Amazon, The Services Firm

CHICAGO -- Online retailer Amazon.com is launching a services subsidiary to sell its Web-sales and fulfillment platform to retailers, CEO Jeff Bezos said Tuesday at the Retail Systems trade show here. Those services now comprise 20% of Amazon's unit sales and represent the fastest-growing part of the company's business, he said. "If the current trends continue, it could easily become the majority," he added.

Companies such as Target and the National Basketball Association are among Amazon's customers.

Bezos said Amazon spends about $200 million a year on business technology, and that it has spent about $900 million on IT since its founding. That compares with about $700 million spent on marketing and customer acquisition and $300 million on warehousing and fulfillment centers. "I think the $900 million has been our best-spent [money]," he said.

Many retailers are deciding that Web sales will represent only 5% to 10% of their business, not 50% as so many had anticipated, Bezos said. They need a Web platform that lives up to the standard of their in-store brands, but at a price that's cost-effective, he said. Bezos predicted that Web sales ultimately will represent about 10% of all retail sales. Says Bezos, "It's critical to have an opinion about what percentage of your sales will realistically come from online, long term."