Selling on Amazon means competing with Amazon. Is this unfair?
Bloomberg recently published an article with the suggestion that Amazon look at their third party retailers best selling items, source the products themselves and then Amazon compete directly with their third party sellers. Even worse, Amazon are starting to manufacture their own products and again appear to compete directly with merchants.
Amazon have on multiple occasions assured us that there is a chinese wall between Amazon Retail and Amazon marketplace and that data on particular sellers isn’t shared between the two sides of their business. So what’s going on?
Nothing untoward is the answer. If you think about how you sell on Amazon, how you source products and the steps you may go through before having your own product range manufactured you probably do some research. You probably look at similar products on Amazon, check prices, check sell through rates and consult the lists of top selling products in the Amazon categories that you trade in. Amazon Retail doubtless do exactly the same as you do.
The difference with Amazon is that they’re a massive retailer and have teams of buyers who do nothing other than liaise with manufacturers and suppliers (probably often the same manufacturers and suppliers that you source from). These buyers have nothing better to do all day than to identify products that will sell well on Amazon and then go and find them. That’s their job.
Amazon Retail don’t need the marketplace side of the business to hand data over to them as it’s all out there on the web. They can see, just as anyone can, what sells and what doesn’t and which products are top performers because Amazon publish these lists for everyone to see.
Yes it’s annoying when Amazon start selling a similar (or the same) product as you. It’s even more annoying if as in the case of the laptop stand seller highlighted by Bloomberg see Amazon manufacture a similar (but distinctly different design) product to their own. But this is business, we should expect competition. We should expect Amazon to manufacture similar products to our own. If Amazon don’t someone else will although it probably doesn’t help that Amazon’s product is less than half the price of the third party retailer’s version.
Are Amazon being underhand and copying their third party retailers best sellers? Absolutely. Is this something underhand and wrong? Not really, Amazon aren’t hiding anything and it’s there for all to see.
It’s tricky relying on the mouth that feeds you not to cut your legs off and compete with you but we all know what we’re getting into when we sell on Amazon. The game is that we’re competitors with Amazon retail and sooner or later they’re going to identify top selling products and start supplying them. We all know that so why are we still surprised when it happens?