With Amazon's Vendor Termination announcement this week, let's look at some of the Winners and Losers and why each business will be impacted, starting with the Winners
[Next post will have the losers]
WINNERS:
1. Amazon, the Company & Shareholders
-Maintaining thousands of "small" vendors is expensive - personnel, inventory management, etc.
-Amazon has MUCH better uses for its capital than buying inventory. Amazon won't reach $3 Trillion by becoming a larger retailer, it's already more valuable than the 9 largest retailers in the US combined. The valuation multiple on services revenue from 3P meanwhile will be much more accretive to shareholders and allow Amazon to invest that free cashflow in things like AI and Data Centers.
2. Smaller Retailers & Distributors
-Retailers like Petco, Best Buy, and Sportsman's Warehouse are exceptionally well-positioned to grow their sales on Amazon with their existing Seller accounts and existing vendor relationships. Their buyers should be calling all their smaller vendors, especially those with bulky items, to see if they lost access to 1P.
3. Third Party Logistics Providers - Especially Those with Seller Fulfilled Prime as a service
-Many products won't work through FBA even though they were stocked by Amazon 1P. Enter 3PLs and those that provide SFP services. Categories like Pet Supplies and Grocery are going to need this.
Lots of options in the 3PL space - Freight Right Global Logistics, Ware2Go, etc.
4. 3P SaaS providers
-There will be a whole new crop of sellers needing new services, especially operations and analytics-focused tech - Kapoq, Carbon6's properties, MixShift, etc.
5. 3P Agencies
-For obvious reasons, impacted Vendors / Brands will need support to navigate the transition.
We do this at AMZ Atlas: Succeed with Amazon, and I also recommend Ethan McAfee's Team at Amify by Cart.com
6. 3P Accelerators
-Many brands won't be able to make the transition quickly enough. Accelerators will have a big opportunity to help brands.
We do this at AMZ Atlas: Succeed with Amazon, as do other players like Pattern?, Spreetail, Recom, and Powerplay Retail?.
7. Internet Authorization Legal Support
-When Amazon did what it wanted to products, brands learned to accept chaos, in a 3P environment managing resellers will be incredibly important. If you thought wack-a-mole was bad before, wait until 1P runs out of stock.
Michael Murphy from K&L Gates is the best in the business for this, full stop.
8. Brand Protection / Brand Authorization Providers
-Amazon usually took a "never lose" strategy and won the buy-box. Smart resellers with broad sourcing capabilities through distribution are going to sprout up like weeds. Brands need to act fast to get control BEFORE resellers realize the 1P inventory is winding down.
David Cooper's IPSecure and Andrew Schydlowsky's TrackStreet are good options for tracking sellers.
What did I miss?
#amazon #amazonvendor #amazonseller #ecommerce