Selling Toys in the Age of Amazon

Guest-writer (1)

TBurns.Cartoon.Pho.toTIMOTHY SCOTT BURNS has launched thousands of new products across multiple digital and traditional platforms. This includes Amazon businesses that generated eight figure revenue streams. Through his own agency, South Pole Digital, he now advises clients on ecommerce strategy, digital marketing and marketplace sales execution (Amazon, eBay, Walmart.com). Tim is the author of a soon to be published book, Selling on Amazon – Strategy and Tactics that Help You Succeed a beginner’s guide to understanding the basic concepts of selling on Amazon, and how to succeed there. He can be reached at tim@southpoledigital.com

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Amazon sold 2 million toys last year on Prime Day. At an average price point of $25, that’s $50M in toys…in one day!

If you’ve been following the Top Selling Toys on Amazon the last few months, you might think that fidget spinners are the only thing that kids want these days. And you might be right, since currently 3 of the Top 10 toys on Amazon are fidget spinners, and going just a few weeks back into April, when sellers finally started to receive their inventory and began to satisfy demand, the entire Top 10 toy list on Amazon was fidget spinners.

We all know a hot toy when we see one, and as retailers and manufacturers, we have to take advantage of the opportunity – even when the retail is under $10. But what is really going on here?

Amazon sold 2 million toys last year on Prime Day. At an average price point of $25, that’s $50M in toys…in one day! There will no doubt be Prime Day deals on fidget spinners this year too. Especially because the demand is shrinking and merchants need to move that inventory before the fidget spinner craze completely dies.

Amazon sells over 400 Million unique products through its marketplace. That may sound like a huge number, and it is. In the Toys and Games category, there are about 8 Million unique listings. But whatever individual toy or game you sell, you can be confident that someone, a current retailer/dealer/reseller is already selling your products on Amazon.

I see the supplier/manufacturer point of view. You make a product. You sell that product. You sell it a lot of different places. You have many different relationships. Maybe your product is in big box retailers like Toys R Us and Target, but you also do well with specialty retailers like catalogs and with a few regional niche resellers. You may even sell that toy in grocery stores like Wegmans or Trader Joes. But I think selling to Amazon is different. They are not just another retailer.

It’s not about size. It’s not about reach. It’s not about price. It’s not about service. It’s not about convenience. All those different markets you sell your toy or game through already compete on those pieces of the value chain. What is different about Amazon is – control. Amazon has all those things – size, reach, price, service, convenience. They offer the widest selection of products, to the entire world (well almost) at the lowest prices all delivered for free (almost) in two days. The bar is really high from a competitive standpoint. And because of that – Amazon has control.

Seeing your products sold on Amazon is often followed by a loss of control. Maybe that is not all that important to you? I don’t know. But understand that Amazon now exerts influence over all the other “traditional” channels you sell through. Consumers showroom your products. They shop prices on their mobile devices, and that starts with Amazon. Customers read reviews – reviews from Amazon customers – about your products when in the store or on other websites or flipping through catalogs. Amazon controls all that media related to your product.

It’s not necessarily a bad thing. It’s just something to consider when you are chasing that six-figure purchase order that Amazon is dangling in the wind.

Oh – and your current retailers probably hate the idea of selling direct to Amazon. We can talk more about that later.

If you have any questions, or need help with your marketplace strategy you can contact me at tim@southpoledigital.com

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