Recent news reports highlight retailers making deals with Amazon to sell products through their site. This is basically an extension of services Amazon has offered to smaller retailers for several years. If you are considering this stop and think. The temptation may be great, and looking at a few of the brands on the list I can see why they think they need this, but it smacks of desperation. Let me put an image in your mind. Think of the devil sitting on one side of your shoulders and an angel sitting on the other. One is saying “come over to the dark side, we have cookies” while the other is saying “they look good but there will be a price to pay.”
Does this sound too extreme? Amazon is like heroin, delivering a major rush at first. New visibility for your brands and products leads to higher sales. The problem being the high wears off, the devil wants his due, and you can’t get free by saying the devil made me do it. Once Amazon has you in their grip they will use every piece of information they gather to build their business at your expense. Literally, everything they do is done for a reason. Think you have unique products? What will they do with the information? Can they do a knock-off and produce it themselves? What about similar products in their assortment, they will use this data for pricing tests. And don’t forget they are using you to help fund their Amazon Prime program.
Sure Amazon has brand power, but it’s not your brand power. Do you believe in your brand? If the answer is no then go ahead because the handwriting is on the wall. Some brands that are on the downhill slope may extend themselves long enough to garner revenue. If the answer is yes then the question is a different one. Have you developed a strategically placed marketing plan to drive digital business growth? Ecommerce is growing exponentially for many retailers. Is digital growth what you want to do? If so what’s your strategy for physical retail? How much of your business do you want to transfer from bricks to digital? If you can’t answer these questions then don’t make the leap.
If you decide to partner with Amazon I wish you all the best. Make sure you have a clear goal in mind for how dependent you want to become. Do you want 10% of your digital revenue to come through Amazon? Or is 20% the right number? Just make sure you know what the number is and that you go in with an understanding of how you will replace the sales volume should your plans change. Start with an exit plan in mind. Structure a deal on your terms not theirs. Good luck with that as they know you need them but they don’t need you. If you’re not desperate just say no.