Breaking News: Amazon Breaks into Electronics Gadgets Market, Should You Too?

Amazon.com, the internet bookstore giant, has been expanding its inventory to include a wide variety of products over the last few years, especially in electronics. In the past, Amazon have sold products made by other manufacturers, but they have recently launched their own branded products, which consist primarily of blank CD/DVD media and accessory cables for electronic goods.

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One of their most recent additions to the marketplace, though, is a gadget called the Amazon Kindle, an e-book reader that can download e-books, newspapers, magazines and blogs from Amazon's library of over 350,000 titles. This is Amazon's first foray into manufacturing and so far it has been a success, sales-wise. The introduction of the Kindle 2 saw sales grow exponentially. The latest version, the Kindle DX, was released in June 2009.

A Surprising Move?

Amazon's move into this marketplace was surprising because traditionally they have been a retail outlet rather than a manufacturer, and their infrastructure would have had to be modified to a great degree in order to facilitate this change.

Amazon's largest strength as it begins to adopt this additional focus is its brand name recognition and brand trust. Everyone has heard of Amazon.com, and most people are familiar with the user-friendly and innovative ways they present themselves online. This can only mean good things for prospective sales.

So What are the Implications for You?

The implications for small and medium-sized retail businesses attempting to replicate such success are a little bleak.

The Kindle is currently exclusively manufactured and sold by Amazon, meaning more competitive pricing due to a smaller accumulation of mark-ups.

If this trend continues as Amazon broadens it's product base, they will attract more and more customers away from other, smaller retailers who cannot match Amazon's prices or supporting infrastructure.

However, niche products unique to your company that don't directly compete with the big boys such as Amazon may do well. The trick will be to find a market you can exploit. Market research companies can be employed to find such niche markets.

Sourcing Electronic Gadgets

In order to source electronic gadgets, small and medium-businesses will have to think about how to find, evaluate, and engage suppliers of the goods and services they require to make the transition into the gadget market.

Cross-cultural issues, time differences, language barriers, quality control, shipping and product assembly from separately manufactured component parts are all factors that must be considered.

Selecting products that blend and complement your existing inventory of products and services will not only provide a one stop shop for customers, but increase the chance of repeat business as further services and supporting products are desired.

So what should you do if moving into the gadget business is on your wish list? Research, in a word. Find out who would use what, and how that would tie in with your existing business.


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