In the modern era of globalization, the world is moving towards the latest technology trend bringing a revolution in people’s lives. A few decades before, most people went to shopping malls for purchasing purposes. Now everything is available for sale on online eCommerce platforms. Amazon is the biggest eCommerce platform around the globe.
It can be witnessed in Fig 1 that Amazon has financial grown since the last 16 years and gained net revenue of 386.06 billion US dollars in 2020. An increase in revenues and profits also leads towards intense competition in business to capture market share. Nowadays, millions of sellers compete to sell the same products under different brand categories. Companies should be unique and innovative to succeed in the modern competitive environment.
As the number of independent sellers increased in competitive e-commerce platforms, Amazon aggregators also escalated. Amazon FBA aggregators are acquirers of small businesses that search both off and on Amazon to increase revenue. Amazon aggregators have become a fundamental part of the Amazon platform. They provide Amazon with a wide variety of products at the best possible prices and offer the opportunity to small businesses for growth.
What will the Rise of Amazon aggregators do?
It will create a substantial competitive environment of independent sellers on Amazon faced through Amazon aggregators. Independent sellers can operate their business on Amazon or sell Amazon business. Amazon Aggregators encompass rich funding resources for scaling up their brands quickly through significant investment. On the other hand, independent sellers will face difficulty scaling up their brand due to limited funds for investing in the expansion of their business.
Amazon aggregators look for leading category leaders who stand in the top positions in volumes and reviews. It means that they are differentiated from the brand. Aggregators are also looking to add value to that business they see potential and help them gain maximum profits. If sellers conduct partnerships with aggregators, they can be benefited from:
Independent sellers on Amazon have to reinvest many of their profits into inventory and marketing purposes. Conducting partnerships with Amazon aggregators will provide them access to capital that will help them reduce their expenses and overgrow.
Most Aggregators provide consultation and business structure to the sellers through their internal eCommerce expertise. It can help independent sellers to grow their business with effective strategies.
Providing support in logistics and supply chain
Amazon aggregators are efficient and enjoy economies of scale. They can be resilient and cost-effective supply chains and logistics to brands that can help them grow faster.
Access to the platform of the analytical process
Aggregators greatly emphasize the power of analytics for making business decisions. Once aggregators acquire a seller, analytical integration guides business decisions.
These things will improve the business performance of your brand if independent sellers are partnered with Amazon aggregators.
The rising competition can be fruitful for Amazon sellers because:
By witnessing intense competition, independent businesses will think innovatively to capture market share and upgrade their business. This process will lead towards increasing innovation.
Reducing unnecessary costs
After intense competition, independent sellers will analyze their financial situation and plan to reduce unnecessary investments. They will invest in more productive activities to increase their market share.
Need to self-reflect
When the competition rises, it urges the seller to analyze their entire situation on what is going wrong in their business or how to improve our business? These questions will lead to possible solutions to win the competition.
Amazon market competition can be problematic for sellers, but at the same time, it can allow independent businesses to reflect on their performance and improve their business. It will enhance their business and provide them with adequate opportunities.
What options do you have?
There are certain things to look deeply for making your business successful in Amazon-like knowing your customers and products. Independent sellers should regularly look at their business performance to determine whether their profits are minimized, or their consistency is low. Businesses in Amazon require an effective tool to analyze their business effectively and reach the best possible solutions.
1: Join Aggregators
If the independent sellers cannot compete with Amazon aggregators, it’s effective for them to join Aggregators. Moreover, joining Amazon aggregators is not easy to compile as they have high standards of joining the independent business. Big Amazon Aggregators are very tricky and choosy to select independent partnerships.
They will consider essential aspects of your business like brand registration confirmation, ranking on Amazon, having a good review moat, checking that you are operating under Amazon FBA, analyzing your profit margins, and many others. Your independent business has to pass through some difficult stages to get selected as partners with Amazon aggregators.
One of the critical aspects of Amazon aggregators is that they invest heavily in data analytics of brands. These analytics are processed by the use of third-party latest soft wares to reach the accurate performance of running businesses. Through their analysis, they are able to make accurate decisions about their businesses that can lead towards future growth. Moreover, it is fundamentally important to check business performance analytics to propose future strategies.
2: Competing on your own
If you don’t want to join aggregators to increase your independent business performance, you can do it on your own by using a 3rd party analytics platform. The most effective platform will be that which incorporates:
It is for those brands that want to gain an understanding of their business through native amazon and wider performance data.
Analysis of customer
Customer lifetime value is a tool that can be used by different companies to sustain their customers. Moreover, this tool can also help you to investigate profit margins.
The analysis of the product will acknowledge the behavior of customers when they interact with your product. It will allow you to upgrade your product or enhance its quality after acknowledging results.
The decision completely depends upon you whether you want to merge with Amazon aggregators or to compete against the businesses. If, as an independent seller on Amazon, your brand is well established and you have rich financial resources, then you can compete with Aggregators to capture your market share. However, those independent businesses that earn average profits and invest more in their brand management don’t have many resources to compete with large-scale brands. They can merge with Amazon aggregators for their financial growth and business stability.
In the end, competition in the online market is escalating at a supreme level. Independent businesses making huge profits and gaining significant market share are able to compete with renowned brands. However, small and medium independent sellers face difficulty in capturing market share under intense competition due to a lack of investment. Here, Amazon Aggregators will help these businesses to grow by providing huge funding.
It will allow them to grow at a fast pace and gain market share. Due to these reasons, Amazon aggregators have become the backbone of the Amazon business, and they are extremely effective for independent sellers on Amazon.
Also read: How to Identify Fake Apple Products and Avoid Being Fooled