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eBakery interview with ex-Amazon employee Felix Gassmann
Ali Oukassi of eBakery in conversation with ex-Amazon employee Felix Gassmann. Many questions on various marketplace-specific topics were answered. Felix gives us insight on what to look for as an online retailer to sell successfully. Topics such as FBA, PANEU or third-party tools were also addressed. Want to learn more about Amazon and supposed pitfalls? Then be sure to check out the interview. On the eBakery Youtube Channel, you will find many other interesting videos with Ali from eBakery.
Amazon is an important marketplace
Everyone knows Amazon. And online retailers can’t get around the marketplace either. After all, together with eBay, it offers an unparalleled reach that you can cleverly use for yourself and your range of items. It’s a technology company that can get you ahead, but it also comes with a few drawbacks. First and foremost, it is important for Amazon to satisfy its customers. Anyone who works in eCommerce knows that customer satisfaction is a crucial aspect for long-term success. If you are late with a delivery, Amazon may take direct action and block your account. However, as a seller on Amazon, you are in a sense also a customer of the marketplace. Thus, the marketplace also shows ambitions to keep you as a seller and make sure that you can sell successfully.
Amazon wants to automate and optimize processes
On the other hand, Amazon is also a company that is strongly interested in automating and optimizing processes. To ensure this focus, a company needs a large number of employees. The problem here, which is already well known among retailers, is that Amazon has too few employees to ensure that long and difficult processes in particular can be carried out correctly and quickly. This leads to decisions being made automatically by tools or processes taking too long. And this is exactly what can lead to resentment among sellers. Especially since Amazon’s traffic light system is pretty strict. If you sell on Amazon, you must always ensure customer satisfaction, as mentioned earlier. To do this, you must also always keep in mind to make the shopping experience as customer-centric as possible.
Use Amazon Seller App
Of course, this is precisely one of the reasons for Amazon’s great success. When a marketplace places a high value on outstanding support, it naturally wants its sellers to provide that support as well. Thus, sellers need to act in a similar way to Amazon itself. If you are not sure whether you can provide this service, you can also take help from certain service providers. Or even use the Amazon Seller app. For example, as a seller on Amazon, you must respond to a customer inquiry within 24 hours. The app helps you respond in time even on a day like Saturday thanks to pre-written answers. In general, however, you should be careful to provide as much information as possible in your initial response so that the customer correspondence is as brief as possible. This is also important from a business perspective. If you’re texting back and forth with a client all day, it’s hindering your ability to focus on core business.
Sell internationally with Amazon FBA advisable
If you open an Amazon account, you may already know that you can play on several Amazon marketplaces with just this account. If this sounds like a great way to generate more sales, Felix Gassmann advises against it. The effort behind PanEU should never be underestimated. One important aspect here is the language barrier. If you receive a request from e.g. Spain, you should also be able to answer in the local language. And after all, no one can ask you to know several languages. If you decide to go international, it is advisable to use Amazon FBA.
What are the costs associated with Amazon FBA?
That’s because Amazon FBA already takes care of a lot of the customer service, since Amazon takes care of all your logistics here. Therefore, many product requests end up right at Amazon before you get them as a retailer. In addition, this also simplifies the whole tax law background for you, such as delivery thresholds or EU declarations. The Amazon FBA cost structure is also pretty simple. If you sell via FBA, you have 3 building blocks that are definite costs. The first of these is the category-specific commission, which ranges from 7% to 15%. Furthermore, the storage fee and the pick-pack-send shipping costs will apply. In addition, costs may also be incurred for marketing, e.g. for sponsored products. So before you decide to go for FBA, as with any project, you should first carefully calculate the costs and whether it’s worth investing money for the current stage of your merchant career.
Amazon Marketing and Buy Box
Besides FBA, Amazon marketing can also get you ahead. But here, too, you have to look at when which campaign is worthwhile. Do you sell products from brand manufacturers? Or do you sell your own products? The marketing opportunities for sellers are becoming more and more similar to the opportunities for a vendor, which makes the seller area more and more interesting, especially for vendors. Basically, Amazon has performance marketing, which works similar to Google Adwords. That is, you bid on keywords and can then place your products accordingly higher. Amazon’s Buy Box also gives you advantages in sales. The Buy Box is the blue box of an Amazon product page. In this blue box is the seller and his company. You have a chance to get into the Buy Box if you offer the product available and at a good price, show a good performance and guarantee a fast delivery.
Use additional tools like a repricer
So it’s a mix of parameters that can lead you into the buy box. For example, Amazon may sanction errant behavior not by suspending your account, but by depriving you of the chance to get into the Buy Box. If you really want to take the chance, there are even extra tools you can use, such as a repricer. Since repricing is now an important topic in eCommerce, there are repricers from different companies. Amazon itself has its own repricer, which is fast, but only analyzes prices in one direction. If you’re still at the beginning of your eCommerce career, it can be easy to lose track of all the tools on offer. Here it is important, should it be necessary, to seek professional help at some point. Experts know many great insider tips and can demonstrate years of experience.
Combine Amazon FBA and Prime
Vendor managers on Amazon have the goal of selling as many products as possible with Prime. For example, if you sell your own products as a seller, with which you can generate a lot of traffic, it is quite possible that you will be contacted by Amazon. And that’s in hopes that you’ll move into the vendor space. However, this change is only advisable if you have already built a strong established brand and are also very good at negotiating. If you are not sure, we can also help you with an Amazon Vendor Consultation. If this is not an option for you, you can follow this insider tip: If you offer Amazon FBA along with Prime, you’ll actually get the same conversion as a vendor and about 3 times the conversion you’d get with your own and private shipping.
Amazon has a good infrastructure
With all the things you have to look out for on Amazon, you might be wondering if it wouldn’t be easier to opt for a different marketplace? In terms of size and reach, eBay, for example, would be a suitable competitor. But eBay also has its own unique difficulties. For example, as a merchant you have to take care of a lot of things yourself, such as handling the entire customer service, but also finding suitable payment service providers or shipping options. So when it comes to infrastructure, you can build a business on Amazon much easier than eBay as well. Of course, you still need the right motivation. To start and directly generate a lot of sales, so probably will not work directly. Instead, you need to invest time and diligence.
Additional tools for cost calculation
But how exactly is Amazon’s cost structure formed and where can you find relevant information? For FBA, for example, Amazon offers a calculator that gives you a breakdown of the exact costs. Additional tools can also be used that specialize specifically in costing. Many “high-flyers” come from America. This could be mainly because Amazon is also developed and tested in America and only then arrives in other countries. Therefore, as another insider tip, you should always take a close look at the American Amazon site and how it is structured. Because about half a year later, possible changes will also be seen on the European Amazon pages. Are you currently optimizing your listing, you can get valuable information with this tip.
Sales volume on the American marketplace large
Amazon is also looking to push global shipping further and further, so that American and European tools and sellers are becoming more and more intermingled. And it’s never been easier for European traders to get to know the U.S. marketplace, too. But does the sale carry risks? After all, there are various legal and also tax aspects to consider. However, if you find the right service providers and deal with the factors in detail, the sales volume on the American marketplace offers great potential. With greater sales volume, however, comes increased competition. It is always important to have developed a well thought out strategy behind each new step and never approach a sale too naively. Since Amazon focuses primarily on markets with large buying power, opportunities are available to you in every Amazon marketplace.
Success on Amazon is definitely possible
If we talk about Amazon, we certainly have to talk about AI technology like Amazon Alexa. After all, Alexa has become one of the best-known voice assistants in a very short time. But there are also concerns here, for example when it comes to data protection. However, you have to think about how much damage a corporation like Amazon would bear should it actually come out that data is being misused in some way. Should we therefore really believe that Amazon would take such a risk? So, in summary, Amazon is a global leader interested in innovative technology and in growing with its sellers and vendors. If you are serious about selling professionally on Amazon, take customer satisfaction seriously, develop a tactically smart strategy and dedicate a lot of time to your brand, nothing should stand in the way of you and your success on Amazon.
Want to learn even more about marketplaces like Amazon?
If you want to sell successfully on Amazon, it is important to know as much as possible about the marketplace. And that’s where we come in. As an eCommerce agency, we have experts who can inform and advise you in detail about the perfect marketing strategy, about the right systems and about different marketplaces. Please feel free to contact us for this.
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