Has Amazon Finally Been Rumbled?
More and more businesses are realising that Amazon.com is not the Holy Grail.....far from it, infact it could be the thing that actually destroys them.
Nov. 10, 2012 - PRLog -- We all know just how hard the last four financial years have been with closures, redundancies, rising food prices, fuel, taxes on everything, banks having a laugh at our expense and Governments seemingly hell bent on bringing us to our knees.
It is with this in mind that many retailers have turned to third party sites such as Amazon and eBay to bolster their dwindling sales. Amazon, with headquarters in Seattle, Washington, United States is currently the world's largest online retailer; it derives around 40% of its sales from affiliate marketing called "Amazon Associates" and third-party sellers who sell products on Amazon.com either directly or through Fulfilment by Amazon (FBA). This is where Amazon store your products in Amazon Fulfilment centres, they then directly pick, pack and deliver them for you. This is, however, not cheap, you will generally be billed for fulfilment fees, selling on Amazon fees, storage fees and other applicable fees depending upon the nature of your goods and bear in mind that there is a semi-annual “Long-Term Storage Fee” of £882.50 per cubic metre (£25 per cubic foot) which will be applied to any Units that have been stored in an Amazon fulfilment centre for one year or longer.
All of this however, has not deterred small businesses from pursuing additional revenue.....until now.
Amazon has always been aggressive in the market place but some of its recent antics have antagonized small businesses “Amazon faced a backlash from small businesses for running a one-day deal to promote its new Price Check app. Shoppers who used the app to check prices in a brick-and-mortar store were offered a 5% discount to purchase the same item from Amazon” and in an article by Don Reisinger from June 27, 2012 he observes that “The Wall Street Journal is reporting today that some retailers in Amazon's Marketplace have witnessed the online company examining which products they sell that are popular, and then offering them itself to the detriment of those merchants”.
The New York Times reports on Friday, November 9th, 2012 that “Many Booksellers are Shunning Amazon” and that “Wal-Mart and Target have stopped selling the (Amazon) Kindle”.
In the UK one of the world’s leading soft toy manufacturers, Jellycat Ltd, has finally run out of patience with “third-party”
The resulting effects of these selling tactics has been a price war between third party traders and actual recommended retailers working from their own sites, this has seen the Jellycat brand marginalised to only best-selling lines, at the expense of the whole catalogue. This has become unacceptable to Jellycat who have felt for a number of years that their quality designs have been undersold thus undermining the jellycat brand name and creating a false impression in the minds of the buying public.
They have finally had enough and released the courageous news that they will no longer, from 31st December, 2012, be supplying “third party” traders and anyone caught breaching these sanctions will be instantly removed from Jellycat’s suppliers list.
One of Jellycat’s long term customers is Fleurtations, the Nottingham based gifts company, who have been diligently building a quality reputation in the internet retail market by providing, amongst other things, the entire Jellycat catalogue. They offer over 140 pages of Jellycat products on their own site. The personal touch is evident on every page, with individual banners, separate “more details” pages, a full list of customer services and privacy policies.
The owner, Mr Graeme Wiser, has been involved with Jellycat since they first started back in 1999. He started the Fleurtations website six years ago “to try to bring quality items, such as Jellycat, to a larger audience”. Since then Jellycat has grown out of all recognition and so have Fleurtations. Mr Wiser says of the latest news “This is just the break that we have been looking for, we have been working on our site for six years and really feel that it has an intimate, friendly feel whilst still offering great service. We have slowly moved up the Google natural rankings and appear regularly in the top three sites in the country, we even made second in the entire world a couple of weeks ago. It has been difficult to compete with retail giants like Amazon, particularly when they cherry pick the top designs, but the news from Jellycat has given us hope that we can continue to provide not only great service but the entire catalogue as well”. He goes on to say, “The future of retail on the web has got to be an intricate weave of large, medium and small entrepreneurs and not just a single giant retailer monopolising the entire market place, so this news has got to be a step in the right direction. We know just how important Google is for retailers such as ourselves and their apparent relentless pursuit of quality search has got to bode well for sites with great content and honest SEO, I actually feel that we are on the brink of something extraordinary”
And what does all this mean for Amazon’s immediate future?
Probably very little but, and it is a big but, the writing is now on the wall for companies to decide that their long term financial well-being is far more important than mere short term gain (giving a retail giant access to all of your best selling products is never a good idea).
As a point of interest Amazon announced on the 25th October, 2012 “that it had swung to a quarterly loss for the first time in four years”. The earnings report, issued after the market closed, immediately sent Amazon shares down 9 percent (information from The New York Times).
The Fleurtations Jellycat site can be found at http://www.fleurtations.uk.com/
Page Updated Last on: Nov 10, 2012