Should DTC Brands Sell on Amazon?
Here are three reasons why your brand should have an e-commerce presence on Amazon.
Last Updated: January 14, 2021
Published: March 16, 2020
Is Amazon friend or foe? This is one of the most common questions anyone in e-commerce asks themselves. On one side, Amazon’s incredible operational infrastructure and ubiquitous customer base present an opportunity for most brands. On the other, their willingness to move up and down the value chain and compete fiercely is well-demonstrated.
Walmart grew from $26 billion to over $400 billion in sales from 1990 to 2010. In those days, by not working with Walmart, you were conceding a huge portion of the market and much of the market’s growth. Today if you avoid selling on Amazon, I fear you are doing the same and the market will leave you behind.
There are three reasons why most brands should be selling on Amazon:
to leverage the organic growth of Amazon
play defense against third-party sellers
to build a new merchandising capability
In the digital world, you must play offensive and defense. Chances are that a third party seller has already listed your products on Amazon and the product / service experience they are providing reflects on your brand.
For many traditional brand managers, this is reason enough to have an Amazon presence and actively defend your brand equity. The more traction third-party sellers gain, the harder it is to displace them. In a world where the consumer can decide where to buy your product, you must be everywhere.
Lastly, I believe the function of merchandising is changing. Merchants used to be the deciders of what products would be available to consumers and largely use historical sales data or gut feel to make most of these decisions. Merchants must figure out what consumers want in order to succeed but today’s world gives them a new toolset for doing this.
Merchants must figure out what consumers want in order to succeed but today’s world gives them a new toolset for doing this.
I believe it’s possible to create a great company without selling on Amazon; however, I don’t know why you would.