Archive - 2017

1
Amazon Buys Whole Foods
2
Amazon Transparency Program
3
Strategy and Tactics

Amazon Buys Whole Foods

The above is totally NOT how things went down but it’s an amusing thought in the midst of the news that broke today about Amazon acquiring Whole Foods for 13.7 Billion dollars.

The news that Amazon is making this big of a move into Brick and Mortar has the grocery and retail world stunned and worried about what the future holds.

“This is an earthquake rattling through the grocery sector as well as the retail world. We can only imagine the technological innovation that Amazon will bring to the purchasing experience for the consumer,” Mark Hamrick, senior economic analyst at Bankrate.com, said in an email Friday. “Now, we can see in hindsight that its recent dithering around the brick-and-mortar experience, as an experiment, was only a rumbling of the seismic event in the offing.”

 

Amazon’s “Amazon Fresh” offers delivery in a few key cities, (including Denver now, which makes me super happy) but I have a feeling that after they get Whole foods in the fold the locations that they deliver to are going to increase exponentially. The retail footprint that they just acquired in one fell swoop is rather impressive, especially for a company that so rarely goes out and makes large acquisitions like this.

The stock market shows the immediate reaction of the sector as one of overall fear. Just counting the twenty biggest losers in the retail and food categories from the S&P 500 the market cap loss was $37.7 billion Friday. Meanwhile, Amazon stock went up more than 3% for a market cap gain on the day of 14.5 Billion which has effectively made their purchase profitable already.

As we move forward it’s going to be interesting seeing how Amazon handles this move into Brick and Mortar – but I think it’s going to be even more interesting seeing how other retailers respond to this development.

Go Ship Some Stuff!

 

Amazon Transparency Program

I just got back from the Resonate Conference in Atlanta Georgia and one of the presenters brought up an interesting new program that Amazon is in the process of implementing. It’s aimed at helping Amazon ensure that all inventory that is being sent to their warehouses is authentic.

For a brand to get involved in the program they have to agree to add the Transparency 2-D barcode to the outer packaging of ALL of their inventory, to include any inventory sold via non-Amazon channels. Once they make this change Amazon will refuse to accept any inventory that doesn’t include a valid Transparency barcode. These barcodes are each unique (Think of them as digital serial numbers) and will have to be purchased from Amazon.

This is an interesting change that has a few different implications moving forward, especially for resellers. If this takes off and is implemented by brands resellers like us may find ourselves with older legitimate inventory that Amazon will refuse to accept because it is missing the “Transparency” barcode. While this will create an issue with some inventory it is my understanding that Amazon will be providing some sort of a “grace period”. When a product is added to the program they will be sending an email to anyone that has ever sold the item to alert them that the item will start requiring the 2D barcode for future shipments.

The program is currently free for the rest of 2017, but Amazon will start charging fees for the barcodes starting in 2018. Once they start charging in it looks like pricing will be $0.04-$0.05 per barcode for less than 1 million barcodes, $0.03/code for 1 million to 10 million, and about $0.01 per barcode above 10 million.

This is an interesting option for people who have their own product and are struggling with counterfeiters. I personally am looking into creating some private label products this year and will likely take advantage of this program when I do.

According to the good folks over at the Prosper Conference, if you are interested in implementing Transparency into your products you can reach out to Amazon for more details at transparency-busdev@amazon.com

Go Ship Some Stuff!

Strategy and Tactics

Recently, in a private group I’m in someone asked this question.

Is your company a strategy or tactics driven company?

…and why?

With my military background I have a problem with the question, it’s fundamentally flawed because to be successful you have to have both Strategy AND Tactics.

 

Strategy is the overall “plan of attack” for your business. Tactics are the method you use implement said strategy. You can’t really have one without the other.

I really like the following quote about the difference between the two. It comes at it from a military point of view but the same concepts work when it comes to business.

“Military strategy and tactics are essential to the conduct of warfare. Broadly stated, strategy is the planning, coordination, and general direction of military operations to meet overall political and military objectives. Tactics implement strategy by short-term decisions on the movement of troops and employment of weapons on the field of battle.” Source

My attempt to translate that from Military-speak into Amazon-speak is below.

“Strategy and tactics are both essential to how your ecommerce business operates. Broadly stated, strategy is the planning, coordination and general direction your business is headed in while pursuing the goals you have set for your business.

Tactics are the real-time/Short Term actions that you take\decisions you make in regards to how you use your resources to attain profitability.”

 

While this is probably an imperfect translation I feel like it’s something worth sharing.
Go Ship Some Stuff!
Matt

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