Many entrepreneurs have a love-hate relationship with Amazon. On the one hand, Amazon’s success has helped transform the retail industry, making it increasingly difficult for small business retailers to compete. At the same time, the Amazon shop has enabled entrepreneurs to sell their goods worldwide without having to create and maintain their own web presence.
Amazon first opened its online shelves to small businesses in 2000, and has since invested in helping entrepreneurs, handcrafted artisans, and small businesses selling in its store. In 2018, the company doubled that support and created an in-house small business empowerment team currently led by Keri Cusick, an Amazon veteran since 2014. Keri’s motivation to make small businesses thrive stems from childhood, watching her parents and a grandparent build their own businesses.
John Greathouse: Thanks for taking the time, Keri. Let’s start with Amazon’s definition of “small business,” which can vary widely from company to company. I’m also excited to see what the relative impact these small businesses have on the overall Amazon store.
Keri Cusick: Thanks for having me, john. Firstly, it is important for us that we define small businesses in the same way as our customers and business partners. In the US, we follow Gartner’s definition: Small businesses are companies with fewer than 100 employees and annual sales of less than $ 50 million.
We have over a million independent companies in our business worldwide, making up more than half of all products sold. In fact, their sales continue to outpace our own retail sales, which is exciting to see. We know customers value choice and the opportunity to discover local small businesses. Our sales partners play a key role for us and offer products in all categories.
Great house: Of course, some sectors outperformed others, but in general, how did small businesses perform on Amazon in 2020?
Cusick: While COVID-19 has posed many challenges for small businesses, we’ve seen smaller businesses continue to grow despite the crisis with Amazon. In 2020, the number of US SMB (small and medium-sized business) sellers with sales above $ 1 million increased more than 20%, and more than 3,700 sold more than for the first time $ 1 million. And SMBs selling on the Amazon.com store have created an estimated 1.1 million jobs.
This success and growth continued during the Christmas season, which was the best ever for our distributors. Global sales increased over 50% compared to the same period in 2019. The effects of the pandemic have touched each of us, but it’s inspiring to see how our little business partners have turned and succeeded.
One story that shows the passion and ingenuity of these small business owners over the past year is the impact Sheets & Giggles, a sustainable bedding brand based in Denver, Colorado, had on their community. They kept their business on Amazon through the pandemic, donating $ 40,000 in cash to COVID-19 relief in Colorado and thousands more in sheet sets and comforters for homeless shelters, shelters and health workers in their state.
Great house: I am a small investor and advisor to CLIQ Products who created a bottle-sized chair that became the leader in the Amazon category in 2020. Due to our sales growth, Amazon reached out to us proactively and helped us optimize our Amazon shop.
With the help that Amazon CLIQ has provided, I am excited to see what other programs or services are available to entrepreneurs using your platform.
Cusick: First of all, congratulations on your small business success on Amazon. We have a number of programs and initiatives to help small businesses sell and grow successfully.
We offer free training and resources through programs like Seller University and the Amazon Small Business Academy. The academy’s free webinars and events run year-round and are available online. They are open to entrepreneurs and aspiring entrepreneurs who provide them with resources to learn about strategies to help them be successful. In fact, in 2020 we hosted over 1,000 educational events for SMEs around the world with more than 150,000 attendees. Topics include learning how to become an Amazon seller, how to get your book published on Kindle Direct Publishing, and tips on starting business-to-business sales on Amazon Business.
Examples of paid services are Strategic Account Services, where salespeople work with a specific account manager to provide coaching and advice in key areas such as fulfillment and inventory, account balance, selection and conversion growth, merchandising and advertising, and global expansion.
We also have programs like Amazon Launchpad, which provide sellers with resources, expertise, and global support to help them grow and accelerate their business, and Amazon Handmade, an all-artisan community of sellers who sell their handcrafted goods on the Amazon store.
Great house: Good to know. Not only did someone (from Amazon) help us sell more in our store, they reached out to CLIQ to participate in Prime Day as part of a small business initiative. What were the mechanisms of last year’s campaign? Are there any plans for similar campaigns that smaller businesses can use in 2021?
Cusick: This was one of my favorite projects in 2020. We designed this final Prime Day to help small businesses and allocated more than $ 100 million to grow them during the shopping event and holiday season. This included running our largest small business promotion to date, where customers who bought $ 10 worth of products from a participating small business that sold on Amazon earned $ 10 in Prime Day credit.
In the two-week lead-up to Prime Day, small businesses involved in the promotion generated sales of more than $ 900 million. Overall, Prime Day 2020 was the greatest day of all time for our SME partners. They achieved sales of more than $ 3.5 billion, an increase of nearly 60% over Prime Day 2019. We’re looking for additional ways to re-highlight and promote our small business distributors in 2021.
Great house: A common concern I’ve heard from entrepreneurs, especially entrepreneurs with successful crowdsource campaigns, is that pirates are counterfeiting their products before they have time to meet the demand they have created. I was pleased to see that Amazon recently filed a high profile lawsuit against some suspected pirates.
What should sellers do to reduce counterfeit sales of their products on Amazon? Are there specific programs that they can turn to?
Cusick: Yes, we focus on preventing counterfeits from ever getting listed in our store. We have created many opportunities to help brands protect their intellectual property through programs like Brand Registration, Transparency, IP Accelerator, and Project Zero to ensure that only authentic products are sold in our stores.
Our IP Accelerator helps companies get intellectual property rights faster by connecting companies to a network of law firms that charge pre-negotiated fees, making it easier for SMBs to acquire trademarks. Since the program was launched, we have connected SMBs with participating law firms, resulting in more than 6,000 trademark registrations. Additionally, companies using IP Accelerator will have access to our more comprehensive trademark protection services months or even years before their trademark registration is officially issued. We also thoroughly investigate any counterfeit claims, including removing the item, permanently removing the bad actor, pursuing legal action, or working with law enforcement agencies.
We created the Counterfeit Crime Division in June 2020 to work with trademarks and law enforcement agencies to prosecute bad actors and hold counterfeiters accountable to the fullest extent of the law. In 2019, we invested over $ 500 million and employed more than 8,000 people against fraud and abuse, including counterfeiting.
Great house: Wow, those are huge numbers. I know it’s an ongoing arms race with the crooks, but I’m glad to hear that this is an important priority.
Another concern that entrepreneurs have shared with me is that their success on Amazon could lead Amazon to produce its own version of its bestselling products. What would you say to an entrepreneur with this concern?
Cusick: The sales of our SMB distributors account for more than half of all products sold in our store. The products they sell are very important to us and our customers. We have no interest in limiting the performance of our distributors in any way, and we strictly prohibit Amazon employees from using non-public, seller-specific data to determine which private label products to market.
Amazon, like all retailers, offers its own branded products, but they make up a very small fraction – about one percent – of the sales in our store and do not replace the incredible range of products offered by our distribution partners.
Great house: Many of my Forbes interviews focus on entrepreneurs with traditionally underrepresented backgrounds. Does Amazon have specific programs to help small businesses run by minorities and / or women?
Cusick: Yes – that is our top priority. For example, we actively invest in helping minority-owned companies. We have partnerships with the Minority Business Development Agency of the Department of Commerce and the National Business League to help black-owned companies accelerate their growth through online sales.
Late last year we opened our Support Small Store, a collection of small business vendors. It offers clients the chance to meet small business owners, including black-owned companies, women-owned companies, and family-owned businesses. We are actively recruiting and onboarding minority companies to sell in our stores and looking for new solutions we can offer to help these companies grow and thrive.
Great house: Good to hear all round. In addition to helping minority-owned businesses, the impact of COVID has led many of us to focus on helping our local businesses. Does Amazon have any tools to make buying local products easier? Can small vendors make sure they are highlighted locally?
Cusick: Small businesses are the lifeblood of our communities and our economy, and we are committed to helping them. Our Support Small Store helps small businesses reach customers. The special shopping experience helps customers buy products from tens of thousands of local small businesses by region or category.
Great house: Nice, I wasn’t aware of the Support Small effort.
What’s your elevator talk for entrepreneurs who have created a successful online sales model but are not using the Amazon platform?
Cusick: Good question, John. While selling on Amazon may not be for all business owners, it is a great option for many businesses. First, it creates access to a fantastic global customer base – we have more than 300 million active customers worldwide. This is a powerful business driver, especially when combined with the hundreds of programs, tools, and support services that we offer business owners at every stage of their corporate journey.
Selling on Amazon also opens up opportunities for business-to-business sales with customers that include Fortune 100 companies, some of the largest US hospital systems, and many local governments in the US. I can’t get enough of the stories of business owners who have grown up with their great ideas for great businesses in partnership with Amazon, whether they just had a business idea, just started a business, or were longtime business owners looking for ways to get around to grow.
As small business owners plan to adapt for the future, selling online will be a crucial component of recovery and long-term sustainability for many.
You can follow John on Twitter: @ Johngreathouse.