The Secret of Success: Volume
The secret to success is not much of a secret at all. It’s right there in front of all of us and Amazon is showing us the way. What is not a secret is Amazon’s incredible eCommerce and package volume. This volume makes feasible, and justifies their investment in, a network of fulfillment centers moving closer and closer to population centers, as well as, their insourced delivery services.
What is really interesting about the graph is how recently Amazon has accelerated its growth in facilities. Growth started taking off just a few years ago in the 2011 timeframe. We are still so early in the life of eCommerce. The good news is there is still time for you to take bold action to respond to the competitive threat of Amazon. As Jeff Bezos writes in every Amazon annual report, “it’s still day one.”
MonarchFx offers you a bold path to respond to Amazon and what has been our secret, until now, is our collaborative logistics network to quickly support the volume necessary to deploy inventory close to population centers, shorten the delivery distances, and create the delivery density to lower delivery costs.
MonarchFx developed a network of 3PL fulfillment service providers to provide the fulfillment centers close to major markets that you as an individual retailer, consumer brand, or marketplace (collectively – “sellers”) do not have the eCommerce volume to do on your own. We also ask sellers to understand the need for collaboration among sellers to provide the volume of orders and packages to help the network achieve its goals of lower prices, faster fulfillment, and quicker delivery. Now, you can convert the battle from a logistics one with Amazon that you cannot win, back to a merchandising battle which is your core strength.
When we talk collaboration with sellers, we are simply talking of the light form of collaboration, such as, when you are located in the same mall as your competitor because in the past this provided convenience and benefit to your customers. Also, you probably used the same delivery firm as your competitor, likely UPS, since their market dominance allowed you to reach every address with quality service. In today’s fast changing digital world a big part of the convenience your customers are looking for is from eCommerce and, increasingly, eCommerce with fast delivery. Just like UPS and Amazon have succeeded with a large share of the market, if someone is going to rise to the challenge of Amazon, they too will have no choice but to win a large share of the market.
MonarchFx is making a strong first move in this market to benefit our seller customers with the market share and volume necessary to provide the high level of eCommerce services at low cost and fast speed. For big retailers, eCommerce is shifting to a platform model. What we all see in other industries that are, or have shifted to, a platform model is that there are only a very small number of winning platforms. In the personal computer industry there is Windows with a small share left for Mac. In the smartphone world the winners are Apple’s iOS and Google’s Android operating systems. In “social” there is just Facebook. Retail is a big a piece of the domestic and international economies that might support more than two platforms, but not much more than two. Amazon has already locked up one slot as a dominant eCommerce platform.
Who will grab those one or two other positions as possible eCommerce platform alternatives? It may only be one position available if you foresee one of the large international platforms like Alibaba or JD.COM eventually succeeding in the U.S. with their size, financial might, technology, and the relationships they are developing with retailers and brands from all around the globe who want access to the Chinese eCommerce market.
As you can see there is urgency here. It is time to make a decision, time to take bold action. Are you in with Amazon, are you going to be part of a bold new alternative in MonarchFx, or are you going to go it alone? If you do not make a decision you are really deciding to go it alone which is a scary thought going up against the resources of Amazon, Alibaba, and Walmart.