Anyone who is in a business that has an e-commerce component — which means almost all consumer companies — needs to grapple with the way Amazon’s transformation of the e-commerce landscape is accelerating. For years, the e-commerce giant has been selling a whole universe of products for a low price with fast free shipping, hoping to become so essential to consumers that they can’t imagine life without their homes filling up with Amazon boxes.
The pandemic super-charged a well-established strategy, and Amazon has been on a hiring spree to cope with their explosive growth, adding an astonishing 427,300 employees since the pandemic began. That has almost doubled the e-tailer’s global workforce, which now is comparable to the population of a state or small country at more than 1.2 million.
Amazon is not only goosing up hiring, but is also prompting a whole business ecosystem to spring up around it. Understanding the whole scope of what those companies do is part of understanding why Amazon is such a powerful force in e-commerce today.
Amazon Seller Central
Part of Amazon’s ubiquity in the lives of consumers relies on the range of products it carries and in order for the company to do that so successfully it needs to make life easy for independent businesses. Amazon Seller Central is the interface that allows companies to set up stores on Amazon, and it’s been a huge success: half the products on Amazon’s product list come from independent sellers.
Fulfillment by Amazon
Besides the ease of the interface, working with Amazon has become an irresistible proposition for a number of small and medium sized businesses for an obvious reason: reach. With a well-established network of fulfillment centers across the globe, Amazon is able to offer entrepreneurs the opportunity to store their product with Amazon and have Amazon handle all the shipping and fulfillment of orders.
The World of Amazon Subsidiaries
Amazon also owns a number of companies that might surprise consumers: Audible and Goodreads help the e-commerce giant be even more ubiquitous in the lives of book lovers, Whole Foods has helped Amazon penetrate the lucrative grocery market, Twitch broadens Amazon’s influence with youth, which other key e-commerce concerns like Shopbop, Diapers.com and Zappos are part of the conglomerates appeal to a wide range of customers.
Growing the Impact of Amazon Businesses: Thrasio
Naturally third-party companies have looked to hitch their wagon to Amazon’s star and Thrasio is one of the most intriguing startups in this space. Thrasio buys companies that produce well-reviewed, popular private label products that sell primarily on Amazon. Examples of companies Thrasio has bought include ones that produce hiking poles, pet deoderizer, anti-fatigue floor mats and exercise equipment. By focusing on a niche and doing it well, these companies are profitable but may be harder for their founders to scale up. Thrasio steps in, offers companies upwards of a million dollars for their enterprise and sets to work scaling the product offering on Amazon.
Looking to the Future
We expect more and more startups to try to mine gold from the Amazon ecosystem, whether that be in logistics, product development or company acquisition.
Are you using Amazon to grow your business?