Among the most overlooked issues with selling your brand on Amazon is the impact on legacy sales channels. I know many sales and marketing executives who receive daily calls from their customers and sales teams because they are “getting killed” by Amazon. In the case of brands that have been around for many years, these are conversations with old buddies and friends, making it particularly painful and personal.
I remember when mail order catalogs started to increase back in the 70’s and retailers were up in arms about it. It was long before the internet, but it was the first step towards breaking down the geography of retailing. We didn’t have to drive to our local store to get information and purchase a product. We could order it, and have it shipped.
Fast forward to the age of the internet and e-commerce and the geography of the retailer is, for the most part, gone. National and Global marketing strategies have replaced regional and territorial sales strategies and everything seems to arrive in about two days. Holy moly…it’s a dream, and a nightmare.
It still surprises me the number of senior executives continuing to fight this situation. It all comes down to the massive discomfort of “change.” If only we could go along without technology changing things all the time, business would be so much easier. And that attitude has put many companies out of business.
If your brand has other channels besides Amazon (I hope so), integrating your existing sales channels with your presence on Amazon requires some serious planning. It also requires that you look objectively, with your eyes wide open, and understand the potential impact. If you list out each of your channels such as distributors, National Brick and Mortar Chains, VAR’s, other c-commerce sites, etc., and tally up the percentage each channel contributes to your total sales, you are off to a good start. Now add Amazon into the mix, and this is where it gets dicey. What will Amazon do that impacts your other channels and how will you prepare and manage that impact.
There are so many options when it comes to your brand’s presence on Amazon. I see some brands that want to “farm it out” to a third party resource and avoid the whole process of figuring out Amazon. It might be a good first step, but it rarely works for long if you have other sales channels. Ask yourself a few questions….
What if Amazon becomes your largest channel?
How might Amazon impact your internal sales team and their stake?
How will you allocate inventory?
What happens if your pricing on Amazon gets out of control?
What if unauthorized 3rd party sellers start offering your products?
There are lots of “what ifs” and it’s hard to gauge it all until you take the leap on Amazon. For a lot of brands, it’s best to start off carefully. Dumping your entire product catalog onto Amazon might turn you upside down and wreak havoc on your business.
So plan carefully and work through the potential issues. It’ll be well worth the time and effort. For more information download the “7 Steps to Preparing your Brand for Amazon” at Amvise.com.