Sep 17, 2021

Entering Amazon – how to navigate the online hyperplatform

Despite the challenges our geography poses for logistics, the Nordic countries are entering the global online market as Amazon takes a foothold in Sweden. What does this mean to online retail? What are the new challenges and opportunities?

New era for online marketplaces

Amazon is a multinational tech company and currently the leading online marketplace for customer goods with estimated annual turnover of 380 billion dollars for 2020 – a sum (manyfold the annual budget of Finland) much larger than Finland's GDP for 2020. It has several subsidiaries and brands of its own, as well as logistics solutions to support the promise for fast delivery of goods to customers.

As the Nordic countries are not densely populated and with long distances, efficient delivery chains from warehouses to consumers have been a challenge that has so far kept big players such as Amazon off the field, but Amazon’s entry to Sweden is now changing the game. Local retailers must re-evaluate their online strategies and choose wisely the ways to coexist with global giants. However, “Going to Amazon” really can be like entering the jungle: if you are not prepared, your survival is not likely.

Call for strategic planning

Gaining good visibility at Amazon requires resources. The platform is not just a static online store but rather a dynamic space guarded by sophisticated algorithms where products and goods are offered to online visitors according to how well they rank according to several factors. It is therefore essential to build an efficient strategy to make use of the investment for online presence, and to be able to choose the right partners to operationalize the maintenance of it. Agencies specialized in Amazon exist in many countries, and it is wise to use the local know-how on marketing to your selected customers.

Aside from being a marketplace, Amazon has increasingly also become the primary search engine for consumers looking for products. In its key markets, over 60% of customer journeys start from Amazon search, while most sales come from the products visible as top results within the Amazon search engine. If a product is to be found in Amazon, it is also likely to be available, whereas traditional search engines require more clicking through the result pages to find out the availability and price range of the given product. This is one reason to consider entering the marketplace, but also here investments are needed to ensure being found in the searches.

Mapping the right path

Due to the complexity of Amazon, it is important to make realistic plans on whether to enter it or not as a place for selling goods. This requires benchmarking competitors and the market while optimizing the product range online as well as setting the financial parameters according to available resources and finding the best partners for operationalizing the routines required for keeping your company’s presence on Amazon alive.

As the emergence of global platforms in the Nordic countries is the present reality, this changes the market permanently also for those businesses who currently cannot compete in Amazon. This might call for adjusting the marketing strategy or making the existing online presence stronger to nurture the existing customers and to drive new traffic into your own webshop. 

Whichever is the right direction for now, the first steps always take effort. We can help your business to take them.

Want to know more? Please contact Anssi to discuss how Iona can help you find your way on Amazon.

Anssi Falk

Commercial Director