Whether you’ve been selling on Amazon for a month or five years, you’re probably very familiar with the age-old problem of online retail: how do you get your product(s) exposed to a wider audience?
In July 2015, Amazon came to the rescue with the release of a new marketplace called Launchpad. What makes it unique? It’s a platform exclusively for for products made by startups. With a mission to “help (customers) discover unique and unexpected products from today’s brightest startups,” the Amazon Launchpad gives entrepreneurs access to an online storefront, a simple on-boarding process, custom product pages, inventory management and marketing materials. Launchpad products are eligible for Prime’s free two-day shipping and are also sold through Amazon’s main website.
The website has millions of monthly visitors, allowing online sellers the chance to get in front of a massive audience without spending a ton on marketing expenses.
Speaking of marketing, Launchpad offers a nifty suite of marketing tools that includes supported merchandising placements on the site, along with an invitation to join the Amazon Vine review program.
Amazon takes care of fulfillment and operations, and your products will be eligible for Prime’s fast and free shipping. You will also have access to Amazon’s storage facility and customer service center. Of course these are also benefits available to any Amazon Seller.
Sure, taking advantage of Amazon’s storage facility, customer service center and shipping arrangements is a “pro,” but anytime you put your products in the hands of a third-party you run the risk of losing a degree of control over the process.
You’ll have to get through the lengthy, somewhat elusive approval process, and the company offers few particulars of how it works. Applying costs nothing, at least upfront.
Amazon doesn’t offer support for manufacturing, a vital area that can stymy up-and-coming startups. You’ll need goods that are already rolling off the production lines (or just about to) before Launchpad will even consider you. Cash-strapped startups with pricey products should note that Launchpad ties into Amazon’s Vendor Express program, which requires sellers to submit free units if they want Prime status.
Some critics that don’t think the Launchpad showcases anything worthwhile.
Launchpad has a longer payment cycle than the FBA cycle. Vendor Express offers payment terms of Net+60 days, meaning that you will receive payment for purchase orders 2 months after confirming the Purchase Order. This might be difficult for new startups who need to preserve capital. By contrast, the Seller Central/ FBA payment cycle is 2 weeks after each sale is made, which often creates more predictable, steady cash flow.
Jennifer Petoskey, Launchpad’s senior marketing manager, says that the long-term goal of Launchpad is simply to increase the product selection for Amazon customers while helping startups grow faster. “As these companies become successful in e-commerce, they’ll continue to focus on e-commerce for their distribution strategy,” she said.
Which, ultimately, will help grow the overall e-commerce pie. At it’s inception, Launchpad had only 25 venture capital partnerships and sold about 200 products. Now, it works with over 100 leading VC firms and has helped over 700 startups sell roughly 1,400 products around the world. For some sellers, the vagueness could be worth dealing with. Because if you do manage to get in, then you’ll be sitting pretty under Amazon’s ever-expanding magic halo of e-commerce and distribution.