14 Principles of Amazon for All E-Commerce Business Owners
I’ve encountered hundreds, if not thousands, of questions from e-commerce business owners when it comes to selling on Amazon. Most of them fall into one of these general themes:
- What is Amazon going to do or say if I ask about this?
- How is Amazon going to react to this?
- How do I know what direction I should take my business?
I’ve had similar questions throughout my growth, and I’ve been lucky to have former Amazon employees and guru-level sellers tell me, “you really need to understand Amazon’s fourteen principles.”
Amazon’s fourteen principles guide the direction of everything they do. As a third-party seller on Amazon, embodying these principles will help create an effective business and greatly enhance your communications with Amazon.
The First Principle: Customer Obsession
“Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.”
If you really want to make sure Amazon values your contributions to the marketplace, you really need to focus on customer obsession. Amazon sure is. Every time you’re re-pricing, looking at your own return policies and even enhancing your listings – keep the customer in mind. How is what you’re doing going to impact the customer experience?
We once had an issue with sending out the wrong sized teddy bear to a customer. We resolved it by saying, “We’re going to refund you. Keep the bear, and we’ll send you out a new one.” Sure, it takes a little out of your overall profit margins, but service what Amazon is concerned about. They don’t care if someone is trying to scam the system, they care about a positive experience.
The Second Principle: Ownership
“Leaders are owners. They think long time. They don’t sacrifice long-term value for short-term results. They act on the behalf of the entire company, beyond just their own team, and they never say ‘that’s my job.'”
This principle comes into play when you’re working with a warning or violation sent from Amazon. They don’t want to hear you place the blame on your supplier or accuse a competitor. They want you to acknowledge the problem and discuss exactly what you’ve done to fix it – and prevent it from happening again.
The Third Principle: Invent and Simplify
“Leaders expect and require innovation and invention from their teams and always look for ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by ‘not invented here’. As we do things, we accept that we may be misunderstood for long periods of time.”
Adopt this principle as you grow your business. One of the reasons why our business has grown so quickly is that we’ve learned how to automate things that most people would think couldn’t be automated. We maximize our efficiency by constantly looking at how to streamline operations in a way that creates a positive customer experience. We even view Amazon as one of our customers.
With everything we do, we think – “will this business be healthy long-term?” If not, we go back to the drawing board to invent and simplify.
The Fourth Principle: Are Right, A Lot
“Leaders are right a lot. They have a strong business judgment and good instincts.”
Amazon has high expectations of their own leaders. If you expect to become a leader in your niche, you need to focus on being right a lot. Making meaningful changes is a great way to do this. Are you adding feature-driven bullets and quality images to improve listings? If Amazon sees that you’re enhancing their platform, then they’ll form a positive opinion about you.
The Fifth Principle: Hire and Develop the Best
“Leaders raise the performance bar with every hire and promotion. They recognize talent, and willingly move them throughout the organization. Leaders develop leaders and take seriously their role in coaching others.”
I believe Amazon is a truly amazing company, and this principle is largely why. I apply this principle directly when I’m growing my team.
A common mistake I see other e-commerce business owners make is trying to hire someone and pay them the least amount possible. They look at hiring $2/hour virtual assistants and wondering if they can get by with paying employees minimum wage.
If you want to work with the best, you need to pay a little bit more for them. You also need to nurture their talents and help them grow in your organization.
The Sixth Principle: Highest Standards
“Leaders have relentlessly high standards. Many people think that these standards are unreasonably high. Leaders are continually raising the bar and driving their teams to deliver high-quality products, services, and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.”
Understanding this principle will help you when dealing with Amazon. You might receive warnings from them that seem unfair – “they can’t expect me to do that – that’s out of my control!”
Well, they do expect you to do that. The same standards they apply to themselves are also applied to third party sellers. If you can’t bring your A-game to Amazon, then perhaps it isn’t the right platform for you.
The Seventh Principle: Think Big
“Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.”
This principle is invaluable when it comes to resolving conflicts with customers and Amazon. How can you boldly create a resolution that the customer will value? You can even reference this principle by saying that you ‘thought big’ to come up with the resolution you’re proposing.
The Eighth Principle: Bias for Action
“Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.”
Amazon is known for quickly suspending accounts, rolling out unexpected changes and changing their procedures. They value speed, and so should you. Amazon is always going to have a bias towards action. This means when they come to you with a warning or conflict, quickly resolving the issue will be appreciated and noticed.
The Ninth Principle: Frugality
“Accomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention. There are no extra points for growing headcount, budget size, or fixed expense.”
Amazon is always looking for the most profitable way to do things. That means efficient solutions that are cost effective. You can use this when you’re working with Amazon to update an item listing or resolve a conflict. Say something like, “I know that one of Amazon’s principles is frugality, and I know that updating this item listing will reduce returns and produce a cost savings to Amazon.”
The Tenth Principle: Be Curious
“Leaders are never done learning and always seek to improve themselves. They are curious about new possibilities and act to explore them.”
This principle has directly helped me grow my business. I try to read one or two non-fiction books every month to keep me learning and growing. Developing a love of learning within yourself, whether that means diving into audio books, regular books, conferences or following the right blogs, is going to help your business.
The Eleventh Principle: Earn Trust
“Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team’s body odor smells of perfume. They benchmark themselves and their team against the best.”
You need to be the absolute best in your industry to earn trust. You need to look for the best in everything you do, from sourcing products to looking for virtual assistants. You’ll earn trust by providing high quality content to Amazon and earning the trust of their customers.
The Twelfth Principle: Dive Deep
“Leaders operate at all levels, stay connected to details, audit frequently, and are skeptical when metrics and anecdotes are different. No task is beneath them.”
Amazon expects you to dive just as deep as they do. If you’re going to bring a private-label item to market, you must understand everything involved to legally sell it, such as FCC compliance or FDA approval.
Dive deep into the Seller Support Guide, Amazon is already expecting that you’ve done that. Make a monthly habit of reading through it, because it’s often updated without warning.
When approached by Amazon or a customer with an issue, dive deep to discover the root cause of the problem and illustrate that it’s been solved. Tell Amazon that you’ve “dove deep” and fixed the issue.
The Thirteenth Principle: Have Backbone; Disagree and Commit
“Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.”
My team and I live by this principle. We often disagree on certain ways to grow our business or how to solve certain problems. We debate, discuss and eventually decide on something. Once we decide, we’re all in it. Nobody is waiting for the decision to fail so that they can be right.
This also applies to Amazon’s decisions. If they roll out a new policy that you disagree with, voice your opinion in a seller support ticket, but adhere to the new decision or get off the platform.
The Fourteenth Principle: Deliver Results
“Leaders focus on the key inputs for their business. They deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.”
Amazon expects you to consistently deliver high quality results. That’s why your metrics are so important. Understanding your defect rate, bottom performance, feedback and A-Z claims helps you ensure consistent quality. You should also proactively reply to any policy violation warnings or notifications. Send an email to sellerperfromance@amazon.com and let them know you’ve found and solved the issue.
Principles to Guide Your Business
Each of these principles will help you when dealing with Amazon directly. They also help with growing your own profitable business as a third party seller. Even entrepreneurs who aren’t involved in e-commerce study these principles to help guide their business’ growth.
Once you commit to these principles yourself for your e-commerce business, you’re going to find that everything you do with Amazon becomes a lot easier.
No comments:
Post a Comment