Jeff Bezos started Amazon in 1994. It began as essentially an online bookstore but quickly expanded into other consumer goods, electronics and so on. Amazon launched Prime in 2005, and that really changed the game in so many ways as a two-day delivery membership. They passed Walmart as the most valuable retailer in market cap and today they have over 100 million Prime members.
Amazon has continued to take more and more market share. Traditional retail has been declining and small and large businesses have had a hard time keeping up, not only with Amazon but with the changing market landscape in the Internet sector. One reason is simple: Amazon is convenient, trusted, and has changed the industry by instilling “convenience demands” from consumers. They can order a product, usually at its lowest price, and know it will be there in two days with free shipping and that Amazon will help fix any problems.
In the Internet marketing space, you can pick up books on any shelf related to e-commerce and management. The vast majority of businesses have not focused on Amazon and that is what I was doing for five years. I learned my Amazon strategy, I learned how Amazon leadership views the e-commerce platform, and how to better position my companies on Amazon. Understanding such Amazon leadership principles as Day One and “Customer is ALWAYS first” allows me to grow with the platform. Amazon directly says its number one goal is to be the most customer-centric company in the world and everything they do on the platform is based on that goal. And that alone is something businesses should take for themselves. A lot of businesses focus on competitor obsession . . . rather than customer obsession. I see it all the time. But if all you are focusing on is your competition, then how can you really create something and lead the path?
I am all about reinventing the wheel and doing things better than competitors; however, the point here is if you are always focused on your competition, then you are not going to be able to spend enough time on scaling and bettering your company.
I completely engulfed myself in marketing as it related to Amazon for a long period of time and became an expert in Amazon. I have since also learned other digital marketing skills but it was that foundation and the credibility I had that allowed me to get connected into small circles outside Amazon’s platform and learn those, eventually acquiring several brands outside the space to bring in-house expertise to my portfolio. But I would argue that trying to become a specialized expert in all the platforms will hurt you. Google, Facebook, Amazon, LinkedIn and others all require specialization and expertise in their fields to play the game. You are playing against people, like me in Amazon, who live and breathe it, and it will be difficult to compete against us if you are trying to be an expert in each platform. To excel in Internet marketing, based on my experience, you must completely immerse yourself in all the moving pieces of the platform and evolve with it. You must get creative to properly scale — acquisitions, hires and systems.
Finally, Amazon is not going anywhere. I pride myself on my ability to see trends early and Amazon has created a data user base that is more valuable than I would say anything else in their company. Because Amazon is a shopping platform — unlike Google and Facebook, which are more data-based on your interest — it has data dating back a long time on what we actually want to buy. And I mean very detailed data. This data allows them to understand not only what we buy, how old we are, but also what we want to buy at that specific time. If you follow Amazon, you know they have moved into many markets and dominated those market spaces quickly. Have you ever thought how? Outside of their trusted name and their ability to remove consumer uncertainty with their Prime program — which has a no-questions-asked resolution on anything that went wrong — it is because they have all the data they need. And Amazon is only getting bigger and completely disrupting longtime industries every year.
To thrive today, companies must be able to navigate the Amazon platform and create strong business plans that include it. Amazon’s platform is extremely complex with so many different programs, rules and administrative intricacies that you must either develop the expertise, hire the expertise or acquire the expertise to actually excel on the platform. And those who do not evolve and change will become irrelevant as this is the direction we are heading. That’s where ZonLux Digital comes in. You cannot view Amazon as your competitor but must figure out instead how to leverage the platform and make them a partner. You must get inside the mindset of whatever you are doing — Amazon leadership in this case, to understand how they make decisions. They have redefined how we sell, research, purchase and interact.
Although I think there is value in telling the Amazon stories — as more companies should think how Amazon thinks — I include this is an example of how I created a successful company. In our technology world, everything changes rapidly. Understanding everything about your business, the model, whatever it is allows you to predict and mitigate risk. I could predict how leadership would make decisions on the Amazon platform, for example. I know how they make decisions and how they evaluate opportunity and then I leverage that to create my own opportunity.
I loved Amazon initially because of their logistics and distributions infrastructure — how easy they made it for me to start and run a business as they took care of it all through their FBA centers. It doesn’t matter how small your brand is, their distribution centers cater to all size businesses and they get the product to your customers in less than two days for strongly negotiated fees in your favor. Further, I loved that I did not have to spend money to “acquire” a customer. All the customers were there on Amazon searching for products related to mine; I just needed to learn how to optimize my listings and how to do things the way Amazon wanted them to be done — with their algorithm as well as their “customer first” model. A customer complained about a product, wanted a refund . . . no questions asked was our model.
Additionally, Amazon provides instant credibility. If I created a Shopify store, how would I get the same level of trust from consumers as Amazon gets right off the bat? That would be extremely difficult and, thus, the conversion rates at the beginning have always been higher for us on Amazon because consumers trust them. Again, we have created successful companies in both areas but, to start out, I liked how it made the process easier and mitigated my risk further. Finally, I noticed then (and still notice today) that retail brands and other large companies treat Amazon as just another sales platform. It is not. It is not a place where you just list your product and budget another revenue stream.
There are more users looking to buy products related to yours on Amazon than anywhere else . . . and Amazon has paid to get all those customers onto the platform. You just need to secure the purchase of your product over your competitors.
Through it all, I always seek to stay ahead of the curve. For example, I think advertising and measuring how you make money on the advertising is completely broken. Many other large companies concur. But I believe Amazon will be the one to fix this. They already have extensive data and metrics such as ROAS and ACOS to understand what is happening within the platform. Amazon has the most data as it relates to purchase data, which means they know who saw it, the purchase data that comes with it, and a very strong infrastructure.
I give this story as an example of how I went about starting in the business. I identified an opportunity, and learned everything about the business, even the company that put together the platform. I networked with everyone I could, spent countless hours researching new ways to scale the company, and got involved in new beta programs and connecting with people. With ZonLux Digital, we have built an Amazon gateway that brings companies the absolutely crucial expertise to thrive on the biggest sales platform of our time. — Matt
Matt Newman is founder of multiple 8-figure and 7-figure brands, as well as an investor and partner in many other companies. He currently runs a large e-commerce portfolio primarily selling on Amazon. His current focus is ZonLux Digital, an agency he founded to meet the growing need in the digital and retail space for understanding how to sell on Amazon.