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According to a variety of online sources, online retail giant Amazon has been developing plans to take on UPS, FedEx, DHS, and even Alibaba by building a global shipping network.
At first blush, this may seem like a great idea for entrepreneurs who sell products on Amazon and, in fact, it may help you to consolidate your operations by enabling you to channel more of them through a single source. However, there could be some huge drawbacks to the plan, as well.
According to a Bloomberg report, “Amazon’s senior management team proposed an aggressive global expansion of the company’s Fulfillment by Amazon service, which provides storage, packing and shipping for independent merchants selling products on the company’s website. The report envisioned a global delivery network that controls the flow of goods from factories in China and India to customer doorsteps in [the US and Europe].”
While this may sound like a great idea for the “little guy”, since it could help you to streamline your operation, the Dragon Boat Project could also make it easier for international suppliers to compete directly with you on the massive online retail platform; something that is happening with increasing frequency, and which we addressed in a previous post, Is Your Chinese Supplier Now Your Competitor on Amazon?
So, with our decades of experience, what do we see as the pros and cons of Amazon’s Dragon Boat Project?
Dragon Boat Project Pros:
- Amazon will be able to negotiate better shipping rates
- Amazon will have access to an Amazon-built team of freight forwarders and custom officials
- Amazon may be able to apply more assurance of the care of the delivery of products
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Dragon Boat Project Cons:
- ONE, AND ONLY ONE, YOU SHOULD WORRY ABOUT
Amazon will know exactly who your supplier is, how much you pay for your products, and will be able to copy your business strategy – making themselves your nightmare competition.
Just like some of the apps and programs you add to your Amazon account to source and track your profits, Amazon will have increased access to your account; 14access to where you buy your products, how much you pay, when they are arriving, how much you are ordering, etc. Do we need to go on?
Anyone who has access to your account also has the ability to see what your products are and how well they are doing. Think about this for a second…
While many of the product suppliers, app creators, and support people you deal with are honest and show the utmost integrity in dealing with you, it makes little sense to offer what should be confidential information to others who may not protect it for you. In the increasingly competitive world of online product sales, including Amazon, you need to be aware of who has access to such valuable information and protect it to the best of your ability.
If you’re an entrepreneur selling products on Amazon and are eager to protect your business from increased competition from Dragon Boat and other Amazon policies, the Training Programs offered at Private Label University are exactly what you’ve been looking for!
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