Different companies have different approaches to Amazon business due to their different backgrounds and purposes. Currently, companies usually have the following three positionings for Amazon business.
The first is the boutique model. The so-called boutique model is mainly to take the branding route. This type of seller has two major characteristics: first, there is only one store with fewer SKUs; second, all products in the store are under one category and are related to each other. This type of company pursues the concept of big single products, which is the single product explosion that readers are familiar with, with thousands of orders for one product per day. This type of seller uses the Amazon FBA logistics system to ship goods, and in the long run, it will take the branding route. Many large factories and domestic brands adopted the boutique model when they first started cross-border e-commerce. The boutique model is a model encouraged and approved by the Amazon platform, which conforms to the basic logic of Amazon’s “flywheel theory”. At the same time, capital also prefers sellers who do boutique models.
The second is the distribution model. Compared with the boutique model, the distribution model emphasizes opening as many stores as possible and putting as many products on the shelves as possible. The product sales rate and the absolute number of SKUs are the two most important indicators for this type of seller. Sellers who adopt the distribution model mostly ship their products domestically and basically do not send FBA. They are usually the ones who are most infringed by copycats. However, in the long run, the distribution model is not welcomed by the Amazon platform, and it violates the platform’s regulations on accounts and products. The pressure on distribution sellers will increase in the future.
The third type is the fine distribution model. In a broad sense, the fine distribution model is a branch of the boutique model, similar to a distribution-style boutique model; in a narrow sense, the fine distribution model is a combination of the boutique model and the distribution model, between the two, and combines the advantages of the two models. On the one hand, it will not be like the boutique model, with only one account, poor risk resistance, and a large amount of funds are all pressed in FBA inventory, and the cash flow is extremely unhealthy; on the other hand, it will not be like the distribution model, where there is no connection between products and no brand concept. In the fine distribution model, sellers will have a certain number of accounts and products, and the products are concentrated in several specific categories. They mainly send FBA, and the principle of small quantities and multiple shipments is pursued. They will not excessively pursue single product hits, but pay more attention to the long-tail effect of products. Compared with sales, the fine distribution model emphasizes profit and cash flow. At present, the fine store model has gradually become the preferred model for many Amazon sellers.