How Does Amazon Fit Into Your Online Strategy?

Still Not Optimized on the Fastest Growing Shopping Mall on the Planet?  What are you Waiting For!?

As Amazon continues its meteoric growth and evolution, brand owners and manufacturers are increasingly faced with the dilemma of deciding if and how to engage with the “everything store.”

  • Amazon owns 5% of all retail sales and 50% of all e-commerce
  • Market cap is approaching $1T and exceeds that of the 9 next largest retailers combined (Walmart, Home Depot, Costco, Lowe’s, CVS, Walgreens, Target, Kroger, Best Buy)
  • 100+ Million Prime Subscribers
  • Ad business is now worth almost $2.2B and growing fast

As the stats show continued momentum and dominance, burying your head in the sand simply cannot be the winning strategy.  What Amazon has built is a platform in which brands and manufacturers, whether large or small, have every opportunity to define a strategy that can be successful.  Regardless of product category, whether the product is B2B or B2C, has variable price points, or the brand lacks fulfillment capability or has poor brand recognition, Amazon has an answer for these problems.

In addition, for larger brands with wholesale distribution, their products are most likely already being sold on channel whether they like it or not.  This is a fact that major international brands like Nike, Birkenstock, and Ikea have come to understand as they all have embraced the channel each with their own unique strategy.

If you’re a young brand that lacks resources, Amazon allows you to plug into an already existing customer base (55%+ of all internet product searches start on Amazon), build a storefront, drive traffic to that storefront and also handle your fulfillment.  Never in history have the barriers to entry been lower for product-based entrepreneurs.  This is exhibited in the fact that unit sales in Q2 of 2018 for 3rd party sellers eclipsed 53%.  That means 3p sellers are outperforming the unit volume of Amazon owned inventory.

If you’re a well-established brand, Amazon allows you multiple selling options and strategies designed to give you max control over content, assortment, merchandising and pricing.  These can be wholesale, retail or hybrid selling strategies that each come with their own level of nuance but if used correctly, very successful.

In addition, the ad platform on and off-channel continues to evolve and is becoming even more robust with new digital ad products being added through the Amazon Media Group (AMG) and Amazon Advertising Platform (AAP).  The ability to drive traffic to Product Detail Pages within Amazon and also externally into your storefront and PDP’s is already immense and growing.

On Amazon’s B2B platform, you as a brand or manufacturer have the opportunity to engage with the business buyer.  The 3 primary B2B verticals Amazon is targeting are Healthcare, Education, and Government.  They are betting big on B2B by making an investment in technology integrations with the 30+ largest ERP buying platforms in the market.  Essentially sellers can market and advertise product to business buyers offering quantity discounts as well as negotiated pricing and invoicing payment options while buyers can simply buy product through their existing buying platform as opposed to navigating to Amazon.

In all cases, B2B or B2C, if you can maintain control of the platform, mitigate channel conflict with other retailers and win market share on Amazon, you can be successful.  The key is determining your goals, picking the right strategy that will get you your intended results and execute at a high level while staying within Amazon’s ever-changing Terms of Service.

If you are interested in learning how to optimize your brand on Amazon, please click here or reach out to Channel Key at [email protected] today.

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