Amazon has announced that it will no longer send customer details to merchants via API. Here’s Lisa Miles-Heal, our Chief Operating Officer, with her take on the decision.
At Unleashed, we champion any Good Product business. Any company who is passionate about what they sell: about its provenance, its production process and its impact. These companies offer consumers a choice, by challenging the incumbent players who have long dominated what we can buy. Their rise has been a gratifying story in recent years.
I believe that Amazon’s decision to stop sending customer details to merchants via API will make it harder — potentially causing problems for customer relationships, productivity and data protection. Before I outline six suggestions for how to mitigate these issues, I’d like to elaborate on why.
Getting to know customers
Product businesses operating today need to understand their customers intimately. Where Amazon used to facilitate this relationship, now it has placed itself in between sellers and buyers.
Analysing demand by each region, customer, channel and item is key to growing sales and ensuring that your goods are perfectly suited to customers’ requirements. Carrying out that analysis under the new rules is now much harder.
This is problematic for reporting — but creates a minefield for recalls and returns. When a recall arises, speed and accuracy are paramount. Manually pulling details offers neither. And hundreds of product businesses have now lost the ability to connect directly with customers, an important part of maintaining healthy relationships during repair or return issues.
Before Amazon’s decision, a business using Fulfilled by Merchant (FBM) would automatically receive all order details into its inventory system. Now, it will have to deal with orders from Amazon separately: extracting each order and matching it to a specific sale manually. For many users of FBM, the time to complete order fulfilment will escalate.
Growing sales productively requires spending less time on each order. Otherwise, boosting sales volume will require extra headcount, or drag on existing staff time. Now, selling on Amazon FbM adds unnecessary admin, forcing staff to waste time on repetitive tasks almost every other sales channel automates.
Data protection is a hugely important issue to consumers and sellers today — and any attempt to pursue better protection of customer details is laudable. There are better ways to achieve this aim, however, and Amazon’s approach may not have the desired effect.
Amazon is still allowing merchants to pull customer details manually. At Unleashed, we’ve seen suggestions online to download or print out customer information to refer to it later, which would increase the risk of that personal information not being secure.
The best way to ensure that customer information is properly protected is to make each business accountable for the data it holds. This move takes that accountability away from merchants, arguably muddying the question over who is actually responsible for personal data protection.
A poorly implemented data protection policy can lead to a ‘siloed’ approach from businesses and may have unintended negative consequences for all involved. Amazon’s decision, for example, could push merchants on to Fulfilled by Amazon (FBA) so that they can avoid these new fulfilment headaches. But for many who sell high-value or ‘tracked’ products, FbA is deeply problematic. For the consumer, this may limit the great products they can buy on Amazon.
Amazon has introduced many pro-consumer practices over its history, but this latest decision risks undermining that. For many years, the channel was a no-brainer for anyone selling good products. Now, I’m not so sure.
Using Amazon: 6 strategies
However, pulling all your products off Amazon overnight isn’t a realistic proposition. And I don’t want good product businesses to miss out on the opportunities that it brings — through size and presence alone. So I’d like to share a few strategies on how to maximise the benefit you can get from Amazon to counter some of this new inconvenience.
Use Amazon as a lead generation tool
Some of the most effective merchants I know treat Amazon as a way to get their products in front of their target markets — instead of as a sales channel. The power of the Amazon brand can expose customers to your products more cost-effectively than many other marketing investments.
Consider selling a smaller ‘taster’ section of your full range. This keeps order management simple and encourages buyers to deal with you directly for a wider selection of products.
Work hard for positive reviews of your products
Reviews are a great way of building trust in your products. Even customers who buy directly from you, or your bricks and mortar resellers, are influenced by reviews they can find online from sources like Amazon.
So, ensuring you abide by Amazon’s T&Cs on this, ask for customer feedback as often as you can. Asking your customers for honest reviews of the goods and services provided can help improve your business if you’re open to receiving them. Remember feedback is a gift in so many ways!
Offer a powerful incentive to buy on your preferred channel
Make sure you have a process to convert Amazon buyers into direct ones. Including an offer within the product packaging itself is probably the best approach.
The key here is to offer an incentive that adds value for your specific customer base. Someone buying coffee, for instance, might want discounts on future orders. But someone buying a high-value tech product might prefer a free warranty.
Check your contract carefully
You need to be completely clear on who’s dealing with recalls or returns. If it’s Amazon, are you happy not contacting customers in the event of a recall? Or can you contact them alongside, protecting your brand and encouraging them to deal with you directly in the future? Focus on ensuring that warranty and proof of purchase interactions are handled in the most customer-focused way.
Weigh up the true cost of FBA
Choosing to sell FBA comes with advantages and disadvantages. On the one hand, you can eliminate the time-consuming task of fulfilling orders manually. But you may see more lost goods, or lose the ability to develop deeper insights on your product and market performance.
Take all of these benefits and drawbacks into account when deciding how to proceed. Treating lost stock as part of the cost of using FbA, for example, means you can incorporate it into your margins instead of it coming as a nasty shock.
Treat Amazon like a retailer, not your own digital sales channel
Selling on Amazon isn’t too dissimilar from, say, getting listed in a major supermarket. Think about how to make your products and your brand stand out, so you can get that first purchase in and start nurturing meaningful connections with customers and your products in the market.