Understanding Amazon’s Vision For Sellers

Picture of Author: Martyn N.

Author: Martyn N.

Hi! I’m Martyn, a full-time Amazon E-Commerce Manager with over 5 years of experience selling and managing a wide range of products for various small businesses on Amazon.

If you’re selling on Amazon and you’re regularly browsing the Web for advice on how to increase your sales (like me) then you’ve probably noticed that while there are many how-to guides and step-by-step tutorials for new sellers, there doesn’t seem to be so much content explaining Amazon’s overall business strategy and how this impacts the businesses of small-scale or individual sellers, which is extremely important for anyone selling on this platform.

So strap in and let’s talk about the importance of knowing your business environment, Amazon’s vision and how you can turn all of this to your advantage.

I. Why is it important to understand Amazon?

So why is it so important to understand your business environment aka Amazon’s mission and vision?

Understanding your environment is critical to the long-term success of your business – Sun Tzu, one of the world’s greatest military strategist ever, coined it as “Earth” one of the five critical elements for success in his legendary classic “”The Art of War”:

 “distances great and small – danger and security; open ground and narrow passes; the chances of life and death.”

(Great book by the way, I recommend it. It’s also fairly short.)

Now this might seem to be far-fetched since we’re talking about Amazon, but actually this principle is a lot more relevant than it seems at first glance. Understanding the “earth” means understanding the external environment in which you are going to fight – and in our case, compete.

Let’s take a simpler example – a game of Monopoly. Would you be confident in winning the game if you didn’t know the rules? Who do you think would stand a better chance of winning? Someone who knows which streets give the highest returns and have the highest likelihood of having someone land on them, or someone who is just winging it? What about playing chess without knowing which positions give you the strongest advantage? Do you think you could beat even a decent amateur player without it?

Knowing how Amazon works and what it’s business objectives are is like knowing the rules of the game and how it functions – and if you know the rules and the inner workings better than your competition, you will already be ahead of them.

II. General E-Commerce

Before we dive into how Amazon works, let’s look at the environment that’s even larger than this – E-commerce. What are the impacts of not having your customers physically in your shop, and how can you leverage this to your advantage?

Well, if you are already selling online, I don’t have to tell you about the advantages and disadvantages from a seller’s point of view as you’ve most likely considered those before going into this business venture – or at least, I hope so!

So let’s talk about the biggest advantages and disadvantages from your customer’s point of view, as this is going to be the main factor behind your industry’s shape.

I know this might seem like “going back to the basics” but it’s crucial to understand the reasons behind your customers even going online and not to physical shops. As online sellers, we tend to get so focused on specific details that we forget to look at the big picture every now and then and remind ourselves of the core principles – that’s why I want to mention this first.

Going back to Sun Tzu’s example: If your business environment is the “earth”, then your customer’s psychology represents the tectonic plates that shift around and shape it. Knowing why your customers will purchase online and more importantly what they expect from you is critical to your business’s long term success.

Firstly, let’s talk about the greatest advantage of e-commerce, which as you may guess is it’s convenience.

You’ve been wanting to get yourself a new set of warm socks for a while now as winter is approaching, and you said you’d do it today, but…the couch feeling extra comfy, you’ve had a long day, it’s raining outside, you’d have to get in your car, drive to the shops…nah, let’s order them online.

Not only is this a physical convenience – having the comfy socks delivered straight to your door – but it’s also a mental one: No need to go through several shops and aisles trying to find that pair that you have in mind – simply type it in the search bar and voila!

Understanding that most customers buy online due to convenience is a critical aspect to take into account for the success of your business. Why? Because it can make or break your online business.

After all, if ordering online was as tedious as going outside, then why not go to a shop instead? Most customers actually prefer to go to a shop, as unlike browsing online, they can interact with the product – see it, touch it, feel it, talk to a human being about it, ask questions, read the packaging easily, and so on.

This highlights the biggest disadvantage of e-commerce, which is that the experience that your customers can have is limited to two senses – vision and audio.

There are many ways to replicate an experience as closely as possible to having the real thing in front of your customers, which I will explain in more detail in future videos – but as a principle, whatever you do in terms of online marketing and product showcasing, you will want to emulate as closely as possible the experience that your customers would have if they were to actually have the product in their own hands.

Another hurdle that you have to consider is how easily your customers can go ahead and get what they want. This is usually one of the most ignored pain points of e-commerce businesses who often focus too much on convincing the customers to buy and not enough on ensuring a proper follow-up.

 Now, the great thing with Amazon is that this process is all done and best optimized for you, which means that you don’t have to worry about things like checkout difficulties, payment methods, or even delivery timing if you are using FBA, which I highly recommend not only to pass the burden on to Amazon, but also because this works in your favour in terms of how Amazon views your business, which we will now talk about.

But these are the very broad expectations that we’ve seen ever since e-commerce has started out – so what are the customer expectations from ecommerce nowadays?

According to several studies, online shoppers are more than ever expecting brand transparency, personalization and a strong business-led push to creating a loyal relationship between them and the brands they use. They are expecting brands that not only provide great products that are going to help them live better lives, but also that have a personality of their own that they can relate with and approve of.

This means that a modern e-business has to go beyond just a great-looking product with a cool list of features – it needs to feel like a friend.

People like to buy from people, not brands. While having a smoothly-operating e-commerce business was enough of a competitive advantage a few years ago, it is now so engrained in our expectations that it no longer will provide you with a “moat around your business castle” as the renowned investor Warren Buffet likes to put it.

III. Amazon’s vision and what it means for sellers

Now that we’ve talked about general e-commerce, let’s bite into the juicy bit: Amazon’s mission and vision.

Amazon is built around one thing: customer satisfaction.

Amazon was founded in 1994, and here’s it’s mission: “We aim to be Earth’s most customer centric company. Our mission is to continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover and buy anything, and empower businesses and content creators to maximise their success.”

It’s quite embellished and we’re not fools – we know that for a business to grow, they still to turn a profit or in Amazon’s case, the prospect of future earnings.

But making sure that customers make a habit of buying on Amazon because they’ve had a good experience is and will remain the core strategy behind Amazon’s growth when it comes to it’s e-commerce operations.

What does this mean for you?

“If your business is in line with Amazon’s objectives, then you’ll never have to worry about whether Amazon might see you as a disturbance to their mission – as such, it is critical for the long-term to have a business that is oriented towards your customers – and in fact, that’s exactly the marketing philosophy that I will promote on this channel, as this is the way to go – at least that’s what I’ve learned personally and what a lot of people smarter than me have been saying in these last few years, and this only seems to get stronger and more important every year.

So this means that everything that you do, plan or undertake needs to take into account that it somehow benefits Amazon’s customers.

(and notice I didn’t say YOUR customers, because as far as Amazon is concerned, these are their customers –  they are coming directly to their website looking for a product, and then they choose your or your competitor’s products.)

The customers who will buy and eventually interact with your product will associate it with a purchase over Amazon, which means that if you provide a positive experience for the customer, this customer is more likely to purchase on Amazon again, which is a step forward for Amazon in terms of reaching their vision, and similarly if they have a negative experience, this is more likely to push them away from purchasing on Amazon in the future – and Amazon is VERY aware of that fact.

This is what they base all their decisions upon when it comes to sellers like you. “Are you helping us become the nr.1 platform for purchase in the world, or are you preventing us from becoming that?”

This is has become even more so in the last few years as more and more companies have been trying to take away Amazon’s crown over the e-commerce industry, such as Walmart.

You might have as a business objective to reach financial freedom by making a certain amount of profit a year by selling on Amazon – but you have to remember that Amazon doesn’t give a crap about what your objectives are – and it’s big enough that it has the full power to toss you out at any time it wants. There’s loads of people out there who want to sell on Amazon and many of them will be willing to play by their rules.

Now, this doesn’t mean that you have to completely sacrifice your independence and become a minion of Amazon – but you have to understand that by selling on Amazon, you are accepting a deal:

 You get to have a shot at their pool of millions of customers that they have painstakingly acquired over decades of hard work and razor-thin margins if you accept to contribute to their survival and their vision. After that, it’s up to you to decide whether you are ready to take that deal or not.

Now the great thing about this is system is that the more you get Amazon to think that you are making a contribution to their cause, the more incentive they will have to grow your business. This means more exposure than your competitors, even if you are late to the race! This is the big advantage of Amazon that you’ve heard of – making tens of thousands, if not hundreds or even millions of dollars in sales in a matter of a few months. Sure, it takes more than simply having a customer-oriented business to do so, but without that business mentality, it is very hard to reach such numbers.

So ultimately, this is what you want to always keep in mind: “How can I best leverage Amazon to serve my own business objectives while contributing to theirs?”

I would strongly advise to have this sentence written somewhere where you can easily see it and refer to it every now and then, because if you go by it, you will have a much easier time finding out ways to be more successful on Amazon.

Now if you’re following a little bit on how Amazon is expanding, you might be reading that many sellers are losing sales because Amazon decided to start selling the same products and of course, Amazon is going to promote Amazon more than it’s going to promote you. This might seem gloomy and discouraging at first, but here’s how you can deal with this: Make sure that Amazon cannot be better at making happy customers than you can. It’s that simple! As we’ve now discovered, Amazon’s vision is to become the first choice for any prospective buyer throughout the world. If it thinks it can do a better job of this than you can, then eventually, it will.

So how can this be done, when they can offer lower prices due to economies of scale?

Well, what do you have that Amazon doesn’t?

It doesn’t have you.

Amazon cannot replicate the complexities of who you are and what you can bring to people. It can’t create the same story. It can’t tell your story like you can, it can’t talk to your customers as you can. Amazon is a huge corporation, and as much as this comes with many advantages, it cannot have the advantage of being a human being. That is your advantage. And guess what? People buy from people. Not corporations. As long as you manage to leverage that advantage, you will have an edge over Amazon, and as long as you have that edge, Amazon’s best course of action when it comes to your business it to let you thrive.

Once you truly understand all of this, then you will have a better understanding of the environment in which you are – the “earth” that you are standing on. And unlike your competitors who will be rocked and confused when the inevitable changes will come – you will stand stronger because you will know how the game works better than they do.

Hope this helps!

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