There’s a massive new middleman for replacement contractors to contend with: Amazon. The omnipresent online retailer announced in late March that it’s launching Amazon Home Services, which is designed to connect shoppers with 700 service providers including plumbers, various types of installers, and general contractors.
Much like other services such as Angie’s List and Yelp, Amazon’s entry will heavily rely on user reviews to help customers decide which contractor to hire. It’s already partnered with the online handyman finder TaskRabbit. But Amazon says that it will also vet contractors with background checks and an assurance that they have the correct licenses and insurance. The company even plans to offer refunds of up to $2,500 if customers aren’t satisfied, according to a report in The Wall Street Journal.
Approved contractors will be listed in the Home Services department and alongside related products, so a customer shopping for flooring, for instance, would also see flooring installers, according to company information. Unlike Angie’s List, which is behind a pay wall, all of this would be available for free to the 85 million customers Amazon says shop for products that require professional services.
Of course, all this comes with a price: Amazon wants to set the cost of services, and plans to take a cut of between 10% and 20% of each service arrangement, depending on the type.
For now, the service is mainly limited to major cities with plans to roll out wider in the coming months. Larger replacement jobs such as roofing don’t seem to be on the list of services—yet. But contractors and industry experts agree that it’s most likely only a matter of time before Amazon becomes a formidable player in the replacement contracting world.
“Jeff Bezos wants to rule the world,” said John Gorman, president of Save Energy Company, referring to Amazon’s CEO. “So I wouldn’t bet against him.”
The prospect of getting leads from Amazon and its 270 million customers is tantalizing to Gorman. He said he’s become less satisfied with the leads he’s getting from Angie’s List, despite paying more money for his listing. But he and others say there’s much still to be determined about Amazon’s new service.
What it does make clear is the growing importance of customer reviews in getting new business, says Bill Good, executive vice president of the National Roofing Contractors Association (NRCA). “Contractors need to pay attention to online reviews,” he said. “Those review are really going to start to matter now.”
Good says that the NRCA will reach out to Amazon in an attempt to ensure that it properly vets roofing contractors. He said an effort by Sears years ago to offer a roofing contractor service harmed the industry because proper vetting wasn’t done. Instead, the service became known for cheap, low-quality work, and eventually failed.
The Vinyl Siding Institute (VSI) also hopes Amazon will favor its certified installers, said Kate Offringa, VSI president, who notes “exterior siding project” is still in the beta testing phase.
“If VSI certified installers are listed on a referral network with the imprimatur of Amazon, then that’s a win-win for homeowners,” she added.
Maybe, but Gorman says that it’s still not clear what Amazon plans to do for contractors. His biggest concern right now is how the revenue sharing will work. “If they have to get in our books and vice versa, that will be awkward at best,” he said. “I’d like to see how they pull that off.”
Still he knows this is one middleman he can’t ignore. “It’s
Amazon,” he said. “So I have to take it seriously.”