Following my article about Honey and why Amazon sees it as such a big competitor, it only seems fair that I write an article about what’s resulted in Amazon being in such a vulnerable position.
Realistically, there’s a countless amount of reasons why Amazon are potentially losing traction. Many reasons revolve around the company’s ethics, as Amazon constantly finds itself under scrutiny for the way it treats employees, avoids tax, its environmental impact, destroying other companies, and much more. If the company’s questionable ethics were to kill the company, though, they would have done so already.
Most consumers don’t care about how a company behaves, it’s why the biggest technology companies continued (and continue) to use Foxconn as a manufacturer for years without disruption.
Consumers care about one thing above all else; the product or service. And, until recently, Amazon had a pretty impressive track record of reliably delivering quality products promptly to your door.
This all changed when Amazon began obscuring whether it was the one selling the products or not.
In the past, it was easy to see if a product was sold and distributed by Amazon when searching their website. Whereas now Amazon have removed that information from the search results.
This made Amazon a much more even playing field for independent sellers and Amazon alike, and made the website more of a “marketplace” than just an online shop. With the option for independent sellers to advertise within the website/app, using Amazon as another platform to sell your products was becoming a no-brainer.
However, by creating a more accessible marketplace for small brands, Amazon also opened the door to those looking to abuse the system, specifically “drop shippers”.
Drop shipping, for those who are unaware, is when a person or company sells a product which they don’t stock themselves, and it comes directly from the manufacturer or a supplier.
Drop shipping isn’t an inherently evil idea. Many brands use drop shipping for their online sales, as it can be a great way to reduce running costs. For example, if you own a small clothing brand, you can use drop shipping to sell your clothes without needing to pay for warehouse space or staff. The manufacturing, packaging and shipping is sorted; so you can just focus on the marketing and designing the apparel.
When people refer to “drop shipping”, though, they don’t tend to be referring to this general definition. If someone talks about doing “drop shipping” or if you see it referred to in an article, it tends to be when they are selling a generic product online (like a white coffee mug or a hamster wheel) and getting it shipped directly from the manufacturer to the consumer.
They’re not creating a “brand” or looking to create repeat business, they’re just trying to target impressionable consumers for easy sales. The actual product the consumer buys is just some cheap knockoff item which would usually cost them a $1 if they bought it from AliExpress (which is what most drop shippers use for “buying” their goods), but because they bought it through the drop shipper it cost £20.
Amazon opening its doors to being a generic marketplace allowed drop shippers to add all sorts of crap, including crap that imitates genuine brands.
For example, when buying ear protectors for my brother at Christmas, the best selling pair (and most expensive) were an off-brand pair re-boxed as a reputable brand.
As drop shipping continues to become a popular way for marketers to make a secondary income, it’s inevitable that Amazon will become more full of this junk. Within the next couple of years Amazon will just be another eBay, where ordering something is more akin to a game of roulette than a reliable online store.
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