Unwinding Amazon's complexity

Maybe I am getting older, or maybe wiser, but I find myself thinking about simplicity more than I used to.

Not easy. Simple. There's a difference.

Simplicity forces you to look for leverage. To find the one thing that actually moves the needle, instead of doing ten things that look like progress. You can't be simple and complicated at the same time. And an enemy of growth I see more often than any tactical mistake is stopping what works because something new looks more promising, chasing the latest tool or tactic because staying the course feels like FOMO.

When I work with brands, whether it's a strategy session, a growth audit, or ongoing management, I'm always looking for simplicity. Not to oversimplify a real business, or avoid work, but because simplicity forces focus, and focus creates leverage. I could argue it’s actually bigger work. And if "I help brands tame Amazon's complexity" were a more marketable headline, I'd use it everywhere (would that resonate? anyone?)

So, let’s unwind Amazon’s complexity in more practical terms for more sales, profit, and peace of mind.

Part One - Diagnose

These questions below may seem like ‘Amazon is complex'' type of questions. But they really about clarifying where to start.

1. Who owns Amazon P&L? Not only top line, but the full role of Amazon in the overall business

2. Do you know contribution margin of every active SKU? Visibility of building blocks of profitable/sustainable growth

3. When something breaks, how long until its acted on? This is all about speed. Things break, and often they take time to fix, and often Amazon is the party in more control for things to be fixed. But speed to act is in the brand’s control

4. Is advertising driven by inventory and contribution margins, or do they run independently? When advertising and inventory availability are not in full synch, then ad spend funds operational gaps rather than growth

5. How many product lines, marketplaces, channels you added last year? Did operational infrastructure keep up pace? Addition always brings more complexity that can impact results

If you answer these honestly about your business right now, and the rest of this piece will be more useful.

Part Two - Understand

I bucket any unproductive management of Amazon complexity in 3 root causes:

1. Accountability gap. It’s more common than you may think. In a smaller business, the gap is a bandwidth issue: there may be a freelancer, or an internal person, or both. The founder is accountable in theory. In practice, the account manages itself by default. In a larger organization, accountability is diffused: marketing manager (who often ends up with Amazon on its list) responsible for top line, warehouse/logistics makes call on inventory availability, CFO asks the right profitability and fees questions. Each function optimizes for their metrics, but nobody really integrates them. So nobody truly integrates the outcome. Another note on ownership: this has to be an internal person. Whether a founder in a smaller business, or a dedicated ecommerce lead in a larger one. Agencies, freelancers, play important roles - execution, expertise, capacity -but they are not the owner. The brand is. That accountability has to live inside the business, because the platform context and continuity that good ownership requires cannot be held externally.

2. Decision latency. Platform like Amazon does not tolerate slow action. You should be thoughtful in bigger decisions, but not in actions. I’ve worked with brands where creating and approving creatives took weeks, rather painful. We could have run a full A/B test in that time and get more sales. With things like suppressing listings, account notifications speed is key because every hour of inaction literally costs money.

3. Complexity compound. If you have 5 SKUs in one marketplace you have a manageable number of intersection of product pages, inventory, advertising. A business with 50 SKUs across three markets has exponentially more, because each new element interacts with every existing one. But it still rolls up to one core business who has to make these decisions and manage compounded complexity.

   These three gaps can form a loop. With no clear ownership there is decision latency. Then complexity builds up. Which makes it harder to get to intergrated ownership.

   Part Three - Act

   Well, now that I successfully made everything sound so depressing, let’s not despair. It’s just an order of priority of decisions. Think about it with the question:

   What is one thing that, if solved for, would make everything else easier?

   1. Name the owner. Who is responsible for results, but also has a say with inventory/logistics and has a right to present a budget ask.

   2. Build a SKU-level contribution margin. Its a numbers North Pole. Don’t add SKUs until current ones are understood

   3. Align inventory and advertising. Advertising compensating for inventory gaps is the most expensive loop in most Amazon businesses

   4. Install operational cadence. Just like what we do on a daily basis makes us a person, our day-to-day business cadences make our business. The boring but necessary things.

   5. Addition governance. Every new product line addition, marketplace should pass the test of operational infrastructure being able to handle it.

Conclusion - Own

None of that is complicated, but yes, it’s complex and hard. All of it requires a decision to prioritize it over the next tactic.

If the diagnostic questions in Part One surfaced something worth working through, those are the highest leverage points to begin with.

Saludos,

Irina