By Martin Heubel, Amazon Strategy Consultant at Consulterce
What is the biggest misconception by vendors about Amazon? They think of Amazon as a traditional retailer. And so they treat the online giant just like any of their retail partners.
Sure, most CPGs know that Amazon is somewhat different.
Yet, they overlook that Amazon is a marketplace retailer whose mission is to connect existing supply and demand.
This business model differs significantly from demand-creating retailers such as Walmart.
And it changes how Amazon operates with vendors:
- Traditional retailers lean into in-store innovations, treating ecommerce as a secondary channel. Amazon’s priority is innovative, top-notch digital customer experiences.
- Retailers often place bulk orders early in the product lifecycle. But Amazon purchases minimal quantities, adjusting to fast-changing demand cycles.
- Traditional retailers focus on long-term supplier partnerships. For Amazon, any vendor with a current market share becomes a strategic partner.
So what can we learn here?
Amazon’s primary goal is to reflect customer demand, not to create it.
The online retailer puts less emphasis on category development than other retailers, because the existing customer demand dictates how much it orders from suppliers.
And this means that the responsibility of driving innovation and category development sits with 1P vendors. Amazon won’t take the lead on this.
So as you review your 2028 e-channel strategy, remember to treat Amazon as a marketplace and not as a traditional retailer.
For further information and support, contact Martin Heubel here
