Joshua Warren  0:00  
Oh you should be strategic with Amazon, you should not depend on it as your main channel or your soul channel. But it could be a good supplement to add. But I do think there's also some strategy, maybe they don't list their top selling items on Amazon. Or maybe they're very careful about which items they kind of curate a collection for Amazon because they realize that anything they're doing through Amazon, that's data that one way or another, Amazon's gonna get their hands on

Darin Newbold  0:38  
Good day and welcome to another episode of Commerce today. My name is Darren and I am here with our wonderful hosted Josh to talk about all the commerce things that are happening right now. Well, Josh, for this one, I am very excited. And if I could cue the theme music, I would cue it right now because I can hear kind of that Imperial March going on in the background as we begin to discuss our topic for today is Amazon, friend or foe to the retailer. And I for those that are starting to listen or are listening to our podcast regularly. We do talk about Amazon a bit. We do want to make sure and say that. For sure. Both of the hosts of this are huge fans of Amazon and we do take part in their stuff. But we want to make people aware of some things that are going on in the in commerce and especially what how Amazon can do some things and maybe create some challenges. So Josh, friend or foe, where are they at?

Joshua Warren  1:38  
All right, so So are you hoping that Amazon's lawyers have tuned out now? Exactly. Okay. You said nice things about them. They've gone now it's just us. Okay, good. Yeah, Amazon. So it's funny, I remember, for years now, going back years, being at different conferences and retail conferences, and hearing Amazon mentioned by a speaker, usually with like, Oh, we don't really like them, but or with like a series of booths from the audience. And I just thought that was kind of interesting. And wanted to talk a bit about that today. Because obviously, Amazon can be great, they can be a friend to the retailer, they can be a great platform to sell your products on, they can be a great channel to reach a lot of people. They're doing a lot with film of Amazon and prime and things like that to get your products into the hands of your consumers pretty quickly. But there can also be some downsides to working with Amazon. And I actually have an experience that I may change names and products slightly to protect the innocent, and the not so innocent. But this is a story I've heard from others as well. So I know this isn't the only time this has happened. But basically a manufacturer that also was selling direct to consumer, that was a fashion brand that was selling jeans. And they were super excited, because they had just kind of started selling on Amazon. They also sold on the web, and they sold through other retailers. And their Amazon Category Manager for that category came to them and said, Hey, your products are selling so well forget you having to deal with listing them on Amazon selling them on Amazon, we want to buy them direct, we want to offer them from Amazon, Amazon just gonna buy pallets full of jeans from you. They saw dollar signs, they're super excited. It was a great relationship. I mean, everybody's making money. Everybody's happy. Until all of a sudden orders from Amazon stopped and started wondering what happened here. And they're not getting phone calls returned from that category manager and they start digging around and they realize Oh, Amazon now sells what could arguably be considered knockoffs of our exact same items at half the price. So once again,

Darin Newbold  3:50  
we cue the theme music

Joshua Warren  3:56  
which Yeah, I did not approve the budget to license any Star Wars music today. But yes, that is that was not a very pleasant situation. And that's where there's kind of an open question in my mind. Is Amazon a friend or foe? I think if we ask Amazon directly, they'll say, oh, no, no, there's, you know, the people that have access to the data of what's selling, and what our third party sellers are doing. That's not the people that are buying products and, you know, deciding what we manufacture and things like that. I think they at least try and at least say that there's some silos there and some protections there. But I've just heard too many stories and seen too many situations like this where I do think there's a risk, you know, and that goes beyond the other risks with Amazon. Basically, you don't control the channel, you don't control the customer relationship at any time Amazon could decide, and they're not as bad as old stories from the old days of certain other auction platform that shall remain nameless that would very quick usually shut down accounts. But Amazon could still decide, hey, there's something about your account that looks suspicious, we're going to turn it off, may take us a week or a month to turn it back on. So if that's 100% of your ecommerce revenue, while now 100% of your ecommerce revenue is gone, and that's where I feel like, you should be strategic with Amazon, you should not depend on it as your main channel or your soul channel. But it could be a good supplement to add. But I do think there's also some strategy, you know, kind of based on that experience, I've had some clients that maybe they don't list their top selling items on Amazon, or maybe they're very careful about which items they kind of curate a collection for Amazon because they realize that anything they're doing through Amazon, that's data that one way or another, Amazon's gonna get their hands on. Well, that's

Darin Newbold  5:48  
it. Yeah, that's what I was gonna ask you, Josh, two things on the on what you're currently talking about? Is it is it one of those strategies that maybe a merchant would grab their their overstock or or especially a merchant that maybe is their own manufacturer as a as a special line that they might use their overstock in an Amazon type of sailing, to use that as the as the avenue to sell?

Joshua Warren  6:13  
Definitely, yeah, it can be a good place for clearances and liquidations overstocks, things like that. Also seen brands that will decide that, hey, they don't want to pass up the Amazon opportunity, but they don't want to kind of erode the margins on their main product line. So they might launch a separate brand, or a separate subset of products just for Amazon, that are targeted at kind of a lower price point.

Darin Newbold  6:35  
Okay. So all right, we kind of spent the first opening here a little bit on the, shall we say, the less than positive side of Amazon and being in the Amazon, selling experience for for potential merchants. There's an upside here, though. And one of the neat things is is the the barrier a barrier to entry, not that, you know, from where we're talking about, we're usually talking about a little bit larger of merchants, but the barrier to entry, I can start selling on Amazon tomorrow. What are some other things What, what's the positive side, the friend side that really does make this a applicable area that a merchant might want to

Joshua Warren  7:12  
explore? Yeah, so actually, at their conference for sellers this year, Amazon announced a lot of really interesting new things where you can, for instance, on your product listings with Amazon, you can now run split tests. So you can basically do the same sort of experiments you might do on your own website, on Amazon. And if you're selling the right things in the right way, on Amazon, sometimes it's a lot easier to get traffic to those Amazon product pages than your own product pages, gives you a good environment to test. And I think Amazon sees this, this dichotomy and this fear among sellers, and they're trying to do things to encourage people to be willing to sell on Amazon, for instance, this holiday season is the first time they're allowing merchants to market to people that have purchased from them on Amazon. So Amazon, when you buy something on Amazon, your relationship is with Amazon, the marketing emails, you get it from Amazon, they're not from the retailer, the retailer usually actually never gets your email address, they get a masked email that goes through Amazon, Amazon's realized that's not great for sellers that want to kind of build up a good repeat following. So they've added some tools where you can actually now go in and start marketing to those people as well. So definitely some opportunity. And there's a lot of things that Amazon is doing to try to make it more kind of acceptable or a positive experience for sellers.

Darin Newbold  8:37  
Well, one of the things I saw as we were we were researching a little bit was even this. And I think you mentioned it a little bit just a minute ago about bracketing. But the even the try before you buy as an option. Have you had any experience with that? Or what's your thoughts on the try before you buy?

Joshua Warren  8:54  
Yeah, I haven't actually had direct experience with that yet. And it's funny, I told you beforehand, if you want to ask a question that stumped me Go for it. You got a we need a sound effects for that one. So yeah, despite what you may have read, I don't have all the E commerce answers just most of them, I guess.

Darin Newbold  9:14  
Well, one of the things that I was I'm seeing here is is that there's some scenarios where it's not the right path, but I'm gonna leave that alone because that's obviously another episode of Commerce today. What are some other things from the positive side? What would what would be a potentially a decision making factor I have. I'm a merchant, I don't have a store. I don't have a brick and mortar. I have I have my online store. It's doing pretty well. What decision making what would be some reasons I might want to explore having an E having some of my products on Amazon.

Joshua Warren  9:47  
I think if you're in a situation where either through manufacturing capacity or through access to capital, you are able to have more products and more supply basically then You currently have demand on your own website. And you feel like you've kind of exhausted or if really pursued things like paid advertising and trying to drive more traffic to your website. I think adding Amazon as a channel and not not looking at it to provide 50% or 100% growth, maybe start small say, hey, we want to drive an incremental 10 or 20% of additional revenue through selling on Amazon, I think it can be a great scenario to kind of try it out. And definitely set reasonable expectations around that, it's going to be a little experiment we do, we're going to take some of our excess inventory, we're going to allocate it to Amazon, and we're going to sell it there. And some products are going to do really well. And some product types will do really well some wall. And it's a combination of factors of really the competition that you're going to face on Amazon and how well known your product is. But try it out and see. And you may be surprised, there's a chance that you decide it's not for you that it's not driving enough revenue to be worth it. There are some there's some overhead kind of as you grow, and you're selling on Amazon. But I think for a lot of retailers, you might find it's a good way to boost your EECOM revenue.

Darin Newbold  11:08  
So last quick question is we're kind of closing this out the flip side of my question, I'm selling any site I'm also selling on Amazon, besides the evil gene story, we'll leave that one out. What would be a reason maybe I pull off of Amazon move away from it.

Joshua Warren  11:26  
I think we got to be careful and watch what Amazon does long term with who owns the customer, you know, they've offered sort of that olive branch have been able to market to people that have bought to you on Amazon, they haven't said that's a permanent decision. So I would say watch that. Because really, if you're if you're dependent entirely on new Amazon customers, those could disappear any day you could. There's a thing when you're selling on Amazon, and if you've bought on Amazon, you probably notice sometimes it'll say sold by amazon.com. Sometimes it might say, sold by Bob's Amazon store. Well, that's called Winning the buy box, which means you won the competition among all the other sellers to actually appear as the seller. When that person went to that page. That algorithm changes all the time. And Amazon could suddenly decide that you don't get to win the buy box anymore. And you appear in that. Click here to see all the other sellers option, in which case your sales will die off very, very quickly.

Darin Newbold  12:23  
Wow. That's it. I didn't know that. Thank you for sharing that. Well. I hope you've enjoyed this episode of Commerce today about Amazon Friend or foe. There's some really interesting perspective to look at for you and your retail opportunities. As always, we appreciate you being here with commerce today with Josh and I and definitely, if you're enjoying the podcast, hit us up for a like and as always, we'll see you next time.

Transcribed by https://otter.ai