Amazon Makes High Demands on Your Logistics

By Vibeke Specht, Apr 28, 2018 10:54

 

His e-commerce company earns “double-digit” millions of Danish kronors on Amazon. He also works full time as an Amazon expert. Søren Kipling, from Danish be-ahead.dk, explains what Amazon’s power is all about, and what to think and do about it.

Søren Kipling has just left a meeting with the Danish foreign ministry. There is a high demand for his consulting services today.

“The Danish manufacturing industry is starting to realize what a gigantic export opportunity Amazon is because it gives you access to over 300 million customers. Which is exactly how they should look at it,” says Kipling.

“Amazon IS an opportunity. It is at least a force that cannot and should not be stopped,” he says. Then he details how big a share Amazon has won wherever it has set up shop: 35% in Germany, 25% in England, 30% in France etc.”

Even though the company has only recently established itself on the European market, it is growing faster than the e-commerce industry in general and is thereby putting a lot of pressure on brick-and-mortar retailing.

“Amazon is the third largest online store in Denmark even though Amazon doesn’t exist in Denmark. Zero marketing.”

Do Not Just “Be” on Amazon

“You can either choose to say ‘no I don't want to support this,’ or you can say ‘I want to be really good at selling via Amazon.’ I recommend the latter.”

But that does not mean you should go all in.

Shipping and delivery are very important if you want to sell via Amazon.

“You should not rely on Amazon as your only sales strategy. It is important that you have your own e-commerce platform using your own domain name. On Amazon, Amazon, not you, “owns” the customer, and that is not optimal. With your own platform, you can build up your brand, which is important for your business outside of Amazon as well as on Amazon.”

“Amazon likes strong brands that people often search for and want to buy.”

Read more: How We Became Successful on Amazon

The Customer, the Customer, the Customer

“Amazon is successful because it’s the world champion in customer experience—all the way.”

Having your own warehouse and delivering via Amazon demands a lot of your deliveries and logistics management.

Søren Kipling explains how important it is that you take your e-commerce business seriously and deliver what you promise in a way that also strengthens the whole customer experience.

Make Amazon Like You Just a Little Bit More

“Make sure you have the product in stock and make sure to offer different delivery options. Options that you can live up to. The most important thing is that you deliver on your promises, but Amazon will like you even more if you can offer really quick or flexible delivery options, such as one-hour deliveries.”

“Having your own warehouse and delivering via Amazon demands a lot of your logistics and logistics management. Don’t forget traceability (‘track and trace’). The customer should be able to track the order all the way home.”

“Shipping and delivery are very important if you want to sell via Amazon.”

Read more: What Happens to the E-Commerce Industry and Shipping Costs When There Are Not Enough Truck Drivers?

When Is Amazon Coming to Scandinavia?

“Nobody knows. But I think that Amazon will open up its platform in Swedish, Danish, and Norwegian first. It will take a while before it sets up warehouses and offers the Fulfillment by Amazon (FBA) service. On the other hand, you could say that Amazon is already in Scandinavia, since it’s the third largest e-commerce store in Denmark.”

FBA refers to Amazon’s logistics and delivery services. It is optional. Amazon charges a fee for the FBA service.

What Happens When Amazon Can Offer FBA in Sweden or Denmark?

“Then you better be waiting in the starting blocks. Because then the so-called Prime service will come here. Prime is a form of subscription service where members receive benefits such as free shipping, one-day deliveries, and discounts and can also stream TV shows and movies. Amazon has about 80 million Prime members globally today.”

What Do Your E-Commerce Operations Look Like?

“I have been running the shoe company Eshoes for 12 years. 50% of the sales come from Amazon and from five European countries. I then own three domain names (.se, .no and .com versions) where I sell via my own platform. I handle the logistics myself from a warehouse in Herlev, a suburb of Denmark’s capital, Copenhagen.”

Søren Kipling’s Five Most Important Tips

  1. Consider getting a good warehouse management system.
  2. Make sure that all your products are marked with a barcode.
  3. Make sure you have a system in place for what to do when an item is out of stock.
  4. Make sure that someone at your company is fully dedicated to your Amazon sales channel.
  5. Encourage your customers to give feedback on your products and your service by writing so-called Reviews on Amazon.

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