During the last Digital 1to1 organized by the Club Ecommerce several retailers and professionals of the e-Commerce world exposed the problem that Amazon represents by having a dominant position in the market and putting against the ropes most of retailers and Spanish distributors.
The Digital 1to1 is a reference meeting in the world of e-Commerce and digital business and has hosted this year more than 400 attendees, including representatives of the main Spanish e-Commerce, Brands and Retailers over 50 million € of turnover and digital solutions of all kinds.
Within the event, there was an intense debate about Amazon, where Jordi Ordoñez (Marketing Director of Due-Home and Consultant Ecommerce, author of the Complete Guide to Selling on Amazon and Pablo Renaud (Strategy Director Ecommerce of Ebolution) exposed the main points for and against Amazon and many of the attendees commented on their experiences and fears that Amazon could leave them out of the game.
Amazon is the largest e-commerce player in the West and the main enemy to be beaten for the Retailers
According to Pablo Renaud, "in the United States, almost half of e-commerce sales are already made through Amazon. Between its position of power and the changes in consumer habits, they are experiencing a true retail apocalypse and it is expected that within 3 years half of the shopping malls will disappear".
For his part, Jordi Ordoñez, makes it clear that "Amazon has the customers and not selling on Amazon means giving up an important part of the consumers who either only buy on Amazon or start their buying process on Amazon. In addition, if you don't sell your product on Amazon, your competitors will surely do it, so it is difficult to resist selling on that channel. However, be very careful not to sell too much through Amazon because if you depend too much on them you can be out of the game at any time".
For José Carlos Cortizo (CMO of BrainSINS and the En.Digital podcast and moderator of the debate), "the general opinion on the part of retailers is that Amazon is the main enemy to beat, although at the same time an obligatory ally in most sales strategies. Customers are on Amazon and either you sell in your vertical or your competition sells, so the decision is almost imposed. However, Amazon's position of power is so strong that as soon as you start selling well through their marketplace they always try to go to your manufacturer to put you out of the game and get a better price".
Many of the retailers attendees at Digital 1to1 confirmed that they already sell through Amazon, but that they are increasingly fearful about this channel because of Amazon's ongoing abusive practices. On the one hand Amazon is in the habit of bypassing retailers and going after the manufacturer as soon as a product line starts to sell well. And on the other hand, some of the manufacturers present in the debate complain that Amazon changes the rules of the game continuously and start working with you with certain conditions but then "the cuts come" and between delays in payments and various "revolutionary taxes" that you are charged without having to have signed them, often the expected accounts are greatly reduced and make the profitability of selling through this channel is in question.
Is it convenient for retailers to sell on marketplaces?
For Jordi Ordoñez, selling through the marketplace "no longer makes sense, it is a continuous struggle against your margin, and the few possibilities we have left are to be manufacturers for Amazon. This is the path we have followed in Due Home and we have managed to go from being a company with 2 people just a few years ago to a turnover of 13 million € with 11 people". However, it is a risky path and you have to be continuously diversifying in other marketplaces so as not to depend solely on Amazon.
Pablo Renaud points out other cases in which Amazon is still useful, such as testing new markets in Europe, experimenting with other product lines or "selling a really differential product, with a lot of innovation and that no other retailer or manufacturer can sell". In those cases the Amazon channel makes a lot of sense, because it will take time to copy you or jump you in the value chain and you can take advantage of squeezing the customers that are inside Amazon". Be that as it may, Amazon's customers are Amazon's customers, and any action in its marketplace is a short and medium term bet, and everything points to the situation becoming even more complicated in the long term, so Pablo Renaud encourages all retailers to explore other ways to make e-commerce "Amazon-proof".
