In the year following the Pandemic, I came across an Amazon tv spot that got me thinking. What caught my eye was not the acting or its similarity to an older and better 2010 Staples campaign. Instead, what struck me was the emphasis on price as Amazon's key attribute.
Every actor in the commercial repeated the phrase 'Wow, that's a low price!" while gazing at their screens. And every time they did, I imagined an Amazon seller sacrificing margins or sourcing the cheapest product possible to stay competitive.
Amazon's vision is to become the world's most customer-centric company, a goal that received praise from business critics and reflected in the company's exponential growth. But, sellers are not on Amazon's priority list or vision, and they can only contribute to its success by offering the best price possible to Amazon customers (not their own).
The focus on price is what makes the Amazon-Sellers relationship, well, complicated. Just Google the term "Amazon Price Wars." Yes, it's a thing. Some big brands have turned their backs on Amazon. To name a few, Nike, Birkenstock, Vans, and Patagonia have no official brand presence in the marketplace. You may still find their products from third-party sellers, but these big names focused on their online stores, where they have complete control of the brand experience, access to customer data, and better margins.
Amazon has the traffic and potential to reach millions of ready-to-buy customers just a click away from next-day shipping. It's very tempting for a new brand to explore the biggest e-commerce retailer in the world.
But is it worth it?
For smaller brands prioritizing their story, quality, and sourcing, staying out of Amazon might be wise. Platforms like Shopify offer an alternative for smaller players to build their online stores and create unique customer experiences. Shopify's ecosystem is merchant centric. As its founder Tobi Lütke stated in a Businessweek interview: "Amazon is trying to build an empire, and Shopify is trying to arm the rebels."
Shopify understands the challenges of independent brands and has made efforts to overcome the gap of being unable to provide a next-day shipping experience to its merchants. However, the challenge persists; recently, Shopify sold its logistics vertical to Flexport. 😬
But shipping is not the only obstacle for brands that want to compete with Amazon; customer acquisition is still the biggest challenge for DTC brands that want to attract clients directly to their independent stores. Shopify knows the marketing struggle and continues to offer solutions and channels to help brands reach new audiences. Shopify Collabs, for example, is an initiative to help merchants increase sales by facilitating collaboration with creators and influencers.
Plot Twist: Amazon Buy With Prime
Last year Amazon launched Buy With Prime, a solution that lets independent e-commerce stores offer Buy With Prime at checkout. Even though Tobi Lucke initially received the news positively, Shopify's army of rebels is pushing back the move.
The day Gabriela Mekler, owner of mumi got a request from Amazon to onboard her Shopify store on the Buy with Prime checkout, she was shocked. Imagine the effort and cost of acquiring a client on your store and sharing that back with Amazon. "It's a greedy move from Amazon," she shared.
For now, Mekler declined the offer. While some mumi products are available on Amazon, mumi's bet is to keep growing the brand's Shopify store, where it can offer product personalization, showcase the brand, and get better margins.
Still Guilty of Prime 🤷♀️
Even though the Amazon merchant ecosystems will keep growing, Amazon's price-centric approach will keep pushing quality-focused brands away. As for myself, I will still pay for Amazon Prime and get convenient next-day free shipping on light bulbs, school supplies, and many products I've been guilty of buying with one click.
But, whenever quality needs to be part of the equation of my product hunt, I will be ok sacrificing Prime even if that means paying for shipping. And for my mumis, I will still get them on mumi.com, since I know the joy each of those Shopify dings brings to Gaby, her team, and ours.