Thousands of brands have been questioning the future of their Amazon business after their regular Monday morning purchase orders failed to come through. The internet has been abuzz, trying to piece together the story while Amazon has been reticent to discuss.
Assessing the situation is one thing, but where do brands go from here? We’ll break down the likely course of events that brands can expect over the coming weeks.
When, If Ever, Should I Expect Another Amazon Purchase Order?
Only Amazon knows the true answer to this question. But from what we have seen, Amazon has been shifting the costs of shipping and storing products to other sellers on their platform.
They want to remain the top eCommerce retailer, driving people to their marketplace and taking a cut of the sales that occur there. But they are stepping away from Amazon First-Party (1P) Selling where they buy, sell, and ship inventory from brands. This forces brands to engage in Third-Party (3P) Selling, where another entity offers products on the Amazon Marketplace and Amazon takes a 15% cut of the sale.
A Long Time Coming
This trend has been consistent over the past 10 years, and it would stand to reason that this mysterious lack of orders is the latest and most drastic move in Amazon’s long-term strategy for success. Not placing these purchase orders will have an immediate impact on Amazon’s short-term bottom line. However, Amazon has built a marketplace that is so essential to the eCommerce space that most brands will be forced to figure out another solution to remain on the platform because they can’t afford to lose the channel completely.
The Issue is Likely to Persist
Amazon is calculated in their approach. This move to cut off purchase orders to everyone but their top-tier vendors proves that Amazon is confident that they can increase their revenue and decrease their own time, money, and energy invested in managing customer service, shipping, and inventory forecasting.
Here’s What You Can Do
While the future of Vendor Central is uncertain, what is clear is that it’s time to start preparing a solution to keep your products in stock on Amazon; to maintain your sales projections, protect your brand, and keep your business on track.
SupplyKick can help you get back on schedule with regular purchase orders of your products. We’re here to help and we’d love to talk through your Amazon strategy with you and continue growing your sales on Amazon.
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