It can take a system failing for businesses to discover their breaking points. When Amazon was clumsy in the handling of its fulfilment services during the early days and weeks of the coronavirus pandemic, the fallout surprised a lot of retailers.
But it shouldn’t have. It should have been obvious.
Amazon owns huge warehouses that hold stock on behalf of the retailers who sell through its site. It picks, packs and posts products as soon as a customer completes an order. It will even handle orders placed through other sites, too. It is a phenomenal service.
However, when the coronavirus pandemic first truly hit our shores, Amazon struggled to define which products it would prioritise, and what counted as ‘essential goods’. And if you weren’t a priority, then your products were left sitting on their shelves, somewhere out of reach to either you or your customers, even if orders had been placed.
That’s an awkward bump in the road for anyone who held some stock in Amazon’s warehouses, but it completely halted any trade for retailers who had handed all of their stock over to Amazon’s care.
Of course, Amazon prioritised the shipping of its own goods. That shouldn’t be a surprise, why wouldn’t they? But even if the service had fallen over, and the warehouse had stopped working for any other reason, this should really highlight how dangerous it is to rely too much on any one service, be that fulfilment or anything else.
The ‘holy grail’ for some retailers is to sit at home, or on a beach, or wherever, and have absolutely everything handled by somebody else.
But you can’t complain when you rely on someone else to run your business and you find out that you’re not their number one priority. Especially when that company also competes with you, as Amazon does.
What you can do
Conduct a risk analysis
It took the breakdown of the fulfilment process for many businesses to realise that this was a potential weakness. But there are plenty of other things that can break or go wrong, too, and it pays to be aware of them in advance. Walkthrough every stage of the process, starting before the order and finishing after returns have been handled, and try to identify things that could go wrong, and what your back-up plan is if they do. There are experts that will do this for you if you have the budget.
Diversify your operation
You can’t rely too heavily on any one particular service, because if it goes away, you’re left with no way to do business. We saw when Instagram stopped working for a few hours and again when Amazon couldn’t fulfil orders, that even the biggest companies can fail to deliver. Wherever you rely solely on one service, you’re one hiccup away from having no way to do business.
Build your brand
As we’ve discussed before on this blog, Amazon is a fantastic way for new customers to find you, but it shouldn’t be the only place you sell. When you do make a sale through its site, make sure you market to the customer in a way that encourages them back to your own website for repeat purchases. Make your brand known through emails, social media and including marketing materials when you mail out products. You keep far more control and a larger share of the profits when sales are made through your own site.
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