Many entrepreneurs have a love/hate relationship with Amazon. On the one hand, Amazon’s success has contributed to the transformation of the retail business, making it more and more difficult for small enterprise retailers to compete. On the similar time, Amazon’s retailer has made it potential for entrepreneurs to promote their items globally, with out having to create and keep their very own internet presence.
Amazon first opened its on-line cabinets to small companies in 2000 and has invested in supporting entrepreneurs, handmade artisans and small companies promoting in its retailer ever since. In 2018, the corporate doubled down on that help and created an inner Small Enterprise Empowerment staff, presently led by Keri Cusick, an Amazon veteran since 2014. Keri’s motivation to assist small corporations succeed arises from her childhood, watching her dad and mom, and a grandparent, develop their very own companies.
John Greathouse: Thanks for taking the time, Keri. Let’s begin with Amazon’s definition of “small enterprise,” which may range extensively between corporations. Additionally, I’m curious as to the relative affect these small corporations signify inside Amazon’s general retailer?
Keri Cusick: Thanks for having me, John. First, it’s crucial to us that we outline small companies in the identical manner our clients and enterprise companions do. Within the U.S., we observe Gartner’s definition – small companies are these with fewer than 100 staff and whole annual income of lower than $50 million.
There are over one million impartial companies promoting in our retailer worldwide they usually account for over half of all merchandise bought. Truly, their gross sales proceed to outpace our personal retail gross sales which is thrilling to see. We all know that clients worth a big selection and the chance to find native small companies. Our promoting companions play a key position in that for us and supply merchandise throughout all classes.
Greathouse: Clearly, some sectors outperformed others, however on the whole, how have small companies fared on Amazon throughout 2020?
Cusick: Whereas COVID-19 has created many challenges for small companies, we’ve seen smaller corporations proceed to develop with Amazon, regardless of the disaster. In 2020, the variety of U.S. SMB (small and medium companies) sellers that surpassed $1 million in gross sales grew by greater than 20% and greater than 3,700 surpassed $1 million in gross sales for the primary time. And, SMBs promoting on the Amazon.com retailer have created an estimated 1.1 million jobs.
That success and development continued by the vacation season, which was one of the best ever for our promoting companions, with worldwide gross sales rising over 50%, in comparison with the identical time interval in 2019. The impacts of the pandemic have touched each certainly one of us, however it’s inspiring to see how our small enterprise companions have pivoted and located success.
One story that displays the fervour and ingenuity these small enterprise house owners have displayed this previous yr is the affect Sheets & Giggles, a sustainable bedding model out of Denver, Colorado, has had of their neighborhood. They sustained their enterprise on Amazon by the pandemic they usually had been in a position to donate $40,000 in money to COVID-19 emergency aid in Colorado and hundreds extra in sheet units and comforters to homeless shelters, emergency shelters, and healthcare employees throughout their state.
Greathouse: I’m a small investor and advisor to CLIQ Products – which created a bottle-sized chair that grew to become an Amazon class chief throughout 2020. Due to our gross sales development, Amazon proactively reached out and helped us optimize our Amazon retailer.
Given the assistance Amazon has supplied CLIQ, I’m curious as to what different applications or providers can be found to entrepreneurs utilizing your platform.
Cusick: First, congratulations in your small enterprise success with Amazon. We now have numerous applications and initiatives that assist information small companies on easy methods to efficiently promote and develop.
We provide free schooling and assets by applications like Seller University and Amazon Small Business Academy. The academy’s free instructional webinars and occasions happen all year long and can be found on-line. They’re open to enterprise house owners and aspiring entrepreneurs to provide them assets to be taught extra about methods to assist them achieve success. In truth, in 2020, we hosted over 1,000 instructional occasions for SMBs world wide, with greater than 150,000 attendees. Subjects embrace studying easy methods to turn out to be a vendor on Amazon, easy methods to publish your e-book by Kindle Direct Publishing and suggestions for launching business-to-business gross sales by Amazon Enterprise.
Examples of paid providers embrace Strategic Account Services, which pairs sellers with a delegated account supervisor to offer teaching and recommendation in key areas like success and stock, account well being, choice and conversion development, merchandising and promoting, and international growth.
We even have applications like Amazon Launchpad that gives sellers with assets, experience, and international help to assist them jumpstart and speed up their enterprise and Amazon Handmade which is an artisan-only neighborhood of sellers who promote their handcrafted items in Amazon’s retailer.
Greathouse: Good to know. Along with serving to us promote extra on our retailer, somebody (from Amazon) reached out to CLIQ about taking part in Prime Day, as a part of a small enterprise initiative. What had been the mechanics of this previous yr’s marketing campaign – are there plans for related campaigns that smaller ventures can leverage in 2021?
Cusick: This was certainly one of my favourite tasks in 2020. We designed this final Prime Day to help small companies and dedicated greater than $100 million to assist their development over the buying occasion and thru the vacation season. This included holding our largest small enterprise promotion but, throughout which clients who bought $10 in merchandise from a taking part small enterprise promoting on Amazon earned a $10 credit score to spend on Prime Day.
Within the two-week lead-up to Prime Day, small companies included within the promotion generated greater than $900 million in gross sales. Total, Prime Day 2020 was the most important two days ever for our SMB companions. They surpassed $3.5 billion in gross sales, which was a virtually 60% enhance over 2019’s Prime Day. We’re taking a look at extra alternatives to focus on and promote our small enterprise promoting companions once more in 2021.
Greathouse: A standard concern I’ve heard from entrepreneurs, particularly those that have profitable crowdsource campaigns, is that pirates knockoff their merchandise earlier than they’ve time to fulfill the demand they’ve created. I used to be happy to see that Amazon lately issued a high-profile lawsuit in opposition to some alleged bootleggers.
What ought to distributors do to mitigate counterfeit gross sales of their merchandise on Amazon? Are there particular applications they will flip to?
Cusick: Sure, we’re targeted on stopping counterfeits from ever being listed in our retailer. We’ve created some ways to assist manufacturers defend their mental property by applications like Model Registry, Transparency, IP Accelerator, and Challenge Zero to make sure solely genuine merchandise are bought in our shops.
Our IP Accelerator helps companies extra shortly receive mental property rights by connecting companies with a community of regulation corporations who cost pre-negotiated charges, making it simpler for SMBs to acquire logos. Because the program’s launch, we have now related SMBs with taking part regulation corporations, leading to greater than 6,000 trademark functions. Moreover, companies utilizing IP Accelerator get entry to our wider model safety providers months, and even years, earlier than their trademark registration formally points. We additionally examine any declare of counterfeit completely, together with eradicating the merchandise, completely eradicating the dangerous actor, pursuing authorized motion or working with regulation enforcement as applicable.
We established the Counterfeit Crimes Unit in June 2020 to work with manufacturers and regulation enforcement to pursue dangerous actors and maintain counterfeiters accountable to the fullest extent of the regulation. In 2019, we invested over $500 million and had greater than 8,000 staff preventing fraud and abuse, together with counterfeit.
Greathouse: Wow, these are large numbers. I notice it’s an ongoing arms race with the crooks, however I’m glad to listen to this can be a main precedence.
One other worry entrepreneurs have shared with me is that their success on Amazon may result in Amazon producing its personal model of their bestselling merchandise. What would you say to an entrepreneur with this concern?
Cusick: Gross sales from our SMB promoting companions account for greater than half of all the things bought in our retailer. The merchandise they promote are crucial to us and to clients. We now have no real interest in limiting the efficiency of our promoting companions in any manner, and we strictly prohibit Amazon staff from utilizing private, seller-specific information to find out which non-public label merchandise to launch.
Amazon does supply its personal store-branded merchandise, as all retailers do, however they make up a really small portion – round one % – of gross sales in our retailer and don’t substitute the unimaginable collection of merchandise provided by our promoting companions.
Greathouse: Lots of my Forbes interviews deal with entrepreneurs from historically underrepresented backgrounds. Does Amazon have particular applications to help minority and/or girls led small companies?
Cusick: Sure – this can be a prime precedence for us. For instance, we’re actively invested in supporting minority-owned companies. We now have partnerships with the Division of Commerce’s Minority Enterprise Improvement Company and the Nationwide Enterprise League to assist Black-owned companies speed up their development by promoting on-line.
Late final yr, we launched our Support Small retailer which is a set of small enterprise sellers. It offers clients the chance to fulfill small enterprise house owners, together with Black-owned enterprise, woman-owned enterprise and family-owned enterprise storefronts. We’re additionally actively recruiting and onboarding minority-owned companies to promote in our shops and exploring new options we will present to assist these companies develop and thrive.
Greathouse: Good to listen to, throughout. Along with serving to minority-owned companies, the affect of COVID has precipitated many people to deal with supporting our native companies. Does Amazon have instruments to facilitate shopping for native? Is it potential for small distributors to make sure they’re highlighted domestically?
Cusick: Small companies are the lifeblood of our communities and our economic system, and we’re dedicated to supporting them. Our Assist Small retailer helps small companies attain clients. The devoted buying expertise helps clients store merchandise from tens of hundreds of native small companies by area or class.
Greathouse: Good, I wasn’t conscious of the Assist Small effort.
What’s your elevator pitch to entrepreneurs who’ve created a profitable on-line gross sales mannequin, however usually are not using Amazon’s platform?
Cusick: Nice query, John. Whereas promoting on Amazon will not be a match for all entrepreneurs, it’s a nice choice for a lot of companies. First, it creates entry to an superior international buyer base – we have now greater than 300 million lively clients worldwide. That may be a highly effective enterprise driver, particularly when paired with the lots of of applications, instruments, and help providers we provide to enterprise house owners at each part of their entrepreneurial journey.
Promoting on Amazon additionally unlocks alternatives for business-to-business gross sales with clients that embrace Fortune 100 corporations, a number of the largest U.S. hospital techniques and lots of native governments throughout the U.S. I can’t get sufficient of the tales of enterprise house owners who grew their nice concepts into wonderful companies in partnership in Amazon, whether or not they merely had a enterprise concept, had simply began a enterprise, or had been longtime enterprise house owners on the lookout for methods to develop.
As small enterprise house owners plan to adapt for the long run, for a lot of, promoting on-line will probably be a crucial part of restoration and sustaining over the long run.
You’ll be able to observe John on Twitter: @johngreathouse.