Amazon Is a Platform Not a Channel: Most Brands Are Not Well-Served By An Amazon Reseller
I speak with many brands about their Amazon businesses, both 1P and 3P, and one vexing question I see above all is this: should I outsource this business to a reseller or not? For any major brand, the answer is definitely a hell no.
It's not a matter of the service provided by an authorized reseller, it's more a matter of alignment and importance. Think about what a reseller is for. In the end, it's for one reason above all.
It's to make the pain go away. 🤕🤕🤕
The pain of unauthorized resellers. The pain of competitors squatting on your brand terms. The pain of a polluted channel. Figuring out how to negotiate with Amazon. How much you should spend on ads. The latest promotion. The pain of fake merchandise. I truly get it: Amazon is an unending series of things you must take care of.
None of those things are the fault of your sales team! Or neglect from your marketing team! Or your merchandising team for not considering appropriate SKUs. Oh no! Perish that thought right now. 🙄
If a reseller for your brand was such an important strategy, why don't you put an authorized reseller in charge of your DTC website?
The reason is simple: it's too important an experience to outsource.
Some brands take this plan, it's called licensing. Licensing is a very viable model, and if you are pursuing it, then an authorized reseller is a valid approach. You don't want to operate, inventory is difficult. Just collect your check, even with guaranteed minimums.
If you want to pursue licensing, there are many investors who will help you.
But don't be surprised when:
Your reseller has their own goals.
Your reseller doesn't want your full assortment, they only select the SKUs that align with their cost structure and business model.
Your priority assortment might not be their priority assortment.
The check you get back is less than you thought it would be.
Relinquishing control of an essential venue like Amazon should be done as a last resort if you don't have the time, expertise, management skills, or patience to build competency, either with a good agency partner or internally.
At this point, completely outsourcing Amazon for a major brand is like outsourcing "this internet thing." It can be done, sure, and even somewhat profitably and successfully. But it's mostly to make the pain go away.
And not what it should be: treating Amazon as a considered and critical part of your buyer's journey.
