This article is by Kiri Masters, Founder & CEO of Bobsled Marketing.
We’ve attacked this question in various indirect ways on the blog before, in posts like:
We talk with dozens of brands every week here at Bobsled Marketing, and we know that working with an agency to handle their Amazon sales channel is just one of several options to consider.
The most compelling alternative to working with an agency is to build an in-house team. I think this can be a perfectly fine option for a company - as long as they understand the pros and cons of doing so. Here are six pros and cons of building an in-house Amazon team versus working with an agency, and also a middle-ground alternative.
Pro #1: Build and retain institutional knowledge
Institutional knowledge can be anything from actual product IP to Standard Operating Procedures. And companies generally prefer to keep business-critical information (like how to run their second or third biggest sales channel, in the case of Amazon) inside the company.
Agencies may be more or less likely to share their own institutional knowledge (procedures, workflows, technology) with their clients, so the company never really gets to build their own Amazon muscle. If they need to leave the agency, all that knowledge of how to build and manage their Amazon sales channel is lost.
Pro #2: The promise of lower costs
I’ve spoken with dozens of companies who begin talking with agencies, only to eventually decide to hire a individual person (generally an ex-Amazon employee) to handle their entire Amazon channel. The idea is that this one individual is adept at managing everything related to Amazon, and the company will have an all-knowing, in-house expert.
Call me biased, but I’m skeptical that one individual can be equally skilled at running highly efficient PPC campaigns, writing Amazon-optimized copy for product listings, staying on top of program and policy developments, and doing inventory forecasts. And should that same person, if they are so highly skilled in these strategic growth-focused areas, also handle customer service, resolving cases, responding to product reviews and scanning products for unauthorized sellers and counterfeiters?
This leads directly on to the first Con.
Con #1: Costs of an internal team are usually not as
low as you think
Once the core competencies of your internal Amazon team are identified, it could require the discrete skills of 2-3 individuals.
Does your company’s Amazon channel have the volume to justify 2-3 FTEs? If yes, will a Manager or Director be required to oversee those individuals to ensure harmony in the team and approach?
Con #2: Internal team turnover
Besides the costs of hiring these individuals, paying their salaries and managing them, there will be turnover. When working with an agency, it’s the agency’s job to have a pipeline of qualified candidates to take the reins for any position that’s vacant.
At Bobsled, we spend an enormous chunk of time recruiting, vetting, and keeping our “bench” of candidates warm, ready for growth and backfilling positions. We also have extensive onboarding training, peer learning, and handover procedures. There are generally four individual Bobsled team members overseeing each client account. So even if a team member leaves, no momentum or account-specific knowledge is lost.
With a smaller internal team of Amazon experts, companies have significant “key person risk”. If that person provides 2 weeks notice, the company will probably struggle to retain momentum on Amazon while they backfill the position.
Con #3: Relationship weight with Amazon
As Amazon continues to grow the number of Sellers and Vendors on their platform, they are also trying to automate as much as possible. This means that many brands who previously had a ‘warm body’ at Amazon who might help them have found that support disappear. Amazon has introduced new direct support models, which are paid programs.
A major benefit of working with an agency is when the agency has a direct relationship with Amazon. At Bobsled we’re fortunate to be part of the AMS and AMG partner programs, and we’re a proud member of Amazon’s SPN (Solution Provider Network). In September 2018 two Bobsled team members are going to Seattle for an agency-only event where Amazon will share new developments within AMS.
Our AMS partner team helps us with forecasting, troubleshooting, and letting us know about new beta programs. The communication flow is two-way. We’ve provided critical feedback to Amazon about processes and programs that they will consider more deeply, given the volume of accounts and spend that we manage.
Individual companies selling on Amazon are unlikely to get this direct line in to Amazon (without paying for it separately).
Con #4: Real-time comparative information
As an agency that works with brands in different product categories, across different selling platforms (Vendor and Seller), with different budgets, and different objectives, we’ve developed insights about what works and what doesn’t on Amazon across various scenarios.
We generally learn about new beta programs on Amazon just by seeing a new feature pop up in an account one day. We can then determine how to respond to the feature before its rolled out to all clients.
Likewise with bugs, process changes, and terms of service. Chances are that by the time these affect a client’s account, we have dealt with it already somewhere else.
Every day at Bobsled an internal conversation will pop up in Slack along the lines of, “Has anyone seen this before?” and responses will be posted within a few minutes offering case studies of similar situations and how we’ve dealt with them in the past.
A middle-ground alternative: AGENCY SUPPORT OR
CONSULTING FOR YOUR IN-HOUSE TEAM
You might think I’m pretty biased when it comes to this topic, running an Amazon agency, and you’re probably right. Still, I appreciate why some companies opt to build an internal team, or have an existing team that they want to continue to invest in.
So we have started offering consulting services to brands who have established internal Amazon teams, are looking to stay sharp with their knowledge of the platform, stay on top of emerging trends, or troubleshoot pointy issues. We also offer full audits of a brand’s Amazon channel to diagnose issues, opportunities and present a detailed map of how to move forward.