Amazon branding strategy and market competition analysis

As the company with the highest Internet sales in the world, Amazon’s emphasis on branding is unique in the industry. Unlike other e-commerce platforms that have relatively loose access standards, Amazon continues to tighten its standards in the hope of improving the overall quality of the platform by finding more competitive high-quality suppliers. This strategy is not only reflected in its product-led algorithm, but also in its frequent reviews of stores, making it more difficult for individual sellers to enter.

The development of e-commerce stems from the popularization of the Internet, especially in terms of reducing information differences in transaction intermediary links, allowing consumers to obtain the same products as in offline stores at lower prices. Although the retail industry in the United States is relatively developed, under the impact of e-commerce, many offline supermarkets have had to downsize in order to cope with increasingly fierce online competition. Currently, many products sold online are still sold by dealers and retailers, and there are intermediate links. Especially as competition becomes increasingly fierce, offline stores rely on their physical and shopping guide advantages to form reverse pressure on online stores. . Therefore, brand has become an important tool to capture users’ minds.

Since 2017, Amazon’s stock price has continued to rise steadily, which shows that the continued development of the platform has also brought about reduced product costs, improved user experience and increased traffic. From the perspective of flywheel theory, this growth trend represents the success of Amazon’s business model. Understanding Amazon’s development history helps to analyze its branding ideas in depth. For example, although some specific products, such as books, strictly follow the standard product indicators, Amazon still adopts its established rules when introducing third-party sellers, retaining ownership of the links, thereby stipulating the seller’s sales behavior.

In terms of branding strategy, Amazon pays special attention to dealing with malicious follow-up behavior. In the early days, some sellers purchased goods through discount promotions and other methods and sold them accordingly to obtain the price difference. Although follow-up selling itself may not necessarily break the market order, its abusive behavior has a significant impact on the interests of the platform and other sellers. To this end, Amazon did not choose to simply cancel or restrict the behavior, but introduced a brand management mechanism to increase sanctions against infringements. Amazon has launched “Plan 0”, “Transparency Plan” and “Brand 20” and other functions to help sellers with brand registrations promptly complain about follow-up sales. Once confirmed, Amazon will quickly ban the infringing store.

In the clothing category, due to the relatively low unit price, the ensuing phenomenon of follow-up sales is particularly serious. Therefore, for normal clothing sellers, as long as they register for brand sales, many problems can be solved. In addition, establishing a brand and conducting industry branding operations can not only increase profit margins, but may also effectively promote business transformation. This echoes the “smile curve” concept in the manufacturing industry, that is, front-end design and back-end branding create a higher profit margin.