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As Amazon takes steps to protect customers, retail partners feel the squeeze

by | May 3, 2019 | Public Relations

New research from The Upstart Group shows retail communicators that even the world’s biggest brands are taking strategic steps to put consumers first—which in this case might leave other brands large and small scrambling to improve their customer experiences.

Global e-commerce giant Amazon is quietly instituting policy changes that will have a large impact on many companies who have come to rely on the site as a key source—and for some, the onlysource—of retail sales. Right now, thousands of vendors are not receiving purchase orders, creating havoc and panic among businesses across the landscape, according to the new data.

“[In recent weeks], Amazon has cut off in-network and dropship purchase orders for vendors classified as VSP, the Vendor Success Program,” said Rohan Thrambahalli, founder of The Upstart Group, a strategic marketing and technology company focused on helping businesses succeed on e-commerce platforms.

“We believe these drastic changes are being made to ensure Amazon protects their customer experience” Thrambahali added. “Too many customers have been receiving damaged or counterfeit goods, or have had a poor customer service experience. Amazon is protecting their brand and their customers.”

As a result of these changes, Amazon will become very selective in who they bring onboard as a retail vendor

According to Thrambahalli, “We think that vendors who Amazon deems as ‘not strategic’ will need to be self-sufficient in operating on Amazon’s Vendor Central Platform.” Vendors who are self-sufficient in pick-pack-ship, inventory management, customer service and billing, will be able to weather the changes. But they’ll only receive payment when a product is actually sold, and this could have a significant impact on their business. Those used to shipping an order, invoicing Amazon and getting paid within 30 days will have to adapt to a new model.

So what are the alternatives?

If your brand or client is a direct vendor with Amazon, waiting to take action could have a negative impact on your business. Chances are, you won’t hear anything directly from Amazon, so consider partnering with a knowledgeable, experienced Amazon player to help navigate the new environment and minimize the threat to your business.

Disruption creates opportunity, and this is a chance to move your business ahead while competitors sit on the sidelines.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter

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