By Stew Bishop, President and CEO

Some of the most frequent questions we get from current and potential clients are:

  • “How do we add ecommerce to our retailer set without eroding current brick and mortar sales?”
  • “What should our assortment and off invoice allowance be for Amazon?”
  • “Can you guys evaluate the effectiveness of our Amazon Marketing Services spend?”
  • “Can you show us your algorithm for understanding Amazon ROI?”

Our response is always, “Well, it begins with a conversation. What is your business? Who are your customers? What do you want from the marketplace? What are your financial goals? etc.”

As I shared in a previous blog post, the question is not, “How do we respond Amazon?” It is, “What do we as a manufacturer want from our retail partner Amazon?”

It does not matter that ecomm retailers are structured differently than traditional ones, they are still a retailer and a manufacturer that chooses to supply them should know what they want out of the relationship. You don’t give any customer exactly what they want as a first order effect, right?

In order to be prepared for that email or call from Amazon, we have to understand the business we are in based upon researched consumer demand, then make a decision about what how those consumers will be able to procure our products. Brands can’t simply “bolt on ecomm” without first considering a completely new strategy forced by this new shopping environment.

I recently re-watched a Ted Talk given by Simon Sinek of Start With Why several years ago that talked about what makes companies like Apple successful. His framework is their core message is the WHY they make products, then the HOW, and then the WHAT. This is in contrast to the majority of brands that start their marketing message with the WHAT and the HOW, never getting to the WHY.

If you apply that construct to your ecomm strategy, it looks like this.

1. Why are we in business? This not only has to be understood for our overall business; but through which retailers we wish to supply. We must first have the conversation internally.

2. How do we wish to do this? We must then have the conversation externally. Once we have chosen our desired retail partners, will we be able to negotiate a relationship that makes sense for both parties?

3. And then finally; what do we do? We must then execute with excellence our agreements with all retailers, constantly monitoring product reach, price, promotional performance, and stocking condition in all outlets as they compete with each other using our beloved products. This is America; once you sell the product to a retailer, they own it….don’t sell it to them if you don’t like how they are treating it!

It begins with a conversation…..this always has been the case with trade and marketing spending evaluation.

That has not changed just because the retail environment has.