Google Announces Test With No Commissions for Sellers Using Its Shopping Platform

Expanding on an initiative it began April that offered free listings for some merchants, search-engine leader Google on Thursday announced a test that charges zero-percent commissions to online sellers when they sell a product through its Shopping Actions service.

In addition, sellers can use Shopify Inc.’s payment service as well as PayPal if they want to stick with their current third-party payment providers. Google, the chief subsidiary of Mountain View, Calif.-based Alphabet Inc., had said in April that new merchants on its shopping site could link their Google and PayPal accounts. Google calls it the Buy on Google checkout experience.

“These changes are about providing all businesses—from small stores to national chains and online marketplaces—the best place to connect with customers, regardless of where a purchase eventually occurs,” Bill Ready, Google’s president of commerce, said in a blog post. “With more products and stores available for discovery and the option to buy directly on Google or on a retailer’s site, shoppers will have more choice across the board.”

According to information on Google’s Shopping Actions site—Shopping Actions, which is available in the United States and France, is the platform for the Buy on Google test—commissions currently range from 5% to 12%, depending on the product. Ready, the former chief operating officer at PayPal Holdings Inc., didn’t say how many merchants can participate in the pilot or how long it will last. But he indicated it will be expanded.

“By removing our commission fees, we’re lowering the cost of doing business and making it even easier for retailers of all sizes to sell directly on Google, starting with a pilot that we’ll expand to all eligible sellers in the U.S. over the coming months,” his post says. The free listings and no commissions presumably will enhance Google’s competitiveness with online marketplace leaders such as Amazon.com Inc. and eBay Inc. Ready also said Google has made it possible for online merchants to import their inventory listings into Google with only a few clicks and without having to reformat their data.

Thad Peterson, a senior analyst and e-commerce researcher at Boston-based Aite Group LLC, says Google is looking at the rapid growth of digital commerce created by the Covid-19 pandemic and seeing it as an opportunity to increase its market share against Amazon. “With Google’s share of the browser market (47% of the U.S.), they have a good story to tell merchants, and removing the commission could swing merchants toward Buy with Google and away from competitors,” Peterson says in an email message.