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 a new trading year dawns upon us so does the much awaited trading terms negotiations with Amazon. And no doubt this year will be even more challenging to find a win-win solution.
This will pose many challenges to businesses that have traditionally not seen strong through Amazon. Amazon will surely use this growth to their advantage and will be asking for more investment this year. It is for businesses to position themselves for 2021, to understand the impact a vaccine will bring, and to realise that normal will never be ‘normal’.
Businesses will need to use the 2020 growth streak to their advantage by re-strategising their Amazon business and pursuing negotiations skilfully, based on the best investment opportunities for them. If your brand awareness has increased in 2020, then you may need to consider investing more in Amazon advertising to sustain 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.
If you’ve had stock and operational challenges with Amazon recently, then it could be time to invest in an AVS programme. You may have to pay to play with Amazon! Same with Brand Analytics – get a specialist in if you do not have the resources in-house. Amazon is a data-driven company, and products with better quality data will perform better. Brands will achieve a competitive advantage if they make better use of their data analytics.
Did you know that your agreement with Amazon will auto-renew if you don’t have a Vendor Manager? Small businesses don’t always have the luxury of appointing a Vendor Manager, and they probably need one the most! They are heavily impacted as they don’t have someone to negotiate on their behalf. However, if you are fortunate enough to have a Vendor Manager, you will have better success with Amazon. No doubt there will be profitability challenges in the market. But because of the pandemic and the exponential online growth, businesses will have to be prepared for the fact that Amazon will be asking for more than usual.
If you have multiple offices, Amazon will try and push you into a Pan EU model. And if you have already been pushed the Pan EU route, you will have to determine now already how that structure will impact your business in the future. Amazon will use Trading Term negotiations to force the PAN EU model on you. Are you ready for that eventuality? It will not be as easy as merely replicating the same trading terms across every market you are currently in. Brands will lose momentum in markets that they don’t dominate in if they don’t approach their Amazon trading terms with care.
Consider the fact that new markets have opened up in Netherlands, Sweden, and Poland this year – you cannot immediately have the same trading terms across these markets. You will need someone with expertise in these markets to strategise with you and negotiate with Amazon on your behalf.
It is not all doom and gloom! 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.
Etopia Consultancy can help you in developing your trading terms with Amazon and help build that e-Commerce strategy. Not every brand can realistically 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 account management in-house. To manage your Amazon business, you will require a lot of different skills ranging from Sales, Analytics, Marketing, Admin, to name but a few. And being a Full-Service Amazon Agency, we can facilitate that.
It is time to get ready for 2021, and Etopia can help you strategise. Please contact us today.
