Amazon Marketplace gives small retailer big consumer access
For vertical medical accessory retailer Cielo Pill Holders, simply getting its products in front of potential customers is a key business challenge.
To meet this challenge and also obtain third-party fulfillment support, North Bend, Washington-based Cielo has been leveraging the Amazon Exclusives program of the Amazon Marketplace platform since summer 2015. The Exclusives Program, which provides extra benefits in exchange for agreement not to sell items on any other third-party retail platform.
“Amazon Marketplace provides access to where consumers are buying products today,” said Christine Boerner, founder and CEO of Cielo, during an interview with Chain Store Age.
Boerner launched Cielo, which domestically manufactures waterproof pill fobs for sale online, in 2013. Initially, the company sold its products through a proprietary e-commerce site. However, in addition to obtaining a larger customer audience, Cielo also gained several other advantages from becoming an Amazon Marketplace seller.
“On the back end, Amazon Marketplace manages all my shipping and fulfillment,” said Boerner. “We ship goods in bulk to one warehouse, where they break them apart into orders that are sent to fulfillment centers across the country.”
Other hosted services Cielo obtains include customer service for product returns, as well as a reporting tool to check inventory position.
“Amazon Marketplace takes most of the back end off my plate,” commented Boerner.
Actual shipment of products is handled by UPS through Amazon, meaning Cielo gets to pay the reduced Amazon rate. Currently, Cielo handles its own e-commerce fulfillment using a proprietary back-end platform built on the Squarespace content management system. However, the retailer may shift that portion of its back-end operations to the Marketplace platform, as well.
In the seven months since it started selling on Amazon Marketplace, Cielo has seen a four-times increase in online sales volume.
“We get extra marketing support,” said Boerner. “Our products show up in curated search results, and there are additional public relations opportunities.”
Commentary: Walmart primes new two-day shipping program
Walmart offered its own version of the Amazon Prime Day online sales event last summer, and now is directly taking on Amazon Prime.
The discount giant is piloting a two-day version of its paid ShippingPass unlimited online delivery program. Normally, customers pay $50 per year for the ability to obtain three-day delivery of more than 1 million items Walmart.com with no additional fees.
ShippingPass, which itself is still in testing mode, launched in May 2015. The service costs about half of the $99 annual Amazon Prime membership fee, with customers trading one day of shipping for a lower cost. Interestingly, the new two-day version is being offered for one dollar less than the three-day version, or $49 per year. However, Walmart has the advantage of fulfilling from its network of thousands of local stores, as well as not offering other digital features of Amazon Prime such as content streaming.
Walmart’s online shipping program has no minimum requirements for number or cost of items ordered and also accepts free returns. Much like Amazon’s secrecy around the performance of Prime, Walmart has so far not broken out details about ShippingPass metrics.
In addition to offering its own July online sales event, Walmart has also treaded on Amazon’s turf by providing online grocery delivery and free cloud hosting services, as well as by testing delivery drones. Testing out a paid two-day shipping program is the discounter’s most direct challenge yet to Amazon’s online supremacy.
While Walmart may never have quite as broad an online assortment as that of Amazon, it does currently offer about 7 million items online. This gives the retailer a lot of room to expand ShippingPass, and if it can maintain a price that is 50% lower it should be able to capture significant marketshare.
Walmart to launch two-day shipping
Walmart is escalating competition with Amazon’s Prime service. The discounter’s online subscription ShippingPass program, which is still in pilot, will begin offering delivery in two days rather than three, Bloomberg reported.