With an easy access to the Internet and new markets, entrepreneurship is being promoted and the world is now producing thousands of new entrepreneurs. Amazon.com, Inc. (NASDAQ:AMZN) found this to be a lucrative opportunity and came up with a unique offering for startups that helped them to promote their products. While many of you may not know about this offering, Business Insider has explicitly revealed it and explained how the e-commerce giant came up with the idea.
The unique offering called “Launchpad” was introduced in July 2015 and exclusively targeted startup. Amazon is the leader of e-commerce and hence, leveraging its expertise, it came up with a website that served as a marketplace for this segment. Similar to the operations on its official website, Amazon considers these startups like its vendors from whom it buys at the warehouse level. These companies were giving exposure to a wider audience through custom pages as well as a whole website dedicated to them. Moreover, the products from the startup companies also had exposure to the official Amazon website and were also eligible for the free two-day Prime shipping, which likely means more reach and more sales.
The history behind this Amazon idea is also quite interesting. A group of amazon employees initially in 2015 thought of a different idea but ended up with Launchpad and apparently, it also got quite successful. The initial idea was to be a crowd-funding website akin Kickstarter. However, that idea could not go long and the group soon realized they won’t be able to survive in a highly competitive market. It was then when the group thought of this unique offering. They realized that any startup requires two important things – funds and a platform to promote their products. While there were several rivals in the former requirement, Amazon decided to go for the latter and its retail experience helped it to go further.
Launchpad’s senior marketing manager Jennifer Petoskey told to Business Insider: "What Amazon knows a lot about is going to retail, and we continued to hear that that's a big problem for startups. Launchpad is like having an amplifier for what you as a startup is trying to do."
In just a years’ time, Launchpad has managed to achieve significant market traction. At the time of its launch, it just had 25 partnerships with Venture Capitalists (VCs), incubators, and crowd-funding sources. It also sold only 200 products on its site. Currently, it has over 700 partnerships, including popular VC firm Andreessen Horowitz, and facilitates more than 700 startups with its roughly 1,400 products worldwide. Popular startups on Launchpad include recently-added nutrition juicer Soylent as well as Anki and Sphero.
These partnerships are very critical for the growth of Launchpad. It is through these partnerships that Amazon gets to know about the best startups, and how to easily get access to buying their products. It’s a win-win situation for all the three parties involved. The startups get access to millions of Amazon customers, the funding agencies benefits, and if they get successful, Amazon reaps more benefits in its bucket.
The Launchpad eligibility criterion is also quite simple. The startup should be able to deliver products to Amazon warehouses within 30 days of an order, and it should have a history of receiving some sort of funding from a genuine source. Amazon then reviews the product offering, and if found suitable, it promotes it on its website.
While Amazon may not benefit a lot from this distinct offering, the startups surely are going to be on the favorable side. With funds in hand and platform for exposure to millions of customers, there should be nothing to hinder their road to success. The success of startups would eventually mean the glorious win for the whole industry and that’s where credit goes to Amazon. The tech giant is helping the whole e-commerce grow and as it grows, Amazon will be the one benefitting out of it.