Amazon Still Not Just "Another Retailer"
Amazon Still Not Just "Another Retailer"
By far the biggest challenge I see with brand organizations that are still nascent in their DTC approach is their decades-old view of what Amazon is and what it is not.
To be clear, Amazon is a technology platform masquerading as a retailer.
If you are a brand working with a typical retailer, it's because way early in the year someone had a meeting and setup a tight or loose "open to buy" (it's just a budget), which then creates a category and SKU purchasing plan for the upcoming season.
Which then some poor marketer attempts to sell through in an often pre-ordained "forecast" which coincidentally (!!) better always match the buy.
Amazon has a consumer forecast - that's it. And probably more economists than the Federal Government.
There's no "open to buy" allocation for you. If Amazon thinks it can sell through, it will buy against it. If it's essential to their competitiveness according to their algorithms, they will buy against it.
If it's not, they won't.
Things Amazon doesn't care about:
- your margins, and the fact you forecast a little more this year
- your manufacturer's price increases
- the fact that your product is way down the search results
- the increased time your product spent on the water last month
- your rising or falling freight costs.
- the fact that you have new products coming out this season.
Brands treat Amazon as "another retailer" at their own peril. Their vendor management team - god bless them - is not a customer service team. It's there to roughly simulate what a normal retailer might look like -- almost like a robotic simulation of the interface between a retailer and a brand -- essentially, replicating what they learned from Walmart long ago. It's not "Amazon-like" in any way.
Your job is to stop whining about your vendor manager, look at the entirety of Amazon's platform and use the parts that work well for what they do well, and ignore the parts that don't work for you.
But most especially, stop trying to use ONLY one program as the entirety of your approach with Amazon. That comes from your comfort level only, not an optimized strategy.
Between 1P, 3P, advertising (endemic and non-endemic), promotions, coupons, and now Buy With Prime, there is a set of programs that you can pick from.
You need to be as armed as Amazon is with your own data about your unit profitability, goals, and - most importantly - knowledge about where each Amazon program fits and where it does not fit if you're going to be successful.
