What a year 2020 was! With the pandemic bringing such strong growth in e-Commerce, I’m sure many toy manufacturers have seen double-digit growth through Amazon. With January upon us and as a new trading year dawns upon us so do the much-awaited trading terms negotiations with Amazon. And no doubt this year will be even more challenging to find a win-win solution. For a business to successfully navigate 2021, they will need to understand and consider the impact of a vaccine and differentiate between the lasting/temporary effects of the pandemic to identify what the new “normal” will look like”. Only then will you be able to successfully negotiate the favourable Amazon trading terms that your business needs
2021 will pose many challenges to businesses that have traditionally not seen strong growth through their Amazon channel. With many businesses not having access to a Amazon Vendor Manager, agreements will auto renew. With no human contact at Amazon these increases will go unchallenged. Amazon will always push for incremental changes, exerting their influence to grow their profit margins, and will be demanding greater European integration. However, these changes are not inevitable if you have the correct Amazon negotiation skills. Businesses will have to be prepared for the fact that Amazon will be asking for more than usual. The pandemic caused exponential growth online, and when it comes to Amazon negotiations, they will no doubt consider the profitability challenges in the market.
The phenomenal growth spurt of 2020 will have to be capitalised on by businesses to re-strategise their Amazon channel. Negotiations will have to be handled skilfully, based on the best investment opportunities. Amazon needs to be recognised as an additional marketing platform and that your competitors are becoming more competent in using the power of Amazon Advertising to their advantage. If your brand awareness has increased in 2020, then you may need to consider investing more in Amazon Advertising to sustain and defend that awareness.
Don’t just look at what is in front of you, or base decisions on what has worked in the past. Think outside of the box. Consider other marketing activities you can pursue on Amazon. Sometimes you have to pay to play with Amazon! Especially If you have had stock and operational challenges recently, is it time to consider investment in Amazon’s AVS programme? An AVS can be very useful if working closely with them to help navigate through Amazon’s operational complexities and forecasting challenges.
Data data data! With Amazon being such a data-driven company, now is also the time to study your Brand Analytics to gain insights of 2020. Amazon will be looking at their margins in negotiations and therefore you need to know where they stand ahead of the lengthy discussions.
Consider the fact that new EU markets have launched (Netherlands, Sweden, and Poland), you could use this as an opportunity for negotiating introductory terms in those markets. Depending on the size of your business, structure, and logistical capabilities, you will need to contemplate if the PAN EU approach with Amazon is more beneficial.
You have a brilliant opportunity to dissect and understand the things you should invest money in. We are living in an accelerated digital era, and we should take full advantage of the opportunities it presents! Businesses should be prepared to challenge the norm, to unearth how to grow in a supercharged e-Commerce landscape.
It is time to get ready for trading with Amazon in 2021, and Etopia can help you strategise. We can help you develop your trading terms with Amazon and help build your e-Commerce strategy. Not every brand can afford to have a whole Amazon business unit in place. Whether you are big or small, an Amazon novice or veteran, we do training, and we can bring Amazon account management in-house.
