Where Does Amazon Fit Within Your Organization?

​With each passing day and for Brands of all stages, Amazon is becoming increasingly important as a sales and marketing channel. As Brands seek to answer the “Amazon Question” themselves, one of the first considerations is “Where does Amazon fit within the Organization?”

If you find yourself in this situation, or perhaps are simply revisiting your approach, I would stress that the ‘Where It Fits’ is less important than ‘How You Serve’. Amazon will not fit perfectly within any traditional silo in your organization, and understanding the web of dependencies that stretch across your organization is the key consideration as you build out your Amazon Business Unit and support network. 
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There is a lot to answering the ‘Amazon Question’, but in an attempt to make it more approachable, let’s first level-set on the dynamics of what we call ‘Operational Marketing’.
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What you need to Know about serving your Amazon Channel:
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• Amazon is more than just another sales channel
• Amazon requirements are unique, with dependencies across your organization
• Facilitating cross-functional communication is critical to your success
• Every functional area must have an understanding of the platform to ensure proper decision making

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How did we get here?
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​ In my last post I discussed ‘The Amazon Game’ where I touched upon the concept of ‘Operational Marketing’. 
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A quick recap: Your Amazon Search Ranking is inexorably linked to any type of conversion (paid or organic). Any fall-off in conversions, for whatever reason, are quickly punished by Amazon’s algorithms. Thus, all functions that have influence on a customer’s ability or willingness to purchase must be in harmony in supporting the channel.  We call this paradigm ‘Operational Marketing’. 
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What is Operational Marketing?
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​We define Operational Marketing as:

 “A state in which your operational functions inform and affect your marketing efforts, while your marketing efforts inform and affect your operations”

It could be argued that this maxim has always been true, but it has taken the emergence of Amazon to clearly demonstrate its importance. 

I have been around long enough to remember when e-commerce wasn’t a thing.  In the early 2000’s, I had the opportunity to launch a Fortune 200 Company’s first Direct-to-Consumer channel, and saw first-hand the organizational inertia that had to be overcome. 
Times certainly have changed but to say that the problem has been addressed would be an overstatement.  Amazon, and e-commerce generally, require a specific focus especially as organizational processes have historically been built around the needs of Brick & Mortar channels. 

For Amazon, inventory needs to be allocated, marketing purposefully designed, packaging reworked, and derivative models developed to improve the economics of the channel. And unlike the rest of your channels, where there is a buyer to please and floor spots for which to compete, Amazon leaves merchants largely to their own devices (outside of those dreaded chargebacks). There is no squeaky wheel to keep you on top of your game.

And less apparent, there are many decisions made in an organization that at first glance seem unrelated to Amazon but can come back to bite you. This can include decisions such as how you utilize distribution and structure contracts, the pricing and programs you offer across channels and regions, and how you and your trade partners manage SKU obsolescence and floor changeovers.  If you don’t know where your products are from cradle to grave, and at what cost they were procured, you run the risk of derailing your Amazon business.
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It is for this reason I recommend your entire organization have an understanding of Amazon and frame any decision-making with your Amazon presence in mind… regardless of where it ranks in your sales mix.
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What is an Operational Marketing example?
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​Having worked with hundreds of brands over the years, I have seen many achieve stellar success with Amazon, but have also witnessed the many ways in which things can go wrong. Covering them all is not feasible, but for the sake of this discussion consider the following baseline goals for the platform:

1. Win the Buy Box
2. Never Stock Out
3. Eliminate Resellers
4. Price Competitively
5. Build Strong Reviews (Product and Seller)
6. Tightly Manage End-of-Life
7. Grow Search Relevancy

To give you a sense of the interconnectedness of the Amazon channel, let us first start with this (over) simplified org chart, found in many consumer products brands. 
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For the sake of this discussion I’ve placed Amazon within the Sales Channel, though have also seen it roll-up through Marketing or eCommerce, with the work possibly outsourced in part or in whole.

Structured by function, each column supports the others in achieving those baseline goals, but otherwise operate within their own silo. And within each silo, the underlying teams may not have full visibility into the activities of the others in their department.
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To add some color, take this simple example. A brick and mortar sales executive’s primary concerns are in hitting their specific channel targets.  And though the negotiations may ultimately impact the Amazon team, it is not at the forefront of their mind… at least no more than is usually considered in managing cross-channel conflict.
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How is Amazon supported by your Organization?
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​Zooming in on the Amazon team and mapping the underlying ‘AMAZON REQUIREMENTS’, you can see it is much more than just a sales channel.  And while similar functional support may be needed for the rest of your trade partners, I would argue that only two areas (Demand Forecasting and Warranty) can be transferred wholesale. And in the case of Advertising, Amazon is truly unique. 
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Taking it one step further, I have mapped the ‘SUPPORT FUNCTIONS’ against the ‘AMAZON REQUIREMENTS’ so you can see just how broadly Amazon stretches across your organization. 

The broad requirements of Amazon present a challenge to those who are not living it every day. To be successful on the platform you need quality reviews, polished and purposeful content, and efficient operations and inventory support… all with the distinct Amazon twist. And on-platform advertising, which has become a must-have, is highly dependent on all of the above if you hope to spend efficiently and drive search relevancy (see The Amazon Game). 
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Across all functions there is a virtuous cycle of data and information that needs to be shared across the organization, and with any external support teams.  If you are not circulating the learnings from your customer feedback, sales trends, financial performance, and advertising and operational data, your stakeholders will be blind to important context that can help guide and influence decision making.
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Why should you care?
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Organizations that treat Amazon as a bolt-on business under their current infrastructure are not only missing an opportunity to build a successful new sales channel, but also on all that can be learned about your customers, your products, and your industry. The channel has unique requirements, and requires cross-functional understanding and support.
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Before you make the call on ‘Where It Fits’, consider first ‘How You Serve’ through breaking down traditional silos and facilitating the lines of communication.  There is gold to be found in your Amazon data, but if you don’t have a means for getting it, reading it, and communicating it across internal and external stakeholders, performance will suffer. Every party has a role to play, and broad organizational buy-in is critical to your success.  
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todd vanderstelt | founder | dash/APPLICATIONS
as a former Amazonian, todd is an amazon expert who works with brands, agencies, and investment firms to demystify the platform while leading the development of our amazon focused solutions.

​https://www.dashapplications.com/about-us.html