Flowspace

### Amazon’s Downward Descent

In mid-November 2022, Molson Hart, CEO of Viahart, an educational toys and games seller, [took to Twitter](https://twitter.com/Molson_Hart/status/1592915924138754049) to air his frustrations with new restrictions that Amazon was placing on inventory. Hart said that company forecasts, which were based on 10 years of experience, predicted they would sell more than 243,000 units before Christmas. The problem? Amazon had placed a restock limit on was limiting the stock they could send into its warehouses – restricting them to only 4,270 units. Viahart had been selling on Amazon for more than a decade and paid the company more than $4 million in the previous 12 months. Hart was becoming increasingly frustrated with the company’s lack of consistency and how little control he had over his brand’s products, and presence, across the platform. “I have no idea what they're doing right now. And neither do they,” Hart wrote. Viahart had an even bigger Black Friday than forecasts predicted. But Amazon further restricted the brand’s inventory, dropping restock availability to 0, leaving the brand sitting on thousands of orders they were unable to fulfill. A detrimental outcome, for both the brand and its customers.

## Why are Brands Leaving Amazon?

While brands are looking for ways to diversify their sales channels, selling on the Amazon Marketplace can still be profitable. Many of the benefits, however, can actually be double-edged swords.

### Increased Competition

Just take a look at the increasing competition for consumer attention and product awareness. Amazon’s popularity as a retail destination with huge traffic is part of its appeal to increase reach and sales, but the increased competition can make it harder and harder for brands to get noticed, especially if they’re not willing or able to dedicate advertising spend within the marketplace. It’s not just competition against other third-party sellers, either, but competition with Amazon itself. Consider the Amazon Basics line, the company’s private-label brand of items that are duplicates of top-selling products.

### Rising Fees and Restrictions

As Amazon prioritizes its own bottom line in an uncertain economy, it’s trying to squeeze as much profit as it can out of every sector. Amazon’s operating income at a recent earnings report was $2.53 billion, down from $4.85 billion just a year earlier. The ecommerce giant has begun a suite of cost-cutting and changes, including layoffs, warehouse closures and changes to its merchant-facing fulfillment and fee structures. Because Fulfillment by Amazon (FBA) is an avenue through which to offer Prime shipping, and the fact that Amazon prioritizes listing products sold through FBA, some sellers go all-in on the service. But sellers reliant on FBA are at the mercy of the company when it comes to fees and restrictions, which have increased significantly of late. Amazon’s fulfillment fees have cumulatively jumped up 30% since 2020 through a series of small fee increases. A one pound item that cost $3.48 to fulfill in 2020 now costs $4.75 in 2023—an increase of almost 40%. In fact, today [Amazon is taking more than 50% of sellers’ revenue](https://www.marketplacepulse.com/articles/amazon-takes-a-50-cut-of-sellers-revenue), on average.

## The Alternative to Amazon: A Balanced Portfolio

For a brand that has built its business on the scale of the Amazon Marketplace, what are their other options? The most effective ladder to success is a [balanced portfolio of sales channels](/content/blog/the-omnichannel-imperative/index.html). A diversified omnichannel approach – which can include Amazon! – will ultimately drive scale and profitability, as long as merchants maintain consistency in the customer experience across each channel. And while appearing at the top of Amazon’s product listing page can create a boost in sales, growth through recommendation, repurchase, and word of mouth is more sustainable – [and more profitable](https://www.forbes.com/sites/forbesbusinesscouncil/2022/12/12/customer-retention-versus-customer-acquisition/?sh=6f6e4a591c7d) – over time. To accomplish this, brands need to prioritize reliably prompt, efficient delivery across every channel, providing a great customer experience.

## Flowspace Supports Omnichannel Scale

Flowspace powers independent fulfillment, providing fulfillment solutions for brands across every channel. Flowspace’s next-gen software brings every sales channel together into a single point of command. Paired with its best-in-class fulfillment services, Flowspace is a singular, centralized fulfillment partner that scales alongside brands. While Flowspace provides solutions for brands looking to optimize their Amazon availability – including [FBA prep](/content/blog/fba-prep-with-flowspace/index.html) and [Fulfillment by Merchant](/content/blog/fulfillment-merchant-flowspace/index.html) (FBM), it also serves as an alternative for brands looking to be less reliant on Amazon. Flowspace enables sellers to readily respond to demand, from any channel, without expending the added costs, time, and regulation compliance required to adhere to Amazon’s strict rules. Flowspace provides fulfillment, storage, and all the warehousing services brands need to manage and optimize orders and inventory, as well as pick, pack, and ship products, across fulfillment locations. What’s more, Flowspace [integrates seamlessly](/content/integrations/index.html) with an entire ecosystem of sales channels, marketplaces, retail partners, and technologies. The platform allows sellers to integrate best-in-class ERPs, such as SAP, Netsuite, and others, to view cross-channel orders, shipments, and fulfillment in one place. Minimums, restrictions, and limitations are a thing of the past – with Flowspace omnichannel brands can eliminate the issue of overpaying for unneeded space and improve their logistics networks and even avoid selling through Amazon all together if they so choose.