In the past two years, the world of private label on Amazon has significantly evolved.
In 2013, entrepreneurs entered the field with relatively small financial investment and little experience, successfully establishing impressive operations and achieving profitability relatively quickly. However, by 2021, the situation had changed completely.
Anyone entering the field in the last two years knows that the initial required investment is quite substantial. If you don't thoroughly understand the field, you can easily lose all that money. Entrepreneurs who have been in the game for a few years understand that to unlock the exponential growth potential year after year, advanced skills are required, and this field is no longer just a hobby but a full-fledged business.
Every Amazon entrepreneur is essentially required to possess the capabilities of five different professionals:
VP of Commerce
Responsible for product sourcing, supplier identification, supply chain, production, negotiation, and proper pricing control.
VP of Logistics
Responsible for the entire supply chain, from inventory planning to moving goods from the factory to Amazon's warehouses, working with external warehouses, handling returns, and more.
VP of Marketing
In charge of planning and executing the marketing and advertising strategy for the products, both on Amazon and beyond.
VP of Finance
Responsible for financial planning, budgeting for each stage of the process, raising and managing funds, and monitoring progress towards goals and objectives.
Each of these professionals is dedicated to their respective areas of expertise, which can sometimes lead to disagreements. For instance, the VP of Marketing might want to increase the advertising budget on Amazon and expand to platforms like Facebook and Google, potentially affecting profitability, which may not be approved by the VP of Finance or could lead to delaying the next inventory order, causing concerns for the VP of Logistics and the VP of Commerce.
Such conflicts and many similar ones are daily occurrences in the boardrooms of large companies, but in our case, they all take place in the mind of the Amazon entrepreneur.
How do you resolve this situation? Over the years, I've realized that in order to run this business properly, I need to develop these resources and capabilities within myself. Moreover, I must be able to switch hats at the right moment. In essence, at the beginning of each year, I put on the hat of the VP of Finance, build an annual work plan, and secure the required funds. In the middle and end of each month, I ensure that we are on track with our numbers and goals and then pass the baton to the other VPs.
I then switch to the VP of Commerce's hat to inform my suppliers about order timelines to ensure everything runs smoothly. After that, I put on the VP of Logistics hat and create a structured work plan for shipping and storage based on the production dates I've set. Finally, I transition to the VP of Marketing's role and manage the activity in line with the goals and objectives I've set as the VP of Finance.
When there's a need for change, which happens quite frequently, I handle it in the conventional corporate way – creating a work plan and using Excel to explain what changes will be made to the planned numbers. If everything aligns, I update all the plans accordingly.
Therefore, the most important role that every Amazon entrepreneur needs to develop is that of the CEO. Someone who can listen to the feedback and insights of each VP, detach from the details, and make the best decision for the business.
So, whether you're new to selling on Amazon or have been a successful seller for several years, I strongly recommend reading books about successful CEOs, learning about the successes and failures of Israeli and international CEOs, and developing the skills and traits of a CEO. Because the success of your Amazon business depends on it, whether it rises or falls.