Amazon Versus Angie?

Category: Reference

Amazon Local Services debuted recently, allowing customers to purchase contractor services for setup, installation, and repair work. In contrast to the huge noises it makes about smartphones, tablets and Kindle ebook readers, Amazon has been quite circumspect about easing into the local service professional business, which puts them in direct competition with Angie's List and other players. Read on for the full story...

Amazon Wants to Sell Plumbers Now

Everyone knows you can buy books -- in both physical and digital form at Over the years, they expanded into electronic gadgets like the Kindle, and the Fire lineup that includes smartphones, tablets and a streaming video stick. And now, you can buy almost anything at the online behemoth.

So why not plumbers, electricians and painters? Or perhaps even an Amazon-approved accountant? Amazon crushed the brick-and-mortar bookstore industry; will they also kill competing services like Yelp and Angie's List, which offer reviews and referrals to local service professionals? (And will they offer Free 2-Day Delivery of overall-clad plumbers, or will those guys still need their own trucks?)

Today, only Amazon customers in Los Angeles, New York, and Seattle will see offers from contractors, and only when they are shopping for goods that require such contractors’ services. There isn’t actually a category for “plumbers,” for instance. Even Amazon’s library of daily press releases – which includes announcements of executives’ retirements – don’t mention Local Services.
Amazon Local Services - Angie's List - Yelp

Such caution is a good idea when venturing into the shark-infested waters of local contractor services. As most homeowners know, fly-by-night operators and outright scammers are fairly common. For Amazon to put its reputation and legal liability on the line is a big risk, and taking it slowly is surely the best strategy.

But Amazon does plan to go “all in,” as poker players say. Reports indicate that the company will guarantee customers’ satisfaction with contractors’ work or refund their money! The word is that Amazon contractors must provide proof of professional licenses and/or registrations applicable to them, over $1 million worth of insurance coverage, and a clean background check. That would put Amazon Local Services a clear step ahead of many of its competitors.

Who Can You Trust?

By contrast, Craigslist provides absolutely no information about an advertiser’s reputation. Yelp provides consumer reviews and is widely believed to manipulate those. Staff at Angie’s List will help an aggrieved customer obtain satisfaction. But if the contractor advertises on Angie’s List the customer’s unflattering review is expunged, leaving future customers in the dark. About two-thirds of Angie’s revenue comes from ads, which prompted Consumer Reports to question the reliability of the service.

Amazon may be able to overcome its late start in the local services market by establishing a high standard of customer satisfaction and trust. That will take time, and may cost Amazon quite a bit of money. Sure, Amazon won’t need to buy inventory or build warehouses for service providers, but it will need to spend a lot of labor and cash on recruiting and vetting contractors, and on resolving the disputes that arise inevitably from contracted home improvements.

But the addition of contractor services will fill a large, important gap in Amazon’s e-commerce strategy. Amazon is already huge in physical goods; the services sector is an equally large plum. If Amazon can sell you solar panels, it should be able to sell you installation and maintenance services, plus a local accountant who can help you write it all off your taxes.

It’s no coincidence that Amazon earlier this year introduced a smartphone-based payment card reader similar to those offered by Square, Inc., and Paypal, or that it’s named Amazon Local (cash) Register. Local small businesses are the last frontier for e-commerce. Wooing them takes great effort.

It looks like an interesting road ahead for all players in the professional services review and referral business. Home improvement giants Lowe's and Home Depot also have their own contractor referral services. Google Local wants to connect consumers with local businesses. If Amazon gains traction, some analysts speculate that Google, Yahoo or eBay may enter the fray, or up the ante by acquiring Yelp.

Have you used an online service to hire a contractor or service pro? Tell me about your experience. Post your comment or question below...

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Most recent comments on "Amazon Versus Angie?"

Posted by:

16 Dec 2014

I think that this could work, though the rules vary from state to state (and often city and county for that matter) as to what is required for registration, licensing and liability insurance. Your best bet is to always get a minimum of two estimates and check out referrals and the BBB. Word of mouth from people you know who are credible is always something to consider. The lowest cost is not always the best buy.

Posted by:

16 Dec 2014

To supplement your interesting blog in just one respect: Amazon has developed a very effective customer review process that drives some of its ecommerce effectiveness. It has the potential to outYelp Yelp and make local services more responsive to customers. This is a very promising development.

Posted by:

16 Dec 2014

Did you check with Angie's List about expunging bad reviews? I asked them about it, and they responded that they don't remove a review unless the member requests it, or if the member confirms that the review is for the wrong provider. They don't allow anonymous reviews, and they don't allow reviews from people who are affiliated with or related to the provider.

It sounds like they're doing things right. I've been unimpressed with some of Consumer Report's articles in the past, and this may be one where they were wrong.

Posted by:

16 Dec 2014

I welcome Amazon into the mix, and as a very dissatisfied former Angie's customer, I hope Amazon seriously kicks Angie's butt. I ran into the problem of dealing with an Angie's advertiser when I hired them to make repairs to my mobile home. The company I worked with had stellar ratings on Angie's. But they took forever to finish a job. In fact, they never really did finish. And what they did, they had to redo and fix problems they created along the way. They overcharged for their services and did shoddy work. They made appointments to come out and work and then either failed to show entirely or showed up several hours late. And yet, they touted their "straight A" Angie's ratings, and I found out why: They weren't scared of upset customers because they knew Angie had their back. When things went south and I mentioned I had recently seen a horrible review posted on Angie's, they told me that review was being removed. They eventually refunded some of the money I'd paid, on the condition that we "not post any reviews on electronic review sites." Feeling stung by their high prices and shoddy service, and frankly, wanting to just be done with them and Angie's, we accepted the deal and took the money. I immediately canceled my Angie's account (not an easy thing to do), and I now advise anyone who asks that I don't think Angie's service is worth the money. I've been fairly consistently happy with Amazon's services and they certainly couldn't do any worse in my book.

Posted by:

16 Dec 2014

Hardly a week goes by that there's not a story on TV about some contractor ripping off the public. Almost always the same story- the contractor overdraws on the job and they didn't check them out for references and many times they don't even have a contract. A fool and his money is soon parted. My friend asks the question - how did they ever get together in the first place?

Posted by:

16 Dec 2014

If Amazon goes ahead with this I hope they do a better job with vendors than they do now. We bought a laptop through Amazon from one of their vendors listed as new, refurbilshed on both ends of box. Vendor wanted 15% restocking and me to pay for the return, sure hope they don't go into roofing!

I'll stay with Angies List.

Posted by:

Richard Christensen
17 Dec 2014

It would be better to focus on articles that relate to operating, upgrading, managing, repairing, tuning up a computer rather than using the internet to hire a contractor. You are getting out on a tangent when you look at this kind of thing. There is a myriad of other sites that address this issue. You should get back on track and write articles that help computer users use their computer.

EDITOR'S NOTE: Thanks for your comment. I write about computers and the Internet. Certainly "operating, upgrading, managing, repairing, and tuning up a computer" is important, but it's just one piece of the puzzle at Using the Internet (and related gadgets) to get stuff done is just as important to me, and (I hope) many of my readers.

Posted by:

17 Dec 2014

We are an Angie's List provider, and pay several thousands of dollars to them each year to advertise and to run email "Big Deal" offers. And Angie's List refuses to delete the two negative reviews we have, one of which isn't even from a customer! We gave the person an estimate and they ripped us to shreds in a review saying that we were ripoff artists and liars. (Um, hello, all we did was tell you how much it would cost to hire us. All you needed to say was, "No.")

So I'd love to know where you get the idea that negative reviews are deleted for providers who advertise through Angie's List. Because it sure ain't happening for us.

Posted by:

Greg C
17 Dec 2014

A year ago I "purchased" installation of a gas range from a retailer with large stores in both Canada and the USA. The contract, with a supplier in Toronto, was sublet to a local and well know multi trade contractor in my city. The salesman arranged for a visit which I though a bit unusual, I expected a qualified tradesman to visit and asses my installation.
The visit by the salesman was very confrontational. I was VERY clear that he did NOT want the installation contract. He tried to find issues that would stop the installation; The distance of the gas line was well within the original contract.
He offered to give me an estimate. I told him that I had already paid for the installation. He replied, " You haven't paid nearly enough" I told him I'd get back to him. I ultimately got a quote from a utility installer that was similar to what I had paid ( & refunded )from the big box store.

Posted by:

17 Dec 2014

I do not trust Angie's list The BBB is just as bad giving great reviews without looking into complaints.

Posted by:

j b spence
17 Dec 2014

Yelp certainly does filter reviews.

If the subject of your comment is one of their advertisers, forget posting a critical review.

Posted by:

17 Dec 2014

Angie's List. Visit it to get reviews. Just hand over your credit card info to learn anything. Heavy advertising on tv. They don't mention the fee involved until you get to the website. To me that's deceptive. Then someone posts that they charge contractors to advertise. Let's hope Amazon is less deceptive. When customers enter reviews, that's a help to prospective customers.

Posted by:

18 Dec 2014

A service in Colorado was doing this for the Denver area - they had criteria for recommending contractors and carefully followed up. I think they're still in business.
The biggest problem I saw was that in smaller areas feedback on contractors and workpeople is difficult to obtain and verify.
In my opinion, common sense is needed whenever purchasing services or goods. Accepting the word of any entity, whether it is Angie's List or Google without examining the advice carefully is an invitation to be taken.

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