The Big Question at eTail Connect: Should we sell on Amazon?

E-tail Connect in Miami was just a few weeks after ShopTalk, but it was a very different setting. The organizers of eTail Connect carefully selected 100 executives from some of the most innovative retailers to come together and discuss the future of retail in a variety of formats, from workshops to networking events to highly interactive panel discussions. The conference is designed for a more intimate setting that is focused on collaboration and learning.

While I was there, I heard so many great conversations about AI, Data, and Chatbots. However, there was one panel discussion that stood out to me, because it seemed to tap into the big question that was on everyone’s mind. The panel was called “Everything Amazon – To Join Or Not To Join, That is the Question.” Based on the attendance and the questions asked at this panel, it’s clear that many retailers are struggling to figure out whether joining Amazon is the right move.

As we all know, Amazon is expanding from an online marketplace to a search engine to a logistics company, and even to a brick-and-mortar retail store. With all this change and growth happening so quickly, it can be confusing and challenging for retailers to make the right choice in how to partner with Amazon, and have a good understanding the full impact of that business decision.

The panel included Suman Singh, CEO of Austin Bazaar and BAJAAO.com; Leigh Rawdon, CEO of Tea Collection, and Nancy Eichler, VP of Global Digital & Social for Brownie Brittle. While each panelist admitted to having a love/hate relationship with Amazon Seller, here’s what they said.

Joining is a must, but it won’t be painless. All of the panelists agreed that Amazon Seller is not easy to navigate, but if you’re not on it, you’re losing out. Just to demonstrate how powerful Amazon has become in the consumer buying cycle, consider this: 50% of product searches start on Amazon, not Google. Essentially, if you haven’t joined yet, you are missing out on half of all the product searches by your potential customer base.

Use Amazon as a gateway to your eCommerce site.  All three retailers found that only the lower price-point items sell well on Amazon. For the higher-priced items, customers still prefer to go to the retailer’s direct e-commerce site for a more high-touch experience. Austin Bazaar’s Singh said that items under $100 did well for them. Tea Collection’s Rawdon revealed that her company sells specific SKUs on Amazon versus their own website, and Brownie Brittle’s Eichler said that the company doesn’t sell all of its varities on Amazon by design. This way, Amazon is more of a lead generation tool by giving them access to new customers. Once they build brand loyalty, the goal is to grow the relationship beyond Amazon by offering exclusive items on their e-commerce sites.

Amazon’s data is your new best friend. Another big advantage to being on Amazon is all the consumer trend data that you can leverage. For example, Singh analyzed the data and found that there were a lot of searches for ukuleles and that other music retailers weren’t capitalizing on that. He then worked with a manufacturer to fill consumer demand. As a result, Austin Bazaar is now seeing more than 20% of sales come from selling ukuleles. Austin Bazaar’s own research about their consumers revealed that most are dreamers, drooling over the higher-priced musical instruments. Selling ukuleles and entry-level guitars on Amazon helps them to capture their customers at the beginning of their musician dreams, then continue to interact with them on their own website as their tastes and budgets move up the food chain. Singh noted, “Amazon represents an opportunity to connect with your customers through a channel they have come to like and trust. Amazon provides enough tools to ensure that you connect with those customers with the right message and branding.”

Get on Amazon’s registries and wish lists. Making sure your lower price-point items are included in popular Amazon registries can help build brand loyalty, long after the wedding or baby shower is over. Says Rawdon from Tea Collection, “At this point, holding back from selling on Amazon might be like going back to 1999 and holding back from selling online.”  She added, “Amazon is less of a retailer than it is a means of selling online: search, credit card processing, fulfillment, and delivery.”

Own your brand. If you’re not on Amazon, there’s a strong chance that someone else is selling your products there instead of you, and that’s a problem. You’ll lose brand control and potentially be left with negative feedback from your customers over transactions you had nothing to do with. Eichler advised, “Being present on the Seller Central side of the business in addition to Vendor Central is critical for us as a manufacturer. Amazon’s algorithms dictate their purchasing of our goods through Vendor Central, and those algorithms don’t work with holiday items or new products. Seller Central allows us to launch holiday items and new product items at the quantities we know are needed, during the seasons they’re needed.” In addition, Eichler pointed out: “We can stock additional inventory through Seller Central in preparation for Vendor Central promotions, like lightning strike deals. If those promotions perform well, Vendor Central will run out of stock, but having inventory on hand through Seller Central allows us to continue to take advantage of that increased consumer demand.”

Many of Chameleon Collective’s retail clients are on Amazon, but so many are adamant that they will not join. As a consumer and an Amazon Prime member for many years, my view is, as the old saying goes, if you can’t beat them, join them. The panelists agreed with that sentiment. I really enjoyed the panel discussion and the conference. I loved the intimate setting and it was a great opportunity to build connections with other retailers. Plus, Miami is a great place to be during April, so I’d definitely recommend that you attend.

If you would like to learn more about how the Chameleon Collective helps our retail clients successfully enter Amazon Marketplace, download the case study to see what we did for MISSION Case Study. If you’re on the lookout to hire an experienced e-Commerce Director who understands how to position your brand please book a 15 minute strategy call with me.