Many merchants view Amazon as a competitor, albeit one they are forced to sell on. Brent Bellm, CEO of BigCommerce, disagrees. He believes Amazon can complement an ecommerce business. I spoke with him recently to discuss how independent merchants, in 2017, should deal with Amazon and other marketplaces.
Practical Ecommerce: How should a merchant approach Amazon?
Brent Bellm: Ecommerce is very healthy for small merchants off of Amazon. It’s the middle and upper end of merchants that are really struggling against Amazon. If you’re a smaller brand that can carve out a differentiated positioning for yourself off of Amazon, you can be successful with that. We at BigCommerce strongly believe that the vast majority of brands and merchants should be selling both on their own branded sites as well as on Amazon. Amazon is, by our calculation, 36 percent of U.S. ecommerce. For merchants that we’ve surveyed who have a BigCommerce store, those that also sell on Amazon get a third of their sales there.
You should be selling on both a branded store and Amazon — if it at all makes sense for your business. That doesn’t mean you’re selling the same products or selling them at the same price points or in the same ways. In fact, there is a range of different strategies for having Amazon complement what you do on your branded site and vice versa. You really should be doing both of those.
You also need to be using software or an ecommerce platform that is integrated into both. Never make the mistake of having your Amazon sales running on a completely different tech stack than your website sales because that doubles the workload.
PEC: How do you define smaller, middle, and upper-end merchants?
Bellm: What I know is that merchants selling below $1 million a year on their branded website on our platform are growing meaningfully faster than the average U.S. ecommerce business.
PEC: You mentioned the necessity of smaller merchants carving out a niche, or words to that effect. What is a successful niche for a smaller merchant in 2017?
Bellm: One of the most successful ways to do it is if your product is your own brand, either because you’re the manufacturer or a reseller. You’ve got the combination of a product that is different than other products on the market and your own brand name behind that. If you are selling the same product that other people are selling, it is a lot harder work to build a brand around yourself. On Amazon, you can’t even do that. You just are competing on the things that Amazon values in the Buy Box.
PEC: What’s a complementary strategy of selling on a branded ecommerce site and on Amazon?
Bellm: I’ll give you a couple of examples. In one example, it’s an industrial product, an electronics products seller. They sell a huge catalog of completely commoditized items. They do the unusual thing as they put the entire catalog on Amazon that’s on their store. In our experience, only about 20 percent of merchants do that. When they get sales on Amazon, they will include inserts or other things within the packaging that make the purchasers aware of their branded site and hopefully get some of those folks over to that branded site for subsequent purchases.
In the case of another merchant that’s selling furniture, they came up with a product that was sturdier and higher-priced at a higher quality than comparable products on the market. They put that on Amazon. Sure enough, there was a real need in the market for this product at a higher quality level. It just sold like crazy.
PEC: Say I’m a merchant with products on a BigCommerce store. How do I get those products on Amazon’s marketplace?
Bellm: We have integrated our platform via APIs into Amazon and created the functionality for someone to take some or all of his products and map it into Amazon’s catalog structure.
The point is that there is an API mapping between the two so that Amazon knows what the inventory count is. The inventory count is the same as what the merchant is using for their branded store. When there’s a sale on Amazon, then that is confirmed back into BigCommerce. A merchant could, for example, use ShipStation to print the labels and fulfill for orders from the branded site or from Amazon. The merchant would see common reporting across the two.
PEC: Is Amazon a competitor to BigCommerce?
Bellm: When I arrived at BigCommerce, conventional wisdom was that they are, that in essence, we were creating an ecommerce platform to help merchants compete against Amazon in an Amazon-dominant world. I reversed that mentality 100 percent. It’s our job, as a platform, not to position Amazon as the enemy, but instead enable our customers to succeed on Amazon and on eBay, if that makes sense for their business.
PEC: Does BigCommerce have plans to go public?
Bellm: Nothing that we would comment on at this point.
PEC: You’ve addressed selling on Amazon and eBay. Certainly there are other marketplaces. How should merchants decide which marketplaces to sell on?
Bellm: We encourage merchants to sell on as many as they can handle, operationally. By our estimate, Amazon is 36 percent of US ecommerce. eBay is 8 percent, but 8 percent is huge. What sells on eBay is often different and complementary to the others.
PEC: How is eBay is different?
Bellm: What sells really well on eBay are parts. In fact, that’s one of those categories — auto parts and parts in general — where eBay is still ahead of Amazon and ahead of, really, any other place on the web for people searching for things. There are plenty of niches on eBay where subsets of products sell far better than they do anywhere else, because that’s where people go to look for them.
PEC: Anything else?
Bellm: If you are a seller looking to optimize and grow your business as large as you can on the web, the top two places to start are your website and Amazon, followed by eBay. But don’t forget other places where consumers go.
Think about Google shopping. Think about Facebook. Think about Pinterest. We just announced an Instagram integration a week or so ago. Soon, you’ll be able to commerce-enable Instagram posts for those who follow you there. That will be very powerful for brands with a strong following.