Amazon Selling - If You Can't Beat Them, Join Them - Chapter 1

Amazon Selling - If You Can't Beat Them, Join Them is a book authored by Andrew Tjernlund which will be released as a series of blog posts on AMZHelp.com. If you have any questions about our services or wish to sign up, please reach out.

Chapter 1

People don’t have any idea yet how impactful the Internet is going to be and that this is still Day 1 in such a big way. -Jeff Bezos

The company that created a new approach to the way people search and shop for products also has a novel way of organizing their corporate campus. Rather than simply applying a database generated name or identifying it by the street address the building that houses Amazon’s Internet Movie Database is known as the Wainright Building. In 1995 John Wainright became the first customer of Amazon and in addition to the book he ordered also received legendary status among Amazon nation.

Unlike the carefree and fun origin of the Wainright Building’s name, the Day 1 Building’s name derives from a much more meaningful idea. Essentially, we are at Day 1 of the internet. Sure, many people can recall being on AOL, Juno or NetZero and dialing up to the internet as part of a pay-per-minute service. The same people may recall email that worked great, but only within their physical building. Despite significant advances from those days it is important to remember that as far as what the internet can and will be--we are still only moments beyond its birth.

Every generation can look back at their great grandparents and covet the marvelous opportunities that lay before them. One may think, “Wow, if only I was given the chance to be there during expansion of the Western Frontier. Then I could really create something special.” Well, the internet is this generation's Western Frontier. Although a few claims have been staked, there is so much opportunity already known and to be revealed that future generations will be similarly jealous of those that lived in our time. Realizing this is half the battle and taking action based on this unique moment is the other half.

Amazon provides established businesses a simple way to benefit from the momentum of the internet revolution and to create something special in these exciting times. Amazon began as a book broker following a traditional wholesaler business model, but through acquisition and strategic shifts it is now nearly the largest retailer in the world. Currently 39.3% of all online sales occur on Amazon. In fact, in 2015 more than half of all growth in Ecommerce came from Amazon. That is, of every additional dollar sold online in 2015 compared to 2014, $.51 was from sales on Amazon. Selling on Amazon thus provides a “double wave” of growth opportunities: the first wave is the growth of ecommerce in general with the second wave coming from the growth in Amazon’s share of the ecommerce market.

The reason behind Amazon’s growth with the greater ecommerce space is their willingness to experiment with new ventures and create twists on their selling model. Sure, Amazon get’s most of their headlines for their endeavors into rockets, drones and other businesses that, at least currently, appear distinct from their retail business. However, those familiar with Amazon know that they have recently embarked on several endeavors that provide more value to their customers and more opportunities for their vendors.

What if a business wants to be able to offer their items Same Day or Next Day to anywhere in the country affordably? Amazon makes it possible. What if a business wants to be able to sell internationally with minimal logistical hassle? Amazon makes it possible. What if a business wants to advertise their product, but only pay when a sale occurs? Amazon makes that possible. What if a business wants to quintuple sales without having to add any new employees, facilities or processes? Amazon really does make that possible.

From Fulfillment By Amazon, to Vendor Central, Campaign Manager and beyond, Amazon is constantly updating and unleashing new services that add new opportunities for sellers to allow Amazon to be fine tuned for their business needs. Virtually any business can leverage some tools that Amazon provides and still maintain full control over all the aspects of their business. Amazon is not a “take it or leave it” strategic decision anymore, but a “take what you like and leave the rest” buffet of opportunities.

All of the services Amazon offers, many of which will be discussed in later chapters, have the combined effect of changing what it means to own a brand and what is means to be a retailer. Traditionally, brands and retailers were expected to, at least in some part: inventory products, educate customers, promote or advertise, process payments, provide customer service, handle returns, and in many cases, pick, pack and ship. Not only does Amazon provide tools or services that handle all these functions, but in many cases can do so at a cost or convenience level far beyond what many brands or retailers can match.

For example, because of Amazon’s scale their shipping rates allow them to offer shipping costs (that include packing materials and labor) far below what a normal business can get, even with a bona fide commercial shipping account. Likewise, Amazon’s automated return process offers both customers and businesses better control, visibility and flexibility than most companies can match.

These examples of Amazon advantages are made available for Amazon sellers not to create a competitive atmosphere with Amazon, but to allow retailers and brand owners the ability to focus on what really makes their business special: their brand or products. Amazon realizes that order fulfillment, administrative tasks and even some customer service activities can be a distraction from the main value a business offers. By freeing businesses of many of these duties Amazon allows them to innovate new products, work more closely with suppliers and develop new ways of adding value to customers. And by being companies that can focus on those tasks, as opposed to non-core activities, those businesses that take advantage of Amazon’s services see a huge improvement in their enterprise as a whole. By making Amazon a partner and riding their colossal coattails many mid-market businesses can grow their customer base and serve those customers better--the recipe for growth.