How to make your full product portfolio work on Amazon


January 26, 2022

It's not unusual for brands to have some parts of their product portfolio that they struggle to make work commercially on Amazon. So, what can you do to resolve this issue?

While it's often tempting to dive straight in with tactics to try and solve the problem in the short-term, taking a step back and evaluating the whole situation can help uncover the root causes of unprofitable ASINs. Read on to learn how to ensure your product portfolio has the best opportunity for success on Amazon.

Identify where your main issues lie

For many brands navigating their understanding of Amazon’s terms, ways of working and operational excellence standards can be complex. When ignored, this can prove costly for their overall business. Seeking consulting support on the likes of JBP (Joint Business Proposal) negotiations and catalogue management can be particularly valuable when discussing Cost Price Increases with Amazon. Tackling these conversations with Amazon frequently helps massively and is key to helping you identify pain points with regards to profitability early on, putting you in good stead in conversations going forward.

Work with Amazon to build a collaborative vendor relationship

At the same time, it's helpful for brands to try and understand Amazon's point of view and lean into being collaborative. Amazon is a logistics company in many ways; and there are many ways to remove costs, but for some brands this could mean a new selling models or ways of working. Appreciating what Amazon looks for in a vendor relationship and understanding their requests makes for a more collaborative outcome for both parties.

How does this help with making your full product portfolio commercially viable on Amazon?

Whilst Amazon won't necessarily encourage its prominent vendors to move onto 3P, sometimes brands can't sell to Amazon profitably enough to cover their costs - Molzi Retail can support here.

Through a 3P retail solution, it's possible to overcome some of the challenges brands face when selling on Amazon. This solution can be an option for brands who face profitability challenges, particularly those who have a 1P or vendor relationship with Amazon.

Why and how to get started with a 3P retail solution?

For brands with a wide breadth of products in their portfolio, a 3P retail solution can take those products that are more difficult to achieve a profit on, allowing you to still sell on Amazon – but in a different way. Equally, for brands with minimal Amazon expertise, all-in-one support from an experienced 3P partner removes the need to work with multiple agencies or retailers; helping your brand achieve sustainable growth on the marketplace.

A typical starting point for brands looking to sell via a 3P model is to address CRaP ASINs, where Amazon “cannot realise a profit” from the product. Amazon's ever-growing terms and wholesale margin requirements often make certain ASINs unprofitable for you and Amazon itself. Eventually, Amazon will want to delist those ASINs, which is far from ideal for your brand. Switching to selling CRaP ASINs on Amazon via a 3P retail solution, rather than your direct account or through Vendor Central, can help you to manage costs and maximise profitability in the long run.

Molzi Retail allows you to sell on Amazon via our store, rather than your own direct account or through Vendor Central. We handle all aspects of Amazon administration, fees, VAT and customer service so you don’t have to. You get the benefit of Molzi’s global Amazon team and our experience with Amazon strategy, advertising, and content optimization, but instead of paying us a fee, you give us a cost price. 

 

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Laura Freeman, Head of Retail

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