What is Amazon Launchpad?
Today, the digital retail industry is as prominent as ever. With the likes of crowdfunding platforms, venture capitalist firms, and seed accelerators, startups have a plethora of resources at their disposal.
While the process of turning concept into product has become more achievable, addressing factors such as marketing and distribution channels still stand as sizable hurdles crucial to your business’ success.
That’s where Amazon comes in. In July of last year, the e-commerce giant announced Amazon Launchpad, a program designed with startups in mind. As Amazon describes it, “Amazon Launchpad makes it easy for startups to launch, market, and distribute their products to hundreds of millions of Amazon customers across the globe.”
While the program has established a presence within the Amazon ecosystem, many startups are still questioning whether or not Launchpad stands as a viable outlet for, not only their product, but their brand.
With nearly a year having passed since its creation, now is as good a time as any to revisit the platform and assess its potential value to your business.
The Pros & Cons of Amazon Launchpad
In the process of weighing the pros and cons, it’s important to first understand the architecture of the Amazon Launchpad system. Geared toward the startup community, Amazon has partnered with organizations, such as Y-Combinator and Kickstarter, known for housing innovative ideas and products.
A brief glimpse at the Launchpad site exemplifies the angle Amazon is trying to nail down with the platform.
With products like portable projectors and universal touchscreen remotes littered across Amazon Launchpad’s dedicated storefront, it’s clear the company is gravitating toward the creative side of product innovation. Successful campaigns and projects from these various mediums are then encouraged to join the Amazon Launchpad platform.
“We support these young companies with Amazon’s retail expertise so they can stay focused on product innovation, and by working with them closely, we’re able to bring their exciting new products to our customers”, Amazon says of its program.
Amazon Launchpad: The Bad
- All in all, the benefits Amazon Launchpad provide sound like a pretty good deal for companies trying to leave a mark on their respective industries. And a lot of it is. But that’s not to say the program doesn’t have its own set of disadvantages.In order to participate in the FBA service, wholesaling your products to Amazon is required. While this is normally a fairly common practice for more established companies, losing out on profit margins can be incredibly impactful on smaller businesses.
- Payment terms for Vendor Express are a “Net+60” cycle; meaning businesses won’t receive payment for up to two months after the purchase order has been confirmed – which may be a hard pill to swallow for strapped-for-cash companies.
- You’ll also need to decide how flexible you’re willing to be with pricing, as Amazon may have some input. “If the selling price of your item to Amazon (and to the suggested retail price) meets our expected price, then we will accept your price. If it is higher than our expected price, we will recommend a lower price that we can accept for the item”, per their terms and conditions.
- An initial product shipment must be sent to Amazon at no cost. Ultimately, these units are used to evaluate what demand there is in the market for your product. If Amazon comes to the conclusion that there is not enough market interest, program approval won’t be granted and you’ll have to take a loss on the initial shipment.
All of these factors play into the Amazon Launchpad application process, making it a bit more strenuous than the site leads on. How much weight each of these variables carry is left rather open-ended by Amazon, and the likelihood of being approved is somewhat of a guessing game.
However, with the opportunity of having an established network like Amazon support your brand’s marketing and distribution channels, many companies are finding that the Amazon Launchpad program is well worth the time.
Amazon Launchpad: The Good
Amazon Launchpad’s framework provides a number of program offerings for participating startups. The onboarding process is a fairly simple progression.
Getting started, companies are required to create an Amazon vendor account where basic product information is requested. Once the account has been established, an initial product order is then sent to Amazon’s fulfillment centers.
Finally, any additional product information – such as photos, videos, and company descriptions – can be uploaded to the site’s systems. With the exception of a few caveats, Amazon Launchpad’s onboarding process isn’t too extensive.
For newer companies, overcoming the challenges presented by marketing and distribution can oftentimes be nothing short of daunting. This is where Launchpad’s appeal resonates with so many startups.
- Brands are offered marketing strategies designed to subject them to a level of exposure that is typically more difficult to attain for less established companies.
- Companies are provided with a dedicated page that host product details, company insight, and a brief Q&A with the company’s founders, often detailing how a product came to fruition.
- Ad placement across Amazon’s site and even access to their customer review program, Amazon Vine – which usually requires an invite to have your products reviewed on.
- Launchpad is structured to have Amazon house all inventory in order to facilitate distribution with the Fulfilled by Amazon (FBA) service.
The accumulation of these benefits can be incredibly advantageous for budding startups. Having access to Amazon’s global fulfillment network, fast shipping on products through Amazon Prime, and allowing them to handle customer service needs all assist in increasing a brand’s potential customer reach.
With Amazon Launchpad’s extensive network of support, startups enrolled in the program stand to benefit quite a bit from having a presence on one of the biggest retail platforms in the digital space.
Amazon Launchpad User Insights:
Q&A with Earhoox
Like any product or service available on the market, reviews and first-hand accounts are generally a good indicator in gauging customer experience and feedback.
Earhoox, whose products stand as a solution to loose and uncomfortable earbuds, has been operating on the Launchpad platform since August of 2015. The company’s founders, Jeff Becker and Helmut Wyzisk, heavily revered their time with the Amazon program.
Q. What was the initial process of getting started with Amazon Launchpad like?
A. Getting set up with Amazon Launchpad was a great experience. We were introduced through a business connection at an amazing start-up called The Stable out of Minnesota who helps companies like ours scale and find opportunities to grow. With Launchpad, we were working with a great team right from the onset, and they helped us to develop content and build a page that represented our brand and our story.
Q. What have been your favorite aspects of using the Amazon Launchpad platform?
A. Favorite part, I would say, has been the exposure and the support from Amazon. Launchpad has made Earhoox more accessible both to consumers and to media outlets to see who we are and how we’re changing the way the world moves with their music. The other part that is fantastic is the logistics. Since moving into their Vendor model and Amazon Launchpad, we receive PO’s weekly and are able to let the experts optimize our listing to drive sales. Before, this was left to us, and while we were good at it, our Amazon team is definitely better.
Q. Do you think Amazon Launchpad has been a big factor in contributing to the growth of Earhoox?
A. Launchpad has definitely given our business a boost. For our company, revenue and units have both increased, but more importantly, our relationship with a company that is integral to our success has gotten significantly stronger. The fact that we have a team to help us has dramatically improved our ability to plan and grow both with Amazon and beyond.
Q. Do you think Amazon Launchpad was a good starting point for helping to get your business off the ground? If you had to do it all over again, would you follow the same path with Launchpad?
A. We didn’t start with Amazon Launchpad, so I wouldn’t call it a starting point. We started as a third party seller, then graduated to using their FBA services, and ultimately into Vendor/Amazon Launchpad. Each time we moved closer to Amazon, our business improved. The only thing I would change is that we would have tried to build this relationship sooner.