Amazon Marketplace for retailers and suppliers

by | Apr 18, 2017 | Omnichannel, Retailers, Suppliers

If you’ve shopped online anytime at all in the last few years, you likely already understand options consumers have these days. You also probably are aware of the choice (and opportunity) facing retailers and suppliers when it comes to dealing with Amazon. The online retail giant has reshaped the e-commerce world, transformed the entire retail and logistics industry, has changed the way we shop and what we expect from internet shopping as consumers.

Retailers and suppliers have been throwing out all the stops to try to compete with Amazon: leveraging new e-commerce technologies, offering free shipping, increasing product offerings and doing whatever they can to keep up.

But we’re of the opinion that rather than fighting Amazon, retailers and suppliers can join Amazon and take advantage of their customer and logistical reach. In fact, many already have through Amazon Marketplace (and Amazon Retail). These are collections of 3rd party retailers and suppliers who already sell their products through Amazon’s platform. Perhaps selling through Amazon Marketplace could be a good choice for your business as well.

What Amazon Marketplace offers sellers

To make everything available on The Everything Store, Amazon opens its platform for anyone to sell anything. Participants selling on the Marketplace are able to quickly list products, while paying a small percentage of each sale for the referral. A seller on this marketplace merchandises their products through Amazon’s Seller Central. This is where listings and orders are managed for engagement and fulfillment.

Amazon fuels the Marketplace with additional services to make it easier for sellers. Fulfill by Amazon allows Marketplace sellers to tap into Amazon’s fulfillment centers for inventory, picking, packing and shipping to end consumers. With control over the fulfillment, Amazon allows for products Fulfilled by Amazon to be Prime Eligible. Amazon has additional services such as pricing automation, advertising, promotions, and shipping quotes to help sellers win the buy box.

Considerations for selling on Amazon

Amazon Marketplace operates with free market forces. When you have a platform that enables the sale of practically anything, there are those who push it to the edges. If you are a brand, there is little control over product listings that may be resold on the platform by way of 3rd parties. The best a brand can do is ensure they have contracts in place with their other sales channels, controlling their distribution rights.

Overall, Amazon Marketplace is a boon to retailers and suppliers of all sizes for a number of reasons. For one thing, it allows retailers to open up a new sales channel in addition to their e-commerce site, along side their other sales channels. For small retailers that don’t have an e-commerce site, this is an excellent way to test the waters and see if there is a demand for their products. Both suppliers and retailers can test the demand for new products by selling them through one of the most heavily trafficked shopping sites in the world.

Marketplace also allows suppliers, vendors and wholesalers to sell direct to consumers without creating their own e-commerce sites or taking on the IT headaches that come with running an e-commerce system. One pharmaceutical wholesalers makes $70 million each year selling both common and hard-to-find pharmaceutical and beauty supplies strictly through Amazon, with nary a brick-and-mortar store to be found. It’s also a way for suppliers to sell products at retail prices, which can help with overall profitability.

For retailers and suppliers who want to sell on Amazon, it doesn’t have to be a separate, siloed channel from the rest of your sales. You can connect to a single Network that can communicate with your Amazon business, consolidating your channels for a single vantage point.

Whether you want to sell products on Amazon Marketplace, or any other network of retailers or suppliers, SPS Commerce can help you find a solution. To learn more about our cloud-based software solutions for retailers, suppliers, and third-party logistics providers, please contact an SPS representative for more information today.

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Megan Brang


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