Challenge and Opportunities for Amazon

 

Challenge

Compromised Cash Flow

For vendors, Amazon's compensation mechanism causes serious difficulties. While vendors frequently have to make upfront payments in order to purchase or produce product, payouts are normally provided every two weeks. For instance, a large number of Chinese firms demand payment in full up ahead.

Over the course of the entire process—from production and delivery to customs clearance and Amazon's payout cycle—a merchant may not receive paid for three to four months after making their first investment in products. As a result, sellers must wait a long time to receive a return on their investment.

For Amazon merchants, managing cash flow is therefore a significant concern. Creating their own sales channels, like a stand-alone e-commerce site, is one practical approach. This eliminates Amazon's role as a middleman in the payment process and gives merchants direct control over sales and instant payments.

Account Security and Fraud Prevention

As online shopping raises and criminal activities become more sophisticated, account security and fraud prevention have become key challenges for Amazon sellers. These threats include phishing attempts, unauthorized account access, fraudulent transactions, and cyberattacks, all posing significant risks to business operations, financial stability, and reputation.

Sellers deal with a variety of dynamic security issues. Cybercriminals obtain access to seller accounts through deceptive methods such as phishing emails and phony websites. Once inside, they can steal confidential data, cause financial losses, and make illegal changes to product listings. Both the seller's reputation and the trust of the buyer may suffer from these violations.

(Hopstack, 2022)

TP078618 Kok Sze Jun

Opportunities

Account Security and Fraud Prevention

    How might we increase the account security and fraud prevention as Amazon? There is only one method that Amazon can apply to increase the account security of a user (that they have not done already). One is to enforce multi-factor authentication as a requirement for any user who would like to use Amazon's services. Although multi-factor authentication is an included feature in Amazon accounts (letting users to sign in with biometrics, mobile number, and email address), it is an optional feature at the end of the day (Fanas, 2024). Amazon should try to enforce the need for multi-factor authentication much more, and only allow users to not have multi-factor authentication after making the user fully aware of the consequences of not having multi-factor authentication. Unfortunately, most of the burden of account security and fraud prevention lays upon the user to enforce it. Other than consistently reminding users on how these cyberattacks are done and how these criminals commit fraud towards a user, it is very difficult for Amazon themselves to increase their account security and fraud prevention with more methods than they have not done already.

Implement AI and venturing into developing markets

opportunity

 Amazon is having a splendid position to capitalize from various strategic opportunities to increase and diversify. Pioneering in developing regions such as Southeast Asia, India and Africa provide a good opportunity to meet the demands for online shopping. Most of the people nowadays preferred online shopping instead of physical shopping. As customer able to do comparison easily by just scroll through the digital mobile. In addition, customers are also able to check for the feedback and review of the product to check whether it is a robust product. Instead of buyers online shopping also provide a platform for sellers. Since seller do not need to rent, renovate and hire staff for a physical store it just need to apply or register an account and start selling their products. Henceforth, online shopping platform provide opportunity for people with low budget to start up their business. Next by implementing AI, Amazon able to enhance the customer shopping experience since AI able to provide visual search and recognition to customer that will boost up customer satisfaction. (Alexandrea, 2024). For instance the customer do not know the product name so it will take a long period for them to search. However, with the help of AI visual search and recognition customer just need to upload the photo then let AI do the work to find the similar product to them. With the help of venturing into developing markets and implement AI Amazon able to achieve more achievement. 

Darren Koo Yong Chong TP079020

  

Reference

Hopstack Inc. (Febraury, 2022). Top 8 Amazon challenges in 2024 & their solutions. https://www.hopstack.io/blog/challenges-faced-by-amazon-fba-sellers

Fanas, H. (2024, January 3). How to enable Multi-Factor Authentication on Amazon.com. TLC Tech. https://www.tlctech.com/how-to-enable-multi-factor-authentication-on-amazon-com/

Alexandrea, J. (2024, August 7). AI in eCommerce: Maximizing Profits and Customer Satisfaction With AI in 2024. Hostinger Tutorials. https://www.hostinger.my/tutorials/ai-in-ecommerce