Selling on Amazon & Integrating a Multichannel Retail Strategy

By Tinuiti Team

*This article was written by Ifan Kaldain, Marketing Specialist at Brightpearl.

Multichannel Retail Strategy

Amazon has become the de facto marketplace for online sellers, with independent companies responsible for 44% of all transactions. It goes without saying that if aren’t already selling via Amazon, you should probably start thinking about it.

A question that many retailers have struggled with is: how do you sell on Amazon in conjunction with the rest of your business? Selling on a platform as large and diverse as Amazon is all well and good, but can negatively impact your business if certain factors aren’t considered.

Could Amazon drive traffic away from your website?

Could you waste money trying to sell products that Amazon users have little or no interest in buying?

Could you price yourself out of business?

This article explores the ways in which you can avoid these typical pitfalls, and create a profitable and synergetic multichannel retail strategy.

Multichannel Retail Strategy: Distribution of products

Should you upload all of your products on to Amazon, or would doing so dilute the incoming flow of visitors to your ecommerce website?

Rather than doing a bulk upload and hoping for the best, many retailers have identified what sells best on each channel so that they can tailor each platform to meet the needs of their respective audience.

Giantnerd, a retailer of bicycles and accessories, found that Amazon tended to attract customers of whom are relative beginners in the world of cycling, and so are looking for cheaper, more basic bicycles and accessories.

multichannel retail

Conversely, Giantnerd found that the more experienced cyclists would seek out the higher end products on the website, rather than on Amazon.

This is because higher end customers really know their bikes; they’re looking for specialized products that meet their needs, and so they prefer a platform that offers opportunities to gain in-depth product information.

This is where your website gains the advantage over Amazon, as it can provide far more detailed product information.

If your website provides convenient methods of posing questions or concerns to your staff, such as a live-chat function, then the advantage over Amazon becomes even more apparent.

Finally, those seeking higher end products expect the ability to customize their product to meet their own specific needs – which is certainly the case when it comes to bikes, along with desktop computers and furniture. The ability to customize products is not available on Amazon (beyond the basic ability to specify the size and color).

With this in mind, it can often be beneficial to focus your efforts on selling your cheaper products on Amazon, whilst focusing on selling your higher end products on your website.

Ensuring that those who discover your brand via Amazon can navigate to your website with ease, and vice versa, would also be advisable to ensure that this strategy works.

Multichannel Retail Strategy: Customer Data

Of course, these consumer trends may vary by vertical, or even by brand. The key to figuring out how your products perform on Amazon and other platforms is to utilize your retail analytics system.

With all your outgoing stock data available in one place, you can quickly identify whether your Amazon customers come to you for particular types of products, or utilize the on-page reviews to weigh up your product before making a purchase on your main website.

If you use Google Analytics, then you can also deduce what features customers who buy via your ecommerce website appreciate, such as contacting your staff via a live chat function.

Multichannel Retail Strategy: The Price Wars

While Amazon is a great marketplace for building your brand on the national and global scale, it is also a fiercely competitive platform. Amazon, along with similar websites, have driven the price wars to an entirely new level, with competing brands dropping their prices in a desperate bid to dominate their respective markets.

This in turn has encouraged consumers to shop around more, knowing that they can usually find your product sold somewhere else on Amazon at a lower price. This can often be intimidating to smaller retailers – and rightly so.

Before taking the plunge into Amazon, it is best to check your competitors to see what they are selling their products for, and weighing up the benefits of more customers versus the risk of matching competitive pricing in this environment.

This is less of an issue, however, when the supplier of your products has placed a MAP (minimum advertised price) restriction to all its distributors. This countermeasure became popular when concern was raised over the potentially ruinous effects of an overly competitive market.

If your suppliers have such an agreement in place, then you can at least have the confidence to sell on Amazon without the fear that a competitor will price you out of the market.

Amazon is a great platform that can often dwarf the performance of your other channels. The key to using it effectively is to observe and understand the consumer patterns that thread your channels together. Using an effective Amazon inventory management software package can make this mammoth task easier. Did you know that Giantnerd sell 90% of their stock through Amazon? Get more insights from Giantnerd with this free webinar.

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