Amazon: A Case Study in Growing an eCommerce Footprint

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A Case Study in Growing an eCommerce Footprint

As the undoubted leader of digital commerce, Amazon is the name that the world of eCommerce follows. Between shipping decisions, program integration, and even SEO decisions, many online retailers optimize their business to work with Amazon while also following in the same footsteps.

One lesson from Amazon’s growth stands out from the others, specifically that a digital brand will still need plenty of physical space to succeed. Amazon warehouses are some of the biggest buildings in the country. Yet, even with over 319 million square feet of warehouse space, they struggle to keep up with continued growth. 

Few other businesses can hope to reach the same lofty heights that Amazon has soared. Still, even a tiny eCommerce gig can take many lessons and notes from the retail juggernaut’s growth story. Thus, look no farther than Amazon’s growing eCommerce footprint when maximizing your eCommerce strategy.

Amazon: A Case Study in Growing an eCommerce Footprint
Amazon: A Case Study in Growing an eCommerce Footprint

Make Space for Inventory

Amazon has fulfillment centers in all but five U.S. states. However, those states still have smaller hub locations to help facilitate local supply and goods movement. Other states have a massive Amazon presence. For example, Delaware has the largest warehouse at over 3.8 million square feet—and that still isn’t enough space.

Amazon is slated to become the nation’s largest retailer this year. And you don’t top Walmart without the space to hold your inventory.

For a smaller eCommerce business, these lessons still hold. You probably won’t need multi-million square foot warehouses in every state. However, if you don’t have the space for your inventory, it won’t be easy to keep up with customer-led growth. 

Options like dropshipping are one way to eliminate the need for storage space, but it comes at the cost of being a retail middleman. Not owning your storage space is extra money that you have to pay.

The other important lesson of Amazon’s warehouse space is shipping. Amazon customers have the option for next-day and even same-day shipping because there is likely a fulfillment center within a couple of hours’ drive. So when your inventory is always near your customers, they can expect speedy shipping.

Again, this is all but impossible for smaller retailers. So instead, consider other shipping mechanisms that you can use to your advantage. For example, build shipping costs into the price, so the customer always has “free shipping.” As well, you can guarantee next-day shipping with a membership option.

There are several means to cater shipping toward your customers. Often, your customers will be just as excited with low shipping costs and transparency as they are with next and same-day shipping.  

Smaller retailers can also follow Amazon’s selling model. In other words, use similar shipping plans to get past shipping restrictions for bulk or recurring orders. Additionally, follow the same product standards that see the most sales on Amazon itself. These include:

  • Products that can be sold year-round (avoid seasonality).
  • Only sell your brand or unbranded products to keep profits high.
  • Products with low competition will allow for greater market saturation.

Don’t allow your business to fall behind. Always have inventory on the mind. The expansion will eventually necessitate increasing space for a more extensive inventory. Without it, you can face an insurmountable bottleneck that will eat at your bottom line as you hemorrhage customers to the competition. 

Customer Information is Critical

Amazon isn’t making moves without knowing how it will impact its customers. Sure, their sheer size gives them a lot of cushion in case of a problematic rollout. But between AI, tech, and simple customer input, the commerce giant often knows what its customers will buy before they do.

Smaller eCommerce retailers don’t necessarily need this level of customer penetration. However, any data you can collect on your customers’ habits can be invaluable to your business.

For example, think about your website. Does it feature a user sign-in or a membership program? It should. Amazon uses collaborative filtering engines to track customers’ shopping habits tied to their membership. Past purchases, shopping cart contents, and everyday browsing habits are all factored into individual profiles for each customer.

How does this help? Consider this: Would you rather shop at a retailer that will remind you of reorders while generating additional product recommendations? Or, do you want to do all the work yourself? Tracking customer data allows you to pinpoint how your customers’ shop. That can be harnessed to push additional products and gain new customers.

Amazon: A Case Study in Growing an eCommerce Footprint