Challenges, Opportunities and Solutions of Amazon

Challenges

Amazon sellers grapple with intense competition and strict packaging regulations. With a low barrier to entry, numerous sellers offer the same products, driving down prices and making it hard to stand out. Strict packaging guidelines add complexity and costs, risking shipment delays and additional fees for non-compliance. Optional services like FBA Labeling and Prep further strain margins (Hopstack, 2024). 

Opportunities

Amazon has several key opportunities to expand its market presence and drive growth. One significant opportunity is expanding into emerging markets, such as certain countries in Asia and South America, where Amazon has limited or no presence. This expansion can involve entering new geographic regions and diversifying into new product categories or customer segments. By doing so, Amazon can diversify its revenue streams, reduce dependence on specific markets, and capture a larger share of the global retail market. Additionally, expanding its physical store presence through innovative formats like Amazon Go can help Amazon reach new customers, especially in regions with lower e-commerce penetration, and enhance its competitiveness against traditional retailers. (Pereira, 2024)

Another strategic opportunity for Amazon is investing in new ventures and acquisitions. By investing in or acquiring companies in complementary industries such as cloud computing, advertising, and healthcare, Amazon can diversify its revenue streams and leverage emerging trends and technologies like artificial intelligence and the Internet of Things. This approach allows Amazon to stay ahead of the competition and maintain its industry leadership. Furthermore, acquiring complementary companies can also help Amazon expand its capabilities, enter new markets, and bring in new talent, ensuring continuous innovation and adaptation in a fast-changing industry. (Pereira, 2024)

Furthermore, in 2021, Amazon has posted a job listing seeking to hire digital currency and blockchain product lead, indicating plans to enter the cryptocurrency market (Soper, 2021). This opportunity could allow Amazon to offer payment methods using cryptocurrency like Bitcoin and Ethereum for customers to purchase products on their platform (Pereira, 2024). By doing so, Amazon could attract more potential customers and capture a larger share of e-commerce market, as more people starting to use cryptocurrencies for online payments (Pereira, 2024). Moreover, Sid Yenamandra ,CEO of a cybersecurity services provider, clarified that every transaction done on the blockchain is very secure, with a high level of security has built into the technology (Robbins, 2021). This could then make cryptocurrency relatively safe for daily online transactions. In summary, Amazon’s potential entry in the market can bring benefit with enhanced security, broader customer appeal, having faster and effective transactions that could maintain its competitive position and continue growing in the e-commerce landscape.

Solutions

How might we streamline Amazon's supply chain to ensure faster and more reliable deliveries?

For nearly two decades, Amazon has helped our selling partners optimise and streamline their fulfilment and shipping needs. We are now removing even more of the burden from sellers with the launch of Supply Chain by Amazon, an end-to-end, fully automated set of supply chain services that will provide sellers with a comprehensive solution for quickly and reliably moving products from manufacturing locations to customers all over the world. Sellers may now take advantage of Amazon's superior logistics, warehousing, distribution, fulfilment, and transportation capabilities to keep products in stock, ship faster and more reliably, and drastically reduce costs. (Mehta, 2023)

References:
Pereira, D. (2024, May 8). Amazon SWOT Analysis (2024). Business Model Analyst. https://businessmodelanalyst.com/amazon-swot-analysis/

Robbins, C. (2021, October 14). Are Cryptocurrencies Secure? Yes and No – Here’s Why. Retrieved from CoinDesk: https://www.coindesk.com/tech/2021/10/14/are-cryptocurrencies-secure-yes-and-no-heres-why/

Soper, S. (2021, July 31). Bloomberg. Retrieved from Amazon Has 1.55 Trillion Reasons to Start Accepting Crypto: https://www.bloomberg.com/news/newsletters/2021-07-30/amazon-has-1-55-trillion-reasons-to-start-accepting-crypto

Hopstack, T. (2024, April 18). Top 8 Amazon Challenges in 2024 & Their Solutions. Hopstack Inc. https://www.hopstack.io/blog/challenges-faced-by-amazon-fba-sellers

Dharmesh Mehta, Vice President, Worldwide Selling Partner Services. (2023, September 12). Introducing Supply Chain by Amazon, an automated solution to help sellers quickly and reliably ship products around the world. US About Amazon. https://www.aboutamazon.com/news/small-business/supply-chain-by-amazon

Task

Done By

Challenges

Tan Qiao Qian

Chong Jess Wynn

Opportunities

Valerie Annabella

Michelle Wong Hei Hui

Solutions

Yap Huey Shin

Lim Jun Na

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