And therefore, if you are not there and if you’re not a brand that people definitely want to buy, then you probably are not going to be found by the majority of customers.ĬURT NICKISCH: But this also comes at a big risk too, right? What are some of the top line complaints about Amazon, if people used to complain about margins getting squeezed at Walmart?ĪYELET ISRAELI: Yeah. So that means most customers don’t even go to Google or Bing or a search engine where they’re looking for something, they just directly go to Amazon.
So they’re much smaller than Amazon when you think about online presence.īut they are still a big player and brands still have the struggles where they essentially understand that in order to be where customers are looking for you, in the U.S., about two thirds of product searches start on Amazon rather than on search engines.
e-commerce sales, Walmart is roughly 5% to 6%. So Walmart is of course, still a huge retailer in the U.S., but their online presence out of total U.S. They really lamented how hard they had to keep driving costs down and not enjoying bigger profits because Walmart made them do it.ĪYELET ISRAELI: Yeah, and it’s a very similar story, the only difference is just the online presence. Like if you were a consumer goods product, you basically had to be there, right? But those very same companies really complained about just how much the margins got squeezed. So therefore every brand should, at the very least, consider if they can be on Amazon or not.ĬURT NICKISCH: This whole debate reminds me a lot of debates in the past of big box retailers like Walmart in the United States. And Amazon does such a great job in both having customers arrive to the website, as well as giving them amazing service. And then we’ve seen in recent years also the increase in e-commerce in general and how important it is for brands to have their own online presence so that customers can find them, which makes Amazon an important consideration because you need to be somewhere online, you need to serve your customers. I think the latest estimates I’ve seen is that roughly 40% of all online retail in the U.S. And nowadays, we hear more about what is your Amazon strategy rather than should you be on Amazon or not.Īmazon is just so huge. In the earlier days, companies basically had a yes or no, very clear cut strategy. Thank you so much for having me.ĬURT NICKISCH: Now, you write in your article that, “Every brand should consider selling on Amazon.” Why?ĪYELET ISRAELI: In the decade or so that I’ve been researching retail, everyone mentions Amazon at some point. Together with her HBS colleagues Leonard Schlesinger and Matt Higgins, as well as consultant Sabir Semerkant, she wrote the HBR article “Should Your Company Sell on Amazon?”Īyelet, how are you? Thanks for coming on the show.ĪYELET ISRAELI: I’m great. What is a brand to do? Our guest today is here to help businesses that are struggling with that decision.Īyelet Israeli is an associate professor at Harvard Business School. And then there’s the data and feedback from customers you give up by not selling directly. There’s more competition, even from Amazon itself. How can you say no to that that kind of reach? And it grew so big thanks to its fulfillment speed and quality of the buying experience. Plus, it’s the dominant retailer in 28 other countries. customers start their product search on Amazon. Should you sell your goods on Amazon? At first glance, the answer has to be yes, right? Amazon is the most visited e-commerce platform in the United States. It’s a dilemma facing more and more brands nowadays. Ayelet Israeli is an associate professor at Harvard Business School and a coauthor of the HBR article “ Should Your Company Sell on Amazon?” She talks through step-by-step how businesses can decide whether Amazon is right for them.ĬURT NICKISCH: Welcome to the HBR IdeaCast from Harvard Business Review. There are downsides like costs, competition, and lack of data. and the dominant retailer in 28 other countries. It’s a dilemma facing more and more brands: should you sell your goods on Amazon? It’s the most visited e-commerce platform in the U.S.
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