Amazon Partners With Startups to Sell Crowdfunded Products

Amazon.com launched a new platform on Tuesday that will help startups advertise and distribute their products directly to millions of Amazon customers, filling an important gap for entrepreneurs trying to reach a wider market of consumers.

The online retailer is partnering with more than 25 crowdfunding platforms like Indiegogo and venture capital firms to offer 200 products on the platform, which is called "Amazon Launchpad." Amazon said it is not working with Kickstarter in "any official capacity" for its program.

Some of the products are already available on Amazon.com, but the program will be listed on Amazon's Launchpad store.

Amazon will manage inventory, fulfill orders using its own distribution network and provide customer service for a margin of the startup's sales.

An increasing number of startups are tapping crowdfunding platforms like Kickstarter to line up financing for everything from new films to gadgets, but it is also an area fraught with challenges.

Entrepreneurs can attract massive interest in a new gadget through crowdfunding sites, but often find it difficult to actually market and distribute orders on time to a large number of consumers.

"As the pace of innovation continues to increase within the startup community, we want to help customers discover these unique products and learn the inspiration behind them," said Jim Adkins, vice president of Amazon in a statement.

"We also know from talking to startups that bringing a new product to market successfully can be just as challenging as building it."

The company will also help companies expand globally when startups are ready to ship products to consumers outside the United States. Startups will also be able to offer their gadgets to members of Amazon Prime, the retailer's popular $99-year subscription service.

"Before Launchpad I thought we would have to go directly to consumers and begin talking to retailers, but we leapfrogged that phase," said Jake Levine, the founder and CEO of Electric Objects, a startup based in New York that sells Internet-connected screens that can display thousands of different artwork on the wall. The startup launched a Kickstarter campaign last July that raised nearly $800,000 (roughly Rs. 5 crores).

"The fact that I can go from zero to Amazon Prime is unprecedented," said Levine.

© Thomson Reuters 2015