Interview: Growing an Amazon Seller Brand Takes More than Hard Work & an Idea

Interview with AMZSCALE founder on what it takes to win in online retail as an Amazon seller.

Amazon is just a fact of life for most of us. Avoiding it takes conscious effort in the US, and the e-commerce platform grew 38% in 2020 and 19% in 2021, according to Statista.

With some exceptions, like Alibaba in China, Amazon is the dominant force in e-commerce in most parts of the world, with Amazon Markets delivering to over 70 countries. At the time of writing, the Amazon Global seller program reaches 16 markets which include: Germany, Italy, France, Spain, Netherlands, Australia, Singapore, India, Japan, North Africa, Turkey, Mexico, Canada, Brazil, and the US.

But to understand its growth and the key to its dominance, one must appreciate that Amazon's growth is a story of remarkable logistics and partnerships in a delicate ecosystem of other sellers. But don't worry, this isn't the story of how the plucky little guy can make it on Amazon – the days of the little guy doing it on his own may be behind us.

With the gigantic Fulfillment by Amazon(FBA) program, an entrepreneur doesn't need to go through the same drudgery to sell successfully. Now it's less a picture of stuffing boxes, keeping crates of products in your garage, and constantly dealing with the post office. Selling successfully through Amazon has evolved into a game for young capital investors. Selling tube socks in the midwest US may sound like a modest goal, but the buying power required to own your space as a vendor on Amazon has changed the nature of the businesses that sell there.

We spoke with Maurice Glißmann, Founder and CEO of AMZSCALE, about how he got into the Amazon FBA seller game, his new Sales as a Service platform, and a few secrets to success on the $469 billion e-commerce platform.

What's the key to selling successfully through Amazon?

"So basically, the whole secret is a very good product. You can always make short-term revenue with cheap products, but it's not the game we are in. You have to find a good set of related products and find good suppliers and backup suppliers. All the learning and errors I have made myself as a seller I've put into the agency and the AMZSCALE full-service platform. I prefer to have at least three suppliers who can jump on the current supply chain so you don't have to deal with running out of your core assets.

Amazon employs over 1 million people, they have a lot of data, and they see if you're selling bad stuff in their playground. So focus on building good products and understanding your customer. So build a brand around your customers' needs. Don't just build one product. Offer four or five products minimally to increase the value of your customer."

How did you get started in building Amazon merchant brands? And how many brands have you launched?

"We've built 750 products and have about 250 customers. I got started by trying it myself. My first investor was my tax accountant because every local bank said, oh, good numbers, but I would not buy these products. After I built up and sold my first two merchant brands and one smaller software platform, I had an idea. I can leverage my time, knowledge, and network of suppliers to help others and get new companies off the ground."

What's the most common mistake people make when establishing a retail brand?

"I think it's the getting rich quick mentality. So I will start today, and I'm rich tomorrow. Or not understanding that will have roadblocks and many, many roadblocks and failures. I always say try to make many small failures, learn from them, and proceed from there, but do not expect to take any money out of the business in the first two years. So reinvest, learn, and talk to other entrepreneurs. Don't think you are the smartest person in the room – ask other people who've done it before."

What does your new platform do for Amazon vendor businesses?

"Our platform is for small to mid-sized brands. We offer a dashboard that puts all data in one place – customer review management, PPC Performance, sales, costs, and profitability in one dashboard with some features free for any brand that wants to use them. But for brands that work with us on the agency side, AMZSCALE helps with cutting costs, negotiating contracts, working out logistics and financing, and introducing them to the right partners and suppliers.

The whole e-commerce game – especially the physical product game – is about optimizing your landed costs. So if you have better rates, like 20% of logistics costs, especially during these times, that's a significant advantage. That's how we help more prominent retail brands and smaller brands that are there to scale."

How do you try to identify a product that will sell out on Amazon?

"What we attempt to do is to combine mega trends, as we call them. So, for example, sustainability combined with fitness. In this case, we had a cork yoga mat, which is a very sustainable fitness product. They launched the product, and we could not keep it in stock because the demand was crazy. If you are an online retailer – find trends in the market and try to combine them."

When there is an unexpected trend, like the Wow Goose Sweater last winter, is there any way to jump on that trend as a retailer?

"It would be possible. You could try to jump on every trend, but I wouldn't recommend that. One of my biggest failures was jumping on the trends. I bought ceramic knife sets. I think that was 668 years ago. And now all of my personal friends have ceramic knife sets from me, because I couldn't sell them. I had tons of those sets. That's what happens when you jump on a megatrend; there are always companies that have more buying power than you. The profit will drop to near zero because everyone starts getting their landed cost back, and they start selling at a loss… So I wouldn't recommend jumping on those trends. I think you can hit a home run once, but hit a homerun twice or many times? I don't believe in such things."

I believe in growing your brand with a good strategy... Get a strategy in place and execute uncertainty on the way to your goal. Try to eliminate or get the failure points as small as possible and optimize your strategy."

Is there room for the inventive seller to make a hit without significant capital?

"I wouldn't generally say so. I call these people with no experience, no funding, and a big idea "inventors," and sadly, the common issue is that they do not look at the market. They're just inventing something to see if it works. At AMZSCALE, we look at the market to see if there is a need and what product will meet the need. I wouldn't say it's impossible to have a cool idea and create a hit brand, but it gets harder every year to find the spot for a new niche product…"

What is your growth strategy for 2022?

"We are a venture-backed company with a solid M&A strategy. So we are looking at software companies in the niche... We will expand AMZSCALE and the AMZSCALE platform around the globe. We are now in Europe. Our strategy is to build the perfect platform with software solutions and find the right agency partner in the local markets, like Brazil, Mexico, and the US.

We are always looking for investors and agency partners for our new markets – including the US – because they have networks and can help make things possible."

Have you handled any NFT products? Do you see them as a future opportunity for retailers?

"We have tested NFTs in Germany, where the whole blockchain space is quite regulated. I think not only NFTs, but the whole blockchain space will be huge."

Summary

Any system led by profit incentive will spiral toward greater centralization. So it's not surprising that AMZSCALE and its customers are driven by capital investments and playing a game of peace through superior buying power.

It shows the staggering scale of Amazon's footprint that even their vendors are doing global business at scale. But, utilizing Amazon's unparalleled fulfillment services, you can make it big as an online retailer that is just a tiny part of the great e-commerce site's ecosystem. All you need is determination, experience, and substantial upfront investment.

Now that the playing field is defined by Amazon, those more able to understand and manage the system will be rewarded. That is until Web3 Amazon – or whatever the next big thing will be – comes along and disrupts the status quo, letting just a few innovative players in before the pattern consolidates again around the big players.

Cover image by Alexandra_Koch from Pixabay.