D2C is a huge disruptive force in retail and logistics. Retailers are losing, brands are winning, and Amazon is laughing all the way to the bank.
This post is by Matthew Ferguson, Director of Business Development at ecommerce agency Emanaged and Director of Strategy at consultancy Rich Insight.
Business-to-consumer and business-to-business are old concepts in the retail industry. Stores sell to the final buyers, but themselves need to buy stock from manufacturers, suppliers and distributors. They buy from businesses and they sell to consumers. Historically, it’s always been done this way.
Direct-to-consumer, or D2C, is where brands cut out the middleman and sell their wares straight to the buyer. While this is great for us, as consumers, it’s causing alarm among many retailers and suppliers. If we can order online, why do we need to visit a physical store? If the brand or manufacturer is selling their product directly to us, what role do retailers and distributors have to play?
The last 5 years have been particularly dramatic. Amazon, once a humble online bookstore, has switched on its “beast mode”, causing competitors to adapt, adjust and at times simply freak out. Online marketplaces, led by Amazon, have changed the landscape and broken the conventional flow of products along a long supply chain from manufacturers to consumers.
In contrast to those traditional retailers and distributors, direct-to-consumer is a battle that Amazon just can’t lose. Here’s why D2C has Bezos laughing all the way to the bank.
I have my own private label beauty brand and have been selling products on Amazon for the past five years.
I monitor my competition closely and it seems that over the last month, they’ve been getting a lot of reviews, far more than I’m getting even though my product has higher sales. I think they must be buying reviews.
I thought that doing this was against Amazon’s Terms of Service, so how are my competitors getting away with doing it?
Personally, I’m worried about the risks of getting caught. I’ve heard about Amazon suspending sellers for buying reviews and I don’t want this to happen to me. But, I also don’t want my competitors to be using this against me.
Do you know if there was a way that I could do it too without getting caught? Or even a way that would be treated less harshly by Amazon if I do get caught? I don’t want to do this if the risk of being suspended is too high.
I’ve been selling sports and fitness items online for five years through Amazon, eBay, Walmart and my own store.
For the last month, Amazon have been hounding me to set up big discounts on some of my products for Black Friday deals. They want me to knock my prices down by at least 20% for these deals, which is going to make my margins very low.
What I want to know is whether Black Friday deals are worth it. Am I likely to get a large increase in sales volume that means it will still be profitable? Will I get a knock-on effect after Black Friday because the increased sales will bump up my search rank? Or should I ignore it because the whole thing is just Amazon squeezing me to give lower prices?
We have been selling smartphones, tablets and accessories on our website, eBay and Amazon for almost 3 years now. Our sales were very good last year but now they have almost halved. We are also opening our first outlet store in about a week’s time.
Let’s begin with eBay, where some buyers abuse loopholes in the money back guarantee to return damaged items which were delivered in full working order.
Now we come to Amazon which is an even bigger problem. We have four main issues:
Other sellers on our listings keep changing the product details, meaning that the listing no longer matches our product. We only find out when buyers complain.
Buyers are allowed to open A-Z claims up to 90 days after purchasing an item, but can also do it after 6 months and get a full refund!
Amazon penalizes small sellers for a few invalid returns, negative feedback and A-Z claims when there are hundreds of other orders without any problem.
Unlike eBay, buyers do not bother to leave feedback. The only time they will leave feedback is when they are angry.
What can we do to tackle the issues mentioned above and increase our sales on eBay and Amazon?