Product Managers Look For A Better Way To Deliver Products To Customers

Product managers are starting to move away from using Amazon
Product managers are starting to move away from using Amazon
Image Credit: Open Grid Scheduler / Grid Engine

So if you were a product manager and you wanted to both advertise your product to your customers and make it easy for them to buy it from you, how would you go about doing that? If you are like most of us, you would probably use your product development definition to make sure that it got included in Amazon’s inventory. After all, they are one of the largest firms out there and when people go to buy something, they almost always go to Amazon first. However, what if there was an alternative? What if there was a better way to go about advertising and shipping your product? Would you be interested?

The Problem With Amazon

There is no question that Amazon has a lot of reach. Your potential customers probably already use Amazon. If you were a product manager who was looking to boost your sales there is a good chance that you would turn to Amazon. Once you did this, you would add your product to Amazon’s marketplace. Once that was done, you could then use the e-commerce giant’s fulfillment service to package and ship the orders. This would supplement the business that you were already handling yourself. This would look good on anyone’s product manager resume, right?

Then time would march on. It is entirely possible that further on down the line you may find yourself pulling your products from Amazon. The reason that you might be doing this is because of fulfillment costs and seller fees that shaved your margins. Where could you move your online business if you were not going to be using Amazon? You could move it to e-commerce technology company Shopify, which has begun rolling out its own physical distribution service. Despite the vast reach of Amazon’s marketplace, as a product manager you may realize that if you’re trying to build something such as a brand or a relationship with your customers, Amazon’s may not be the best place. In fact, you have even noticed that at times Amazon was advertising their Amazon competing products on your Amazon page.

A lot of product managers who are looking to reach customers and fulfill orders have many more options these days. Amazon’s dominance of digital retail sales has led to a fast-growing ecosystem of startups and services aimed at matching different parts of Amazon’s sprawling network and at helping product managers and brands of all sizes meet consumer expectations set by the e-commerce heavyweight. Taken together, the businesses are creating what amounts to what could be called a virtual logistics system in Amazon’s shadow for product managers racing to keep up with the sector’s leader. This is creating new competition for Amazon even as it continues to upend traditional retail and distribution strategies.

Alternatives To Amazon

So why would a product manager side-step Amazon and go with one of their competitors? Some of the new offerings cater to product managers who may sell on Amazon but don’t want to pay the company’s fulfillment charges, or that view Amazon as a potential competitor. Product managers are not alone in feeling this way – some major brands such as Nike Inc. have pulled back from selling directly through Amazon. These firms have chosen for a variety of reasons to use tools they’ve either built themselves or brought in from other companies. The firms that are competing with Amazon include Shopify, and Squarespace. These firms help sellers set up digital stores and process payments. A growing lineup of new and established software firms are offering tailored technology to tell retailers where to keep their inventory.

Just presenting your products to your customers is not enough. You also have to be able to ship them to your customers. New operators like ShipBob and Quiet Logistics fulfill orders for direct-to-consumer brands through their own warehouses that allow product managers put their inventory closer to customers for faster shipping, To help companies match Amazon’s growing network of distribution centers, on-demand warehousing startups such as Flowspace Inc. and Flexe Inc. connect product managers to warehouses with space to share. Robotics companies like 6 River Systems and GreyOrange supply automation to mimic Amazon’s robot-heavy handling while software companies such as Shippo, ShipHawk and ShipHero help product managers book shipments and track order deliveries.

The upstarts have built business as more established companies including the big parcel carriers have started to tailor services to businesses looking for fast and nimble ways to reach consumers. Amazon accounts for roughly 37.6% of U.S. e-commerce sales. The site’s seemingly endless range of goods has conditioned shoppers to order everything from cell phones to coffee makers online. Many expect shipping for those purchases to be fast, free and trackable. Amazon has created a huge level of expectation. However, Amazon by itself can only fulfill part of it, from a service provider standpoint. Shopify and online marketplace eBay Inc., companies that are best known for helping customers sell goods online, plan to offer physical distribution services, using technology to stitch together networks made up of third-party warehouse operators. Shopify, bought logistics automation company 6 River Systems this and has seven U.S. fulfillment locations says it gives smaller logistics providers access to technology. They can also can offer product managers lower rates than they could negotiate on their own. Shopify tells them where to send their products, and they can fulfill their products in two days to 99% of the population at a reasonable rate.

What All Of This Means For You

Product managers’ product manager job description tell them that they have products that they would like to have their customers buy. The challenge that they face is finding ways to get customers to notice their products and then getting their products to their customers when they purchase them. One of the simplest ways to go about doing this is to work with Amazon. All you have to do is add your product to Amazon’s inventory of products and allow Amazon to handle the shipping and delivery of your product. However, there are some downsides to doing this. Is there a better way?

Many product managers see Amazon as being a way to extend the business that they are already a part of. Their products can be listed on Amazon’s web site and shipped to customers from Amazon’s warehouses. However, over time product managers may discover that that the cost of using Amazon for these services is quite high. Additionally, if Amazon starts to sell a competing product they may advertise their product on your Amazon web page leading to fewer sales. Alternative providers such as Shopify have appeared in the past few years. They have created a virtual logistics system in Amazon’s shadow for product managers to use. Shopify, in partnership with PayPal, has established a physical distribution service that product managers can use to get their products to their customers. Product managers can now advertise and ship their products at lower rates then they could get from Amazon.

The ultimate goal of any product manager is to make their product as successful as possible. In order to make that happen, we have to find ways to sell as much of our product as possible while keeping as much of the money that comes in as we can. Amazon is a great way to achieve the first goal, but it may not allow us to reach our second goal. New companies like Shopify are starting to provide product managers with new options for advertising and shipping their products to customers. Product managers need to evaluate what their options are and make the decisions that will allow them to make their products as successful as possible.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What other Amazon services do product managers have to consider when evaluating alternatives?

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What We’ll Be Talking About Next Time

Let’s face it, being a product manager for a hardware store does not seem like it would really be a cutting edge job. Hardware stores have been around for a long time and we all know what they do: sell a lot of different things that we can use around the house. None of this really seems to be all that well suited for an e-commerce approach – don’t you have to touch what you are buying? The Ace Hardware product managers don’t think so. They’ve made a decision to update their product development definition and try to go digital.