Command your Amazon Operations

Amazon is the largest e-commerce retailer in the United States & Europe. However, Amazon doesn’t identify as a retailer, more so as a technological platform. For example Wall street consistently treats Amazon as a tech platform rather than a retailer like Walmart. Their mission is not to be a place to sell rather to ”help people buy things,” – Jeff Bezos.

Therefore, they prioritize scalability, predictability, consistency and fast innovation. Amazon’s values are customer centered. Hence all actions Amazon is taking are regarding the end customer, not the brands trying to sell their products on the platform. For example Amazon prizes itself on fast shipping with their own internal logistics company, delivering all of their own packages to their customers.

The benefits of doing business with Amazon are two faced. They include customer prime loyalty and encourage Brands to enter by having low entry hurdles.
But on the other hand as a Amazon Vendor (1P) you are faced with aggressive negotiation tactics, high ad costs, or you have to deal with immense chargebacks. They are not investing in partnering with you as a brand, they want to please the end customers.
Therefore they act as a price follower in the markets, seeking more varied assortment for their end customers.

Nevertheless, half of all online searches begin on Amazon and 80% of viewers will stay on the 1st page of that search result (25 products per search term). The customer will see aprox. 145 product placements from the product detail page to advertising to automation cycle. Thus Amazon is a great place to bring your products to the end customers.

The following chart shows the leading e-comm retailers in the US (Statista, 2023). As it shows you loud and clear that Amazon is on the top when it comes to selling your products online.

The transition from physical brick and mortar stores to online presence can be a challenge in terms of technological integration.
You have to set up new e-commerce logistics, you need to understand the complexities of digital marketing (social media, SEO, driving traffic sales), data security and privacy are huge topics in the e-com space.
Additionally more and more sellers rivaling in a highly competitive environment for visibility and customer attention. Resulting in your brands constant search for stability whilst being innovative in order to stand out to your targeted audience.

Besides the competative sales environment you will come across even more compatitive pricing strategies.
Moreover your audience of today wants transperancy in all things pricing.
Being transperent in this matter affects your porfit margins and brand perception tremendously. On the other hand we see how the market has and is changing for good. Social Selling, connectivitiy and internationalization became more and more important since the last years. Down below we will give you an indepth insight on how those aspects can shape your Amazon business and how you can utilize them.

There are a great deal of retail benefits with social-selling, like access to consumers in real-time and the personalization by tapping into that metadata.  However it can be challenging because it produces a great deal of data which requires analytics to understand customer behavior or trends. Also due to a greater reach of people and social-influencers really maintaining the authencity of the brand can be a struggle. For example keeping a tab on the spread of negative reviews is more challenging then ever before.

The transparency of pricing on many platforms can lead to price wars, affecting profit margins and brand perception. Now with algorithmic pricing, there are many unattended consequences which can occur. Maintaining this pricing across channels, navigating different country landscapes as well as fluctuations in the economy are common hurdles to overcome. Using external software solutions like AMVisor can help you to take those hurdles one by one.

The growth of Amazon on a global scale has resulted in an increase in products, quality, shipping dynamics and a incredible growth of the Chinese market. This can have a large consequence on EU/USA brands resulting in  loss of market share, really forcing brands to review their pricing strategy as well as confronting counterfeit and customer perceptions.

Considering those consequences and changes in the e-commerce environment, it can be overwhelming keeping an eye on every new occurance. In our experience focussing on what could be your playground to evolve is necessary. This section will have a closer look on what Amazon is specifically about and how to cope with those specifics to really command your Amazon operations.

Managing data from both retail analytics, Amazon poses a set of challenges for 1P sellers (vendors). First and foremost because Amazons data is not transparent in the sense of how it is retrieved and how you should decode it. Integrating diverse data formats and sources can be complex but leveraging. You requiere a concerted effort to create a cohesive dataset and draw meaningful insights buildling a understanding between Amazons and your own KPIs. As well as consistency of data across all of your challenges as well as real-time data access.

Doing this manually is going to break your neck sooner than later. Utilizing a tool that integrates all those data points and interpreting them for you on a basic level is a necessity nowadays. The solution? A tool like AMVisor that gathers and connects Amazon frontend data, connecting the dots and giving you a clearer view of what drives your revenue on the Marketplace.

We know its challenging to be an Amazon Vendor especially from a fees-perspective (marketing, charge backs, freight allowance). Fees can total up to 25% which is enormously considering they are the same for everyone whether you are a small business owner or a huge corporation. The crowded marketplace with numerous sellers lacks of pricing control which is affecting your margins. All in all Amazon has no loyalty to long-time sellers because all they want is profit. As an Amazon Vendor you have a number of obligations – you have to agree to slow payment terms from Amazon, coordinating with Amazon’s fulfillment network such as managing inventory, avoiding stock out or overstock situations, additionally trying to keep up with Amazon’s revolving policies. To conclude, being a Vendor on the Amazon Marketplace is challenging and most of the time without a tool or agency not trackable or manageable.

Vendors may find it difficult to reach Amazon’s support to reach assistance and this leads delays in issue resolution. With fewer and fewer Vendor Managers who are often overburdened it becomes difficult to negotiate and raise issues through their case system. Some requests go unanswered. With the AVN being incredibly time-consuming and unsuccessful.

Vendors may face challenges defending their branded content and preventing unauthorized sellers from listing counterfeit or unauthorized products under their brand name. Maintaining control over product listings and ensuring consistent branded content across Amazon and various countries.

Unerstanding the nature and changes within your market and niche helps you to further run smoothly and successfully in the competititve e-commerce landscape.
Navigating marketplace fees and maintaining your brands consistency across multiple channels is more important then ever.
That means finding your niche, figuring out what items to sell, and what your customers prefer, seek and desire.
Because let’s be real – consumers are more demanding than ever before.