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.