Teach someone to fish, and they will soon find other ponds. As millions of third-party sellers birthed on Amazon evolve into multichannel selling, they are doing just that.
However, many — perhaps most — sellers lack the expertise or systems to manage warehouse inventory, monitor order progress and do so in a way that increases sales while reducing complexity across social selling, eCommerce, direct-to-consumer and even in-store channels.
While Fulfillment By Amazon (FBA) is the core inventory management system for that mammoth marketplace, its third-party sellers (3Ps) are increasingly setting up shop on other platforms including Shopify, Etsy, eBay and elsewhere. That growth adds complexity.
The matter took on a serious tone in 2021 as more online sellers sought alternatives to Amazon’s marketplace dominance, with Shopify often cited as the most aggressive competitor.
As The Wall Street Journal reported, Shopify “gives merchants access to cloud-based third-party services such as payments and fulfillment, but lets them maintain more control of their branding and customer relationships than the biggest marketplaces offer.”
Fanning those flames while lauding its own Amazon integrations, Shopify CEO Tobias Lütke tweeted, “Amazon is trying to build an empire, and Shopify is trying to arm the rebels.”
Countering the incursion, Amazon acquired multichannel order management platform Veeqo, unveiled on Tuesday (March 8) and signaling that the ecommerce giant wants to be in the sales and inventory management flow, even for products destined for competing marketplaces.
Keeping 3Ps Happy
Keeping its 3Ps satisfied and well-equipped is a strategic priority for Amazon. CNBC reported in October that 3P activity “accounts for roughly 60% of Amazon’s overall retail sales.”
Amazon Multi-Channel Fulfillment (MCF), a subsidiary of Amazon FBA, provides inventory management services on the platform itself. The Veeqo buy potentially gives Amazon data insights as to how FBA sellers are performing on other marketplaces.
PYMNTS reported last August that “MCF launched more than a decade ago, but now Amazon is upping its game and lowering prices to attract more businesses to use its logistics services instead of another company. Sellers still have the home field advantage of maintaining their own stock inventory while handing over the delivery aspect to Amazon.”
Of the Veeqo buy, industry site EcommerceBytes said, “Amazon’s acquisition may also be recognition that it doesn’t need to have every merchant use its own FBA fulfillment service — as long as merchants can fulfill orders to customers quickly.”
Concerning data insights Amazon may gain into other marketplaces via acquisitions like Veeqo and the Selz platform, EcommerceBytes published a statement from an unnamed Amazon spokesperson saying, “Amazon takes confidentiality and security seriously. Veeqo’s seller information is secured against inappropriate loss, access, or disclosure. Veeqo’s seller information can only be accessed by Amazon to the extent necessary to provide and improve Veeqo’s services or to assess and manage logistics provider performance.”
As to the utility of such deals, tech news site Silicon Angle noted that “Selling merchandise through multiple platforms can involve a great deal of duplicate work. If a retailer sells a certain product on three different e-commerce marketplaces, and the price of the product changes, the new pricing has to be separately added to each of the three e-commerce marketplaces.”
See also: Why Amazon Snapped Up Selz