Amazon targets startups with Launchpad
July 28, 2015 04:33 PM
Amazon.com Inc. is inviting entrepreneurs with the next greatest product idea into the supplier fold, today announcing the debut of Amazon Launchpad. Launchpad provides a way for startups to market their products through Amazon.com to Amazon customers.
Companies must apply to be included in the Launchpad program and, if accepted, sell their products to Amazon on wholesale terms. Amazon is seller of record.
Amazon says it is initially focusing its recruitment on startups that work with crowdfunding platforms like Indiegogo, venture capital firms and selected startup accelerators. Amazon says Launchpad can help startups solve sales and distribution issues. “We support these young companies with Amazon’s retail expertise so they can stay focused on product innovation,” the marketing materials for Amazon Launchpad state. The benefit to Amazon, the materials say, is that Amazon can “bring their exciting new products to our customers.”
Startups included in Launchpad can create customized product pages that let them share the story behind their product. Examples shown today include oversized photos, video and background on the startup that made the product being sold. The pages also include customer reviews, including reviews from participants in Amazon’s Vine program. Vine is a program that Amazon runs that has customers review new and pre-release items. Amazon provides Vine reviewers products for free.
With Amazon being the seller of record, that means nearly all Launchpad products are eligible for Prime shipping as well.
“For startups, we handle inventory management, order fulfillment, customer service and more, allowing them to focus their efforts on the innovation that results in more cool products,” says Amazon vice president Jim Adkins. Launchpad products are also grouped together in a Launchpad store, and consumers can sign up for specialized email updates from Launchpad.
Launchpad isn’t the only online product launch and marketing platform available to entrepreneurs. The Grommet, formerly known as the Daily Grommet, has introduced more than 1,500 specialty products to online shoppers since 2008. No. 439 in the Internet Retailer 2015 Top 500 Guide, The Grommet evaluates about 200 new products weekly, ultimately bringing to market six a week. Launch materials include home page placement for the day of launch, video, and Q&As with the product maker. Products then move into the TheGrommet.com’s shop, and the site takes about a 50% commission on each sale.
Bestsellers on the retail side can become B2B sellers through Grommet Wholesale, with Grommet assisting in getting products onto other sites or retailer shelves, with Grommet Wholesale taking about a 15% commission on those sales, says CEO Jules Pieri.
Pieri understands the appeal Amazon Launchpad may have to entrepreneurs but says they should be cautious. “At first glance this offering will sound appealing to an inexperienced new product company,” she says. “We have a unique point of view that starts with launch but extends along the whole product lifecycle. Savvy makers will forgo the quick hit and realize that Main Street and specialty retailers are their true key allies.”