Amazon dominates eCommerce. The selling platform makes up about 38 percent of online retail sales (eMarketer, May 2020). It allows companies of all sizes to reach customers while spending a fraction on marketing that they would otherwise need to spend to get that kind of traffic. But selling on Amazon does not come without serious challenges, as anyone who has sold on Amazon can tell you. The most important decisions to make involve:
In this article, we will discuss these challenges and the solutions for creating profitable, manageable expansion of your business on Amazon with Complemar and Thor and Company (T&C). Selling on Amazon can be fun and rewarding, so don’t give up on your Amazon store!
It is important to have a strategy for selling on Amazon and weigh the options. Selling FBA only can be very costly, especially for small businesses. Selling Fulfilled by Merchant is often overlooked because it is time-consuming to pack and ship orders in house.
Actual screenshot of an Amazon account, August 2020
An FBA, FBM hybrid strategy is possible for your business.
Most businesses have a hard time keeping up with the demands of managing an Amazon account.
There are dozens of companies out there who can help you manage your seller account, but not all of them are worth the high price. If you need help with your Brand Registry, don’t ever hand over control of it. Find out how they make their money. When choosing a seller account management service, make sure they do not have conflicts of interest.
Coordinating campaigns with seasonal products, inventory levels, and Prime Day.
FBA works if you are comfortable letting Amazon handle your inventory. Selling FBM, you have the most control over your products. If your inventory is low, or you are not sure about inventory levels, you can prioritize where your products are shipped only with FBM. You can turn your FBM listings on and off whenever you want. Working with Complemar and T & C, you have control over your inventory and your promotions are managed for you.
The Amazon effect is nothing new for those of us who work in the world of logistics. This effect normally refers to the impact that the retail giant has had on traditional brick-and-mortar retail stores, along with the landscape of online shopping. In truth, the meaning of the Amazon effect could be different depending on your intended audience.
A traditional brick-and-mortar retail store may refer to the Amazon effect as the negative impact that online shopping has had on their business. With the millions of products available online, combined with competitive shopping and fast + discounted shipping, the traditional retailers continue to lose market shares at an increasing rate to online marketplaces like Amazon.
A more modern retailer that is eCommerce focused (or solely based online), may refer to the Amazon effect as the need for these small to mid-market companies to have a presence selling their products on Amazon. This new-found need may be due to the marketing vector that Amazon (specifically Amazon Prime) offers, and the increase in sales that this moniker yields. Inversely, they could be looking to offer their products on the site as a defensive posture to help protect against relevant competition currently selling ‘similar’ items on the site. The Amazon effect for some modern retailers is the quantifiable “need” to have your products available on the Amazon platform (either by FBA or FBM… which is another opportunity that deserves discussion).
The logistical arms of companies, parcel carriers, and 3PL’s may have a different view of the term ‘Amazon effect’. For this diverse group, the Amazon effect is the need to provide services that continually evolve, and improve, to remain competitive. This Amazon effect has forced providers to focus on faster order processing with later same day shipping cut-offs, with a decreased dependency on labor. These efforts are pushed forward with technology advancements, automation, and efforts in continuous improvement. The focus on customer service, business agility, and technology have forced these businesses to adapt and innovate.
Even as a consumer/ customer, the Amazon effect is tangible. How many times have you competitively shopped on Amazon to see what other, or similar, items are available for quicker delivery at a more economical price? Additionally, how many times have you gone straight to Amazon to look for your newly-needed item – without looking at a larger big-box store or the product company’s website? Amazon has created a position within the consumers' buying habits that companies strive for – to be the first option.
At Complemar, we can help you provide the best service offering to your end consumer. The strategic placement of our fulfillment centers allows us to offer you 2-day ground shipping for 98% of the population within the contiguous 48 states. Our proprietary software and technology can offer a unique solution for complex challenges (Serialization, Lot Tracking, Alternate item numbers, etc), and helps us drive for best in class on-time delivery. Additionally, our team of experts and business partners can assist you with the navigation of the Amazon effect – and how you can best position your product/ company for continued success with your customers. We pride ourselves in eCommerce fulfillment, Health Care fulfillment, packaging & co-packing opportunities, with a full-service print facility located in Buffalo, NY.
With Amazon's large network of distribution centers, investment capital, technology advancement, and obsession with customer service – the Amazon effect is a real thing that everyone needs to be aware of. It may mean different things to different people within a product's supply chain, but the Amazon effect is affecting the way we do business, whether it is the faster delivery concept that was adopted from Zappos or the quality assurance that Amazon demonstrates on a daily basis. The Amazon Effect is an innovative idea that is reforming and improving the landscape of fulfillment and e-commerce.