What are the Top 3 Questions Amazon Must Answer in 2023?

Here are the questions I think about for Amazon which help frame its most important priorities as I see them:

Can Amazon Rein in Costs and Become Consistently Profitable?

In the short term, while this is not the most important thing to the business, it is the most important thing to the market.

In the last few quarters, Amazon has mentioned a few times where there are 100M+ costs it has its eye on that have not been reined in. That needs to change.

Surprisingly, hidden in this point is an existential risk to Amazon. If Amazon has such a massive moat, why do its costs to serve need to be so high?

And if Amazon does not have such a massive moat, is the business as special as it once was?

Can Amazon Sort Out Its Fulfillment Issues?

Last year, Amazon tried to simultaneously hold two contradictory statements in its mind, but instead of showing genius, it showed its fallibility.

Statement One: We doubled our fulfillment capacity in 18 months; aren't we great? Isn't that hard?

Statement Two: Dear seller, your FBA limits are decreasing. Again.

Source: Vox

Amazon Warehousing & Distribution (AWD) is a disruptive idea - the notion that you can have virtually unlimited storage at lower marginal cost and better performance than anywhere.

Amazon has a tremendous advantage in fulfillment - every 3PL and carrier on the planet admits openly and behind closed doors that Amazon does it better than anyone. Can Amazon get out of its way and successfully bring these to market more broadly off-Amazon?

Can "Buy With Prime" and its Off-Amazon Initiatives (AWD) Escape The Fate of Amazon Pay?

Amazon Pay, in its history, has been... useful but not transformational.

Despite all the noise about Shopify and Amazon Buy with Prime, the success of Amazon's Buy With Prime program will not depend on Shopify, it will depend on how Amazon approaches and partners with its merchants.

What are the keys?

First, as it does with AWS, Amazon needs to do a much better job explaining how its fulfillment and payments business off-Amazon will not just benefit its Prime flywheel.

To Amazon, this is a new initiative that will help the company grow more. To a brand, letting Amazon in the D2C kimono is a potential existential risk. Amazon must find a self-deprecating and straightforward way to address this before the program can be successful.

Second, they need to find the right carrot to allow them to acquire merchants at scale. Right now, Amazon is training agencies and calling brands. That is primarily outbound.

The tide will shift when it becomes inbound. To give you some idea, in 2021, over 1,000 sellers joined the Amazon marketplace every day.

Third, they need to prove that the program can generate raving fans.

What are your keys for Amazon in 2023?