E-commerce, Amazon and Office Products Resellers

There's a preoccupation, almost an obsession, with e-commerce these days. Amazon is constantly in the news as it continues to set web traffic and sales records and finally make some money. Resellers are flocking to the platform to join their marketplace in a search for e-commerce after the widespread failure of their independent efforts. I, along with many others, have written numerous articles on e-commerce and its importance for the future survival of small independent resellers.

So what's going wrong? We've seen many office product resellers' independent e-commerce efforts fail, and many join Amazon and other online marketplaces. I'm exploring whether or not joining the Amazon platform will likely be the salvation resellers have searched for in their quest to join the digital world and develop e-commerce.

The problem at Amazon, particularly for the smaller, relatively unsophisticated reseller, is that it's really difficult to make any money. Then, to compound that problem, Amazon owns all the customers, not the resellers.

Unfortunately, resellers may be going to Amazon for the wrong reasons. It's tough not to admire what Amazon has accomplished, but we must remember they didn't get to their dominant position overnight. Over many years, they built enormous trust with their customers by providing a service with unprecedented levels of quality and reliability. Customers who transact at Amazon have absolute confidence in them, regardless of whether they're doing business directly with them or a third-party marketplace vendor. The reality is that an Amazon customer doesn't care who's providing the product purchased in the marketplace. It doesn't matter because the buyer knows there's an implicit guarantee behind the transaction, and if anything goes wrong, they'll be taken care of by Amazon. Bottom line - Amazon shoppers are Amazon customers!

The critical factor here is the trust that Amazon has established over its 15+ years in business. This trust is not just because the customer knows they will get their money back if they're not satisfied for any reason; it's also the trust from knowing that Amazon will execute flawlessly on the logistics, with the product being delivered when they say it will be and in the condition, they said it would be. Amazon invested heavily in sophisticated, integrated information technology systems to achieve this.

Successful e-commerce is not possible first, without the use of technology and second, without having developed a high level of trust through the intelligent use of that technology.

During the opening phases of e-commerce development between 2000-2015 and, as companies such as Amazon, New Egg, DepotMax, and Staples, established increasing levels of trust with their customers, that trust translated into a virtuous cycle of more traffic, more transactions, and even more confidence. Of course, the development of their e-commerce did not go unnoticed by small businesses around the nation. So, between 2005-2015 we experienced the first phase of the development of small to medium size resellers' efforts to conduct online commerce. These efforts were mostly copies of the shopping cart concept established by the pioneering companies mentioned above. After all, if it worked for them, why wouldn't it work on a smaller scale for the independents?

However, the part of the puzzle that many independent resellers missed was the necessity for building trust before they could build a successful e-commerce business. Although they could mimic the shopping cart sites that worked so well for large organizations, they slowly discovered that the same approach didn't usually work for them.

There are two main reasons why this is the case. Firstly, as I've said, they didn't establish a foundation for a transaction because no trust had been developed, and, secondly, they had no web traffic to conduct a transaction in the first place. Furthermore, consistent, relevant web traffic cannot be developed without compelling reasons to visit and engage with a reseller's website. Creating that persuasive reason, developing relevant traffic, and slowly building trust is the only way to replicate the success of the behemoth online organizations.

In the future, for an independent reseller to develop e-commerce, it must learn some valuable lessons from the systems and capabilities each of the successful online organizations have implemented:

  • Catalog of high-quality products
  • Integrated information technology platform
  • Reliable logistics and operations (products in stock and shipped on time)
  • A safe and secure environment in which to transact
  • Trust (product reviews, brand, reputation)
  • Social Media for audience expansion and development of trust
  • Large volumes of traffic
  • High service levels and customer service

We know the first phase (2005-2015) of independent resellers' e-commerce efforts broadly focused on only one of these required elements: the presentation of an online catalog. Little thought was applied to how traffic was to be developed for any transactions to occur. The reality was and continues to be that replicating all of the elements listed above would have been far more likely to result in successful e-commerce than deploying a single component of the overall infrastructure.

Unfortunately, independent resellers didn't look under the hood to understand the necessity of each of these elements and that e-commerce cannot occur without each of them securely in place.

Many independent resellers also mistakenly thought they could attract random traffic and customers from across the nation. At the same time, they sat in their offices ringing up online sales and, in so doing, neglected the real opportunity in their backyard. By implementing the technology systems necessary to compete with Amazon and the other major online stores, getting feet on the street in local markets, and developing genuine relationships, they've long had an unrealized and potentially powerful advantage over the faceless online giants.

It seems clear that more and more consumers and businesses want to conduct transactions online in some fashion (even if this does not include re-keying an order from their ERP system into a resellers e-commerce platform), and this trend is not likely to be reversed. However, it's also the case that many buyers attach value to a face, a name, and someone they can count on if a problem ever needs to be resolved.

So, what's the path forward for small resellers with failed e-commerce initiatives? The short answers are for them to implement the overall infrastructure that's needed to be competitive in today's business environment, to develop an improved understanding of their value proposition and where the competitive weaknesses are that can be exploited, and then to leverage this capability and this knowledge, with their physical presence in their local markets.

This doesn't mean there's no place for Amazon in a reseller's business strategy. However, the reseller's mindset and approach must change so the marketplace is treated as a means to achieve their end, not as a means for Amazon to earn theirs. Some tools made available by Amazon can allow sophisticated resellers and the behemoth to co-exist. However, these tools must be utilized to make the market work for the reseller and achieve satisfactory long-term goals.

To increase the value of an enterprise, there needs to be a full integration with the internet, an integration that the enterprise control, ls, and not a third party. The failed efforts at independent e-commerce need to be revisited bt, but this time, they need to be approached when the elements necessary for successful e-commerce are explained here.

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