The moves may eventually help counteract the following trend line: Amazon’s year-over-year unit growth has steadily ticked down, dropping from 30 percent to 23 percent to 20 percent, during the respective first quarters of the last three years.

Such deceleration isn’t surprising for a company on the scale of Amazon, which now boasts a customer base of 278 million. But it’s also not good.

Of course, Amazon’s entry into these new business lines doesn’t guarantee success. But it’s a sign the company is willing to experiment to find new areas of growth for its core marketplace business. Compare that with the approach of eBay, which has declined to expand its marketplace beyond physical products and whose core shopping business shrunk for the first time in five years last quarter. A source told Re/code that eBay has quietly run some pilot tests around selling services, but is still weighing whether to publicly launch any such initiatives.

In the meantime, Amazon is making its move. While AWS is already the fast-growth darling on the business-to-business side of Amazon, the company’s nascent marketplace for services may one day do the same for the consumer side.

This article originally appeared on

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