Amazon has grown into more than a retailer. It is a marketplace for companies to sell their products. As a marketplace it has allowed companies to reach a larger market for their products and smaller retailers to expand their businesses online. However, there is a growing group of companies that are relying on Amazon as their sole distributor. This isn’t just manufacturers, but small retailers who are selling their inventory and individuals who are selling merchandise as a side hustle. Relying on Amazon is a bad business model. Here’s why.
- Amazon competes with its partners: Amazon is currently being investigated for taking the data from its partner’s sales and using ti to compete against them. If Amazon decides to undercut you or downgrade your listings so they appear further down the list, it can be catastrophic if you are relying on them as your sole distribution.
- Amazon’s logistics: In many areas Amazon is taking over shipping from its UPS and FedEx partners. The problem is that Amazon does not have the quality control in place for its logistics. A recent shipment of electric appliances was left at a customer site in the rain. The photo that Amazon uses to show it was delivered showed that the delivery person didn’t bother to walk up the four steps to ring the doorbell and let someone know the shipment arrived. The items were not in a shipping box, just the product box, which was destroyed by the weather.
If you are selling on Amazon, it’s not just buyer beware, it’s seller beware as well.
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