Amazon courts startups, SMBs with Launchpad fulfillment service

Launchpad is an indication that Amazon's fulfillment network and ecosystem for third party sellers is becoming a differentiator.

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Amazon on Tuesday outlined a service called Launchpad that's designed to bring startups and small businesses on its fulfillment network and marketing platform quickly.

Launchpad is an indication that Amazon's fulfillment network and ecosystem for third party sellers is becoming a differentiator and potentially the best way to fend off the likes of Wal-Mart. Wall Street analysts have been putting Amazon's fulfillment network on par with Amazon Web Services in terms of growth potential.

For instance, Jefferies analyst Brian Pitz said in a May research report:

We continue to believe there is a big opportunity centered around Amazon optimizing its e-commerce fulfillment ecosystem. Amazon remains the clear leader in fulfillment based on number of offerings, global footprint, and ability to manage demand elasticity through its digital assets.

Amazon's Launchpad service promises to offer easier on boarding, custom product pages and marketing help in addition to the fulfillment network. Should an enterprise use Launchpad as well as Amazon Web Services it's possible the e-commerce giant could be the soup-to-nuts back-end for a startup.

The hope for Amazon is that it will manage inventory, customer service and fulfillment for startups that can launch products faster and build on its platform. The timing for Amazon is also notable given that eBay recently sold its eBay Enterprise unit, which is seeing defections from large players including Dick's Sporting Goods and Toys R Us.

Launchpad is also likely to compete with marketplaces from eBay and Etsy.

Large companies are increasingly bringing their e-commerce operations in-house to leverage digital and physical channels. That reality means that smaller companies will be the new battleground for third party fulfillment players.

In a statement, Amazon outlined the following:

  • Product pages and a Launchpad store designed to showcase startups and their wares.
  • Reach and marketing help through the network.
  • The ability to expand globally via Prime as well places that Amazon's supply chain can go.

Amazon has partnered with a bevy of venture capitalists and crowd-funding platforms. On the business tech front, Andreessen Horowitz is the most notable venture capital partner.

Early Launchpad companies include Casper Mattress, Cuff DVB Smart Sports Band and Bluesmart Smart Carry-On Luggage.