What is a brand to do? There is no one-size-fits-all solution. Some do give in and offer Amazon a better price if they can afford it.
Some push Amazon to keep the unprofitable product, but give them a better deal on a more profitable item.
Another strategy is to stop selling to Amazon as a wholesaler and instead sell directly, or through resellers, on Amazon’s marketplace. Amazon cannot control the price of an item sold by marketplace sellers, though it can make it harder to find items that aren’t priced aggressively.
The longest-term solution, however, is perhaps the most difficult: Reimagining how a product should be designed and packaged from the ground up, specifically for e-commerce sales. That often means cutting the weight of low-price goods since shipping costs tend to eat into a product’s profitability. (Amazon, in fact, is trying to capitalize on this potential shift by asking brands to reformulate their packaging to make it easier to ship — all done via Amazon, of course.)
Big brands, however, have been doing more talk than action when it comes to pursuing this solution — a fact that you can be sure Amazon has noticed.
But Andrea Leigh, an ex-Amazon general manager who now runs her own brand consultancy, has come across a few examples of brands redesigning goods for e-commerce. One of them, from the brand Celsius, is an energy drink that has been transformed into powdered packets that the customer mixes with water at home.
Then there’s the brand Green Works, which has sold household cleaners in concentrate form, along with an empty spray container.
“If competitors go away and you can live it out, it presents you with an opportunity where you can steal share in a relatively easy way,” she said. “Figuring out how to do online better and not getting CRaP-ed out, that’s a huge opportunity.”