Ecommerce Monetization Models

As a DTC brand, have you considered the risks of relying solely on Amazon as your growth engine, especially as its dominance in the e-commerce landscape continues to surge? Amazon’s share of US e-commerce sales is projected reach an impressive 40.9% by 2025, a clear signal of Amazon’s tightening grip on the retail market. I see this trend as a wake-up call. While Amazon offers unparalleled reach, its growing dominance amplifies the risks of over-dependence. Policy shifts, escalating fees, and fierce competition can destabilize your profitability and erode your control over your brand. The solution? Diversify your sales channels to build a more resilient business. Here are 2 actionable strategies for diversification every Amazon brand should pursue today: 1. Embrace Direct-to-Consumer (DTC) Sales: Invest in your DTC infrastructure. This is the time to focus on building a real brand that stands independently to the vast search intent that Amazon offers. Use Shopify, Klaviyo, Meta, and Google as your "core four" to begin generating and converting demand to your DTC business. Selling directly to your customers lets you bypass Amazon’s fees and regain control over your brand's narrative. By forging stronger relationships with your audience, you not only mitigate the impact of Amazon’s rule changes but also unlock opportunities for higher margins and customer loyalty. 2. Tap into TikTok Shops: With now over a million creators thriving on TikTok Shops and search volumes surpassing Google in certain product categories, it’s a vibrant marketplace waiting to be explored. Partner with influencers and leverage TikTok’s powerful discovery tools to connect with new audiences and drive sustainable growth. You'll also find the discovery on TikTok drives new customers to both your Amazon and DTC business as a bonus. Why act now? Relying solely on Amazon leaves you vulnerable to unexpected disruptions, whether it’s a policy change or intensified competition. But by branching out to platforms like TikTok Shops, building a DTC presence, and exploring multiple revenue streams, you can safeguard your business and seize untapped opportunities. The data is undeniable: Amazon’s meteoric rise is both an opportunity and a risk. Don’t wait for the next policy shift to catch you off guard. Take action today—diversify your strategy, harness innovative platforms, and position your e-commerce brand for long-term success.

There has been a lot of talk about Amazon 1P kicking out some brands to move over to 3P and sell directly... CONTEXT: A few screenshots went out showing some brands (below 10M / rev on 1P) are being kicked out of the program in November... I've been saying for years to be careful and build a 3P strategy and it's now happening Here are my recommendations for brands considering or forced into the 1P to 3P transition: 1/ Prepare for margin changes - Expect annual price increases, likely again in 2025 - Some catalog items may become unstable on 1P 2/ Take control of your brand - Address reseller and counterfeit issues proactively - Invest in strong branding and positioning (EBC, images, content) 3/ Expand your product offerings - Launch new products, bundles & sample packs - Utilize FBA's quick launch times (<12 days) - Consider multi-packs to hit higher price points (e.g., 4-pack of teas >$14.99) 4/ Invest in DTC education internally - Recognize the shift from b2b to b2c model - Prepare for new processes: cash disbursements, refunds, advertising, returns - Plan for a multi-year training process across teams (finance, ops, marketing) 5/ Overhaul your logistics - Adapt warehouses from pallet-focused to individual item shipments - Develop processes for labeling, co-packing, and small-quantity shipments - Prepare for potential chargebacks and disputes - Partner with specialized services (shoutout to TrueOps for handling our reimbursements) - Don't let your massive B2B 3PL do your FBA Prep pls 6/ Consider a hybrid model (if possible) - Keep 1P for larger pack sizes and high-volume items - Use 3P for control and expansion - Find the right balance between the two (might be too late for this option) 7/ Build a dedicated transition team - Don't rely on just one person or department - Allocate sufficient resources - this transition can cost millions - Ensure full organizational buy-in and understanding TL;DR for a successful vendor-to-seller shift: -> Manage margins proactively -> Take control of your Amazon presence -> Diversify through 3P offerings -> Invest in DTC knowledge internally -> Revamp logistics operations -> Implement a hybrid model - > Commit full team resources The transition is challenging, but staying solely on 1P may not be an option. _ What's your strategy? Curious to hear how this plays out

If your only Amazon plan is 1P bulk, you’re playing defense. Go on the attack! A lot of brands treat Direct Fulfillment on Vendor Central like it’s some emergency backup. But the ones playing the long game are building DF into their strategy early because Amazon’s rules can change overnight. Here’s what most people miss. When you’re all-in on 1P bulk POs, you’re taking on more risk than you realize a few key things. One, you’re tied to unpredictable PO patterns that can throttle inventory at the worst possible time. Then you’re eating freight costs to get into Amazon DCs without any say in timing. And then you’re paying to move product whether Amazon’s demand forecast is right or not. Now here’s where Direct Fulfillment can really help your team. First, you control the ship point and stay in stock. If Amazon slows POs, or stops ordering altogether, you can still ship customer orders directly and keep velocity alive. No fighting for reorders. No ghosted POs mid-peak season. Second, you can eliminate inbound freight costs. No more paying to ship massive bulk orders into Amazon’s DCs months in advance. You ship small, fast, direct to the customer and only when there’s actual demand. Third, you limit your exposure to allowances and shortages. Since you’re handling fulfillment, you cut down on damaged product, inventory loss, and all those mystery deductions that show up 90 days later. Fourth, you move inventory closer to the customer. If you forward-deploy inventory with a smart partner, you can hit Prime-like speed without the brutal storage fees and labor charges buried inside 1P. This isn’t about ditching traditional 1P completely. It’s about building resilience into your Amazon business so one bad PO cycle doesn’t wreck your Q4 forecast or burn your cash. If you’re serious about growing on Amazon without getting blindsided, Direct Fulfillment isn’t optional. It’s your margin protector. It’s your velocity safety net. And it’s your insurance policy when Amazon’s priorities shift overnight. B/c you know they will. We can help you with DF. Holler!

If you have to keep feeding ads to make sales… you’re not growing. You’re paying rent. For the past 90 days, my personal brand faced major stock issues, forcing us to cut off ads completely (not a full stockout, but running low—30 days or less on ranked child asin level—which significantly impacts organic rank, especially geo-ranking). That’s why whenever we’re down to 30 days or less in stock, ads must be paused. I expected a slowdown. Maybe a dip in sales. Maybe even a drop in organic rank. But sales? Still rolling in. Organic rank? Still holding strong. Why? Because ads weren’t there to prop up the listing—they were there to build its foundation. See, most sellers think ads = sales. That’s the wrong equation. Ads should = ranking. If you’re constantly spending just to maintain sales, that means your ads aren’t actually working—they’re just buying you temporary placement. You’re paying Amazon rent for shelf space. No ads. No problem. ✅ Organic units still growing ✅ PPC costs cut to zero ✅ Sales keep climbing That’s what a strong organic rank does. Now ask yourself: • If you turn off ads today, what happens? • Does your listing keep moving, or does it flatline? • Are you building a business or just renting visibility? During the building phases, ads help you gain momentum. But if your sales still collapse the second ads stop, you’re stuck in a pay-to-play cycle. Time to rethink the game plan.