• by Rob Cromer , Op-Ed Contributor, September 7, 2022

You never want to see it, but sometimes we all need a wakeup call. Packable’s recent shutdown announcement should be an eye opener to brands. Packable, once the largest 3rd party seller on Amazon, was an “easy path” for brands to sell on Amazon, and unfortunately now, the cleanup begins.

When a brand gives up control to a reseller like Packable, they essentially put all their eggs in a middle man’s basket. The allure of their model, guaranteed sales without doing any of the work, was clearly too good to be true. And unfortunately for the brands, they are the ones that are left holding the bag. 

Sure the largest players like Unilever and J&J will go on like nothing ever happened. It’s the smaller brands, the upstarts and challengers, that will be most affected. Packable was just one of many resellers for the large brands, but many small brands were fully invested in Packable. 

These smaller brands tend to be time-strapped, short on specialization and now without notice, they are without a team and a strategy to clean up the mess. 

For those challenger brands that are going through this fire drill as a result of the Packable news, I want to provide some guidance. Here are seven critical steps you should consider taking right now:

Take back ownership of your brand  

Don’t fall into the same trap of outsourcing your brand to another reseller. Instead use this opportunity to look into what it takes to win your Amazon sales channel. Amazon has built out a wide spectrum of tools such as Fulfillment by Amazon (FBA) to make it easy to handle fulfillment, advertising, and creative without handing it off to people who are not directly aligned with you and your brand.

Start talking to agencies 

Use this time to find THE RIGHT partner. Look for an agency team that can help you maintain your existing momentum, believes in your brand, and has a clear strategy to migrate you to owning your brand on Amazon.

Get Your Data Organized

One of the downsides of working with a reseller is the lack of visibility and data ownership. Whatever data Packable was providing you, download it all and start parsing through it. Having access to and understanding your data is one of the major keys to marketplace success. Prioritizing control of your data can be what helps you get to your next big sales milestone. 

Know your Cost of Goods Sold (COGS)

Amazon is a very competitive marketplace. Brands that are hyper focused and aware of their costs have a better overall lifespan on the platform. Whatever Packable’s margin on your product was, your own will be higher. Your first step should be to research and understand the costs of selling on the platform, and then readying your P&L. A good agency partner will help you understand what those costs are and build a strategy to ensure that Amazon remains a profitable channel for your business. 

Setup a Seller Central Account & Get Brand Registered

Creating an Amazon Seller Central account and having your Brand Registered on Amazon is the first step to selling your products vs having someone else sell on your behalf. Not owning your data, advertising, and fulfillment are the downsides of not managing your own Amazon account. Seller Central and Brand Registry are the bare minimum of getting your business up and running on the platform. 

Bring home your inventory

Packable’s contracts are set up as either a wholesale relationship or consignment. If you were on a consignment make sure to get your inventory back as soon as possible, before it gets tied up in bankruptcy proceedings. 

Start the Conversation with Your 3PL

If you work with a warehouse/shipping company that stores and ships your product on behalf of other channels like your website, it is likely that they are already familiar with the process of shipping product to Amazon fulfillment centers. Start talking to them now and find out what they need in order for you to send inventory directly to Amazon, and so you can get the Prime badge. 

There is a bright side to all of this. If you are a brand that relies on resellers to represent you on Amazon, now is the time to take back ownership and control. Increased margin, better brand equity, and closer relationships with the customer are just some of the advantages to selling direct. 

Amazon is an important piece of a brand’s marketing and sales strategy so be sure to take the time to learn the state of play. When done well, Amazon can propel your brand forward and generate positive results for your business.