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The Business of Food

by Jennifer Barney

 

Getting Amazon Right
3-min read

If you’re not in your Amazon account everyday you’re totally blowing it. 
 
Let me back up. Maybe you don’t even sell on Amazon, and you think that’s OK. 
 
Be prepared that if you don’t set up your Amazon presence for your brand somebody else will. And it will be a terrible cell phone picture of your product that you’ll have to fight with Amazon to get access to change.
Sorry, Banana Butter.
 
If you’ve been selling on Amazon for a while and have had no issues – congratulations! you can skip this post.  
 
If you’re still with me you’re gonna hear some stuff you won’t hear anywhere else. These nuggets of gold are coming to you courtesy of Amazon expert David Tenzer, founder of Amplify Goods, an Amazon management company that specializes in small and emerging CPG food brands. 
 
Amazon is like internet marketing - it is not another wholesale account. 
This is the primary and most common misconception. While there is such a thing as being a wholesaler to Amazon where they are your customer, that option is by invite only. So, for the foreseeable future, startup and emerging brands are not vendors to Amazon. This is the distinction between being a Seller on Amazon vs a Vendor to Amazon. 
 
Brands often set themselves up as Sellers on Amazon and then go, “so when will I get my first P.O.?” 
 
Right, because Amazon is supposed to be a marketplace where they buy my product and market it for me.
 
Marketplace on Amazon refers to the internal side of selling (Seller Central) where Amazon is simply facilitating the sale between you and the end consumer, which is the definition of Direct-To-Consumer, or D2C. 
 
When the lights turn on you suddenly realize this is more like selling on eBay. 
Once it sinks in that Amazon is not your partner in marketing your products, you’ll realize that managing Amazon is super complex. For starters, you can set up your listings by yourself but if you do it incorrectly it’s really hard (but not impossible) to go back and fix. To compound that, you do not have total control over your product pages even once you set them up correctly. 
 
What?! 
 
That’s because Amazon’s success stems from allowing multiple sellers. The model is one product page and multiple sellers – incentivizing commerce through as may people selling as much as possible – which is why others can contribute to your product pages. You have no way to stop this, only to manage it. Which goes back to daily management. 
 
Even if you have someone on your team dedicated to ecommerce sales, chances are they are not an expert at the myriad changing rules (did you know Amazon now has video ads? The rules just changed on ads) or it might not be the best use of their time to be on hold for 5 hours with Amazon over a dispute. 
 
What kind of a dispute?
 
Let’s say you shipped 100 units of goods and Amazon only checks in 75. With Amazon you can go to battle. This means hours on the phone until someone at a call center off-shore promises you reimbursement. You wait for the statement to come and try to match it up, which is not easy, and if it’s not there (which happens) you have to go back and ask again. 
 
In the above scenario you might not want your marketing or sales person, whom you are paying a good salary with WFH privileges and unlimited PTO, spending half their day doing. What you do want them doing is managing the people that will be doing this for you.
 
Enter Amazon management companies. David Tenzer characterizes Amplify Goods as an arbitrage of time. They are a fractional Amazon manager. They handle set up and maintenance of your listings as well as all the execution of running programs (advertising). Which is the second misconception about Amazon: 
 
Operations and advertising are not one thing
It’s difficult to be amazing at operations and amazing at ads at the same time. You don’t have your logistics person running your marketing, do you? These are two different skills. Most Amazon agencies say they do both but really only do one or the other well. Look for an agency like Amplify that is good at both so you’re just paying one fee. 
 
What kind of fees do Amazon management agencies impose, and with all the other Amazon fees, isn’t Amazon too expensive to do business with? 
 
We’ll dive into the Amazon business model next week. 

All my best,
Jennifer
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