The reality of working with Amazon has changed dramatically for brands in 2023.
Amazon focuses on:
๐ต Optimising margin structures
๐ต Reducing headcount resources
๐ต Automating repetitive processes
The list goes on.
๐ฉ Yet, most brands continue with business as usual.
They keep deploying the same investment principles as in offline channels. And they keep their teams locally organised, ignoring Amazon's regional (pan-EU) expansion focus.
This creates a gap between the reality of brands and Amazon, where brands increasingly invest in staffing while Amazon dramatically reduces its headcount.
So how can brands ensure they align their organisation with the new reality Amazon is creating in 2023 and beyond?
โ By following a simple 3-step approach:
Amazon's retail workforce is in decline. In fact, more than 15% of Vendor Managers will lose their role in 2023.
As a result, Amazon has begun to focus its buyer resources at a regional EU level. Instead of 9 Vendor Managers covering each European marketplace, one Vendor Manager will manage the EU9 trade relationship going forward.
This requires brands to adjust their organisational structure to navigate the online retailer effectively. Brands that maintain a localised approach risk losing access to a dedicated Vendor Manager in 2023/24.
Aligning teams at a regional level can help brands achieve significant economies of scale. Centralising resources can help avoid duplication of work when it comes to negotiation or reporting processes, while the virtual shelf and shopper activation management can be maintained at a local level.
Brands that successfully shape their business relationship with Amazon in 2023 will excel in realigning existing workflows at a regional level while meeting and considering the demands of local markets.
With Amazon increasing its efforts to offshore and automate tasks in its retail business, brands have to shoulder more tasks that Vendor Managers and Brand Specialists previously owned.
This means that offshoring and automation must become a top priority for 1P suppliers themselves if they want to avoid a significant increase in their cost to serve.
It's good practice for brands to start capturing repetitive workflows currently done manually and either outsource them to cost-efficient service providers or automate them completely. After all, the size and complexity of Amazon's business will only increase in the years to come.
With the different pros and cons between Vender (1P) and Seller Central (3P) many companies in 2023 are looking to move away from the vendor model altogether and focus entirely on 3P via Seller Central to give them more control over their brand experience and pricing which in a lot of cases can lead to increased sales and profitability
If you would like to explore this further reach out to us and book a call to discuss your unique situation
