On-AMZN: I launched and scaled the third party(3p) selling business for Amazon in 2002, creating digital disruption beyond Amazon’s core retail business. The 3P business now accounts for over 40% of all units sold at Amazon and has over 2 million 3P sellers. A critical aspect of the business was the combination of 3P, Fulfillment by Amazon (FBA) and with Prime eligible items. This article at Wired.com is a good overview of how 3P combined with FBA allows small sellers to have a global reach, creating the next wave of retail digital disruption.
The Next Big Thing You Missed: Thanks to Amazon, Tiny Sellers Can Now Reach Across the Globe
By Marcus Wohlsen, Wired.com
Go to Amazon.com and the link is right there at the top, nestled between “Gift Cards” and “Help.” Chances are, you haven’t noticed it in your frenzy to find the perfect potato peeler. But if you click it, a whole different world of Amazon opens up, one where stuff flows away from you rather than to you. That link reads “Sell.”
Last year, about a billion items sold on Amazon weren’t sold by Amazon itself but by other sellers who make their merchandise available on the site. One of them is Bernie Thompson, a former Microsoft engineer who worked to ensure the Windows operating system played nicely with USB, the standard means of connecting peripherals to PCs and laptops. Thompson now runs his own business, Plugable Technologies, which makes a variety of USB and Bluetooth hardware, from charging stations to docks that connect tablets to desktop monitors. With fewer than 100 employees, the company isn’t huge. But Thompson has no trouble running a truly global business.
In 2006, Amazon launched a service that allowed US sellers to use its network of warehouses to ship their goods. More recently, Jeff Bezos and company have rolled out the Fulfillment by Amazon program globally, enabling entrepreneurs like Thompson to move goods through fulfillment centers in other parts of the world. “It really changes the paradigm when you’re able to ship the goods in bulk to a warehouse in Europe or Japan and have those goods be fulfilled in one day or two days,” Thompson says.
Merchants in the US who want to expand globally can list their products in Amazon’s nine international Amazon marketplaces—the United Kingdom, Germany, France, Italy, Spain, India, China, Japan, and Canada. As they do domestically, sellers can export their goods in bulk to Amazon warehouses in those hubs. From those, Amazon says it ships goods to about 180 countries around the world. “The small seller suddenly has access to the global marketplace,” says Tom Taylor, Amazon’s vice president of seller services.
“We basically get the leverage, the huge scale that Amazon has in negotiating with shipping partners,” he says. Outsourcing everything from taking and shipping orders to converting currencies, accepting payments, and handling taxes lets Plugable focus on customer service, which Thompson calls a key way to set itself apart in the crowded gadget market.
Read the entire article here