E-Commerce with Amazon. Helpful Measures for Achieving Successful Commerce and Increasing Reach

Table of contents

Table of Figures

List of abbreviations

1. Introduction
1.1 Objective of this term paper
1.2 Structure of the term paper

2. The definition and role of e-commerce
2.1 The definition of e-business
2.2 E-commerce classification

3. The definition and history of Amazon

4. The development, conditions and the shipping fees of the marketplace on Amazon

5. Measures for greater reach on Amazon as well as successful commerce
5.1 The role of the product detail page and Retail Readiness
5.2 The requirements for the title on the detail page and its implications
5.3 Visual attention
5.4 The influence of videos on customers
5.5 Bullet points as a decisive building block for success on Amazon
5.6 Keywords

6. Conclusion

Bibliography

Table of Figures

Figure 1: Excerpt of the category referral fees from Amazon

Figure 2: Presentation of an original product title on Amazon

Figure 3: Positioning of bullet points on Amazon

List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1. Introduction

In 2020, e-commerce sales in Germany reached a volume of over 60 billion euros in business-to-consumer (B2C) business. Amazon - the US company - accounted for a significant share of this market.¹ In fact, Amazon generated US $29.57 billion in sales in Germany and as much as US $386.06 billion globally.² In Germany, 90% of online customers are actually Amazon customers. Moreover, 50% of them conduct product searches via Amazon.³ The revenue figures confirm that Amazon has a leading position in online retail for a reason. Consumers' online understanding is influenced by the standards set by Amazon. This is because Amazon has clearly shown what is possible online, and therefore there will continue to be hardly any way around Amazon in online business.

This awareness has now become established among more and more retailers and manufacturers. The debate about whether Amazon should be used as a strategic sales channel and, above all, how it can be implemented profitably, is increasing. After all, there is an opportunity for everyone to sell on the Amazon Marketplace. This applies to both newcomers and established providers. Newcomers in particular can use Amazon as an opportunity to quickly establish themselves in the market. Amazon offers them helpful support through customer acquisition, warehousing and shipping.⁴

Since everyone is actually given the opportunity to use the Amazon Marketplace, this also refers to the direct sellers from China, among others. This therefore means even greater competition for manufacturers and retailers who have previously imported and offered their own products from China. The role of the producer and supplier of no-name goods from China has now changed in this sense. This is because Amazon offers them the opportunity to sell them independently. However, this option is not only offered by Amazon, but also by eBay, Wish and AliExpress. All other retailers can only meet this competition with high-quality brands aswell as distinctly fantastic service.⁵

1.1 Objective of this term paper

Despite the potential dangers, the fact remains that the platform offers great economic opportunities for all retailers who decide to use the platform. Therefore, the topic of Amazon and the right strategy development on Amazon is and will continue to be one of the most significant topics in trade and industry.⁶ For this reason, this thesis deals with the question to what extent the use of certain measures can lead to successful trading and an increased reach on Amazon.

1.2 Structure of the term paper

At the beginning of the paper, the most important terms are defined and explained, which should contribute to a better understanding of the topic. Thereupon, the origin, the development as well as the applicable conditions of Amazon are explained. This is followed by defining and explaining the measures that can be applied for successful trading on Amazon. Finally, the topic is rounded off with a conclusion and the research question is answered, based on the knowledge gained in the term paper.

2. The definition and role of e-commerce

Buying books online, booking travel via electronic travel catalogs, or getting help with product selection decisions through interactive support systems is something that private individuals take for granted these days. With regard to companies, procuring products and services via electronic catalogs or paying with electronic money, as well as ordering goods online directly from the manufacturer, represents normality. All the examples just mentioned fall under the term "electronic - commerce (e-commerce)".

The emergence of e-commerce came about, on the one hand, as a result of the development from an industrial society to an information society, which led to the victory of the Internet. On the other hand, the emergence is also due to the steady expansion of digitalization and the continuously improved price-performance ratio in the field of information and communication technology.⁷

The term “e-commerce” generally refers to the use of the Internet or other networks to buy, sell, transport or trade goods, services and data.⁸ Moreover, the term e-commerce is only a subset of the term “e-business”. These two terms are often confused with each other. For this reason, they will be defined more precisely and distinguished from one another in the following.⁹

2.1 The definition of e-business

There is no universal definition for the term e-business. This work is based on the following definition of e-business: E-business uses information and communication technologies or electronic networks with the aim of initiating, handling, supporting and maintaining service exchange processes. In this context, the term "service exchange process" refers to the transfer of tangible and intangible goods as well as services within different actors. This transfer is ultimately based on compensating services. These can be monetary or non-monetary.

Within organizations and institutions, electronic business is divided into four stages of development. There is a differentiation within these stages,primarily with regard to their complexity and their business activities. Thereby, the fixed product or service presentation describes the simplest e-business form.The second stage of development extends the simple product or service presentation by the pre-and after sales service performance. This service can then be provided, for instance, via e-mail contact. The integration of online transactions and the parallel incorporation of the back office characterize the third stage of development. Value and partner integration represents the fourth and thus final stage of development. The highest level of interactivity exists at this stage because potential transaction partners are integrated into the value creation processes. Development levels one to three are required for a complete e-commerce solution.

There is also a differentiation between four business model types in e-business. These are:

- Commerce
- Connection
- Content
- Context

In this work, the focus is on the model type "Commerce" and for this reason it will be described and explained in more detail in the further course.¹⁰

2.2 E-commerce classification

“The term “e-commerce” generally refers to the use of the Internet or other networks to buy, sell, transport or trade goods, services and data.”¹¹ Since this definition is too general, a structuring according to certain criteria should support the exact classification in order to better define the term.The structuring of e-commerce can be done in the following criteria:

- Actors
- Transaction phases
- Transaction volume
- Proximity to application

Natural or private persons can act as players in e-commerce. Differentiation is made within private persons (consumer), the enterprise (business) and subjects of public law (administration). Nevertheless, they can act both as demanders or as suppliers. Differentiation occurs on the procurement side (buy-side commerce) and on the sales side (sell-side commerce) with regard to the application of e-commerce. After acronyms and new technologies have emerged within e-business, the following system has become established: The provider of services is always indicated first, followed by the number "2" and then the party who will use the services. This results in a combination of a provider-demand constellation by initial letters of the actors "Consumer", "Business" and "Administration". In fact, only six provider-demander constellations of actors are used, although nine could be set up. These are the following six provider-demand constellations:

- Business-to-Business-Commerce (B2B)
- Business-to-Consumer-Commerce (B2C)
- Business-to-Administration-Commerce (B2A)
- Consumer-to-Consumer-Commerce (C2C)
- Administration-to-Consumer-Commerce (A2C)
- Administration-to-Administration-Commerce (A2A)

Among the types that are most often used in practice are B2B and B2C. Electronic commerce between several companies takes place in B2B, where a company can be either the supplier or the buyer. In terms of business-to-consumer commerce, there is a relationship between companies as suppliers and end consumers as buyers. The focus is on an ordering and selling process of a commercial supplier to customers. Physical and digital goods as well as services can be the subject of the B2C transaction.¹² The other four types are not relevant to this work, so they will not be discussed in detail in order not to go beyond the scope of this work.

3. The definition and history of Amazon

Amazon is an American online shipping company and was founded by Jeff Bezos in Seattle in 1994.¹³ Fascinated by the Internet, Jeff Bezos had a vision in 1994 to form "the most customer-oriented company in the world”, “where people can find everything they want to buy on the Internet".¹⁴ An interesting fact is that the founding of Amazon took place in Bezos' garage. Bezos got the inspiration for the name from the longest river in the world, the Amazon. The name should be an association of wide choice for the customers.¹⁵

Based on the realization that even the largest bookstores had a maximum of 150,000 books on offer, Bezos decided to initially only offer books on Amazon. Although the first book was not sold until a year after the founding, but by 1996, Amazon had already achieved sales of $15.7 million. Due to the initial success, the first country-specific websites were established as early as 1998. In 1998, Bezos even buys up "ABC Bücherdienst GmbH" and renames its successful website "Telebuch.de" to "Amazon.de".

However, a turning point then occurs - triggered by the bursting of the dotcom bubble. To avoid going bankrupt, Bezos decides to open a Marketplace. This means, that for a fee, other online retailers are given the opportunity to use the "Amazon" sales platform. This greatly expanded Amazon's product range, and Bezos realized his dream. Amazon evolved from an online bookseller to the largest Internet department store in the world. In the years that followed, Amazon entered more industries and introduced additional services.¹⁶ Since the focus of this thesis is on the Marketplace, the following chapter will focus on it.

4. The development, conditions and the shipping fees of the marketplace on Amazon

Other merchants were given the opportunity to use Amazon as a marketplace for selling goods in the fall of 1999. Thereby, Amazon has no influence on the price as well as on the shipping of the goods of these merchants. Both are in the decision-making field ofthe merchants, who are called "sellers" by Amazon.¹⁷

However, it is not that easy to become or stay a seller on Amazon. After all, it is common knowledge that Amazon's focus is on the customer and that Amazon wants to be the most customer-friendly company in the world. For this, sellers on Amazon must also meet certain conditions and expectations in order to live up to this standard. The procedure to start as a seller on Amazon is as follows: First, you should decide between the two offered sales tariffs. There is the possibility to choose the tariff "Individual" or "Professional". Regardless of the choice of the tariff made, the possibility of offering one or thousands of items on the respective seller's account, remains. The difference between the two tariffs is that with the "Professional" sales tariff, the seller has to pay 39 euros per month, whereas with the "Individual" tariff, the seller has to pay 0.99 euros per item sold to Amazon.¹⁸ In addition to these fees, sellers must pay Amazon a percentage of the total price for each item sold. These fees are called “referral fees”. The total price is derived from the item price, shipping costs and where possible gift wrapping costs. On the other hand, there may also be a minimum amount for sellers to pay. This ultimately depends on what amount would be higher in the case. Below are the different product categories and the respective fees that apply to the sale.¹⁹

As a seller on Amazon, you have the option to ship the goods through Amazon, what is called “Fulfillment by Amazon (FBA) or independently. If one chooses the shipping method “FBA”, it means that they can offer Prime shipping for their items.²⁰ The process of shipping through Amazon is that they send the merchant's their goods to one of Amazon's logistics centers. There, the merchant's goods are picked, packed and shipped - if an order is placed. Another service is the customer service that is provided by Amazon.²¹

[...]

¹ Cf. Köber, B., Stummeyer, C., Amazon für Hersteller und Händler, 2020, p. VII.

² Cf. https://de.statista.com/statistik/daten/studie/374731/umfrage/nettoumsatz-von-amazon-in- deutschland-und- weltweit/#:~:text=Zuletzt%20belief%20sich%20der%20Umsatz,%2C06%20Milliarden%20US%2DDolla r.

³ Cf. Köber, B., Stummeyer, C., Amazon für Hersteller und Händler, 2020, p. 71.

⁴ Cf. Köber, B., Stummeyer, C., Amazon für Hersteller und Händler, 2020, p V ff.

⁵ Cf. Köber, B., Stummeyer, C., Amazon für Hersteller und Händler, 2020, p V.

⁶ Cf. Köber, B., Stummeyer, C., Amazon für Hersteller und Händler, 2020, p VI.

⁷ Cf. Opuchlik, A., E-Commerce, 2005, p.11.

⁸ Cf. King, D., et al., Electronic and Social Commerce, 2017, p.6.

⁹ Cf. Opuchlik, A., E-Commerce, 2005, p.20.

¹⁰ Cf. Opuchlik, A., E-Commerce, 2005, p.18 ff.

¹¹ Cf. King, D., et al., Electronic and Social Commerce, 2017, p.6.

¹² Cf. Opuchlik, A., E-Commerce, 2005, p.24-28.

¹³ Cf. https://www.onpulson.de/lexikon/amazon-com/

¹⁴ Cf. https://www.basicthinking.de/blog/2019/07/08/25-jahre-amazon-geschichte/

¹⁵ Cf. https://www.aboutamazon.de/%C3%BCber-amazon/unsere-geschichte-was-aus-einer-garagen-idee- werden-kann

¹⁶ Cf. https://www.basicthinking.de/blog/2019/07/08/25-jahre-amazon-geschichte/

¹⁷ Cf. Köber, B., Stummeyer, C., Amazon für Hersteller und Händler, 2020, p. 8.

¹⁸ Cf. https://sell.amazon.com/beginners-guide?ref_=sdus_soa_tbg_n

¹⁹ Cf. https://sell.amazon.com/sell?ref_=sdus_soa_sellov_n

²⁰ Cf. https://sell.amazon.com/pricing?ref_=sdus_soa_priov_n

²¹ Cf. https://sell.amazon.de/versand-durch-amazon?ref_=sdde_soa_pricing_fba_i