NEWS

Exclusive: creating a streamlined Amazon supply chain?

Published on: 20th September 2023

Asha Bhalsod examines the aftermath of Amazon’s decision to shift towards sourcing products directly from brands rather than wholesalers in Europe.

Asha runs Etopia Consultancy, to help brands create their eCommerce strategy and grow their Amazon business.

In February, when it was first reported that Amazon informed its European suppliers about the shift towards sourcing products directly from brands rather than wholesalers, numerous questions arose regarding the implementation and the classification of a “wholesaler” according to Amazon. It has been intriguing to observe the evolving outcomes of this strategic transition since its initiation in April. This new approach involves a more direct relationship between Amazon and brand owners, creating a streamlined supply chain that aims to benefit all stakeholders involved.

This adjustment in Europe has impacted the products Amazon purchases directly from wholesalers, as well as the blockers many vendors have seen with purchase orders.

The initial challenges Etopia encountered revolved around a reduction in purchase orders from vendors who acted as distributors for a specific brand. “Despite their authorised status in the Brand Registry portal, we found ourselves perplexed by the absence of order placement through Amazon’s systems,” writes Asha. “Additionally, when we escalated the issue, it became clear that nobody within Amazon had the solutions to address these problems. Frequently, our path led us to Brand Registry and the necessity for vendors to be designated as authorised sellers within it.”

“Amazon EU’s decision to cut out wholesalers seems rushed, without considering the big picture. Relying solely on automated systems might work in some areas, but it falls short in understanding the complex human connections that drive vendor relationships. As Amazon continues to be a major player, it’s clear that its systems aren’t quite up to the task of effectively managing its own 1P strategy.”

To read about these issues in more detail, see Asha’s Viewpoint column, which appeared in the September edition of Toy World, here.

For more information on Brand Registry or Amazon related support, contact Asha on asha@etopiaconsultancy.com.

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