The Amazon Accelerator Program isn’t new, but not many brands are familiar with what it is or how it works. Basically, an accelerator program allows startup businesses to grow rapidly by providing them with a source of information, access to investment, opportunities to network with other businesses, and access to niche markets.
On Amazon, the Accelerator Program is more like a franchise opportunity than a business boost. It’s a chance for Amazon to collect more brands and manufacturers for their exclusive offering to fill in the gaps in their private label business. Amazon already has an impressive collection of over 125 private label brands, and it’s growing rapidly with sights set on 17 product categories. Individual brand growth and sales are high as well, mostly owing to cheaper prices for comparable products.
Brands and Manufacturers Welcome
Amazon wants to partner with more startups as well as established brands. The goal is to expand its private label business, whether this means taking on brands with existing products or manufacturers to develop new products for the retail giant.
The Accelerator Program allows Amazon to improve its offering without going through the research and development phases of product development. It also allows Amazon to offer a more diverse range of quality products almost immediately. It’s estimated that the company is targeting the addition of 10 brands and manufacturers this year.
There are definitely benefits to partnering with Amazon, but certain conditions apply which may not appeal to businesses that want to make something of themselves.
Accelerator Program Benefits
Brands that join the Accelerator Program get a range of perks, including:
– immediate access to metrics tools (basic analytics only, no access to coveted customer data insights)
– a testing ground for new private label products to get quick customer feedback
– free premium product page content and homepage placement on sale days plus additional placements for products with high ratings and reviews
– social media and email marketing executed by Amazon merchandising
– free Amazon Vine reviews (normally $2500 per product for Amazon vendors)
– Amazon Web Services credits for brand websites
– access to a Thinkspace coworking office in Seattle
– participation with other brands in special projects like co-branded pop-up retail stores
The free marketing to Amazon’s wide, purchase-ready audience is a very attractive offer that can work for products that are more affordable to produce. And startups can certainly take advantage of Thinkspace mentors, not to mention nice office space.
Amazon, of course, enjoys more benefits by comparison.
By contracting with brands, they take over control of the supply chain and wield the power to dictate pricing. This means better profit margins for Amazon while they keep their competitive edge. Amazon does not gate for members of the Accelerator Program, so brands have no choice but to drop prices to keep from losing the Buy Box to third-party sellers with lower prices on comparable products.
In addition, cheaper quality products means more customers flocking to the marketplace as well as better customer retention. Brands shoulder the brunt of this to ensure the best customer experience to maintain Amazon’s reputation.
Any brand that joins the Accelerator Program must be prepared to remain a nameless manufacturer tied exclusively to Amazon. The brand becomes the property of Amazon along with any new products under that brand that Amazon wants.
This means no opportunity for growth outside of the marketplace or any chance for a brand to develop its own customer base. The brand will never have the chance to develop relationships with distributors or retailers. Moreover, Amazon can always take on a brand selling competing products.
Is the Accelerator Program worth it?
With all these sacrifices to make – loss of control, limited growth and branding opportunities, plus the expected narrow profit margins – it doesn’t make a whole lot of sense for brands to make a choice that limits their options. If Amazon truly wants to attract more brands, they’ll have to make an effort to sweeten the deal.
Amazon also get the last word, of course. Any brand that’s dropped from the Accelerator Program is lost. Its founders have to start all over again with a new brand and new products. It would be a slightly different story if Amazon were to buy these Accelerator Program brands. So far, however, there’s no word as to whether this might happen in the future.
From the way they’re dealing with brands, it also looks like Amazon would rather absorb or compete with other accelerators rather than engage in a true collaborative effort.
Joining the Accelerator Program
If you’re interested in signing up for the Accelerator Program, you should know that Amazon is eager but still picky about who it will partner with. You must be able to:
– generate a minimum of $1 million in sales in your first month on the marketplace
– commit a minimum of 5% of your revenue to paid advertising on the platform
– maintain a healthy inventory level
You also need to have expertise in digital marketing and brand building before Amazon will consider your application. You’ll also have a better chance of being accepted if you can demonstrate sustainability or your business mission is based on doing good for others.
Open Accelerator Program Categories
Products in the following categories – not an exhaustive list – are a match for the Accelerator Program:
|Apparel & Accessories||Sporting & Outdoors||Shoes|
|Health & Wellness||Household & Personal Care||Beauty|
|Lawn & Garden||Food & Beverages||Baby|
|Home & Kitchen||Consumer Electronics||Toys|
|Business & Industrial||Office Supplies||Automotive|
|Tools & Home Improvement||Pets|
If you fit the above requirements, you can sign up to join the Amazon Accelerator program through the Our Brands page. If you’re a brand, click the link at the top to “Join the Amazon Family of Brands.” If you’re a manufacturer, scroll to the link at the bottom to Become an Our Brands Manufacturer.”
Be prepared for additional requirements once you hit the Sign Up button. And be aware that Amazon will always put itself first. It can be a great opportunity if it fits your business goals, but it can also put a permanent stopper on opportunity, primarily business and brand growth.[/vc_column_text][/vc_column][/vc_row]