Can we talk about the A-word?
Amazon.
There aren’t too many controversial topics in the home furnishings industry, but selling on Amazon can be one of heated debate. Many manufacturers have the perception that selling on Amazon can taint a brand by selling product among thousands of lower-priced, impulse-purchase items available via the ecommerce giant.
“That might have been the Amazon of several years ago,” said Alysa Land, BrandJump Strategic Channel Manager. “But the range of product and pricing on Amazon is now comparable to all of BrandJump’s other channel retailers.”
Home furnishings brands do have a place on Amazon, if for no other reason than it’s simply where your customers are. This makes it more important than ever to start thinking about your business’ strategy for the platform.
The Challenges: Why Selling on Amazon is Hard
Because there can be much debate around Amazon, we’ve heard the reasons why home furnishings manufacturers feel especially challenged by the idea of working with the ecommerce giant. Let’s get those out of the way now:
1. Building an Amazon strategy is tough. It’s true: this isn’t a straightforward, drop-ship partnership. There is a lot to understand and navigate when adding Amazon to your channel mix, including how you want to sell your product. Manufacturers can sell via:
- 1P (First Party), which is more of a traditional wholesale account, in theory. But because of the way Amazon operates, this model comes with the added challenge of maintaining MAP and pushing through price increases, two important factors for any manufacturer.
- 3P (Third Party), which is a marketplace model. Your retail partners may have an Amazon store that includes your products, and you can also use 3P to sell your own products in your own brand store. This hybrid approach is the path most home furnishings manufacturers will take, but that presents another potential complexity…
2. Brands aren’t ready to be a retailer. Selling 3P on Amazon requires brands to act as the retailer. This presents potential channel conflict issues, and also requires the brand to handle all customer service, pay for shipping, and manage marketing and advertising costs, etc. Many brands don’t have the resources or experience on their team to do this.
Plus, brands will need to prioritize Amazon in their channel mix—treating it as an afterthought or side project will likely risk not being able to meet Amazon’s operational requirements. This leads us to the last reason many brands are hesitant to sell on Amazon…
3. Amazon has many operational expectations and requirements. To stay in good standing on the platform, you have to consistently meet these. Amazon has created a gold standard for customer service and doesn’t want its shoppers to have anything short of an “Amazon experience” with any purchase they make. So any brand selling via 3P must be able to keep up.
Despite the Challenges, You Should Still Be Selling on Amazon
So yes, being a seller on Amazon, whether 1P or 3P, is not without its challenges. Deciding whether you should sell on the platform ultimately means deciding if the benefits for your brand outweigh the risks and challenges.
There are plenty of reasons why they do. Here are just a few:
Amazon is one of the most highly trafficked ecommerce sites in the world.
Customers start their shopping journeys on Amazon, even if they ultimately buy on another website or in person. A Wunderman Thompson study in 2021 showed that 57% of consumers in the U.S. go to Amazon to find product inspiration—outpacing both search engines and social media.
If you think of Amazon as a shopping mall, being present there is akin to the exposure you’d get from foot traffic past your storefront.
Your brand is likely already on Amazon.
Because Amazon is a marketplace, your existing retail partners may already be selling your products there as part of their overall strategy. But it’s important that brands have a direct presence on Amazon as well. After all, who better to manage product listings, pricing and content than the brand itself? You want to have a say in the story being told about your brand on all channels—especially one of the biggest ones in the world.
You can achieve higher margins with 3P sales because you’re selling at retail prices.
Though not quite as much as you would think. Because you’re a retailer in this model, you will be paying shipping, advertising, Amazon’s fees, FBA costs, and any agency commissions first-hand. So while higher margins are a possibility, there are added costs to consider as well.
Amazon offers ways to teach customers about your brand.
While Amazon can feel especially transactional, the platform offers some really robust ways to create content that tells customers what your brand and product are all about. A+ content lets you create enhanced, more creative product descriptions with text, imagery, and product comparison charts. You can also use images and texts to build heartier brand content that speaks to the history, value and products of your brand.
There’s also Amazon Posts, where brands can share stories, products and more—for free!—to create an image-driven shopping experience for customers (a la Instagram or Pinterest).
If you aren’t selling on Amazon now, you’re just putting it off.
To stay competitive online, your brand will need some sort of Amazon strategy. It’s simply too big to have a passive approach.
“Even if your strategy is to use Amazon to sell discontinued, non-IMAP product—that’s a start,” Alysa said. “If you want your ecommerce business to be sustainable, you are shooting yourself in the foot to not be thinking about how you will sell on Amazon.”
In other words, it’s not a question of if, but when.
What You Need to Know to Start Selling on Amazon
Once you’re ready to start building that Amazon strategy for your brand, there are a few things you’ll need to think about upfront:
1. Decide if you’re going 1P or 3P. Most home furnishings brands opt for 3P since it gives the brand more control over its pricing and presence on the platform. But you can do both, and that will likely depend on the products you’re selling.
2. Ensure you’re in good operational shape. Before you start selling on Amazon, you’ll need to have your proverbial ducks in a row when it comes to fulfillment and operations. Brands will need to understand exactly what they’ll be accountable for and ensure they can meet those standards to stay in good standing on the platform.
3. Consider your assortment. For brands with a box-in-box-out assortment, this can be the easiest group of products to start with. But that’s not to say it’s the only assortment that will work. Some brands use Amazon to sell their bread-and-butter products while others find success in using it to sell more unique, off-beat items. You’ll want to try a few options around your assortment to find what suits your brand best.
4. Be ready to test. Like all of ecommerce, selling on Amazon requires brands to have a desire to experiment and learn what works.
“That’s inevitably what will make you successful. Very rarely is the first thing you do going to be what works forever,” Alysa said. “That combination of successful and sustainable varies from brand to brand.”
Once you’ve gotten started on Amazon, keep building on your strategy. Consider aiming toward 2-day delivery, start soliciting customer reviews and experiment with Amazon’s marketing opportunities to see what bolsters sales.
The bottom line? Don’t short Amazon as somewhere your customers don’t shop.
“The Amazon customer has grown and learned and developed so much over the last several years,” Alysa said. “Now they can absolutely be someone who is design-oriented, who is shopping at a higher price point, who has discerning taste. They still come to Amazon.”
