Google to waive commission fees on products sold via the ‘Buy on Google’ checkout option

Ecommerce startups

Google is making it free for retailers to sell products in search results by waiving fees for sales made via the ‘Buy on Google’ option. ‘Buy on Google’ is a payment option that lets customers buy products without leaving Google search results.

The option to buy products directly on Google is made available to customers when they click on shopping listings in search results.

Like other online payment providers, Google has always charged a commission fee for sales made through its platform.

Now, in a pilot launch, Google is charging zero commission fees when customers make purchases through the ‘Buy on Google’ option.

“Today, we’re taking another important step to make it easier for retailers to sell on Google. Soon, sellers who participate in our Buy on Google checkout experience will no longer have to pay us a commission fee.”

‘Buy on Google’ Now Commission-Free

‘Buy on Google’ is just one of several checkout options available in shopping listings, though the other options all involve a visit to a separate sales page.

The greatest advantage ‘Buy on Google’ offers over other payment options is the streamlined buying process.

Customers literally buy on Google. There’s no need to visit another page.

With today’s announcement ‘Buy on Google’ isn’t just a convenient option for customers, it’s become one of the most affordable ways for businesses to sell products online.

Google is effectively shaking up the e-commerce world in a number of distinct ways.

1. Level Playing Field

Google is reducing the barrier to entry for businesses who couldn’t afford to sell products through competitors like Shopify and PayPal.

This levels the playing field to a certain extent and will allow more companies to take their business online.

Google states in an announcement:

“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.”

2. Competition for PayPal and Shopify

Many of the web’s leading payment providers charge serious fees for retailers to conduct business using their platform.

That’s all part of the cost of doing business online though… or is it?

All of a sudden retailers have an option to accept payments online and not pay out a commission fee.

This gives Google a competitive advantage over other payment providers.

If the same product is sold through both ‘Buy on Google’ and a competitor, the retailer will keep more of the money from the ‘Buy on Google’ purchase.

With that in mind, retailers may shift their focus toward driving sales via ‘Buy on Google’ to increase their profits.

That would in turn create competition for platforms like Shopify and PayPal.

However, Google seems more intent on working with competitive platforms than against them. We’ll get into more about that later.

What Does Google Get Out of This?

In exchange for zero commissions, Google reaps the benefits that come with keeping a user in Google search results.

The longer someone stays inside the Google ecosystem the more money Google can make serving ads and collecting data.

Therein lies the catch for retailers.

Every time a sale is made through Google that’s one more customer not visiting the retailer’s website.

On one hand, the retailer will earn more revenue from the Google sale as a result of zero commission fees.

On the other hand, the retailer misses out on valuable lead generation opportunities that are unique to on-site sales pages.

When a customer visits a retailer’s website they may opt-in to things like memberships or mailing lists, which are key for customer loyalty.

So that’s something businesses need to consider before being easily swayed by zero commissions.

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