Burton Snowboards teamed up with the Vermont Center for Emerging Technologies on Thursday to host a discussion about Amazon and whether the online retail giant is a “friend, foe, or frenemy” to Vermont businesses.
Hosted at Burton’s Area 13 at their headquarters in Burlington, the panelists were Charlotte Addison, marketing director at Bee’s Wrap; Liz Lavallee, director of marketplaces at Vermont Teddy Bear; Mark Yardley, head of global sales for Darn Tough; Yianni Savoulidis, digital business manager at Burton; and Gwen McShea, former digital marketing director at Ann Clark Cookie Cutters.
Before the speakers took the stage, President of VCET David Bradbury spoke more to what he hoped visitors would take away from the discussion.
“Let’s get Vermonters in the room and see if we can share some really interesting insights, tips, hacks, on how to [use Amazon],” Bradbury said. He described the event as a “community commerce event” hoping to bring Vermont companies large and small together to find the best ways to use Amazon while tailoring it to their business and products.
“So we wanted to learn today from some of the experts that are already here in Vermont,” he said.
The panel started by describing how they view Amazon, to which all of them answered as a “frenemy,” or as a benefit to the company, but something to keep their eye on because of rapidly changing internal policies.
Savoulidis began the discussion by defining some terms Amazon uses like “1P” and “3P,” which also stands for “first party” and “third party.” First party is when Amazon buys product for storage and distribution from their facilities, while third party is when the producer keeps the product at their location and uses Amazon as a way to take orders. Trying to decide whether to launch as first or third party is often the hardest decision when starting to sell on Amazon.
Both options have their benefits and drawbacks, as McShea said third party is more profitable, but Savoulidis said it also depends on what your shipping, as size is very important at Amazon’s fulfillment centers. Yardley said third party sellers have more control over the price because a first party agreement means Amazon is buying product wholesale, setting their own price. Both allow users to ship with Amazon Prime.
The panel discussed how Amazon has become the go-to locations for consumers to product search and price check. Interestingly, Lavallee shared how product searches on Amazon have lead to an increase in natural visits and purchases on the Vermont Teddy Bear website, while market trends indicate Amazon is actually taking business away from manufacturers’ websites. But others reiterated the warning in trends of product searches and price checking.
The panel discussed many ways Amazon can be helpful to Vermont businesses — It’s a look into the global marketplace, where companies can see what their competitors offer and come up with new ideas. They can take product reviews and recommendations to increase business. It’s a way to hire people who will need to manage the relationship with Amazon and keep up to date with what’s happening online. Amazon has been trying to grab a hold in the online advertising industry and companies and buy into that.
The panelists shared many concerns over Amazon as well. Internal operating procedures change frequently, imposters selling counterfeit products, and trying to navigate the complicated Amazon algorithm in order to have the most success were debated. They discussed how difficult it is to reach a real person at Amazon’s support services. All companies shared concerns over their SEO and how product keywords can impact how the algorithm treats the product. Savoulidis talked about how snowboard-specific terms – like base layer and grom (a child snowboarding) — needed to be changed to meet acceptable terms for the product searches.
Bradbury listed some statistics about the crowd of 150 attending and Amazon: 60 percent of the companies attending did not currently sell on Amazon and one third of attendees were from companies with anywhere from two to 10 employees. Amazon adds 3,000 sellers to their marketplace globally daily, they spend $62 billion on shipping and 78 percent of product searches begin on Amazon.
Bradbury emphasized how in a state as small as Vermont, businesses really need to get on Amazon, but admitted it is no easy task. Amazon makes up 45 percent of the United States retail market, and Bradbury said in order for Vermont businesses to remain competitive, “like it or not” Amazon represents a large part of the retail market.
By the end of the discussion, all panelists shared some level of paranoia, not knowing when the next major change at Amazon will drastically affect their business model. For the people in attendance, the panelists all said to do some homework and understand the policies and nuances of product descriptions before beginning to sell. They said Amazon values “first impressions,” so having a strong business model is crucial.
After the discussion ended, optional small groups formed to further discuss some of the issues mentioned in the panel.
Riley Farabaugh is the founder of one of these small companies the event was targeted towards. Mont Verde Media specializes in search engine optimization and pay-to-click services for online companies and retailers. He works with a Vermont furniture company to help them sell in all 50 states, among other companies.
“Burton is obviously a leader and an example in this industry so I felt like anything they had to say I should take note of,” Farabaugh said. While his company does not currently have any connections with Amazon, he is hoping to change that after the event.
Proceeds from ticket sales were donated to the Talent Skatepark, which closed their Williston Road location last year due to financial trouble. Talent is now a non-profit and partnered with Burton to reopen a space inside Burton’s headquarters, coming later this year.
