Most first-party vendors believe they’re one breakthrough away from a true partnership with Amazon.
They’re wrong.
You might disagree, so hear me out.
A few weeks ago, I found myself presenting to the board of a Fortune 500 company. Their business was performing well on Amazon. They were on track to reach their annual growth targets, maintained healthy margins, and executed a robust strategy to navigate the current macroeconomic uncertainty.
Yet despite their success, almost all board members – including the CEO – remained uneasy about Amazon. And it didn’t take long until I understood why.
Only a few minutes into my presentation, the CEO asked:
“Why isn’t Amazon interested in partnering with us across all retail channels? Why are we left with the same tools and processes than our competitors, despite our significant position in the category?”
As I reflected on this question, I realised why so many leadership teams struggle with the online retailer:
They believe there’s a hidden partnership opportunity that their teams simply haven’t been able to unlock.
The truth, however, is much more revealing.
The illusion of a partnership
In its pursuit of building the Everything store, Amazon has turned into an algorithm-led, transactional retailer.
Its leadership team has long recognised that traditional retail ‘partnerships’ often come at the cost of lower margins and performance defects – compromises that would prevent Amazon from scaling beyond its competition.
And while their Retail team may attend your QBRs and leadership meetings, don’t mistake this for a partnership.
It’s solely because you command meaningful market share or category relevance. In other words, Amazon is interested in the status of your brand and the value it offers to your shared customers.
They’re not talking to you because they ‘like’ you or your teams.
This is thinking stuck in the early days when Amazon was more dependent on brands than brands were on Amazon.
Today, the reverse is true.
Why partnerships with Amazon won’t work
If you seek a partnership approach, trying to develop tailored strategies, brand campaigns or brand days/weeks, you’re overlooking an important point:
Amazon seeks standardisation, which unlocks automation and cost efficiencies. Not partnerships that increase the complexity of managing the joint business by ignoring SOPs and automated processes.
Most brands that claim to have a strong ‘partnership’ with Amazon really mean the online retailer bends the rules for them in exchange for additional trade investments.
The moment you remove the word ‘partnership’ from your Amazon vocabulary, you start building a strategy that works with the marketplace – not against it.