Roughly 15 years ago, when I transcended to an e-Commerce consultant from a typical business consultant (maybe not so typical), but a consultant none-the less, I began working as the business development director of an integrator for Amazon.com. Actually, one of the first 5 integration companies. My purpose was to help fortune 100 companies communicate electronically with this new marketplace (Amazon). We developed translation software to enable merchant back ends to talk to Amazon.com programmatically for orders; confirmations, inventory levels, feedback, and everything that you needed to do to conduct business online. The saying was “show me 1,000 merchants, and I’ll show you 1,000 different backends” and really it hasn’t changed much over time. Every seller, be they a merchant, distributor, or manufacturer wants to be unique, in some way.
I was told back then that it was important in Amazon’s world to be able to differentiate yourself. In fact, we were asked to look for companies that were producing products differently, or doing something differently, and bring these companies to Amazon’s attention. I’m sure when I think back in time I didn’t understand fully what that they meant. Initially, my thoughts were companies selling products in the same space (or Category) were simply vying for strategic positioning to grab greater market share. And yes, that much was correct; one of the fundamental things a company needs to help them get ahead of their competition is a point of difference. But today I believe it was much more, Amazon was looking for more than strategic advantage; they wanted a strategic advantage for an extended period of time to gain world domination.
Amazon was in the process of selling books, tapes and DVD’s (media) at the time, but their appetite grew. Amazon has always liked food, apparel, shoes, toys and gadgets to name a few, so they diversified, acquired a few companies and became fairly good at selling other things. The Amazon appetite for the different, the unique, the unusual, was fairly prolific at the time, and yet in comparison, it seems to have grown to be all encompassing today.
It boils down to this. If you are simply a merchant with things to sell these days, then you must admit you have seen a change from the good old days. Competition has spiraled to the extent most merchants have found themselves in a foot race with many others trying sell more for less. And their margins are shrinking.
This rapid transition is escalating with the entrance of the world community, Europe, China, and Australia and the like. It is interesting, we have worked with merchants for years, but today there has been a shift. We now find ourselves working predominately with manufacturers.
After working with literally 1,000’s of Amazon Sellers over the years, I’d like to share several thoughts to help you avoid the foot race and begin moving toward controlling your profit margins more intelligently and effectively, even on Amazon. To begin with:
1. In the past, when creating a brand, and building that brand to be a household name, all of us that have tried it know how expensive that proposition is. Everything about brand building was expensive back in the day; also one of the reasons that fewer people were doing it. The brand prospectus we used to put together for startup entrepreneurs wanting to build a million dollar business 20 years ago typically ran $100,000 plus. Today, it can be done on less than half that amount. Something to think about!!
2. Historically, the big gamble is that you were never sure most of the time if you were going to make a profit or go bust trying. It was not as accurate or effective to perform testing on the acceptance of your products, but today, comparatively speaking, I believe there are numerous ways to “test” and confirm what yesterday was, at bes,t a guess or a mystery.
Amazon attracts and sells to in excess of 236,000 million people each month. Relatively speaking, in today’s world of branding development, we believe that even though there continues to be risk, there is far less risk today than ever before by simply doing adequate testing in a large marketplace, in advance. You can take steps to protect your products and brand and still place respectable numbers to “test” products on Amazon, eBay, Sears, Rakuten Shopping, and elsewhere to judge effectively the acceptance of your new products across nearly 500,000 million shoppers.
3. Another area of concern may be the cost of your infrastructure which can also be huge. But if you can initially lease it or rent it, what does this do to your risk factor? That’s right, lowers it!
4. How about the cost of making a little bit of noise so people know you exist? This too used so cost much more than today. Through Social Media, those that need to be found can be found, though Facebook, YouTube, LinkedIn, Pinterest, and many more vehicles. We don’t believe it is necessarily any one thing that you as a brand builder do to get known, it is a combination of many things in an orchestrated way such as the use of small amounts of PPC, SEO, Blogging, and attention to your audience; this makes the difference. If something isn’t working stop spending in that direction and re-evaluate.
5. Private labeling works. And, it helps you to control your data and margins. The resources now available to enable you to be creative are well worth the investment which will help you to avoid the foot race in the end. However, there are reasons that we continue to promote that you sell other peoples brands when your brand hasn’t fully matured. And that reason is to tap into their customer base to introduce our own.
We at eCatalog believe we have found a method, a formula, to help you cut through much of what cost our predecessors the most…people’s attention. You never can have too many good things working for you, so brace yourself for change and try to think just a little bit differently than you have been.
I believe that Sellers need to avoid the big foot race to sell more for less at all costs.
What do you think, tired of selling more for less?