This post is by James Thomson and Joseph Hansen, Partners of Buybox Experts, a consultancy supporting brands selling on Amazon and other marketplaces. Thomson and Hansen are also co-founders of the PROSPER Show, a continuing education conference focused on developing training and best-practice materials for early-stage online sellers.
When a brand owner contemplates selling on Amazon, they have a big choice to make:
- 1P: Sell first-party, wholesale, directly to Amazon Retail, using the Vendor Central interface.
- 3P: Sell third-party to consumers through the Amazon marketplace, using the Seller Central interface (whether the brand sets up its own 3P seller account, or works with partner 3P sellers focused on the brand).
Given the complexity of the Amazon marketplace, and the desire of brands to control their own destinies, we are seeing a significant move towards brands either setting up their own third-party seller accounts, or working with sophisticated third-party sellers who will manage the brands’ brand equity and product feeds, while respecting pricing and ensuring constant availability of product through the Fulfillment by Amazon program.
In this paper, we discuss the key issues and trade-offs of selling wholesale to Amazon Retail vs. selling through third-party Amazon sellers, and outline the risks involved in each approach.
Many of the multi-channel sellers I talk to are focused on the operations of their business.
They spend most of their time working on the processes that enable their business to run effectively: managing inventory, shipping orders, and handling customer service.
But when I spoke to Kyle Goguen, the founder of natural dog treats company Pawstruck, a different theme kept repeating itself. Kyle understands the importance of efficiency, but his enthusiasm really shines through when the conversation moves to another topic: marketing. I believe it’s Kyle’s enthusiasm for marketing that explains how this young business – less than two years old – has become successful so quickly.
Whether the topic is branding, email marketing, product reviews, social media or even packaging, Kyle has something to say. We also talk about Amazon Lightning Deals: Kyle reveals how his deals performed over Thanksgiving, and gives advice for other sellers on making the most of Lightning Deals.
UK Sports Warehouse, based in Oxfordshire, England, has been selling sporting goods though online marketplaces for fifteen years. They specialise in clearance – products which other retailers have been unable to sell through their normal channels.
Clearance (or liquidation) is a normal part of the retail business. Shelf space in stores and warehouses is a valuable resource, so items that don’t sell need to make way for those that do. And that often means selling them off in bulk for less than the cost price. Sometimes much less.
So clearance can be a great source of profitable stock for marketplace sellers, but there are downsides. One problem is that the supply changes every day – you can’t simply reorder bestselling products. Other businesses can sell the same line successfully for months or years, but clearance sellers need to constantly refresh all their SKUs.
UK Sports Warehouse (UKSW) saw the risk in only selling clearance products and decided to diversify, by adding a number of current product lines to their portfolio. But there was a problem. A “cheap and cheerful” image can work for a company selling clearance gear, but people who want the latest equipment expect to buy from a company that is serious about sports. That’s a very different brand.
So I caught up with Elizabeth Hitchins, an experienced ecommerce consultant who has been working with UKSW for a number of years. Elizabeth had the job of building a whole new sports brand for UKSW. This is the story of how she created SportsBubble, and the ups and downs of launching it as a new business on multiple online marketplaces.
Chad Rubin has achieved a rare thing amongst marketplace sellers: a genuine, recognisable brand name that stands for something.
Not only that, his business was built selling on Amazon’s marketplace – a channel that gives sellers little control over how they market themselves. And he did it selling products that seldom get people excited: vacuum cleaner spares and accessories.
In 2013 Chad’s company, Crucial Vacuum, made Inc.’s list of the fastest-growing private companies in the U.S., with $5.1 million in revenue the previous year. Another rare achievement and recognition for a marketplace seller.
I caught up with Chad to talk about ecommerce, branding, marketplaces and his latest project co-founded with Damir Kunovac, Skubana – a brand new ERP system for marketplace sellers.
Since 2006 eSellerPro has been a software platform for businesses selling high volumes of products on Amazon and eBay.
Over those years they’ve established a solid reputation, but in typical British fashion they haven’t made a lot of noise about what they were doing. It was undoubtedly an effective piece of software – a reliable workhorse – but seldom in the news.
Then in February 2015 a new company emerged. That business, Volo, had a bold design, distinctive videos, and big photos featuring happy customers and team members. Volo seemed full of confidence, innovation and ambition. This was eSellerPro’s new brand, and it couldn’t have been more different.
Why did they make such a big change, and what does it mean for the company? To find out I spoke to Volo’s CEO Paul Watson, who’s been running the business since October 2013. It turned out there’s a lot more going on than just a new brand. Volo also has 50% more staff at the company, a brand new user interface coming soon, and an imminent expansion into the US.
Yet there’s still a focus on high performance: Volo’s customers hold the records for both the highest sales by value, and the highest by order volume, in a single day on eBay, worldwide. It was definitely time to find out more about this company.