Amazon may have faced a huge blow with the announcement late last year that Swedish furniture giant IKEA would no longer be selling on the platform after a two year test pilot of their Smart Lighting product line. But it’s just one in a number of retailers who have exited Amazon in recent years.
As early as 2016, Birkenstock reported pulling certain product lines from the eCommerce entity over concerns of counterfeit merchandisers. Nike quickly followed, citing an increased focus on direct customer engagement. In fact, given higher fees, operational inefficiencies and a reported lack of control over counterfeiting and copyright piracy, you may be asking yourself whether or not it’s worth the trouble of selling through Amazon altogether.
It is. But not necessarily for the reasons you think.
Market Share And Brand Loyalty
Reports that Amazon may be moving to a model of strictly third party distribution appear to be premature, despite third party sales representing over 50 percent of its total merchandise sales by unit. And even with increased emphasis on distributors as opposed to direct sales, there’s one area even distributors have been historically unable to fulfill consistently—customer service.
In fact, according to a recent survey from American Express, almost 70 percent of Americans indicated they’re willing to spend more with a company that provides a superior customer service experience. So much so that an estimated $62 billion per year is lost annually in sales as a result of poor customer service.
Third party distributors aren’t always known for inspiring customer loyalty. Amazon, on the other hand, is. It’s not simply the convenience they provide. Or the diversity of merchandise. Customers have come to expect a uniform order fulfillment experience from an eCommerce provider, and that’s always been a primary focus of Amazon. That doesn’t mean that policies are the most convenient for manufacturers, particularly smaller retailers. But unless your brand is currently at the same level of business with Ikea or Nike, you’re not just ignoring the most influential global eCommerce marketplace with an estimated traffic of over 200 million unique visits each month. You’re ignoring one of the most effective and visible ways of establishing customer loyalty.
Copyright Piracy And Amazon
Counterfeiters are rampant when it comes to eCommerce, and Amazon is hardly immune. What is different is the lengths to which potential counterfeiters will go to try and undermine your credibility as an Amazon seller. Many have been known to try and spoof Amazon return addresses, all in an attempt to scare you from selling. Don’t be fooled. Amazon actually has a clear cut protocol in place to address legitimate copyright infringement claims. If you’re in doubt as to the accuracy of a copyright piracy claim, contact Amazon’s legal department immediately at firstname.lastname@example.org.
A 2018 study from the U.S. Government Accountability Office revealed that almost 40 percent of merchandise sold on eCommerce sites may indeed be counterfeit. But the problem is hardly isolated to Amazon. AliBaba, a notoriously lax haven for counterfeiters, recently led an initiative which seized over $536 million in falsely branded goods in 2018 alone—a relatively minor fraction of the counterfeit goods industry which most recent estimates have placed at $509 billion globally.
It’s not that counterfeiters are outsmarting eCommerce platforms. It’s that many providers simply don’t have efficient policies in place to address the proliferation of copyright piracy. But Amazon’s Brand Registry does just that, along with a broad host of authentication solutions to work with. Effectively, proactively and solely with transparency and your own brand’s integrity in mind as its guiding focus.
Logistics—The Backbone Of Amazon
As we indicated, multi-billion dollar entities like Ikea, Nike and Birkenstock don’t need the visibility that Amazon brings. They established themselves as household names long before Amazon was a two person entity operating out of Jeff Bezis’s garage. But it’s not just visibility maintaining a presence on Amazon brings. It’s their superior logistics network.
Customers have made it abundantly clear they want personalization from a company; and that’s one aspect Nike and Ikea simply can’t offer on account of their size. But more than personalization, customers are even more explicit they expect consistency of service from a brand. And that’s also something a multi-billion dollar entity isn’t able to provide. In fact, supply chain management is one of the most substantial crises facing the retail market right now. Amazon Marketplace doesn’t just simplify the process for retailers. It streamlines it. It refines it. And it continues to innovate retail logistics as we know it.
That doesn’t mean selling on Amazon is a seamless proposition. And that doesn’t mean that occasional clashes with seller policies aren’t inevitable. What it means is that a failure to see advantage where others see loss doesn’t just minimizes your sales channels. It minimizes the very vision you have for your business.
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