Amazon.com is working with Greenlight.com, a Californian
start-up that sells cars with the help of a network of 1,500 car
dealerships throughout North America. Amazon.com has bought a 5%
holding in the company for an undisclosed sum and has agreed to
promote the car site in exchange for $82.5 million over 5 years.
The partnership is part of Amazon’s push to become the destination
for all retail on-line. Apart from books, the company also now
sells CDs, DVDs, consumer electronics, toys, pet products,
kitchenware and garden furniture.
A car tab has been added to Amazon.com’s web site. However, some
other businesses that have paid to add tabs to the site have not
profited from the exposure to Amazon.com’s 15 million monthly
visitors. Living.com, an on-line home furnishings retailer that
agreed to pay $145 million over 5 years for a tab on the site, shut
down last week after it failed to raise extra cash. Similarly,
Drugstore.com agreed to pay $105 million for a tab and has also
since struggled to survive.
Car manufacturers in recent months have taken steps against
independent on-line car merchants. General Motors and Ford Motor
Co. advised their dealers that it is a violation of their franchise
agreements to sell vehicles to on-line brokers. Dealers have
generally supported this advice, taking the view that on-line
sellers are a threat to their industry.
Amazon.com earlier this week launched a French version of its
site, Amazon.fr.
