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Amazon is Going to Slaughter Your Brand

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Almantas

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Hey, guys!

So, I've read an article about Amazon taking complete control of ecommerce, link is here.

What's your take on this? Do you believe that in few years only the few, very local and extremely customer-focused services/brands will survive and the rest will be slowly pushed aside by Amazon?

Do you believe that ecommerce guys will be left fighting for miniature breadcrumbs while Amazon takes away a complete pie off the table?

I am not in ecommerce and simply asking what others think.

In my uneducated opinion, Amazon is a platform that facilitates brand-building and should be used as a partner instead of a competitor. Also, instead of completely depending on Amazon, people should probably use it as another platform to promote/sell their products and then redirect them onto their personal websites, which has even better shopping experience than Amazon.

Just my 2c, what is yours?
 
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Almantas

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Amazon is already taking the pie.

The crumbs of this pie will feed an entrepreneur for a lifetime.

I understand your point, but do you think that those breadcrumbs will eventually be licked off by Amazon too? I know it's a silly question, as complete control in ecommerce space is probably impossible...I hope.
 
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Arbitrageurs will get wiped out as Amz deals more directly with manufacturers (amz biggest competitor isn't ebay or walmart, it's alibaba). But Amz can't control brands or markets, they can only serve them at a discount. Personally, I don't think Amz is eating the world so much as markets are getting bigger.
 
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Almantas

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Arbitrageurs will get wiped out as Amz deals more directly with manufacturers (amz biggest competitor isn't ebay or walmart, it's alibaba). But Amz can't control brands or markets, they can only serve them at a discount. Personally, I don't think Amz is eating the world so much as markets are getting bigger.

IMO someone makes a lot of money (maybe Alibaba?) by fearmongering and trying to turn customers backs at Amazon and by doing so weaken Amazon's competitiveness.

I understand that Amazon provides a direct sales channel to manufacturers, but if your product is made of multiple parts that are manufactured by multiple different manufacturers then chances of waking up and seeing your Chinese buddy selling your stuff for a manufacture price directly on Amazon is highly unlikely. It's all about control - not only in business, but in life generally.
 
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Amazon can't harm mid tier brands. Walmart.com is coming on strong. Amazon is deriving 40% of their revenue from 3P merchants. Small sellers and resellers will disappear, but Amazon will continue to make 3rd tier, 2nd tier, and 1st tier brands stronger.
 

Almantas

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Amazon can't harm mid tier brands. Walmart.com is coming on strong. Amazon is deriving 40% of their revenue from 3P merchants. Small sellers and resellers will disappear, but Amazon will continue to make 3rd tier, 2nd tier, and 1st tier brands stronger.

Thanks for replying.

Please correct me if I am wrong, but are you are implying that pretty much all small sellers, like ordinary folks who want to dip their toes into ecommerce will be swallowed by Amazon?
 
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Vigilante

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Thanks for replying.

Please correct me if I am wrong, but are you are implying that pretty much all small sellers, like ordinary folks who want to dip their toes into ecommerce will be swallowed by Amazon?

Yes. I think that is inevitable, and happening already.
 

Almantas

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That's an interesting input.

I know nothing about brands nor branding, but it seems that guys who know how to innovate/improve existing products will manage to keep their heads above the water. However, guys who are simply re-selling existing stuff from Alibaba/Aliexpress will hardly reach a shore alive.
 
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Lionhearted

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Hey, guys!

So, I've read an article about Amazon taking complete control of ecommerce, link is here.

What's your take on this? Do you believe that in few years only the few, very local and extremely customer-focused services/brands will survive and the rest will be slowly pushed aside by Amazon?

Do you believe that ecommerce guys will be left fighting for miniature breadcrumbs while Amazon takes away a complete pie off the table?

I am not in ecommerce and simply asking what others think.

In my uneducated opinion, Amazon is a platform that facilitates brand-building and should be used as a partner instead of a competitor. Also, instead of completely depending on Amazon, people should probably use it as another platform to promote/sell their products and then redirect them onto their personal websites, which has even better shopping experience than Amazon.

Just my 2c, what is yours?
My bias here, I am considering making my own brand and selling on Amazon.
You never know what the motivation of the person writing the article is (other than going viral or getting clicks) they may be in a partnership with Alibaba, Jet or even Amazon and trying to manipulate the market. Who knows? I take most of what mainstream media tries to feed us BS. They really don't have a clue, in my eyes they are "Scripted". Do you think Amazon would spill the beans if they were going to screw the very people that made them into what they are? Seriously? No.
BTW Amazon makes huge money being the middle man between brand maker and the consumer. Brand suppliers are also Amazon customers. They buy Amazon's services and pay large fees to use them as well they pay Amazon to promote their products (paid advertising). If they squeeze them out they will no longer get those fees also they no will longer get the "creative energy" all these people bring to the market.
Amazon also knows that they have competition out there (Shopify?) and if they screw their customers (brand suppliers are customers) their customers will go elsewhere. As an entrepreneur I always ask,"How can I take advantage of the situation?" I also know that entrepreneurs are "usually" very quick on their feet and adapt quickly to a changing environment. I know one thing for sure, businesses that squeeze the market too tight always create a new opportunity for someone else (see taxi cabs and Uber for an example). I am thinking one of the customers who was squeezed out of business by Amazon (because Amazon bypassed them and went straight to the manufacturer) could wake up one morning and create their own Alt-Amazon that allows millions of entrepreneurs to do what Amazon used to allow them to do at lower fees or in a simpler way and BANG see you later Amazon. Understand that there is always a way to be creative and be the David in a Goliath situation. Remember at one time only had Ma and Pa general stores then we had department stores, then we had big box retail shopping, now we have Amazon and the world of online shopping, sooner or later someone will once again re-invent the wheel. Adapt or face extinction.
 
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That's an interesting input.

I know nothing about brands nor branding, but it seems that guys who know how to innovate/improve existing products will manage to keep their heads above the water. However, guys who are simply re-selling existing stuff from Alibaba/Aliexpress will hardly reach a shore alive.

My pedestrian input: it comes down to the difference between having "customers" and having "fans".
 

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I think this is really interesting. I mean, we can't deny the muscle-power Amazon comes with, they've been in the game really long and they are really dominating; however, there was once a time where generally big brands were dominating in their specific industries. Who was a "nobody" to come along and compete with them? Then, a lot of the small "nobody" brands began gaining market share and also began changing the game entirely, what these "nobody" brands were doing was they began reviewing what all these other big brands weren't doing and they began doing it.

No longer was it about a product selling because it had a big brand name, the "nobody" brands, without pointing fingers, began educating us about the benefits/harms of general products and they offered the alternative as a solution to the harms, which presented more responsibility on their part than the established brands, it reached a point where people were being more educated about what they put into their bodies/on their skin/in their hair/on their children etc., which changed the game entirely.

Though Amazon carries a lot of weight as a company, they can't do everything, or they can't think of everything, there will always be something they'll miss that some "nobody" just may be able to capture and run with it, it may not be as big as the Amazon brand, but it just may carry a lot of weight with it.

Isn't this what makes a Value-Based Fastlane/Unscripted Business? Isn't this where the difference is found?
 
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Amazon is slowly butchering the small companies. Just take a look at the "Amazon Basics" products you find on Amazon.

Amazon is giving their own product priority in the search results over everyone else so that people buy theirs and not these other companies.

It is a matter of time before AMZ also starts limiting registrations for becoming a seller.

As someone who knows what makes products rank on Amazon, I am gonna milk the shit out of it until they boot me and other sellers off.

Soon Amazon arbitragers will be gone.

^My opinions...
 

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Thanks for replying.

Please correct me if I am wrong, but are you are implying that pretty much all small sellers, like ordinary folks who want to dip their toes into ecommerce will be swallowed by Amazon?

They are not getting swallowed by Amazon, they are getting swallowed by other people just like them out working them, out funding them, and out performing them.

The market is the market. Play or die.
 

biophase

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Thanks for replying.

Please correct me if I am wrong, but are you are implying that pretty much all small sellers, like ordinary folks who want to dip their toes into ecommerce will be swallowed by Amazon?

Small sellers won't get swallowed by Amazon because by definition, they are small sellers. Amazon is not entering a market that has low sales numbers.

It is the large and medium sellers that have a simple non-brand loyal product that should be worried about Amazon basics. If you are selling garbage cans or kitchen cutting boards, you could get crushed by them.

Products that require some semblance of R&D are probably not going to be taken over by Amazon basics. They aren't coming out with sunglasses that will rival Oakley's or Rayban, but they might squeeze out the smaller sellers selling ordinary ones.
 

Iammelissamoore

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Amazon is slowly butchering the small companies. Just take a look at the "Amazon Basics" products you find on Amazon.

Amazon is giving their own product priority in the search results over everyone else so that people buy theirs and not these other companies.

It is a matter of time before AMZ also starts limiting registrations for becoming a seller.

As someone who knows what makes products rank on Amazon, I am gonna milk the shit out of it until they boot me and other sellers off.

Soon Amazon arbitragers will be gone.

^My opinions...
You admit to the problems here, which is good; someone reading this is seeing incredible opportunity!
 

Almantas

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Based on abovementioned facts/opinions it's obvious that every challenge masks an opportunity. It's all about vision and execution - guys who are in the game just to make a quick buck will be licked off very soon, but the guys who are in the long-haul type of game with an appropriate attitude and R&D strategy will remain in the game and keep making financial gains.
 
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Sanj Modha

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Who's your competition? Amazon or FBA sellers? It's a beast but I'm not worried about it. There are things smaller sellers can do that Amazon can't because it's so big. For example, one of them is personalized customer service.

We sell a lot of products that are cheaper on Amazon but Amazon isn't always price sensitive. A good friend of mine sells off FBA and does really well. He told me about an example of a bluetooth shower radio which they sourced and branded. It wasn't selling at the lowest price (I think it was listed around $18.99) so he decided to up the price to something like $27.99 and it sold out.

I go back to the above comment - it's the difference between 'customers' and 'fans'. I buy from Amazon but I wouldn't call myself a 'fan'. It's my go to marketplace for cheaper items but it's not always the cheapest either.
 
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Digamma

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Eh, nobody can predict the future. Like anybody trying to predict the stock market, it's just deluding yourself that your biases are accurate.

At the end of the day, if Amazon can do something better than you, and they care about doing it, then they will eat your cake.
If they can't, they can't. It's always about value provided.
 

cutthroughstatic

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Great responses on this thread. It comes down to a few things:

Amazon doesn't control the market. They control a large portion of the traffic, but they don't and can't control the market.

We don't know what is 1 year, 2 years, 3 years out. As Amazon continues to take market share, they will eventually attract rivals. What Amazon did to brick and mortar, someone will one day do to Amazon. There will always be opportunities.

It comes down as always to value. If you can provide more perceived and actual value than Amazon or than another seller on Amazon, you'll win.

The internet is huge. There's tons of ways to get traffic. If Amazon starts eating up some of the sellers, people will get creative and find newer/better ways to get in front of their customers.
 
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SquatchMan

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Based on abovementioned facts/opinions it's obvious that every challenge masks an opportunity. It's all about vision and execution - guys who are in the game just to make a quick buck will be licked off very soon, but the guys who are in the long-haul type of game with an appropriate attitude and R&D strategy will remain in the game and keep making financial gains.

Even if Amazon eats the businesses in the long haul game (they won't for reasons stated earlier), there are still ways to get some breadcrumbs off Amazon's massive infrastructure:

Think of the businesses that service Amazon's massive infrastructure and the contractors they need to hire:

Companies that have contracts to clean the warehouse, monitor the power output, service the water coolers, build the security systems/metal detectors at the warehouse, install the doors, build the conveyor belts (my warehouse had 11 miles worth of them), install all the fencing in the warehouse, paint the lines on the parking lot, make all the signs, service/install the A/C, etc., etc. When I worked at Amazon I would literally see hundreds of business oppurtunites a day. 99% of them involved selling stuff to Amazon (or sell to the companies that are selling to Amazon); not on Amazon.
 

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Small sellers won't get swallowed by Amazon because by definition, they are small sellers. Amazon is not entering a market that has low sales numbers.

It is the large and medium sellers that have a simple non-brand loyal product that should be worried about Amazon basics. If you are selling garbage cans or kitchen cutting boards, you could get crushed by them.

Products that require some semblance of R&D are probably not going to be taken over by Amazon basics. They aren't coming out with sunglasses that will rival Oakley's or Rayban, but they might squeeze out the smaller sellers selling ordinary ones.

I think about this alot, what are your thoughts on Amazon making moves to buy the biggest brands in each niche to dominate their respective market?

For instance I have a hard time seeing an Amazon basic supplement line doing much damage. But if they were to buy BSN or Optimum or a huge move like that I could definitely see that being a massive problem for other sellers.

Same goes for other niches much like it. What do you think @biophase?
 

MJ DeMarco

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I don't expect Amazon to be writing books anytime soon. ;)
 
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MJ DeMarco

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Why would they need books if they have a Washington Post in their arsenal? :smuggy:

Depends if you're in the market for knowledge or propaganda.
 

Almantas

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Lionhearted

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I think this is really interesting. I mean, we can't deny the muscle-power Amazon comes with, they've been in the game really long and they are really dominating; however, there was once a time where generally big brands were dominating in their specific industries. Who was a "nobody" to come along and compete with them? Then, a lot of the small "nobody" brands began gaining market share and also began changing the game entirely, what these "nobody" brands were doing was they began reviewing what all these other big brands weren't doing and they began doing it.

No longer was it about a product selling because it had a big brand name, the "nobody" brands, without pointing fingers, began educating us about the benefits/harms of general products and they offered the alternative as a solution to the harms, which presented more responsibility on their part than the established brands, it reached a point where people were being more educated about what they put into their bodies/on their skin/in their hair/on their children etc., which changed the game entirely.

Though Amazon carries a lot of weight as a company, they can't do everything, or they can't think of everything, there will always be something they'll miss that some "nobody" just may be able to capture and run with it, it may not be as big as the Amazon brand, but it just may carry a lot of weight with it.

Isn't this what makes a Value-Based Fastlane/Unscripted Business? Isn't this where the difference is found?

As I said, "the creative energy" these "nobody" brands bring to the market are part of the value proposition. I think Amazon as a big corporate entity will always be chasing the creative leaders product offerings. I don't see Amazon taking chances with risky product offerings like the "spinner craze" toys but someone brought the toys to Amazon and I am sure made a million $$$$$ off them. Amazon chases the proven winners, I don't see them leading the market because they are not as dynamic and creative as the "nobody" brand entrepreneurs. That is where the "nobody" brands beat Amazon hands down. Be fast and adaptive or get smoked.
 

Lionhearted

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I think about this alot, what are your thoughts on Amazon making moves to buy the biggest brands in each niche to dominate their respective market?

For instance I have a hard time seeing an Amazon basic supplement line doing much damage. But if they were to buy BSN or Optimum or a huge move like that I could definitely see that being a massive problem for other sellers.

Same goes for other niches much like it. What do you think @biophase?

The Amazon Basics brand products are very "generic" in nature which is OK. I have purchased a few of them but they are basically the same as many of the "nobody" brands the only value that Amazon brings to the table with their product offering is an assurance of QC (from what I can tell) which any "nobody" brand could also bring to the market if they wished to by selling good product. So yes they are competing with the "nobody" brands but they are not selling anything that the "nobody" brands can't compete with.

Take for example their 50" camera tripod, the Amazon Basics tripod is a cheap (made in China) product at $13.96 which will do the job (OK) but if you look further down the search page you can buy the exact same product by Prime "nobody" brand for $9.84 (with free one day shipping!). So Amazon is competing but the "nobody" brand is a better value, especially when you consider that you have the exact same option to return the product if you don't like it. There really is no risk in going for the cheaper "nobody" brand tripod. The Amazon Basics brand in a sense is a niche market brand but not impossible to beat.

And yes they could purchase the BSN or Optimum brands but unless they buy the people running those brands they will more than likely lose the branding edge "creative energy" those people bring to the brand. You can buy the brand but the "creative energy" of the brand is elusive and easily lost.
 

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