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February 8, 2024

6 most common myths about Amazon

Amazon is a symbol of innovation and power that shapes the world of e-commerce and influences the global economy. With constantly growing ambitions and innovations, it continues to outpace its competitors by far. Its influence and market position is undeniable. What about Amazon in the Czech Republic? What myths about Amazon circulate among us?

From a garage bookstore in Washington, Amazon has become a leading global marketplace. In the world of e-commerce, it is an undisputed leader and the preferred platform for over 400 million customers. It is simply the place where people search for and buy what they need. With an extraordinarily wide range of products and services, reliable delivery, and a user-friendly interface, Amazon offers its customers a unique shopping experience.

"Amazon is enormous, and people are used to buying practically anything there. This diversity is evident in the variety of orders. On Amazon, you can sell a license plate holder or an air filter, just as easily as a motorcycle helmet or gloves," says Mirek Severa from A Spirit.

Amazon doesn't just focus its operations in the USA, where every third order comes from this platform, but it is gradually conquering the European continent as well. In the EU, every tenth online order belongs to this giant.

Amazon has a local platform in the Czech Republic

The giant has expanded into many European countries and has offered its localized platform in those markets. However, Amazon has not yet expanded into the Czech Republic, and there are no indications that it plans to do so in the near future.Recent data from Czechcruch shows that Amazon would be the 15th largest webstores in the Czech Republic. This is an extreme estimate. The number of Czech customers, taking into account various Amazon domains, is such that it would be sufficient for one of the top Czech webstores.

In the Czech Republic, we currently have a translated version of the German Amazon. However, direct targeting of Czech customers through Amazon is not yet possible. The Czech market currently lacks direct access to a localized Amazon platform. This means that sellers and customers in the Czech Republic do not have the opportunity to take advantage of specific features, services, and benefits provided by a local version of Amazon. This particularly includes certain Amazon Prime services. This limitation can have an impact on the business strategies and opportunities for sellers trying to target the Czech market.

Interestingly, despite not having a local platform in the Czech Republic, Amazon has been successful in attracting Czech customers in certain areas. One of these areas is the provision of cloud services through AWS (Amazon Web Services). AWS holds a significant market share, up to one-third, in the Czech cloud services market and has gained the trust of companies and organizations that utilize its infrastructure.

Another example is Prime Video, Amazon's streaming platform, which offers a wide selection of movies, TV shows, and original content. Prime Video has already gained tens of thousands of subscribers in the Czech Republic, indicating the growing popularity of this service.

Twitch, as well, is one of the most well-known Amazon platforms in the Czech Republic. It is particularly popular in the realm of game streaming and other content. Twitch has garnered a large user base and has become an important part of the online community.

“Even though Amazon doesn't have a full-fledged version in the Czech Republic, its presence in various areas and its growing awareness among customers indicate that it is an important player on the global stage, and its influence is gradually permeating the Czech environment," clarifies David Cikánek, Head of Sales at EXPANDO.

Sending goods to Amazon warehouses as a necessary step for success

If you decide to sell on Amazon, it is not necessarily mandatory to send your products to its warehouses. There are various shipping methods that you can choose based on your preferences and business strategies. Each of the transportation methods listed below has its advantages and disadvantages. It is important to carefully consider which model best suits your needs and goals when selling on Amazon.

FBA (Fulfillment by Amazon) is a shipping model where sellers store their products in Amazon's warehouses. Amazon takes care of packaging, shipping, and customer service. The advantage of FBA is that it offers fast shipping and the benefits of the Amazon Prime program, which can be very attractive to your customers. On the other hand, you have to pay fees for storage and product handling. This method is particularly suitable for sellers who prefer to have Amazon take full care of the storage and logistics of their products. FBA shipping is commonly used by sellers with their own brands.

"The Amazon FBA service benefits us mainly in bringing us closer to customers - considering the parameters it offers," says Michal Press, CMO Skinners.

FBM (Fulfillment by Merchant) is a model in which the seller handles packaging, shipping, and customer service themselves. This method gives sellers greater control over the process and allows them to maintain lower storage costs. However, sellers need to manage logistics and ensure sufficient product availability.

"FBA shipping is especially suitable for sellers who have their own brand. It is much more beneficial from a marketing perspective. On the other hand, we recommend FBM primarily for resellers who may not need to focus as much on the visibility of a specific brand," says Dominik Hegedüs, Head of Customer Support at EXPANDO.

The third option is the Vendor model, designed for manufacturers and large distributors. In this case, the seller sells their products directly to Amazon, which takes care of all aspects of the sale. This model can be advantageous for sellers who want to maximize reach and leverage the benefits of integration with Amazon. However, sellers lose some control over pricing policies and branding. This model is suitable for sellers who prefer wholesale collaboration and are willing to give Amazon more freedom in deciding on their products. It is necessary to note that Amazon itself selects sellers for this form of cooperation.

Seasonal Sales vs. Year-Round Sales

Many sellers often have the mistaken belief that if they start selling their products on Amazon during a specific season, they will achieve the highest sales turnover. However, the reality is different. To fully leverage the opportunities offered by this platform, it is necessary to have a long-term presence on Amazon. For example, if you plan to sell during Christmas, it is essential to start selling with a year-long advance to make your product well-known on Amazon.

Amazon operates on the principle of "product ranking," which determines the position of a product on Amazon. It involves determining the order of products on the platform. Various factors of the product, such as popularity, ratings, sales, product relevance, etc., are analyzed based on the Buy Box algorithm. Products are then placed in different positions in search results according to the results. The better your ratings, the higher your position in the search results. This increases the visibility of your product and, consequently, the likelihood that customers will purchase from you. Quality products have their place and are rewarded for long-term customer satisfaction. From your own experience, you surely know that you search on the first page, not the third or beyond.

Seasons on Amazon are extreme. Some are even artificially created, like Prime Day. Prime Day is an annual event organized by Amazon for its Prime program members. It usually takes place in July and offers exclusive discounts and deals on a wide range of products. Prime Day has become one of the most anticipated online shopping events, attracting millions of customers worldwide. With its global reach, Amazon influences the business environment, and customer purchasing behavior, and consequently extends the seasons (e.g., longer summer season due to southern states, and so on). Different states and regions may have different seasonal periods, so it is important to adapt sales and marketing strategies in accordance with the local conditions where you will offer your products.

Selling on Amazon as an opportunity for everyone

Selling on Amazon is not for everyone. While it may be tempting to use this global platform to expand your e-commerce business, it is important to realize that it requires a certain investment and effort. Entry costs may include product modifications or graphic content, advertising expenses, and more. Additionally, competition on Amazon is very strong, so it is necessary to develop a strategy that sets you apart from other sellers and increases the visibility of your products.

"The greatest advantage, personally, is the opportunity to reach customers who would otherwise be inaccessible with a reasonable amount of effort and costs. On the other hand, Amazon is like a fragile canoe, and I would never want to be financially dependent on income from Amazon," describes Mirek Severa from A Spirit about Amazon.

Another factor to consider is the complexity and time-consuming nature of managing and optimizing your Amazon store. You have to learn to work with various tools and analytical features to track the performance of your products and make necessary adjustments.

“Amazon is a jungle that you have to explore on your own. It sets the standard for quality for both customers and sellers. It requires high-quality services like no other marketplace. Amazon is much more complex than other global marketplaces, and it's not for everyone," says David Cikánek, Head of Sales at EXPANDO, about the global giant.

Currently, no one compares to Amazon. There may be local champions who are successful, but no one has succeeded or will succeed in the future in being successful in as many markets as Amazon.

"We tried selling on Amazon ourselves for about a year and a half. Then we approached EXPANDO. In the beginning, we weren't fully experienced in this field, and Amazon is quite demanding. We had issues with product listings and sales monitoring. In 2021, before the Christmas season, our account was even suspended, but our partner managed to resolve the issue," Michal Press, CMO of Skinners, outlined the complexity of Amazon.

I can succeed on Amazon only with my own product

If you decide to sell on Amazon, it is not necessary to have your own product. A significant portion of the revenue on this platform comes from reselling, which means you can also sell products from other brands.

However, if you want to have your own brand, it is important to offer customers something extra. In a competitive environment, it is crucial to create unique and added value that sets your product apart from others. Quality, innovation, and a personal approach can be important factors in building your own brand on Amazon.

"Anyone can create their own product and start selling it. Amazon has created suitable conditions for that, including a range of services, such as EXPANDO. It is said that 60% of sellers on Amazon have their own brand. This number will change a lot, but it is generally a popular trend," emphasizes David Cikánek, Head of Sales at EXPANDO.

I need to protect my product from being copied by Amazon

In the past, there have been speculations that Amazon copies products from successful sellers on its platform (sources: Verdict.com, agentura Reuters). Amazon has defended itself against all accusations and claimed to support innovation and the development of new products. There was even a congressional hearing on antitrust practices in 2020, where Jeff Bezos stated that the e-commerce giant prohibits its employees from using data about individual sellers to support its private brand.

Generally, the likelihood of such a thing happening is very small. Cases are very rare or insufficiently substantiated. However, it is a sensitive topic that is talked about more than it actually happens.

On the other hand, Amazon has its own brand called Amazon Basics, and its impact is not as significant as many people think. There are thousands of Amazon Basics products among billions in the entire catalog.

Amazon Basics is Amazon's private label brand that offers a wide range of affordable consumer products. The brand focuses on providing everyday essentials and products in various categories, including electronics, home essentials, kitchen supplies, office supplies, and more. Amazon Basics products are known for their competitive prices, simple design, and functionality. They target customers who appreciate the availability and reliability of their purchases.

In conclusion

Amazon is the largest marketplace in the world and the unbeatable leader in e-commerce. Amazon's catalog currently covers 22 countries with worldwide delivery and has over 1 billion listed products.

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