Growing an impactful brand on Amazon is neither wise nor possible. While Amazon can be a valuable marketing tool, prudent business leaders choose direct-to-consumer for complete control over their end-to-end customer experience. The result? Strengthened brand recognition and sustainable customer loyalty.
Your direct-to-consumer platform must come first
Relying on Amazon can swiftly destroy your business or prevent it from becoming profitable in the first place. That’s why before you funnel resources into selling anywhere else, it’s critical to optimize a direct-to-consumer experience that stands on its own. Many of Amazon’s practices put sellers at risk, including:
1. Amazon uses your customers’ data to recommend competing products.
When a shopper browses Amazon, the site’s collaborative filtering engine analyzes personal data such as past purchases, shopping habits, wish lists, search history, and product reviews. This information helps Amazon recommend products the shopper might like, regardless of the seller. An Amazon listing for the latest Fitbit, for instance, includes a “frequently bought together” section directing shoppers toward a third-party charging cable not manufactured or sold by Fitbit.
Directly beneath is a scrolling module featuring 35 competing fitness trackers for sale, most of them knock-offs. Shoppers must scroll past these third-party products to find information about the new Fitbit’s features, specs, and customer reviews. That’s a lot of real estate on your listing page dedicated to competitors.
2. You have to play by Amazon’s rules. Amazon’s goal is to make money for Amazon. That means sellers on the site must adhere to Amazon’s policies, which can prevent you from communicating with your customers. There’s no opportunity to gather customer contact information, build an email list, or run an email marketing campaign. Without that point of contact, Amazon sellers cannot develop relationships with customers or build brand recognition.
Amazon’s forced arbitration policy is an even more formidable risk to sellers. Upon signing up, they must agree to an arbitration clause waiving the right to sue Amazon, request a trial by jury, or take part in a class-action lawsuit against the company.
This scenario played out in 2020 when Amazon cut off contact with a merchant suspected of selling counterfeit goods after seizing $80,0000 and 50,000 products from his shop. The arbitration clause made suing Amazon impossible.
Eighteen months and $200,000 in legal fees later, a mediator decided Amazon had gone too far but awarded the merchant only half of his requested restitution.
3. In Amazon’s quest to be everything to everyone, your company may get left behind. Amazon is much more than just an online shopping destination, making aggressive moves into TV and movies, games, cloud computing, and even healthcare. Should Amazon one day decide to deprioritize your product, alter its algorithm, or even manufacture an in-house version of your product, Amazon-exclusive sellers will be in jeopardy.
Further, as Amazon continues its domination of the market, antitrust lawsuits threaten sellers on another front. In 2019, the House Judiciary Antitrust Subcommittee’s democratic leadership published a report claiming that Amazon controls 50 percent or more of the U.S. online retail market, according to CNBC. In the statement, lawmakers said Amazon also stifles competition in the cloud computing and voice-activated device spaces, “creating a conflict of interest that Amazon has the incentive and ability to exploit.”
3. You can’t build or grow a memorable brand on Amazon.
When customers shop on Amazon, they are, first and foremost, shopping on Amazon regardless of which seller’s item they ultimately purchase.
As a result, it’s impossible to build a lifestyle or luxury brand on Amazon, let alone a recognizable one. To do that, you need shoppers searching for your brand by name, not the type of product you sell.
Scandinavian furniture manufacturer JYSK arrived at this conclusion upon leaving Amazon in 2019. “You can’t build a brand on Amazon,” JYSK country manager David Ashton told Furniture News. “There’s no brand labeling, there are significant delays, and you have no ability to get customers’ details. To deliver great customer service, you need to be able to contact the customer directly. As a platform, Amazon may help many businesses, but if somebody asks you where you bought an item from, and you say Amazon, not JYSK, we develop no brand awareness as a channel.”
4. Amazon’s image problem becomes your image problem
Amazon spoils customers for choice and fast shipping times, making it harder for companies to provide full-scale, thoughtful, deliberate customer service.
While customers may initially think they win by shopping Amazon, a glance at product reviews and news coverage reveals weak spots, including:
- A thriving counterfeit market: A Wall Street Journal investigation revealed thousands of “banned, unsafe, or mislabeled products” on Amazon.
- Fake reviews: A 2019 study found that almost 90 percent of the five-star reviews on the listings they tested were unverified.
- Harmful for the environment: Wired reports that in 2018, Amazon “emitted 44.4 million metric tons of carbon dioxide equivalents into the atmosphere – roughly equal to the annual emissions of Norway.”
- Questionable (at best) treatment of employees in pursuit of cutting costs: New York Attorney General Letitia James sued Amazon in February 2021 for “flagrant disregard for health and safety requirements” needed to protect employees from the spread of COVID-19.
If you do all of your business solely on Amazon, customers will associate your brand with the company’s problematic traits as well.
Consumers aren’t as committed to Amazon as you think.
With your direct-to-consumer channel, you can stand out by understanding Amazon’s shortcomings and gathering insights about consumers who prefer to spend their money elsewhere.
JungleScout’s 2020 Consumer Trends Report highlights non-Amazon shoppers’ values, which can help your team shape a sales strategy that targets the company’s weak spots. Here are a few impactful findings from the report:
- Though non-Amazon shoppers want inexpensive goods (70 percent of non-Amazon shoppers report a household income of less than $50,000 per year), nearly half of those surveyed said they look for quality products with favorable reviews.
- Thirty-eight percent of respondents said a stand-out set of product features is a deciding factor in their purchases.
- One in four respondents said faster shipping doesn’t drive them to purchase one item over another.
Taking advantage of these consumer trends can help you create a direct-to-consumer strategy that offers value Amazon can’t match.
Brands flourish after leaving Amazon
As reputable brands break away from Amazon, the retail landscape will start to change, and Amazon will seem less like the only option for growth-minded companies. In recent years, a rising number of the world’s most recognizable brands began leaving Amazon and reporting significant benefits as a result. Here are a few notable examples.
After experimenting with Amazon for two years, Nike left the platform in 2019, citing a lack of control over counterfeit and unauthorized goods as a primary complaint. Since leaving Amazon, Nike reported brand revenue of 12 percent on a currency-neutral basis and a nearly 12 percent jump in share price, according to The Motley Fool. In a statement to Bloomberg, a Nike spokesperson said the direct-to-consumer approach enables the company to build more direct, personal relationships with customers.
Swedish furniture giant IKEA ran a brief pilot test on Amazon in 2018, but the project was short-lived. Unlike Nike, IKEA didn’t give a specific reason for leaving but quickly resumed focus on direct-to-consumer sales. According to RetailWire, the company may also be considering starting a new marketplace where different furniture brands can sell alongside them.
“You like to control your own destiny, said Torbjorn Loof, CEO at brand owner Inter IKEA in an interview with Financial Times, “so in that sense, if you have the size and the possibility, that’s true [that Ikea would like to create it]. I think in the next five, 10 years, we will see what we now call the platform developing.”
Beard care company Beardbrand cited pressure as a reason for leaving Amazon in 2018. “Blended into our core values is this motto of, ‘I don’t take pressure, and I don’t give pressure,’” said founder Eric Bandholz. “Any Amazon reseller knows the communication between Amazon and the reseller is not necessarily in line with that motto. And frankly, I have choices in life, and I don’t want to put myself in that kind of environment.”
Since leaving Amazon, Beardbrand improved their in-house sales channel, reduced shipping times, and focused on providing excellent customer service, according to a statement on the company’s website. “We found that Amazon slowed us down from delivering on that vision,” Bandholz said.
These high-profile departures point to a future where companies won’t be dependent on Amazon. Over the past few years, many direct-to-consumer firms like Warby Parker, Glossier, Casper, Brooklinen, Blue Apron, and more fostered sustainable growth and lasting connections with customers. Thanks to expert social media campaigns, modern branding, and a keen understanding of consumers’ pain points, these businesses thrive independently.
Growing your business without Amazon has never been easier
Intuitive tools are available to manage every aspect of your business smoothly and efficiently without Amazon.
Shopify’s 2021 Future of Commerce report revealed that consumers are interested in breaking away from marketplaces and big box stores in favor of direct-to-consumer businesses. According to the report, of consumers who purchased from marketplaces since the pandemic began, only 55 percent said they’d continue to do so regularly in six months, and 50 percent of respondents said they actively seek independently-owned businesses to patronize. It’s well worth exploring tools that make it easy to reach consumers without Amazon. An ever-growing list of apps and tools can help your team save time and money while building your brand:
- You can build and host your store with Shopify for as little as $29/month.
- Accept secure global payments with Stripe, which offers a simple pay-as-you-go-plan.
- Offer credit and flexible payment plans with Affirm.
- You can store inventory and fulfill orders with ShipBob, which offers Amazon-level logistics to other e-commerce businesses.
- Handle domestic and international returns with Returnly, and take advantage of its green returns program for sustainable shipping.
- You can even provide same-day delivery with DarkStore.
Services like these make it possible to scale your direct-to-consumer channel efficiently. Take what you need, leave what you don’t, and innovate where you can. Always consider how you can provide a more intuitive shopping experience, foster community, and even collaborate with your audience.
But isn’t direct-to-consumer more expensive than selling on Amazon?
The short answer is yes, but it’s still the smart move for long-term growth because it enables you to attract loyal customers that come back again and again. You can grow your direct-to-consumer business by prioritizing customer relationships. Bedding company Brooklinen, for example, uses insights from conversations with customers to develop new products that meet their exact needs. Notably, forty percent of Brooklinen’s revenue comes from return customers.
Build strong relationships with your customers by interacting with them, listening to their needs and challenges, and providing dedicated customer service.
If anything, use Amazon as a marketing channel
If you must use Amazon, incorporate it as one of your marketing tools rather than your entire strategy. With a thoughtful hybrid approach, Amazon can help drive traffic to your direct-to-consumer platform. Here’s how to do it:
- Use your Amazon shop to sell introductory product packs that feature a selection of trial or “lite” versions of your products.
- Limit your Amazon product selection to less than three SKUs. Ideally, you’ll base your decision on Amazon keyword research to attract non-branded search traffic.
- Mark up the products you sell on Amazon. Price shoppers will check your website to see if they can find a better deal. Some customers may even leave an Amazon review alerting others to the lower prices on your website.
- Leverage Amazon’s DSP advertising platform to drive traffic directly to your store.
- Share premium content on Amazon to create interest in your direct-to-consumer offerings and funnel users to your website.
- Provide premium, branded packaging for a memorable unboxing experience that causes shoppers to associate your product with your brand. You can also insert invoices and other materials into the packaging that invite customers to your direct-to-consumer website for your full array of products.
- Provide exceptional customer service, including hassle-free refunds and swiftly resolved complaints.
- Add Amazon Pay to your direct-to-consumer website to help Amazon customers seamlessly check out without extra steps.
- For your Amazon sales, use Fulfilled by Amazon to ensure Prime eligibility.
What about customers who want things yesterday?
Build a sense of “we’re worth the wait” into your brand. Create messaging around craftsmanship, thoughtfulness, and the meaning behind your product.
For example, you could set up an email flow to keep customers informed on the shipping process and share engaging content to keep them excited about their order. Communicate that fulfillment takes a bit longer because you want shoppers to have an exceptional experience. Stress that if there’s ever an issue with an order, a real live person will be available to sort it out promptly— a level of service wholly unfamiliar to Amazon shoppers.
Key takeaways for leaders
Need buy-in from company executives before moving forward? Share the following impactful takeaways with your company leadership to move the discussion forward.
- Prioritizing Direct-to-Consumer (D2C) over Amazon gives you access to your customer data and analytics, control over end-to-end customer experience, and the ability to build an impactful brand that attracts return shoppers.
- After Nike left Amazon, the company reported a 12 percent jump in share price and greater control over customer relationships. They are one of many companies leaving Amazon in favor of direct-to-consumer in recent years.
- A Shopify survey found that around 50 percent of people actively seek independently-owned businesses when shopping, and tools like Shopify, Stripe, and Affirm make it easy to provide a direct-to-consumer experience efficiently.
- If anything, use Amazon as a marketing tool to drive traffic to your direct-to-consumer platform. To do this, adopt a hybrid approach where you offer a limited selection on Amazon and your full line at better prices on your owned platform.
Don’t leave your company’s future in Amazon’s hands. The cost of not having control far outweighs any benefits. Prioritize your direct-to-consumer strategy so your company can grow independently and exponentially.