This question is directly related to @Trent_Dyrsmid business model (hope Trent or anyone that has a good answer can reply to this).
When pitching my company business model to other entrepreneurs, specifically referring to the wholesale model that focus on closing special agreements with brands to have exclusive distribution on Amazon, I always get asked whether what I provide is a service or not.
I initially thought it was not but then I realized that working on the same offer but providing it as a service might be convenient under certain aspects.
In the “traditional” wholesale model, my company would first close an agreement for the exclusivity to be the only seller of those products on Amazon, then I would periodically buy the products from the brand and do as much as I can to improve sales because it will benefit me (improve pics, listing and invest in ppc)
On the other hand, if I would give the same kind of offer to the brand, but offering it as a service, I would manage their Amazon account (still being the only seller as I would represent the brand itself) but this time I won’t need to purchase any stock in advance (as the brand would provide them), and I will not need to invest in any optimization as it’s their account so I can offer that to them as a service. In terms of payment then I would just get a commission out of sales but without advancing any stock.
I see in the service case (so essentially providing Amazon account management) similar upsides to the “traditional” model (eg. exclusivity) but less downsize (eg. no need to purchase stock in advance)
What are your thoughts about this? Am I missing anything?
My other biggest concern in the “traditional” model is: how do you make sure that the brand won’t end the exclusivity agreement after you have built BSR for their products and invested in PPC and listing optimization?
Or what can you do to minimize that risk?
Thanks in advance