Here are two things that brand Executives worldwide have to consider:
1. Should they offer their products on Amazon?
2. If that is the case, what’s the best and most strategically sound approach for them?
Most executives don’t realize that their products might end up on Amazon whether they like it or not.
This is one of the core elements of the Amazon platform. Individuals can offer any product they have on their possession. The very nature of the platform dictates that every individual or company, regardless of their size, can become sellers on Amazon. This stems from the basic principle that more sellers means more products at lower prices, which equals better opportunities for all visitors.
The whole platform has been created so that you can set up and sell basically within minutes. During the registration process you don’t even have to prove that you have acquired your inventory through authorized vendors or manufacturers. As a result, all brands should assume that they might see their products being offered on Amazon with or without their consent and it becomes evident that the question is not if they should offer the catalog through this channel. The correct question to ask is when that would happen and what effect it could have for their company’s image.
That leads us to the second question, which is a little bit more complex but can be summed to the following two options:
Should they sell on Amazon or to Amazon?
Amazon is a Marketplace but acts as a search engine.
You type search terms that best describe your wish and Amazon produces a number of results that deems more relevant to your keyword. Therefore, not only does a keyword determines which product listing shows up, but its placement also determines the ranking of a product. If a retailer creates all the listings and doesn’t possess the in-depth knowledge of what works and what not based on Amazon’s search algorithm, then that product will not reach the number of customers that are searching for it. It will simply never realize its potential on the platform.
Small sellers know that. They have identify some of Amazon’s algorithm nuances and are able to surpass top companies and get the first spots in their respective category, hence the sudden boom with thousands of private label companies targeting exclusively Amazon.
By maintaining control of your product listings directly you ensure that all products maximize their reach and convert better than ever.
Pricing is extremely valuable in E-Commerce especially when the products are offered through multiple channels. By selling on Amazon the brand retains the ability to determine how its products are priced and ensure that retailers follow to the point the MSRP strategy that best serves the company.
On the other hand, by selling to Amazon, you have zero control over pricing.
Product line and selection:
A crucial question is how and when new products are introduced to their customer base. By controlling all its product listings on Amazon directly, either through a designated seller or some other sort of collaboration, all new products can become available simultaneously on all channels, covering all possible traffic sources. All product info changes can happen exactly when the brand wishes to, and this is big, especially when certain SKU’s are discontinued but there is remaining inventory on Amazon.
What content describes best each product and is it being used efficiently? A marketplace offers significant advantages but one of the main characteristics is that from a customer’s perspective, it provides clarity. It is a way to compare directly all products and this is where the decision making process begins and ends. By seizing control of the content that is displayed on Amazon and analyzing the data constantly, brands have the ability to improve their sales, enhance their credibility and demonstrate their value.
Amazon has its own timeline and will not favor a product over another (to our knowledge). Execs should think of it as a Google website. Do you want your website doing exactly what every other website does or do you want to utilize experience gathered through trial and error and rank to the top?
Selling on Amazon means that brands have a chance to control which re-sellers represent their brand. It is a common practice to find the same item listed multiple times with different UPC codes, with varying quality that only harms the brand’s image. Moreover, the open nature of the platform may result in a negative customer experience as the quality of each product cannot be guaranteed. Yes, re-sellers with bad metrics (a score system that determines customer satisfaction) will eventually get banned but that may take months. That way, brands may incorrectly be associated with inferior quality products.
In conclusion, brands should invest the time and effort required, in order to manage directly their presence on Amazon. They will be able to attract more customers, build and expand their reach exponentially, harmonize and coordinate all their distribution channels and outwork their competition. There is a saying after all: ‘’Don’t fight the wave. Ride it’’.