In a move to avoid counterfeiting Amazon is promoting a brand registry after abruptly cancelling routine merchandise orders from thousands of its long-time suppliers in early March.
The cleaner the marketplace, the better the sales integrity and product integrity.” – Ryan Craver, CEO of Amazon’s Commerce Canal
Amazon’s business platform operates similar to animal health distribution with items offered under a buy-sell arrangement and others through the drop-ship for commissions model. U.S. animal health distributors calls this buy-sell versus agency.
Source: Bloomberg, March 9, 2019. Link. In recent years, Amazon has increasingly prioritized its marketplace. More than half of all products sold on Amazon in 2018 came from marketplace merchants (third party sellers), and revenue-providing services to those merchants are growing at double the pace of revenue from the online store.
Also see: Amazon sellers seek more clout with new ‘Merchants Guild’, March 19, 2019. Link.
The Online Merchants Guild is only just getting started but has big ambitions, which include negotiating better terms with Amazon, pushing the company to respond more effectively to sellers’ complaints and lobbying government officials . . .
INSIGHTS: Amazon, the eight-ton gorilla, faces the challenges we’ve experienced in animal health for decades. National account managers, purchasing managers, marketers and legal animal health pros should take notice. What transpires for Amazon will set new standards for classes of trade and pricing practices.
While Amazon’s recent actions targeted counterfeiting, the policies that emerge may also help with some of the diversion issues that perplex animal health pros.