Creating Your Own eCommerce Empire Means Expanding Beyond Amazon

Man Thinking About Expanding Beyond Amazon

As an eCommerce vendor, it may seem like it’s Amazon’s world and we just live in it. But you didn’t become an entrepreneur just to play by someone else’s rules. Use your relationship with Amazon as a springboard to building your own eCommerce empire.

Rented vs. Owned Platforms

Just as with brick-and-mortar businesses, online vendors have the choice of rented or owned storefronts. Rented platforms include Amazon, Facebook, and other third-party options, while owned platforms are created and operated exclusively by the vendor. An owned platform would be your own ecommerce website.

Of course, both types have their pros and cons. Let’s look at the different elements of eCommerce platforms and how they apply to your business.

Range

This one is a no-brainer. Amazon has a built-in user base that’s second to none. New eCommerce retailers can quickly jump-start their business by tapping into Amazon’s ready-made customer base.

But as your business grows, this benefit can become a drawback. With Amazon controlling all communication between you and the buyers, you have no opportunity to nurture the customer relationships that are key to building sales and developing customer loyalty.

Cost

Again, for a start-up, there’s a financial advantage to using Amazon’s platform. You can bypass the expense of designing and maintaining a digital storefront and invest your funds in product, marketing or other areas that may need it.

If time is money, Amazon’s platform also provides savings in labor. There’s no need to divide your energies between operating your storefront and handling other business activities.

Eventually, these savings become offset by the increased fees you pay as your sales go up. Loss of repeat business is an indirect cost, but one that can ultimately add up even more.

Competition

This is one of the bigger disadvantages of Amazon’s size. Their doors are open to just about anyone, so you’ll often find yourself going up against multiple retailers offering similar or even the same products.

vAmazon does have tools to help you promote your products, but they’re not easy. Prime positioning in the Buy Box or Merchant Offers List is awarded by rankings based on pricing, merchant history, customer reviews and other factors. In essence, it’s a catch-22: to gain one of these spots, you must beat the competition you’re trying to overcome in the first place.

When you’re operating from an owned platform, your products have the spotlight all to themselves. When you get visitors to your website or mobile app, you know they’ve come because they’re interested buyers.

Shipping

Once your product has been sold, Fulfillment by Amazon handles the shipping end of the transaction. You send your products to one of Amazon’s fulfillment centers, where orders are shipped out to customers.

A time-saver? Absolutely. But one that comes with a lot of strings attached. For example, merchants sometimes find a discrepancy between the actual cost of shipping an order and the amount reimbursed by Amazon.

In addition, Fulfillment by Amazon has stringent requirements for the procedures used to package and ship products to their centers. Failure to comply can result in penalties ranging from additional charges to refusal of inventory. Plus, Amazon may limit your warehouse space or even change what is available to use in peak seasons.

When you operate on an owned platform, you’re free to work with an independent fulfillment center that offers the flexibility to scale along with your business. You can still work with Amazon, confident in the knowledge that your fulfillment center will comply with Amazon’s rules.

With the unique Fulfillment by Medallion program, we warehouse your Amazon stock and then ship to the Amazon warehouse when you need a stock refill. Allowing you to fulfill orders from your own website AND Amazon stores or the Amazon warehouse from our company’s two locations – L.A. or Boston.

Fulfillment Services to Fit Every Need

Medallion Fulfillment & Logistics started out in our family garage, so we understand what it takes to grow a business. Contact us to learn more about our full-service fulfillment solutions, including our Amazon replenishment warehousing program.

How to Choose the Right 3PL Partner for Your Business

Handshake to do business with Medallion Fulfillment & Logistics

The rise of eCommerce and virtual storefronts has made 3PL a popular buzzword. Is a 3PL the solution to your operational challenges? Here’s a look at what a 3PL can and can’t do and how to make the right choice for your business.

What Is a 3PL?

Simply put, a third-party logistics company, commonly referred to as a 3PL, handles a wide range of services that make up the supply chain. This generally includes operational functions before and after the sale, such as warehousing, transportation and order fulfillment.

A business can outsource their entire operational “department” to a 3PL or engage the 3PL only for specific functions. According to a study by research and consulting firm Armstrong & Associates, Inc., as much as 86 percent of domestic Fortune 500 companies use a 3PL for an average of just under three different services.

Why Use a 3PL for Shipping and Fulfillment

• When you turn operations over to a 3PL, it frees you up to focus on sales, which is the lifeblood of your business.

• Money you don’t spend on warehouse space and staff can be invested in other areas of your company. In addition, 3PLs can negotiate much better rates with freight carriers than you can as a small or mid-size independent retailer.

• With same-day and next-day shipping becoming the norm rather than the exception, a 3PL’s expanded distribution network allows you to meet customer delivery expectations.

• While the 3PL handles shipping, you are still the face of the company and so retain control over your brand.

• You can leverage the locations of the 3PL warehouse to your benefit. For example, Medallion has an East Coast and a West Coast location – allowing for fast shipping nationwide when you store merchandise at both locations.

• Hiring a 3PL can be made easy when using the right partner. Even small businesses can benefit from using a 3PL partner such as Medallion Fulfillment – who has a special program for startups.

Tips for Choosing the Right 3PL Partner

1. How will you find the answer if you don’t know what the question is? Define your needs and expectations and how you will measure them. You’re sure to come across a few 3PLs that are perfectly fine providers, but if you’re not on the same page, a partnership is pointless.

2. Do some due diligence regarding potential 3PL providers. How long have they been in business? Are they financially stable? What does their performance over the last few years look like? If you commit to a 3PL and they suddenly go sideways, the whole bottom could drop out of your own business.

3. What is the 3PL’s reputation in the business community? Social media and online review sites make it easier than ever to get “word of mouth” reports on companies from a customer’s perspective. You can also solicit recommendations from your peers who may have experience with various 3PLs.

4. Does the 3PL demonstrate a willingness to address customer service issues? Some providers feel no responsibility to go outside the bounds of their specific duties. When a 3PL works with you to solve problems, that indicates desire to be a true partner.

5. Technology continues to progress at a rapid pace. Is the 3PL keeping up with current advancements, or are they content to hobble along on an outdated platform?

6. Where do you expect your company to be next year? In five or 10 years? Look for a 3PL provider that can scale along with you.

Coast-to-Coast Warehousing and Fulfillment Services

Medallion Fulfillment and Logistics has what it takes to be the right 3PL partner for your needs.

Whether you’re a small startup or a thriving eCommerce vendor, we have a program that fits your needs, including our innovative Amazon replenishment warehousing service.

Contact Medallion Fulfillment & Logistics to learn more our customized fulfillment options.

Google Ups Its Game in eCommerce with a New Deep Shopify Connection

As Amazon continues its quest to strong-arm eCommerce retailers into submission, another online giant has decided not to roll over. Google, which holds a commanding 90 percent of the search engine market, has joined forces with top eCommerce platform Shopify to challenge Amazon’s dominance.

Google Takes on Amazon

While Google has so far been only peripherally involved in online retailing, Amazon has been encroaching on Google Ads, which was the recipient of more than 50 percent of digital ad revenues in 2020. However, Amazon grew their own advertising market share from 13.3 percent to 19 percent during the same time.

With more than half of online shopping excursions beginning at Amazon, advertising was a logical extension of their other services. Similarly, Google recognized the opportunity to leverage their own robust ad business into providing an alternative for small and mid-sized eCommerce retailers who feel stifled by the lack of options.

The Changing Focus at Google

The new venture is the brainchild of Bill Ready, who joined Google in January 2020 as the company’s President of Commerce and Payments. Ready had previously served as COO of PayPal and CEO of Venmo and Braintree.

Ready’s arrival at Google coincided with the onset of the unprecedented global pandemic, which in turn triggered a seismic leap in the already robust eCommerce industry. Shortly thereafter, Ready took the first step in shifting Google’s strategy by offering online retailers free listings in Google Shopping.

So, what exactly is the new Google Shopping? What it’s not, according to Ready, is an eCommerce retailer or marketplace. In a blog post sent to Forbes in early May, Ready referred to it as a platform for consumers to discover a wide range of products across a spectrum of sellers, from national big-box stores to small independent retailers.

Days later came Google’s I/O Developer conference, during which Ready officially announced the company’s partnership with Shopify. He expounded on his vision of the venture as part of an overall plan to “democratize” eCommerce with a “free and open” system for consumers and retailers alike.

Why Google Shopping?

Here’s a look at what to expect from Google Shopping now and in the future:

• With just a few clicks, merchants in Shopify’s network of 1.7 million+ retailers can install the platform’s Google channel to auto sync their inventory. They can also link a new or existing Google Ads account, and the free listings policy will continue.

• Shopify sellers can feature their products on heavily trafficked Google platforms, including Maps, Images, Search, Lens and YouTube. More than 1 billion “shopping journeys” occur on these platforms daily, making them fertile sites for new customers.

• Google’s powerful access to comprehensive sets of data will power Shopping Graph, an AI-generated model that makes connections between products, sellers and brands. In an example of this synergy, when a shopper views images of products in Photos, it will trigger a suggestion to search for places to buy the items via Lens.

• Amazon isn’t the only online presence in Google’s crosshairs. The company is testing a program that allows YouTube users to shop for products they discover through their favorite content creators. This is in response to the growing presence of TikTok and Facebook in the eCommerce arena.

Coast-to-Coast Fulfillment Services to Fit Your Needs

How do you set yourself apart in the competitive eCommerce field? Sophisticated shoppers insist on exceptional service, rapid delivery, and complete responsiveness. Let Medallion Fulfillment & Logistics handle your storage and shipping needs while you focus on growing your business.

Our scalable, cost-effective solutions include our Amazon replenishment program. Contact us today to learn more.

Amazon is Drawing Increased Attention as Antitrust Chatter Grows

In the world of online retailing, Amazon is the proverbial 800-pound gorilla. The one-time bookseller has become a global juggernaut, allowing consumers to shop for everything under the sun from the comfort of their own home.

With annual revenue approaching $400 billion, it may seem as though it’s Amazon’s world and we’re just living in it. Earlier this year, a group of independent-business organizations joined forces to take aim at monopolies, with Amazon at the dead center of their target.

Small Businesses Feel the Squeeze

Over the years, Congress has enacted various antitrust laws designed to maintain a level playing field. The purported goal of such legislation is to prevent monopolies and promote a competitive marketplace.

In reality, these laws are only as strong as their enforcement. Larger companies have the means to play Goliath to the smaller companies’ David. In 2020, Amazon alone spent approximately $18 million to lobby against stricter antitrust measures.

It may seem as though fighting the retail giants would be a tall enough order. Adding insult to injury, many small businesses feel that industry organizations such as National Retail Federation (NRF) pay lip service to the idea of equal representation while quietly favoring their largest members.

Standing Up for Market Equality

In a proactive effort to regain some equitable conditions, more than 20 trade and business groups formed a coalition under the name, “Small Business Rising.” Members include organizations such as the National Grocers Association (NGA), the American Booksellers Association (ABA) and Institute for Local Self-Reliance (ILSR), a vocal critic of Amazon’s dominance.

Small Business Rising announced their formation and goals in an April 2021 press release. Amazon was specifically cited by name several times, making it clear what the organization sees as one of their biggest obstacles. As Stacy Mitchell, ILSR co-director stated, “concentrated market power” is the toughest challenge facing today’s small business owner.

The organization’s objectives call on policymakers to do the following:

*Break up tech monopolies, such as Amazon, to prevent them from cornering the online market.

* Add teeth to antitrust laws by making them stronger and more enforceable.

* Put a stop to mega-mergers and set higher criteria for regular mergers.

In addition, Small Business Rising is leveraging the relationships local business owners have with power players in their respective hometowns. Members are organizing meetings, seeking out media coverage and waging letter-writing campaigns.

The Rich Get Richer

The unprecedented conditions of 2020 served to magnify the gap between Amazon and other e-commerce businesses. While COVID restrictions created a surge in online shopping, small online retailers faced corresponding supply chain and distribution difficulties, making it hard for them to accommodate demand.

On the other hand, Amazon was able to draw on its significant resources to weather the storm and emerge stronger than ever. The company spent a reported $4 billion on “incremental COVID-19-related costs,” enabling it to successfully adjust its processes and policies.

In the face of mounting criticism during the last few years, Amazon has tried to brand itself as a valuable ally to small businesses, especially with Amazon Marketplace, its third-party online sales platform. Companies have responded by pointing out how Amazon uses prohibitive fees and data access for competitive advantage.

Grow Your Online Business with Medallion Fulfillment & Logistics

Are Amazon’s arbitrary and restrictive fees and policies helping or hurting your e-commerce business? Medallion Fulfillment & Logistics works with you by offering a full assortment of services tailored to fit your needs.

Contact us to learn more about our flexible and cost-effective fulfillment solutions, including our innovative Amazon replenishment warehousing service.

Does Amazon’s “New Normal” Come with New Problems?

Fulfillment Company Warehouse

In 2005, when Amazon debuted their revolutionary Prime membership program, the centerpiece was unlimited free two-day shipping. As Jeff Bezos declared in the announcement, it was “all-you-can-eat express shipping.”

In an effort to remain the gold standard of online shopping, many items have since been upgraded to next-day shipping. But as with many companies, Amazon has been forced to adapt as the pandemic altered the retailing landscape. What does Amazon’s “new normal” mean for the sellers who rely on their fulfillment services?

Fulfillment by Amazon: The Answer for Third-Party Sellers?

A year after Prime began, Amazon upped the ante by creating Fulfillment by Amazon. This program allowed third-party sellers to store their inventory in Amazon’s fulfillment centers, where the products were cataloged and shipped to customers. FBA sellers also benefited by having their products eligible for Prime.

How powerful is FBA? Research found that three-quarters of Amazon’s top 100,000 sellers utilize the program. The number jumps to an astounding 90 percent for sellers based outside the United States

How the Pandemic Changed Amazon and Online Retailing

While Amazon was already the king of online retailing, demand became even higher as the onset of the pandemic caused widespread closure of brick-and-mortar shops. The first blow to third-party sellers came in March 2020, when the company cut off inbound FBA shipments of everything but high-priority products such as medical supplies.

The essentials-only mandate eased up in July 2020, but that didn’t mean FBA was back to “normal.” Quantity restrictions went into effect, limiting the amount of warehouse space that would be allocated to new products or those with more modest sales history.

One of the benefits of FBA is that products could flow through the warehouse and out to customers on a consistent and reliable basis. Some sellers found their inventory limits didn’t match demand, causing out-of-stock situations and hampering their ability to grow.

Inventory Limits by Any Other Name

In an announcement dated April 22, 2021, Amazon proclaimed that they had listened to feedback from their sellers and were removing limits based on ASIN (Amazon Standard Identification Number, which is assigned to every item in the company’s catalog). The bad news? Limits were now being set at the account level.

Despite Amazon’s efforts to play this up as a positive change, sellers were devastated. As one explained, instead of impacting only a few of their items, the reduction in space now had to accommodate his entire product offering. Adding insult to injury, the change took effect on the same day as the announcement, leaving sellers scrambling to conform to these new restrictions.

The Fallout Continues

While the Amazon customer experience remains relatively the same, it’s a whole different story behind the scenes. Inventory limits and other changes, such as long-term storage fees being charged monthly instead of annually, make it clear that Amazon has positioned FBA for short-term supply.

Sellers no longer have the convenience of using FBA as a one-stop solution for their storage and shipping needs. More and more are looking already to turn to additional third-party logistics companies for backup warehousing. They also face the uncertainty of knowing that Amazon can and will change the rules with little or no notice.

Medallion Fulfillment & Logistics: Working to Promote Your Success

Do you sometimes feel like David fighting Goliath? Our Amazon replenishment warehousing service provides a cost-effective solution that’s responsive to your particular needs.

Features include:

• Lower storage fees

• Climate-controlled warehouse space

• Amazon-compliant labeling, packing and prep

• Software that interfaces with Amazon as well as the industry’s top shopping cart systems

Contact the team at Medallion Fulfillment & Logistics today to learn more and loosen the grip Amazon has on your ability to grow.