Amazon for Swiss retailers?
With your MyCOMMERCE online shop, you have the option of selling your products not only through your own online shop but also through Amazon, the largest online marketplace in the Western world, via the integrated interface. But what does Amazon mean for Swiss retailers?
Amazon is a US eCommerce company based in Seattle and best known for its online shopping platform. The company was founded in 1994 by computer scientist Jeff Bezos, who still leads the company today, with the pioneering idea of selling books online. Since then, Amazon has evolved significantly and, alongside the Chinese platforms Alibaba and JD, has grown into the world’s largest online marketplace, with a product range of over 600 million items and company revenue of USD 233 billion in 2018.
Online shop or marketplace?
Unlike a traditional online store, the online marketplace offers not only products from Amazon itself, but also from millions of independent retailers, manufacturers, and brands. Amazon acts as a digital intermediary, connecting sellers and buyers via its website.
Big, bigger, Amazon
In the USA and Europe, including Switzerland, Amazon has become an omnipresent topic in the media and politics and has grown into strong competition for established department stores and retail companies. This attention is certainly justified. Amazon has become the clear number 1 for online shopping in the USA and Europe and is continuing to drive the ongoing transformation in wholesale and retail. The sales and market share figures are impressive. In 2018, physical goods worth over USD 277 billion were purchased online via Amazon worldwide. This value is made up of USD 117 billion in its own retail sales (Amazon is the seller) and USD 160 billion from third-party sellers via the marketplace. In the USA, Amazon therefore accounts for over 5% of total retail sales; when viewed purely in eCommerce, this figure is already 50%.
Amazon as a product search engine
Another aspect that highlights Amazon’s power and influence is the large number of people who initiate their product searches via the Amazon platform. Similar to Google for general internet searches, Amazon is increasingly establishing itself as a product search engine. Studies show that over 55% of online shoppers in the US begin their product search directly on Amazon. In Germany, the figure is already over 30%. Amazon is literally attracting customers, and it’s a clear sign that all participants in the traditional distribution chain must engage with Amazon in order to survive successfully in the emerging platform era.
Amazon for Swiss retailers
In Switzerland, Amazon’s market power is even less overwhelming than in its direct neighbors, Germany and Austria. In the ranking of the top-grossing online shops in 2019, published at the beginning of July, the US company ranks third with sales of CHF 660 million, behind Digitec (CHF 775 million) and Zalando (CHF 785 million). The fact that Amazon is not by far the largest online shop in this country, as it is in Germany and Austria, is due, among other things, to the fact that to date only a limited part of its product range is available for delivery to Switzerland. The main reasons are the difficulties with imports and exports due to Switzerland’s non-EU status.
Who benefits from using Amazon?
We recommend conducting a future-oriented assessment of your current position and focusing on capitalizing on emerging opportunities. Amazon has a gigantic number of customers who are searching for the right new product every day. Bringing customers together on a single website offers immense potential for new customers and growth, as well as the ability to supply the whole of Europe with relatively little effort. Amazon not only has many customers, but also a large number of different retailers and suppliers. This means that there is fierce competition with high price transparency, especially for well-known and easily comparable branded products. As a small, independent retailer from Switzerland, you probably have little chance of being able to compete with large international companies in terms of price in this segment.
The situation is different for brand owners, manufacturers, and retailers with exclusive brand representation and a unique product range. Depending on the offering, there are fewer or no other competitors and therefore little price pressure. As a retailer, you can always set your own price, but of course, it must be competitive to ensure good sales prospects.
As a MyCOMMERCE customer, you have the opportunity to use Amazon as a Swiss retailer. You can easily sell your product range, or selected parts of it, in Europe via Amazon. Try it out and learn from your first experiences. We will continue to cover the topic of Amazon in the coming weeks and delve deeper into it in the form of focus topics, for example, on Amazon logistics.
You can find more information about creating an online shop here.
This article was provided to us by Carpathia. If you would like to delve deeper into the topic of “selling on Amazon” and the best strategy for your individual needs, Carpathia is happy to support you with its Carpathia Amazon Competence Hub.
