Should Retailers and Brands Sell on Amazon?

Posted by Fidelitas on March 17th, 2020

By now, everyone knows that Amazon is big. Big enough that there’s no ignoring the eCommerce behemoth- no matter how vehemently some marketers and retailers might wish they could. But should retailers sell on Amazon? That’s another question entirely. On Episode 14 of the Lion’s Share Marketing Podcast, Samsonite/TUMI’s Charlie Cole recalled a quote from a friend that likened Amazon to the cute, friendly tiger cub that eCommerce brands can’t resist feeding now- but to remember that the tiger cub is going to grow up and eat the entire lot of us.

At Fidelitas, we don’t have quite a doomsday viewpoint of retailers’ chances against Amazon. The brands that are slow to adapt will suffer and, if they don’t learn their lesson, eventually collapse under the weight of Amazon’s burgeoning market share. Retailers must learn to adapt to the new rules of the eCommerce game and integrate Amazon into their marketing strategy. But before diving in head-first into a new seller account and shipping product to a fulfillment center, retailers and the marketing leaders responsible for stewarding their brands should ask themselves a few questions:

Is my product the first of its kind? If you’ve truly got a unicorn on your hands, you’re likely best served to avoid selling through Amazon and instead focus on selling direct-to-consumer through your own website, as well as through traditional brick-and-mortar retailers. Why brick-and-mortar retailers and not Amazon? Marketing leaders and entrepreneurs need to remember that Amazon is user-focused and search-based, meaning that unless someone is actively searching the platform for your product, you’re not likely to move significant amounts of product. At least with brick-and-mortars, you’ll be rewarded with exposure to new customers through shelf space as a trade-off for your lowered margins. The game changes with a strong PR campaign though. If your product is going to be featured on a national TV show or you have a significant influencer campaign approaching, you’ll want to make sure that your brand’s products are available through as many channels as possible in order to accommodate the influx of customer demand. If your brand is receiving or plans to receive significant exposure, selling on Amazon and other third-party platforms is a must!

Do I control production and distribution of my products?

For product manufacturers, differentiating their brand’s products on Amazon isn’t much different than differentiating their products for big box discount stores like Costco or Sam’s Club. Simply changing the product counts in packaging (kudos to brands like Halo Top and Perfect Bar for figuring this out) and color configurations is often enough to create a unique SKU that satisfies those retailers’ buyers. Likewise, merchants can protect the pricing integrity of their own websites by limiting the SKUs that they make available through third party sites like Amazon. In this case, we recommend offering limited product availability through Amazon.

Is my product already for sale on Amazon through third party vendors?

Want to learn more about how to win on Amazon? Head over to Fidelitas to get the latest marketing strategies.