Detailed explanation of the different positioning and development stages of companies doing Amazon business

When companies get involved in Amazon business, they often choose different business models based on their own backgrounds and goals. These models can be mainly summarized into three types: boutique model, distribution model and fine distribution model.

Premium mode

Companies in this model tend to take the road of branding. Their distinctive feature is that they only operate a single store and sell fewer SKUs of products that are highly relevant. Companies that choose the boutique model usually rely on Amazon’s FBA logistics system for delivery, and their long-term goal is to build their own brands. This strategy is especially favored by large manufacturers or domestic brands that are entering the field of cross-border e-commerce for the first time. It is worth noting that the premium model not only conforms to the core concept of Amazon’s “Flywheel Theory”, but is also favored by the capital market.

Distribution mode

Compared to the boutique model is the distribution model. The core of this model is to widely open stores and put a large number of products on the shelves. What it is most concerned about is the sales rate and the total number of SKUs of the products. Operators in the distribution model rely more on domestic shipments rather than using FBA services. Therefore, such sellers often encounter problems such as follow-up sales and infringement. However, from a long-term perspective, Amazon does not support this approach because it violates the platform’s regulations on accounts and products, and the challenges faced by the future distribution model will be more severe.

Fine paving mode

The fine shop model is actually a compromise between the two models of high-quality goods and goods distribution. In this model, although the company will also have multiple stores and a variety of products, most of these products are concentrated in a few specific categories and are mainly shipped through FBA channels. Compared with the boutique model, companies under the boutique model will not rely too much on a single hot product, but will pay more attention to product diversification and long-tail effects. In addition, the Jingpu model also emphasizes the importance of profits and cash flow, rather than simply pursuing sales.

Development stage

Businesses operating on Amazon are not static. As their business grows, they will go through different stages of development, each with its own specific concerns and operational priorities.

Startup period

Enterprises in the startup stage often pay great attention to operational details and neglect other aspects of work. Companies during this period may rely too much on some so-called “black technology” methods to try to quickly increase sales.

Growth period

As time goes by, companies gradually realize the importance of product quality to success. High-quality products can achieve good sales even without strong promotion, so during the growth period, companies will invest heavily in product development and supply chain construction.

Maturity period

After solving the problems of marketing and product supply, the company continued to expand. The main problems faced at this time were team management and performance evaluation. How to improve team cohesion and effectively motivate employees has become one of the key issues that companies in the mature stage need to solve.

Bottleneck period

After reaching a certain scale, sales growth may slow down. At this time, the company needs to consider attracting external investment through internal financial management reforms, or exploring new market areas (such as increasing product categories or opening up international markets) to break the status quo.

To sum up, companies should choose the most suitable operating model based on their development stage and strategic planning, and make timely adjustments to adapt to changing market needs.