What's Working and What's Not Working for Amazon

2 May 2019

"Some people want it to happen.  Some wish it would happen.  Others make it happen." - Michael Jordan

We're still in China and enjoying the warm but wet weather.

What a ride it has been already, and our China group is just getting started.

Our conversations keep coming back to the scale of everything here, and the speed of growth. It's a land where million person cities are considered villages by locals.

How do they keep up to this growth? How has business here developed to keep up with demand?

It's often chaotic. It looks completely disorganized sometimes.

Like the setup of the markets, or lack of queuing in lineups of people everywhere. It's often uncomfortable for us from the west to try making sense of how it all works.

But somehow things do work here.

Everything from placing orders to crossing the street. Even if the electric motorcycles never stop!

It's a great reminder how there's always a way to make things work.

Anyway, here are some latest news on Amazon.

WE ARE NOT ALONE

I'm not talking about aliens here. As we saw last week, Amazon is pulling out of China due to competition there. JD.com is one of the competitors and delivers 90% of its packages within 24 hours. While their global reach is smaller than Amazon, their local scale is just huge. Amazon is looking to expand one day shipping across the world. We expect to see a lot more global announcements from Amazon in the future. Purchasing will likely become seamless across borders. But they’re not alone. So keep other marketplaces in mind if you are looking to sell outside of western countries.

The difference between Amazon and JD.com China

HOW THINGS CHANGE

Less than a year ago, there was fear in the seller community about Amazon expanding their private label products. And they did advertise and grow their product offerings until recently. Now, we are seeing Amazon's shareholder report saying third party merchants doubled Amazon's growth. And even better still for us, Amazon is now backing off on their preferential ad placements for their own products. They leveled their own playing field. This is inline with Amazon's internal setup of letting teams fight for resources, letting the best rise up, while letting poorly performing teams and products die off.

Amazon rethinking private label strategy

THERE'S MORE THAN RETAIL CUSTOMERS TO SERVE

Amazon and online commerce in general, has expanded to include just about every consumer segment and product type imaginable. We are seeing a consistent interest now to serve commercial and government buyers on big platforms like Amazon. It's a tough market, with tons of rules and regulations buyers and sellers have to follow. But getting the process into an easy to use system like Amazon might be a way for smaller sellers to tap into the deep pockets of institutional buyers. Think how you can target your product to a wider range of buyers, outside of retail consumers.

Amazon as the government's everything store