Amazon has proved itself a significant etailer in major markets across the world, and technology, including mobile accessories, is increasingly a strong category for the company. However recent moves into the wholesale business in the US through its Amazon Supply arm, highlighted by an in-depth Forbes article, suggest a much more disruptive move by the giant.
Amazon has proved a lucrative channel for accessory vendors, distributors and resellers in the countries it addresses in Europe. These are currently the UK, France, Germany, Italy and Spain. Vendors and distributors have have often been successful with Amazon themselves, while resellers have been able to extend their reach through the Amazon Marketplace. In all cases, understanding how Amazon operates, and working wisely within these frameworks, has been the best recipe for success.
The Forbes article highlights Amazon Supply as the unsung initiative that could threaten wholesalers and distributors in every category Amazon covers. Amazon Supply leverages the company’s scale, logistical excellence, and low margin business model to offer access to much of its catalogue at wholesale pricing.
Vendors and distributors in the US are already starting to review their relationships with Amazon. For many distributors, the company is a good customer, while vendors have longstanding distributor partnerships to consider. The potential for conflicts of interest are significant, and how much these are a concern to Amazon remains to be seen.
Amazon Supply has not launched in Europe yet, but is an initiative worth tracking, in particular by distributors. A good time to review the fine print in those Amazon agreements perhaps.