Is your business Amazon ready? This Kochie’s Business Builders’ Case Study is all about the…
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Amazon expert Jeri Murphy gives us the lowdown on everything you need to know to get your business ready to trade before the retail giant lands down under.
With Amazon Marketplace set to change the way Aussies do business, Amazon guru Jeri Murphy tells us why retailers and small businesses should be embracing the opportunities the retail giant will bring.
“Amazon is a threat as much as it is an opportunity,” says Jeri Murphy. “It’s not going away. You either have to learn to join it or be like it or do nothing and go out of business.”
The way Murphy tells it, you can either worry about the impact of Amazon or do something about it.
“If you’re an established brand, the opportunity is there,” she tells Kochie’s Business Builders (KBB).
“You can join Amazon as a platform: You see established brands like Sears in the US – initially trying to go against Amazon – putting their products on Amazon rather than setting up their own platform. If you’re an established brand it’s really important you get on Amazon and take control of your brand presence before all the Amazon Sellers get on the platform and buy your products and start selling them instead and trample all over your brand.”
Murphy suggests for an established brand Amazon is a great way to set up another sales channel.
“Brands still need to have an online presence. No one should stop doing what they are doing. They should just think of it as an additional channel to grow their brand. And if they’re not in a position to go on Amazon – if their products don’t fit in the categories – then they need to then step up their own online platform so that is as easy to buy from them as Amazon. One click. Ship.”
According to Murphy, the most common software small businesses use today to set up their online stores is WordPress with an e-commerce plugin option such as Shopify. Aussie newcomer Neto is another one touch retail solution that is also growing in popularity. She says the main consideration businesses need to take into account before setting up an online store is: does their shopping cart tool integrate with their cloud inventory solutions and accounting solutions. This, she stresses is imperative if businesses want to open up the opportunities of working with Amazon.
With Amazon offering a one-day delivery guarantee, small businesses opting to use the platform will need to have systems in place to ensure they can keep a firm eye on inventory.
Given the vast size of Australia and the remoteness of some regional centres, there has been some scepticism as to whether Amazon will be able to keep its 24-hour shipping promise, but Murphy thinks it’s a done deal.
“I think they will partner very hard with postal services so that they can make it happen,” she says.
“It’s amazing the economies that come out of Amazon,” she adds. “Some retailers get slammed but the two economies that come out of it are freight and 3PLs (third party logistics). 3PL operators all pop up around Amazon’s warehouses – because Amazon fulfilment centres only want to hold small fast-moving goods. So the 3PL warehouses ship to Amazon.”
For businesses to benefit they must have a cloud solution that connects to 3PLs in order to track inventory.
“Then they can see what’s going on as inventory moves around and that an order can be dispatched and delivered straight away. Sadly. so many businesses are still on old software so they don’t have access to real-time information,” says Murphy. “These are the businesses that need to get on the cloud straight away.”
Just last month, the CBA reported that 75 per cent of businesses still don’t have a strategy for Amazon. Murphy says getting into the cloud should be the first step.
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“But it is a big step. It’s a big project. You are changing the entire operational system of your business. You need to make sure you have the right solutions that work with your business and you need to know they work the way you need them to. You need to work on your two core systems – your inventory and accounting. Let’s say Dear Inventory and Xero. Then you need an add-on for your website for e-commerce and a shipping add-on and maybe a customer relationship management tool and a social media manager.
“Being able to manage all that is a lot – and you probably can’t manage to integrate five new systems at once. But you do need to make sure you get started with a cloud-based accounting and inventory system.”
Murphy says Amazon has been a boon for many small businesses.
“In the US there are over 400 million products available on Amazon. The real winners are in fashion – the clothing industry – and in non-perishable goods – and anything that people need on a regular basis.
“Amazon will come out with their own fresh goods service but that is going to take some time. So people that have small products that are easy to move should be the first to look at joining. We still don’t know what the gated categories will be yet. They haven’t revealed what they are, but the main thing is that businesses have a strategy.”
Murphy says it’s not so much how much you ship but that you can ensure you can keep up with the demand that’s important to Amazon. Fall down in this area and Amazon will penalise you.
“It’s really important that people forecast inventory and keep up with Amazon standards. They really can’t afford not to.”