When the coronavirus pandemic led many brick-and-mortar retailers to close their doors, consumers turned to online shopping in record numbers—US ecommerce sales rose by 31.8 percent between the first and second quarter of 2020 to $211.5 billion, according to the US Census Bureau. Not surprisingly, Amazon was one of the big beneficiaries: The tech giant’s second quarter revenue was $88.9 billion, up a staggering 40 percent from the same period a year earlier. Amazon is the cornerstone of ecommerce—but are the merchants that offer their goods on the platform still seeing it as a boon for business?

Sarah Ford (MBA 2007)’s experience with Amazon highlights its allure and drawbacks. In 2012, Ford founded Ranch Road Boots, a high-end shoe company inspired by her roots in West Texas and her experience as a Marine Corps officer. The boots are handcrafted in Spain, each pair requiring 48 hours and more than 250 steps to make. After a few years, Ford began selling the boots online, using the Ottawa-based ecommerce platform Shopify on the back end, with Amazon working on third-party fulfillment behind the scenes. “I could sell [our products] at ranchroadboots.com and push a button and Amazon would ship it for us,” she says. “And you didn’t have to sell anything on Amazon. So they would store it and ship it, and it was really cost effective.”

Ultimately, realizing that Amazon “is like the world’s biggest mall,” Ford decided to list her products there, too. Sales jumped, and by 2018 Amazon purchases accounted for about half of the company’s revenue. But Ford quickly discovered the platform wasn’t a perfect fit. In addition to the 18 percent commissions, she had to advertise with the company to ensure her products were being seen. What’s more, Amazon hurt sales on her own site, since people preferred Amazon’s free two-day shipping. Occasionally, scammers would return cheaper, used boots in Ranch Road boxes for a full refund, and Ford was anxious that an unwitting customer would wind up with the wrong product and leave a bad review. Most importantly, Ford couldn’t control her brand’s image on Amazon. “I was building buzz around my own brand, and Amazon was working against me in that sense,” she says. In August 2019, Ford stopped listing products on the site. After a difficult March and April this year when the pandemic hit, sales rebounded over the summer. “After a seriously rough spring, where I wondered if we were going to make it, we might end up overall better for the year than I’d planned back in February,” Ford says.

Ranch Road Boots is just one example of the companies, both small and large, that are parting ways with Amazon. Birkenstock left the platform in 2016, and last November, Nike announced that it was ending a pilot program with Amazon Retail that it began in 2017, opting to focus on “elevating consumer experiences through more direct, personal relationships,” according to a statement from the company. And hundreds of digitally native direct-to-consumer brands are bypassing Amazon from the get-go.

Imran Amed (MBA 2002), founder and editor-in-chief of the online magazine The Business of Fashion, understands the pull of Amazon’s wildly popular Prime subscription service and the fact that it’s the go-to site for most products. “If someone has a very high level of intent and is going out looking for your products [on Amazon], for them to come up empty handed is a missed opportunity,” he says. And if you’re not on Amazon, odds are good that a competitor is.

But brands are also wary of the site for the reasons Ford described, especially the fact that they don’t own the customer relationship on Amazon. “Historically, all of these things have been areas of great concern and have caused challenges for the fashion industry, because obviously it’s an industry built on premium brands, authenticity, and strong customer relationships,” he says. “Amazon is probably the most controversial company when you start talking to our industry.”

A growing ecosystem of companies is stepping in to make it easier for retailers to scale without Amazon, including the commerce platform Shopify. It serves more than a million merchants and also experienced a boost from the pandemic—in the second quarter of 2020, 71 percent more stores were created using its platform compared to the first quarter of 2020, and the company’s revenue rose 97 percent to $714.3 million. Helen Mou (MBA 2014) is a Shopify product lead who is focused on the company’s conversational commerce tools, which enable merchants to engage directly with their customers through live chat and messaging channels.

“What I have learned from talking to hundreds of our merchants is that when they start a business, it’s really an expression of themselves. And it’s important for their online or physical presence to be able to fully express that brand story,” Mou says. By not requiring merchants to fit their offerings within a rigid product detail page, platforms like Shopify offer more flexibility and control over a brand's story.

As for what’s selling well in the time of COVID, “Some [direct-to-consumer] brands have certainly had a boost during the pandemic, but this is partly based on the categories they play in, not just the fact that they are [direct to consumer],” says Amed. At a time when much of the fashion industry has suffered, Amed points to the success of LA-based Entireworld, known for its high-end comfort clothing. You can’t find its in-demand sweatpants on Amazon—but you can on Entireworld’s website, which is powered by Shopify.

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