Amazon Launchpad: New opportunities for startups

The focus of Amazon Launchpad is championing the individual brand identity of the startups participating in this new marketplace, unlike Amazon’s usual no-frills, uniform product-centric pages. We’re talking videos, lifestyle photos, a paragraph of product descriptions, complete with a designer Q&A section on their inspirations. In fact, one year later, Amazon Launchpad is still making waves in the tech industry with new partnerships.

Considering how Amazon disrupted the retail industry while providing stellar customer service (such as personalized follow-up emails) and shipping guarantees, it’s understandable why the tech industry has been abuzz since Launchpad was introduced about a year ago. After all, it sounds like a combination of different platforms that a small independent retailer juggles through the various stages of sales and distribution.

So we’ve thought up some points to consider before you launch yourself into this new frontier:

Amazon Launchpad lends a hand to scale up

The deal for these startup companies under Amazon Launchpad sounds almost too good to be true: Ship your products to Amazon, and Amazon will handle everything to do with sales and distribution. All Amazon wants is for you sell to your products to them at wholesale price, and the eCommerce giant pockets the price difference between retail and wholesale. With Amazon taking charge of distribution with their Fulfilled by Amazon (FBA) service, there’s the reassurance that your purchases will arrive at your door safely.

For many startups, having their products stocked by Amazon is a sign of turning a project from a gamble into a commercial success. Hence, Amazon Launchpad offers the startups under its wing the opportunity to enjoy the marketing and sales support needed to go global, reaching out to mainstream consumers who would never discover them otherwise.

To make the deal even sweeter, Jim Adkins, Vice President of Amazon states: “For startups, we handle inventory management, order fulfillment, customer service, and more, allowing them to focus their efforts on the innovation that results in more cool products.” Given the strength of Amazon’s infrastructure when it comes to customer service, shipping, and order fulfillment, that attracts marketplace vendors to use Amazon’s FBA services, startups with Launchpad stand to benefit from the extensive support network provided.

Amazon has also promised these startup companies the chance to “boost your content with the same Amazon tool that powers the big players.” These startups will benefit from extensive exposure on the western world’s biggest eCommerce platform, such as placements across Amazon and inclusion in the Amazon Vine customer reviews program, while they won’t have to foot extra charges to enjoy the shipping guarantees of Amazon FBA.

What Amazon Launchpad means for startups

Under Launchpad, startup companies will be subletting sales and distribution to Amazon in order to focus on research and development, which may encourage a reliance on Amazon regarding these areas. This means that even though Amazon doesn’t bind these startups to an exclusive contract, they may have less incentive to venture elsewhere as it would mean liaising with more companies to achieve the same ends.

In addition, Amazon’s new marketplace seems to extract what the eCommerce giant deems as the creme de la creme of the startup inventions, with a focus on those who draw funding from its network of partners (crowdfunding platforms, startup accelerators, and venture capitalists).

Of course this doesn’t mean Amazon will sell just about anything.

One crucial requirement is for the prospective startup to be able to fund the manufacturing of their products – meaning that all companies would have to succeed in pitching their ideas to potential clients for funding before having a shot at Amazon.

Although it may be harder for startups outside of Amazon’s network to join Launchpad, Amazon Launchpad promises to review these on a case-by-case basis. If Amazon follows through on its promise, there is the potential for an inclusive marketplace that will offer a casual Amazon shopper the chance to browse through the latest cutting-edge products from startups all over the world.

One year later: Partnership with Product Hunt

Amazon Launchpad recently launched a section for items that were "Featured on Product Hunt", enabling interested customers to browse items upvoted by the Product Hunt community and participate in conversations around it. 

Meanwhile, members of the Product Hunt community will be able to see an option to purchase products from Amazon LaunchPad in the "Get It" menu, making it easier for interested customers purchase while enjoying all the perks of shopping with Amazon.

Through this new initiative, when visitors from Product Hunt's website end up purchasing a Launchpad product, Product Hunt will earn an affiliate fee that matches those in Amazon's existing affiliate program.

Let us know what you think about this new development in the story of Amazon Launchpad featuring Product Hunt!

Resources from Amazon Rolls Out the Red Carpet for Startups with Amazon Launchpad

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See Also:

3 Lessons startups can learn from Alibaba

You’re either online or you don’t exist – 5 ways to stay on top of the B2B e-Commerce rat race

Top 10 Ways to Increase Your Wholesale Sales

Understand Your Supplier

Don't always view the partnership from your end of the bargain, switch perspectives and think about what's in it for your suppliers from time to time to gain further understanding of the relationship. Also, your bargaining power increases when you know what makes your suppliers tick. However, be mindful and strike a balance in using it to your advantage without abusing it.

To flesh out this point, here's an example: When suppliers are higher up in the supply chain and closer in relation to the manufacturer of the brand, you need to respect their prices more. They wield more control in the industry so it is best not to negotiate too aggressively and come across as compromising their margin for your own profit. On the other hand, for the middle man and traders who are lower down in the supply chain, they are more open to negotiations on product prices because selling at high volumes is their main concern. They are fine with getting lower margins and have not much allegiance towards a particular brand.

Lastly, being a reliable customer can be as simple as making payments on time and putting yourself in your supplier's shoes. The key phrase here is 'mutual respect' - it gets you so much more in return in the long run.

Resources:

Effective Supplier Relationship Management

13 Tips for Negotiating With Suppliers

6 Steps to More Effective Supplier Negotiations

10 Guiding Principles for Successful Supplier Relations Management

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