Vendors: If You Have A Product True… Amazon May Go To School On You… And Sell It Too!

While performing competitive research for its own clients, retail intelligence leader Upstream Commerce noted that Amazon was likely following its marketplace vendors' product success, when, within twelve short weeks, Amazon had picked up and sold 25% of important women’s clothing items that were first introduced by its own marketplace vendors! (Upstream Commerce Retail Intelligence Research Finds Amazon Muscles In On Its Own Vendors' Best Sellers)

"We found the numbers significant enough to believe that operational challenges were not enough of an explanation," said Upstream Commerce co-founder/CEO Amos Peleg, adding:Amos head shot 150

"It's nearly impossible to introduce successfully-selling products on such short notice" and "being weeks late in a category with an 8 to 20 week turnaround time is worth being late only if it's something you can leverage for your bottom line.”

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RetailWire Editor-in-Chief/Associate Publisher & Forbes contributor, George Anderson, picked up on this issue:  

George Anderson RetailWire 150RetailWire: Amazon goes all predatory on marketplace sellers,

Forbes: Is Amazon Undercutting Third-Party Sellers Using Their Own Data? 

 

The question asked of the RetailWire BrainTrust was:

"Assuming it's true, is it a wise practice for Amazon to glean data on its marketplace sellers for its own competitive purposes? What lessons can other retailers learn from Amazon's use of competitive intelligence to help them gain an advantage in the marketplace?

Here's what the RetailWire BrainTrust experts had to say:

"It is always wise to know what your competitors are doing. The issue is, do third-party sellers want to be involved with a competitor that has access to their data and is using it against them? Steve Montgomery, President, b2b Solutions, LLC

"Is this surprising to anyone? …with Amazon actively going after high-end brands, they are the Tony Soprano of retail…. Bob Phibbs, President/CEO, The Retail Doctor

 "Is anyone really surprised that Amazon is likely tracking sales for their own benefit? Does anyone think they didn't learn a great deal by hosting Target's, Toys R Us', etc., e-commerce operations? Bill Davis, Director, MB&G Consulting

"It is highly improbable and almost unbelievable that Amazon would not mine that mountain of marketplace data for its benefit, especially when under siege to show a profit. Chris Petersen, PhD, President, Integrated Marketing Solutions

"Amazon doesn't like to share… I'd say the big takeaway for other retailers is to be careful whom you partner with. The project you build together today might be the seed that grows into a toxic weed and chokes your business tomorrow. Ryan Mathews, Founder, CEO, Black Monk Consulting

"If you're dealing with Amazon, sooner or later you are going to begin to realize that you are sleeping with the devil…The retail community needs to recognize that you pay one heck of a price to work with Amazon. Mel Kleiman, President, Humetrics

"This has been floating around as a rumor forever… But (if) Amazon makes 15 percent of the sale as fees with zero cost to itself (on Marketplace items), I'll wager they don't make that much when they sell it themselves. So why bother selling the product directly? Paula Rosenblum, Managing Partner, RSR Research

"If Amazon can keep track of sales of your products on their site, why would they not? … Is that a fair trade for providing Amazon with data? That becomes part of the next discussions about the retailer-Amazon partnership. Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

"There is no doubt this is happening… Unless the marketer can negotiate some kind of exclusive with the producer, there is really no way to prevent this from happening. Bill Bittner, Principal, BWH Consulting

"The retailer has a choice as to whether they do business with Amazon or not. If they are against Amazon's practice, then don't do business with them. If enough retailers feel this way, then maybe Amazon will get the message and realize they shouldn't compete against their own customers. Shep Hyken, Chief Amazement Officer, Shepard Presentations

"I think the next 10 years of retail are going to be the most fluid and exciting joyride in the history of retail… Good for consumers, not so good for a LOT of dinosaurs. Lee Peterson, EVP Creative Services, WD Partners

Bottom Line For Your Bottom Line:

"Dynamic pricing based on competitive intelligence is an arena where Amazon has been playing an important role for quite some time now, so the possibility that Amazon is going to school on its vendors demonstrates a powerful practice where Amazon is (yet again) showing the way to the entire industry," noted Upstream Commerce CEO/co-founder Amos Peleg.  

 

 

 

 

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Naomi K. Shapiro, Strategic Market Communications

About Author

Seasoned strategic market communicator, Naomi headed public information for several academic and professional associations as well as founding Creative Brilliance Associates Market Communications. She created and published Brilliant Ideas for Publishers Magazine and authored popular newspaper trade reference, The Brilliant Book of Promotions, Sales Tools & Special Events. Simultaneously, Naomi savored the world as an adventure travel writer that included trekking on glaciers, fishing with saltwater crocodiles and swimming with piranhas. Naomi holds her M.A. from the University of Wisconsin, including participation in a unique industry-science-technical writing program.
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