OpenAI is planning to take a cut from online product sales made directly through ChatGPT as the company looks to expand revenues beyond subscription fees, according to Financial Times sources.
Currently ChatGPT displays products within its chatbot interface with an option to click through links to online retailers. Now it aims to integrate a checkout system into ChatGPT so that users can complete transactions within the platform and so merchants can pay a commission on those sales.
Taking a cut of sales from ChatGPT would allow OpenAI to make money from free users in lieu of offering advertising, which is a group it hasn't yet been able to monetize.
I like, and I hate it.
Pros: Obviously, OpenAI was going to monetize its e-commerce operations at some point. Taking a cut of sales feels like a more democratic way for merchants to participate in ChatGPT’s e-commerce ecosystem without having to shell out upfront money for advertising. When only paying a commission, the fees are incremental to sales, so it's a relatively risk-free way for merchants to increase customer acquisition.
Cons: Requiring a cut of sales to appear in AI generated search results doesn't feel so “open,” does it? Although to be fair, is it any more “open” than Amazon's product results, which are like 80% sponsored at this point?
It's also important to note that advertising within AI results isn't completely offer the table either. As recently as December, OpenAI said it had “no active plans to pursue advertising”. However CFO Sarah Friar told the Financial Times it was considering options to introduce advertising but wanted to be “thoughtful about when and where we implement them”.
The commission feature is still in development, according to FT sources, so the details may change. However OpenAI and partners like Shopify have been presenting early versions to brands and discussing financial terms, so it's likely on the way.
At the moment, there are many unanswered questions:
- How will commission rates be determined? Will there be a flat percentage or will different categories, sellers, or price points incur different fees?
- Will Shopify open this program up to all merchants or just Shopify Plus merchants?
- Although the checkout is happening within ChatGPT, is it running behind the scenes on Shopify's payment rails? Or will ChatGPT be processing the actual payments?
- Will users be clearly informed when results are influenced by commissions? Will there be labels or disclosures similar to “Sponsored” on other platforms?
- If a product is available through multiple sellers, how will it decide which link to show?
- Will small or new brands be disadvantaged? Could this create yet another pay-to-play environment where emerging brands struggle to gain visibility?
- Will the company prioritize more popular products that it knows will sell well based on conversion data (so that it earns the commission easier), as opposed to surfacing the actual best items for shoppers?
- Will it exclusively display product results from merchants that are willing to offer a commission? If so, does that worsen the shopping experience for users who will miss out on any type of “organic” results?
- If taking a cut of sales, will OpenAI refund commission fees if items are returned?
More to come on this developing story.