Amazon is cutting off distributors as vendors by sourcing brands directly from brand owners. What does this really mean?

Oh and by the way, selling on Amazon doesn't need to be that complicated. Just make sure that you have the right people with relevant Amazon experience in your team.

Omniarch offers expertise through our Senior Marketplace Consultants with kick-ass experience from leading marketplace positions at companies such as Gina Tricot and BabyBjörn. We have experience from working with seller, vendor, and hybrid sales models on Amazon, as well as other marketplaces such as Zalando, T-mall, Rakuten, Lazada, and more.

Succeeding on marketplaces usually comes from many years of learning by doing (and by making mistakes) where our consultants can share best practices from other brands and their success stories and failures.

So, back to Amazon’s new policy (CNBC, Retail-Week) with cutting off distributors as vendors…

First of all, there is a huge difference between selling products on Amazon (as a seller) or to Amazon (as a vendor). Let’s break it down:

As a seller on Amazon (3P/D2C) you are using Amazon’s interface to sell your products where you are in control of pricing and stock levels. As a vendor on Amazon (1P/B2B) you are selling products to Amazon, losing control of pricing and stock levels as soon as you have confirmed orders to Amazon.

If your company is allowing distributors by contract to sell your products to Amazon, you might be affected by this new policy. Or at least your distributors will be; if they sell your products to Amazon as a vendor. If this is the case, you need to check your options and start planning for the change.

This is just another reason why your business needs a solid marketplace and reseller/distributor strategy in place when selling on/to a marketplace. Relying on the vendor sales model on Amazon as your only sales channel on Amazon comes with high risk since you are losing control, nonetheless if you sell to Amazon as a brand or through a distributor. Despite having more control as a seller on Amazon, other challenges will be faced such as poor ranking and scalability issues.

You also need previous expertise of selling on/to Amazon. This is not just something that you should add to someone’s current role description, if that person has not been trained by an expert. Giving this responsibility to the wrong people actually can damage your brand on Amazon, even long term, since your future visibility on Amazon will be based on your products’ history.

Not selling on marketplaces means lost sales opportunities. 66% that were shopping online in 2021 also were shopping from a marketplace in Sweden, and the numbers are even higher in other European countries. In the US, more people start their shopping journey on Amazon (61%) than on a search engine like Google (49%).

Yes, there is a lot to think about when selling on marketplaces such as Amazon. However, you should not ignore the fact that marketplaces are here to stay. Make sure to at least consider marketplaces as a part of your omnichannel strategy. Also remember that your resellers and distributors could be allowed to sell your products on open marketplaces, so do your research – or let Omniarch do the research for you!

Omniarch offers a Marketplace Assessment, where we identify your sales potential on different marketplaces as well as clarifying what is required from you to start selling on marketplaces. We will provide you with an action list of priorities of what needs to be done, step by step. We can also help your business on your journey to start selling on marketplaces including onboarding, or scaling your current marketplace business.

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Feel free to reach out (Emelie Wallin, emelie@omniarch.se) if:

You have received this message from Amazon
You are curious about your sales potential on marketplaces

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