Little Secrets Chocolate Company based in Denver wants to make the best dark chocolate candy possible. They’re doing a great job. I’ve tried their chocolates and they are divine. I’m not the only one who’s loving them. Little Secrets’ distribution has been expanding rapidly. They’re now in Whole Foods nationwide. They’ve also been selling on Amazon for several years. Amazon has officially announced that they’re going to be offering grocery delivery from every Whole Foods.
“We feel that people are very quickly going to switch from going into stores to getting everything through Amazon and that’s where being in Whole Foods for us is really exciting,” says Jed Morgan at Little Secrets.
Little Secrets sells as a third party on Amazon, but since they sell chocolate, the shipping logistics with Amazon get very tricky. The new announcement is game-changing for countless grocery brands on the Marketplace.
“I find it so much more convenient to order products and have it shipped to the door when the kids are being crazy or I’m in the middle of a project and I need to get it done,” says former Amazonian Rachel Greer.
Rachel used to manage compliance issues. Now she works with Amazon sellers, helping them stay compliant with her company, Cascadia.
Buying groceries on Amazon is about to be more accessible for everyone, everywhere.
Right now, Amazon is testing the delivery service in four cities Austin, Cincinnati, Dallas and Virginia Beach. Amazon plans to expand delivery nationwide later this year.
This is the news many Amazon grocery sellers have been hoping for and anticipating. This means Whole Foods essentially becomes a distribution center because items from orders will be picked directly off the shelves of Whole Foods.
It’s just another sign that Amazon is striving to grow the grocery category. Last fall they dropped the grocery referral fee to 8%. They clearly did that to help recruit more grocery sellers to the platform, especially since grocery has slim margins anyways.
There’s one specific way Amazon grocery sellers can be successful that can help them get their items into Whole Foods and make them eligible for delivery.
“If you’re trying to sell on Amazon.com, then the coolest innovation in the last couple of years that’s come out of Amazon is called Seller Fulfilled Prime,” Rachel says.
Rachel tells us that Seller Fulfilled Prime is one of the best ways for grocery sellers to delivery products. That’s because sellers can completely control the delivery process and still get the Prime badge.
“It doesn’t have to be shipped by you specifically, you can work with a third party co-packer,” Rachel says.
If you’re selling items that have to be temperature controlled, like chocolate there’s only a small window from October through April where you can ship those kinds of items to Amazon Fulfillment Centers. However, even in those months, you can still have issues with heat, especially since you can’t pick where your products are sent. What happens if it’s a warmer spring day and your products are in a fulfillment center in Texas on a top shelf?That’ss why you can encounter problems
“Through a co-packer, you can control the temperature process, you can control the delivery process and then you don’t have this whole risky thing where maybe your $3 truffle arrives and it’s completely garbage and the customer’s upset about it,” Rachel says.
As part of her job at Amazon, Rachel used to go to fulfillment centers and do inspections. Fulfillment centers aren’t air-conditioned and the temperatures can be excruciatingly hot where your products are stored.
“We actually did a quick temperature test at the top shelf which was probably 7 feet tall in the fulfillment center and it was 120 degrees,” Rachel says.
So if you’re selling a grocery item either figure out how to ship it yourself or find a good co-packer to work with to help protect the integrity of your product. A co-packer is a company that will package your products for you, taking special care to make sure it will arrive in perfect condition. If you can do that, increase sales and have a high star rating, odds are you’ll get noticed and you can take that information to Whole Foods –
“It’s actually really difficult to get attention and traction with potential customers, so if you come in and you say, ‘This is doing really well in merchant fulfilled. I’m able to ship x number a week. I have this star rating. I know it’s something you’re interested in.’ That would help,” Rachel says.
Typically, once you get products into a brick and mortar space, you have to buy shelf space. But in this case, since Whole Foods is owned by Amazon and Amazon is making the Whole Foods catalog available through Amazon, you don’t need to worry about where it’s put on the shelf.
“I think that could be interesting where previously sellers may not be benefitted at all. You look at Prime Pantry or a lot of the stuff that’s in Prime Now, its big, big vendors and people that sell directly to Amazon,” Rachel says.
So this levels a lot of the playing field for big brands and small businesses. If you’re in the store, you’re available on the Amazon app, just like all the other products in the store. So small businesses aren’t competing for space with companies like Johnson and Johnson and Kellogg, instead, you get the same amount of attention. You’re going to gain attention from shoppers simply because you’re available in Whole Foods and that puts you in the Amazon Prime Now category.
Now there are a couple downsides to shopping products through Prime Now and Whole Foods online. The first is the detail pages, they’re not super helpful. This is something that will need to change to help shoppers find new products through the website and app.
“It’s really hard to tell what’s being put up on the page. Sometimes I haven’t bought things because I didn’t know what it was. I hadn’t ever bought it in the store and there wasn’t enough detail on the page,” Rachel says.
Another bad thing is the higher price. The delivery price is passed on directly to the shopper.
Two-hour delivery is free but if shoppers want the order in an hour it will cost $7.99 and they have to place an order of more than $35.
The basic price for items is increased, shoppers will pay more. In some cases, it’s double what they would pay in the store. The extra cost is the convenience they’re paying to not have to run to the store.
It’s no surprise that retail and grocery shopping is changing. You see brick and mortar shops adapting, making more seating areas, places to get together with people and less shelf space. The shelf space is just moving online.
“I’m excited because it’s got that piece to it where they’re going to be using retail store as kind of a delivery vehicle for online goods and the reason I find that exciting is to me that’s future of retail stores,” Rachel says.
Thank you to Rachel for sharing her insights on this latest Amazon announcement. If you have a product that you think would be a great fit for Whole Foods or you want help working with co-packers, you can find her at thinkcascadia.com.