Prime Day, Brand Trust + Amazon’s Vendor Flex Program

Prime Day Follow-Up

Prime Day 2021 saw record-breaking sales despite the lower percentage of growth compared to the event in 2020. Amazon’s gross merchandise value (GMV) on Prime Day totaled $11.19 billion worldwide, up 7% from 2020s $10.38 billion. The 7% increase this year stands in stark contrast to the 45% growth seen from 2019 to 2020.

BofA has estimated that Amazon sold 255 million items on Prime Day, up from 240 million in 2020 and 175 million in 2019. The top-selling categories this year were tools, beauty, nutrition, baby care, electronics, apparel, and household products.

According to Adobe’s Digital Economy Index, the 48-hour Prime Day event generated $5.6 billion on day one and $5.4 billion on day two, making Monday the biggest day for digital sales this year and Tuesday the second biggest.

The real winners of Prime Day 2021 were third-party sellers, nearly all small to medium-sized businesses. It was reported that third-party sellers outpaced first-party growth. This significant increase is likely the result of the Amazon-funded “spend $10, get $10” promotion for marketplace sellers.

Main Drivers Of Brand Trust

What’s driving brand trust these days? For one, consumers want to feel in control of personal information. A great way to do this for your customers, as seen with Apple rolling out major privacy protection measures, is giving them easier control over how their personal information is saved and used.

Secondly, set candid product expectations. Giving customers accurate information about your products is important for brand trust. Not every product on the market can be the least expensive, highest quality, and best value – however, the content you create around the product needs to be genuine and clear.

Lastly, give your customer the best user experience possible. Make sure your website is up to date, easy to navigate, and all your links are working as expected. Review how the experience is on mobile and make sure it’s optimized for every interaction. Remember, your website is the cornerstone of your online selling strategy.

If you’d like our team of experts to test your brand’s trustworthiness, contact us to get started.

Amazon’s Vendor Flex Program

Amazon’s new program, Vendor Flex, has gained popularity over the last few months as brands seek to create a more agile and flexible supply chain. Through the program, brands work alongside Amazon to create Vendor Flex “nodes” otherwise known as “cages” in their distribution centers that are staffed with Amazon employees and essentially operate as a small Amazon fulfillment center.

The process starts with Amazon staff receiving wholesale orders, moving the product into the Vendor Flex cage before packaging and shipping the orders to consumers. This program brings a host of benefits, such as reduced shortages and chargebacks, transportation savings, eliminated freight allowance and delayed or missing Amazon pickups, and additional flexibility and capacity if Amazon’s FC or broader supply chain is constrained, which we saw happen throughout COVID-19.

The program is often used to complement TheyPay or WePay and drop ship/direct fulfillment, meaning brands should expect to continue sending a portion of their volume to Amazon fulfillment centers.

There are a couple of considerations you should think about before trying out the program:

1. Think through the space you would need to give up in order to accommodate the program in your warehouse. While node size varies, Amazon is looking for around 8,000 sq. ft. to 12,000 sq. ft. from new participants.

2. Secondly, consider the investment required to get the node running. While the total investment amount depends on the brand and distribution center, it’s important to understand if participating in the program makes sense for your brand and budget.

To learn more about the Vendor Flex program and if it makes sense for your brand, contact us.

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