Pros and Cons of Selling Apparel on Amazon
As we know, Amazon is the world’s largest online retailer, and it’s growing rapidly every day. But when it comes to selling apparel on Amazon, there are some unique factors that major brands need to consider.
Think about brands like Levi’s, Gap, Abercrombie & Fitch, and all the other clothing retailers that became household names before Amazon was even a factor – where do these brands fit in on the Amazon platform? Is it necessary for them to develop a presence? More importantly, does selling apparel on Amazon carry more benefits or more potential harms for these retailers?
Manufacturers of some of the most successful retail apparel brands have recently been confident about partnering up with Amazon. Several majors retailers have started to establish relationships with Amazon, all noting the access to Amazon’s giant customer base (specifically Amazon Prime customers) and dominant presence. Recently, GAP expressed interest in utilizing Amazon to revive business and leverage the growing e-commerce market in their favor. “To not be considering Amazon and others would be — in my view — delusional,” stated Gap CEO Art Peck (via Bloomberg). “We are always considering all of the opportunities beyond our traditional mix of channels and stores. Amazon is certainly one, and there are others as well.”
However, industry experts also note the potential risks of selling apparel on Amazon for these household name brands, including less overall control when it comes to pricing and a decreased brand identity.
For major retailers, it comes down to weighing out the pros and cons involved. Most experts agree that the most important factor to consider is whether or not a particular brand can hold its own – are they a household name, or just starting out?
If a retail brand is just starting out, establishing a presence on Amazon is likely a good idea because of the exposure, customer base, selling with Amazon FBA, and many other perks that come along with running an Amazon business. In addition, new apparel brands can benefit from the exposure generated by selling on Amazon (for example, having your products showcased when a user clicks a similar item).
However, for established brands that have been around for longer than Amazon has, there may be more risks than rewards. First of all, selling branded apparel on Amazon immediately opens up the floodgates and lets Jeff Bezos learn every intricacy of how a business operates. This data is collected, stored, and may eventually be used in a way that does not favor anyone but Amazon. Also, once products hit the Amazon marketplace, they become subject to lowered prices and being compared to other products (often products created by Amazon based on successful sellers).
The bottom line: selling apparel on Amazon certainly comes along with benefits, such as increased exposure to a larger customer base. But it also comes with many risks, all of which involve having less control over your brand, business model, and profit. It is up to each individual retailer to make the decision on whether or not the benefits outweigh the risks.