Discover the secrets of the retail strategy that has propelled Amazon to the top of online commerce. Let’s decipher how to adopt them for your business.
A long time ago, Amazon was just a simple online retailer that sold books. To manage its relationship with suppliers, the company set up an interface called Vendor Central. This platform enabled Amazon to manage purchase orders and resell products wholesale, just as any other retailer would.
However, behind this basic initiative lay a much greater ambition. The name Amazon is indeed a metaphor for the widest river in the world, reflecting the company’s ambition to offer the largest possible catalog of products. Today, we see the fruit of this ambition, with Amazon dominating the global e-commerce market.
But how did Amazon manage to achieve such a feat? What are the retail strategies that have enabled Amazon to become this online retail giant? And how can you, as a retailer, draw inspiration from these strategies to optimize your business? Let’s take a closer look in this article, and discover each retail strategy that Amazon implements to maximize sales.
What is retail strategy?
Retail strategy is a plan of action designed to promote and sell products directly to consumers. It encompasses a set of decisions and actions relating to product selection, pricing, promotion, distribution and customer experience within a point-of-sale or online platform.
With the rise of e-commerce, many companies are now looking for innovative ways to sell without necessarily holding physical inventory, as is the case with the method of selling on Amazon without stock.
This modern approach, combined with traditional retail methods, gives companies greater flexibility to respond to changing consumer needs and adapt quickly to market trends.
Retail strategy no. 1: create your own marketplace
If Amazon’s wish was to offer the widest possible choice of products, as a simple retailer, the task might seem unthinkable. Indeed, it would require significant cash flow to purchase products and complex sourcing. And that’s where the platform as we know it was born: the Amazon marketplace.
Why take inspiration from such a retail strategy?
Amazon’s solution was to develop a marketplace. Taking advantage of the audience it had managed to create through its retail business, it decided to offer other sellers the opportunity to take advantage of this audience to sell their products. In this way, Amazon was able to offer a wider variety of products without having to stock them all itself.
By opting for this retail strategy and allowing other sellers to offer their products, you could expand your product catalog without needing additional cash flow, without complicating your sourcing and without requiring additional storage. You could then use your current audience to entice other sellers to offer their products on your platform, and thus attract even more customers.
By turning your own e-commerce site into a marketplace , you can not only increase the target audience for your products, but also generate additional sales. Let’s take an example: you sell women’s clothing and open up your platform to another merchant who sells children’s clothing. A mother wishing to buy clothes for her children, and therefore your seller’s products, could add clothing for her own consumption to her basket. Indeed, bringing together different offers encourages your customers to take advantage of several of them, and if they don’t necessarily land on your site for your products, this doesn’t prevent them from becoming consumers.
How can logistics facilitate this retail strategy?
Implementing this retail strategy does, however, present challenges, particularly in terms of logistics. Indeed, turning your website into a marketplace means that orders must be shipped from your warehouses, as well as those of your sellers. What’s more, you are the intermediary between the seller and the customer who has purchased the product. This raises the question: how do you access your sellers’ sales information?
OMS Supervision Shippingbo could well be the answer. By equipping your sellers with a Shippingbo WMS, the latter gives you access to their stock and shipping information. On the one hand, you’ll be able to know in real time the stock levels of products sold on your platform, and on the other, stocks will automatically be sent to your marketplace. This ensures a smooth partnership with your sellers and prevents out-of-stock sales on your platform.
In conclusion, creating a marketplace is a particularly interesting retail strategy that can help you expand your product catalog to reach a wider audience. Nevertheless, by becoming a marketplace, you share your corporate image with your sellers, and how can you be sure that their performance won’t tarnish it?
Retail strategy #2: Develop your fulfillment platform
As a platform, Amazon has an image to uphold, one that relies heavily on its ability to guarantee a seamless, reliable shopping experience for its customers. And that’s why it has developed the Fulfillment by Amazon (FBA) service to improve the quality of service on its platform, particularly for marketplace sellers.
Why take inspiration from such a retail strategy?
FBA was created in response to a problem encountered by Amazon: not all sellers on its marketplace could guarantee the same standard of quality as that offered by Amazon’s warehouses. By offering a fulfillment serviceBy offering a fulfillment service, Amazon can control the delivery process and ensure a high quality service, reinforcing customer confidence in the platform.
By managing logistics for your marketplace’s sellers, you can guarantee a high level of service. This includes shipping and delivery times, delivery via your own transport contract, returns management and product storage.
What’s more, this retail strategy can enable you toleverage your warehouse capacity and optimize the use of your logistics resources. It’s also an additional service you can charge your vendors for, creating a new revenue stream for your company.
How can logistics facilitate this retail strategy?
Although Amazon has invested billions of euros in building warehouses around the world, not all companies have the resources to do the same. Shippingbo offers a solution to this challenge, helping your company to quickly create your own fulfillment offering. Find out more about our Order Management System.
With Shippingbo, you can transform part of your warehouses or drives into storage and shipping points for your fulfillment service. You can also extend your offer by relying on a network of logisticians, giving you greater diversity and even greater specialization.
Shippingbo, as a technology, facilitates this process by creating a connection between the various logistics players, enabling you to get up and running quickly. Whether you need to store fresh produce, bulky goods, batteries or anything else, Shippingbo enables you to create a fulfillment offer tailored to your needs. What’s more, Shippingbo gives you real-time visibility of the physical location of your inventory, which can help you optimize your logistics operations and make more informed decisions.
Finally, developing the retail strategy of accompanying your marketplace with a fulfillment platform enables you to guarantee the quality of the services you offer your customers on the platform. And if, on the other hand, your sellers have excellent logistics performance, and their products sell very well on your platform, what strategy should you consider?
Retail strategy No. 3: Start dropshipping
Seeing that some of its sellers had excellent logistical performance, but that the products they sold on its marketplace could be subject to stock-outs, especially during the holiday season, Amazon deployed a new retail strategy: dropshipping.
Why take inspiration from such a retail strategy?
With a dropshipping strategy, Amazon remains the owner of the order, creating the product sheet and defining the selling price, but the logistics to the end customer are entrusted to the supplier. This is an effective strategy, especially when a product is a success and stocks are depleted. Dropshipping enables Amazon to maintain the product offer while it replenishes its stocks, thus avoiding any stock-outs.
This retail strategy offers several advantages. On the one hand, dropshipping reduces the risk of stock-outs, as your suppliers can continue to ship products even when your inventory is depleted. This can be particularly useful when a product is in high demand.
Dropshipping can also help you reduce delivery times. Instead of waiting for products to be restocked in your warehouses, your suppliers can ship products directly to your customers, speeding up the delivery process.
Finally, adopting this retail strategy can enable you tooptimize your logistics operations by reducing the amount of stock you need to manage and store in your warehouses. This can help reduce your operating costs and improve the overall efficiency of your business.
How can Shippingbo logistics facilitate this strategy?
Shippingbo offers a solution that facilitates the implementation of such a retail strategy. By connecting your suppliers’ inventories to your website in real time, you gain access to precise, real-time management of available stock.
In addition to this, Shippingbo provides your suppliers with the tools they need to ship orders under the best possible conditions, including the use of your transport contracts, if necessary.
So you and your dropshipping partners can enjoy the benefits of such a retail strategy without having to invest heavily in your own logistics infrastructure. The Shippingbo solution enables you to implement a dropshipping strategy quickly and efficiently.
Dropshipping with Shippingbo therefore gives you access to more stock without any additional logistical constraints, so you can guarantee your stock levels without increasing the size of your warehouse. What if your sellers’ only logistical drawback was an inadequate delivery service?
Retail strategy no. 4: Share your transport contract with your vendors
Amazon, aware of the importance of offering an optimal customer experience, and faced with the need to control the level of after-sales service quality for its sellers’ sales, has decided to share its transport contract with its sellers.
Why take inspiration from such a retail strategy?
In the marketplace model, when the seller manages its own logistics, Amazon has no direct control over the process. This can lead to situations where, in the event of a problem with transport, seller and buyer can find themselves in a dispute situation, with Amazon in the middle, having to arbitrate without being able to act directly, as it is not the bearer of the contract.
To solve this problem, you too, as a marketplace, can opt for this retail strategy and propose to your sellers to use directly the transport contract you have negotiated. Even if the product leaves the seller’s warehouse, it’s your contract of carriage that’s used, enabling you to manage after-sales transport and ensure a better experience for your customers.
Sharing your transport contract offers several advantages. Firstly, it allows you to maintain a high level of quality control, even when the seller manages his own logistics. And you can guarantee a consistent customer experience, which is essential for your reputation and customer loyalty.
What’s more, this retail strategy reduces the complications of shipping disputes. As the holder of the shipping contract yourself, you can efficiently manage after-sales service and quickly resolve problems, thus avoiding conflicts between your seller and buyer.
How can Shippingbo logistics facilitate this strategy?
The Shippingbo logistics solution can facilitate the implementation of this retail strategy by providing comprehensive support for vendors. Shippingbo connects vendors with your transportation services, enabling seamless and efficient integration.
What’s more, Shippingbo offers the tools to help your sellers ship their orders in the best possible conditions. By providing turnkey solutions for order, inventory and shipment management, Shippingbo enables your sellers to focus on what they do best, while ensuring that logistics processes are managed efficiently.
Ultimately, with Shippingbo, your sellers can enjoy the benefits of implementing such a retail strategy, while minimizing logistical challenges and maximizing their operational efficiency. In the long run, this means boosting sales on your platform and satisfying your marketplace image.
Sharing your transport contract with your sales force can not only help you manage your after-sales service more effectively, but also improve your sales force’s logistical performance, not to mention your ability to negotiate better prices with your carrier. Now, how can you ensure that your sales staff will be able to manage their logistics efficiently during Peak Seasons?
Retail strategy no. 5: Give sales staff access to simplified logistics during Peak Seasons
Peak seasons like Christmas present major logistical challenges. In the face of growing demand, optimized logistics management and sufficient storage are essential. To overcome these obstacles, Amazon has implemented its“Vendor Flex” strategy, which involves reserving space in a brand’s warehouse or its logistics provider for stock purchased in advance. In this way, even if Amazon does not have sufficient space in its warehouses, strategic stocks are secured at its sellers’ premises.
Why take inspiration from such a retail strategy?
To overcome these challenges, Amazon reserves space in the warehouse of a brand or its logistics provider, specifically for stock purchased in advance, to ensure the security of its inventory. However, it also needs to ensure the quality of the process. Amazon therefore also plans to be able to send an operator or supervisor to the seller’s warehouse. The latter is equipped with a WMS, ensuring a consistent Amazon experience, even if products are stored and shipped from the seller’s warehouse.
The main advantage of this strategy is that it enables you to effectively manage the increase in demand during Peak Season, without being limited by the storage space in your own warehouses. In this way, you can guarantee the availability of high-demand products, improve customer satisfaction and boost sales.
What’s more, this approach enables you, like Amazon, to maintain a high level of control over the quality of logistics operations, even when these are outsourced to third-party vendors or logisticians. This ensures a consistent customer experience, regardless of stock location.
How can Shippingbo logistics facilitate this strategy?
Shippingbo can help you implement this retail strategy by providing comprehensive logistics support for vendors. Thanks to its WMS, vendors can efficiently manage their inventory, warehouse and shipments. But the solution also gives you the visibility you need over this stock, which is housed in another warehouse, so that you know its flows and movements at all times.
What’s more, Shippingbo facilitates the integration of your WMS into your vendors’ management systems, enabling smooth coordination of logistics operations and a seamless customer experience. What’s more, with Shippingbo, your vendors can easily adjust their logistics to meet the fluctuating demands of Peak Season periods, while remaining efficient and profitable.
In short, Shippingbo enables your sales staff to make the most of this retail strategy, while optimizing their own logistics operations for maximum performance during Peak Seasons.
A retail strategy such as Amazon’s “Vendor flex” enables you to secure your stock during certain periods, in close partnership with your sellers, and to ensure the quality of their services.
Perhaps you’ve considered one of these strategies? But why choose just one when Shippingbo gives you access to all of them?
Access a new growth horizon for your retail business
Combine various retail strategies with Shippingbo
Shippingbo offers a unified inventory management interface that lets you combine various retail strategies to optimize efficiency and increase sales. Whether you opt for marketplaces, dropshipping, or a combination of the two, it’s not a question of opposition, but of complementarity.
Shippingbo simplifies and centralizes the management of your business by offering a unified platform capable ofharmonizing the processes and workflows of each sales channel. Whether you sell on one or more marketplaces, or via fulfillment offers, Shippingbo offers you unprecedented simplicity.
In these times of retail transformation, Shippingbo strives to make this possibility accessible to all, and to standardize processes for your users. It helps you to diversify your business and your logistics, making it easier to secure your inventory and your business.
Access to omnilogistics
From its beginnings as a simple online book retailer, Amazon has reinvented itself and pushed the boundaries of what’s possible in the retail world. Through a series of innovative strategies, Amazon has grown to become the e-commerce giant we know today.
But these strategies aren’t just for Amazon. As a retailer, you can also use them to optimize your business, and Shippingbo’s logistics solution can help.
Ready to embark on a new retail strategy and maximize your growth? Find out more about these strategies and how to adopt them by watching our dedicated webinar!
Conclusion
From its beginnings as a simple online book retailer, Amazon has reinvented itself and pushed the boundaries of what’s possible in the retail world. Through a series of innovative strategies, Amazon has grown to become the e-commerce giant we know today.
But these strategies aren’t just for Amazon. As a retailer, you can also use them to optimize your business, and Shippingbo’s logistics solution can help.
Ready to embark on a new retail strategy and maximize your growth? Find out more about these strategies and how to adopt them by watching our dedicated webinar!
