A few weeks ago I was reading a Forrester Research white paper “Why Amazon Matters Now More Than Ever” from July 26, 2012. You may be aware that Amazon is a German Maestro headphone customer. Amazon actually respects the German Maestro MRP (Minimum Resale Price) policy. I am informed that this is a rather rare circumstance.

All that said, the paper is about 28 pages in length and it says all of the usual and expected stuff. BUT, on page 22 I came across two paragraphs under the heading “Competing With Amazon Is No Easy Task”. Howzat for an understatement! Any way they touched a nerve.  I’d like to share their substance with you and I will quote briefly from the paper.

The article makes reference to the danger that Amazon represents to its more substantial competition, Target, Toys R Us, etc… BUT these specific paragraphs are quite relevant to specialty retailers and all of their competition, Internet, table-tops at the flee circus, Amazon, etc… The paragraphs start, “Amazon thrives on known brands that have little concern for how retailers price their items…  [retailers should consider] partnering with disciplined manufactures [which helps] protect one’s assortment…  But the reality is that companies need to eliminate or significantly reduce their reliance on commoditized products [brands]…  replace that volume with other products [brands]”.

The second paragraph starts…  “Rethink their manufacturer relationships…  partner with manufacturers that have consistent pricing across channels…  reduce their reliance on those who do not.”  Wait till you read this next one!  “…[with] manufacturers who do not exercise pricing discipline, retailers should consign merchandise…”

Then the paper goes on with more of the standard stuff, consumer experience, inventory availability, quick turns, technology…

I was however intrigued that the advice in these two paragraphs seemed equally sage for all retailers who find themselves reliant on third party suppliers in order to manage and grow their only asset; a long term profitable relationship with the consumer. 

All retailers gotta be engaged and constantly paying attention to their suppliers, competitors and most importantly the education of their consumers.