Impact of Online Market Platforms
Question 1
There are several advantages as well as disadvantages of Stihl utilizing the Amazon Marketplace to market and sell the products it manufactures.
Pros
One of the advantages Stihl utilizing the Amazon Marketplace is that it will be easy for the company to get started on this market platform. Stihl manufactures well-known standard tools; hence the company will find it easy getting started on Amazon Marketplace. The second advantage of Stihl selling its tools on Amazon Marketplace is that; the company manufactures unique products and has, for many years, had adequate profit margins (Danziger, 2020). Over the years, the company has become a global top chain saw seller as well as a dominant manufacturing powerhouse. Its unique tools have earned Stihl a massive reputation in the United States as well as around the globe. The third advantage that Stihl can get by marketing its tools on Amazon Marketplace is that; the company will have a profitable future. Currently, most companies are marketing their products through online platforms. These platforms are helping companies remain competitive in the market, and the ones that have not joined are being left behind. Additionally, e-commerce has gained popularity and many customers are purchasing what they need through online platforms.
Cons
On the other hand, there are also disadvantages of Stihl can get by selling its tools on Amazon Marketplace. One of these disadvantages is that of unscrupulous sellers stealing the company’s listings. Unscrupulous sellers can find a way of hijacking the item number of Stihl tools on Amazon Marketplace and use the company’s market to get attention to their counterfeit products. The second disadvantage is high commissions, as well as the demands for free deliveries cut into profit margins. Several veterans in the United States like Hollywood Mirrors’ Adam Watson have accused Amazon Marketplace of being greedy. Amazon Marketplace uses the rampant competition on its platform to force sellers to market low prices even further. This can negatively affect Stihl. The other disadvantage that Stihl can incur by selling its tools on Amazon Marketplace is losing customer relationships. Over many years, Stihl has maintained its competitive nature in the US market around retailers like Speed’s-mom as well as pop hardware stores (Bloomberg – Are you a robot?, 2020). Stihl will be unable to remarket to Amazon Marketplace or vigorously sell to them in the imminent years. Those customers will be Amazon Marketplace customers. The other disadvantage is that success is not guaranteed by selling products or tools on Amazon Marketplace. Infringing on the platform’s policies can lead to the shutting down of a selling account. Reinstating the selling account on Amazon Marketplace is quite difficult.
Question 2
There are various reasons why it is recommendable that Stihl should consider using the Amazon Marketplace in selling its tools. One of the reasons why the company should sell its tools on the Amazon Marketplace online platform is to expand its market in the United States and around the globe as well. In the United States, the company’s business model is built around retailers. Despite having 8,500 dealerships in the United States, many of these do not have 3D printers, and they are as well not working on drones used in package delivery. The Stihl’s dealers do not have in place delivery measures. Although the company details its tools at length on its website, any customer who needs Stihl’s products has to meet one on one with the dealership employee (Greene, 2020). The absence of delivery services from the dealers places Stihl in an unfortunate position. Stihl can overcome this challenge by selling its products on Amazon Marketplace.
The second reason why Stihl should consider selling its products on Amazon Marketplace is to enhance its competitiveness in the market. Currently, a considerable number of companies are marketing their products on online platforms. Amazon Marketplace is helping businesses grow big since it’s the current dominant force behind e-commerce as well as commerce in general. Even though Stihl must maintain its retail website, it is more beneficial to market products on Amazon Marketplace. This is because many eyes can find a product on Amazon Marketplace, unlike on its own retail website. An increase in the number of people finding a product on an online platform transforms into an increase in sales.
The other reason why it’s recommendable to Stihl to sell its products on Amazon Marketplace is that the platform will help the company to grow exponentially. Stihl has a variety of exclusive products; hence Amazon Marketplace can be a good and profitable partner. With the good reputation Stihl has earned for many years, customers will be satisfied to find its products on Amazon Marketplace. A huge number of customers trust Stihl’s products, and hence it will be easy for the company to market and sell its products through such a platform. The other reason for recommending Stihl to sell its tools on Amazon Marketplace is because the company will increase its profits. This is because many customers will locate the products online, purchase large numbers, and this transforms into an increase in profits.
Question 3
Indeed, changes in a situation can lead to a reverse in the given recommendation. There are certain situations where Stihl can consider and change the idea of marketing its tools on Amazon Marketplace. One of these changes in a situation is an increase in competition. Many companies are marketing their products on Amazon Marketplace. Stiff competition on Amazon Marketplace can make the platform to force sellers to market their products at low prices Marketplaces (Year in Review 2018, 2020). Stihl can stick to its dealerships and trust the dealers in demonstrating to customers how well the company’s machines work. Cost-cutting pressure from Stihl’s big retailers has driven a number of the company’s competitors out of market and business. Change in the quality of a product can also be a good reason to reverse the given recommendation. Different copycats can, at times, game the Amazon Marketplace system and end up stealing the company’s listings. These copycats list their counterfeit products on Amazon Marketplace under other company’s legit item numbers. Such unscrupulous sellers end up benefitting illegally as many customers get attention to their products. These counterfeit products also taint the reputation of a company’s products.
In a change of situation where Stihl changes the quality of its products, it is recommendable for the company to reverse the recommendation of selling its new product on Amazon Marketplace. In a situation where Amazon Marketplace demands more commission before marketing and selling Stihl’s products on its platform, the given recommendation can also be reversed. The platform’s commissions should be considerate to allow Stihl to gain its profits. A change in a situation where Stihl has to pay high commissions upon selling its products on Amazon Market place, the recommendation can be reversed. Another change in a situation that can necessitate reversal of the recommendation to sell its products on Amazon Marketplace is the failure to achieve customer satisfaction.
In a situation where the company sees itself losing customers to its competitors due to bad relationships, the decision to sell its products on such a platform can be reversed. Customer satisfaction is vital to the success of any company. Selling products on Amazon Marketplace can be challenging by destroying the relationship between a company and its customers. If there is a consideration that; the recommendation to sell Stihl’s products on Amazon Marketplace will deteriorate its relationship with customers, it can be reversed.
References
Bloomberg – Are you a robot?. (2020). Retrieved 10 April 2020, from https://www.bloomberg.com/news/articles/2014-04-24/stihl-chain-saws-thrive-outside-the-big-box
Danziger, P. (2020). Thinking Of Selling On Amazon Marketplace? Here Are The Pros And Cons. Retrieved 10 April 2020, from https://www.forbes.com/sites/pamdanziger/2018/04/27/pros-and-cons-of-amazon-marketplace-for-small-and-mid-sized-businesses/#1ef6b6446867
Greene, J. (2020). Amazon Tests Pop-Up Feature Touting Its Lower-Priced Products. Retrieved 10 April 2020, from https://www.wsj.com/articles/amazon-tests-pop-up-feature-touting-its-lower-priced-products-11552655614
Marketplaces Year in Review 2018. (2020). Retrieved 10 April 2020, from https://www.marketplacepulse.com/marketplaces-year-in-review-2018