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What Third-Party Sellers Can Expect from Andy Jassy

August 18, 2021 in Blog
What Third-Party Sellers Can Expect from Andy Jassy
Amazon has a new CEO. Will things be different for third-party sellers?

Jeff Bezos has made a name for himself by being the world’s richest man and founding the biggest e-commerce company to date. But he will be spending more time in the background after he stepped down as Amazon’s CEO.

The spotlight is now on his successor, Andy Jassy, who will soon become a household name.

Jassy has helped Amazon grow into the giant it is today. But what can third-party sellers expect from this new leader? Will the well-being of 3P sellers be prioritized under his leadership?

Related Reading: From A to Z: The Complete History of Amazon.com

Why Did Jeff Bezos Step Down as CEO of Amazon?

Before we get to know Andy, let’s see why Jeff stepped down in the first place. After 27 years of holding the reins, Uncle Jeff decided he’d like to focus on other things.

However, he won’t completely be out of the picture. He’s now Amazon’s executive chair and will focus on “new products and early initiatives.” He will also be heavily involved in so-called one-way door decisions or those major decisions that can’t be taken back.

He stepped down on July 5, 2021, a date he chose because it was the same day his company was incorporated in 1994.

So Amazon has a new CEO now. Let’s get to know him a little better.

Who Is Andy Jassy and Why Was He Chosen as CEO?

“Andy is brilliant and has the highest of high standards.”

This is how Jeff Bezos described Jassy in his last letter as CEO to shareholders. But how brilliant really is this New York-raised executive?

His is definitely not a rags-to-riches story. He was raised in Scarsdale, which, according to Insider, is the richest town on the East Coast. His father is a senior partner of the Dewey Ballantine corporate law firm while his mother is a homemaker.

When Jassy became Amazon’s CEO, he had been with the company for 24 years. He was hired in 1997, just three years after it was founded and immediately after he got his master’s degree from Harvard.

He entered the company with no idea what his job was going to be. Jassy was also almost fired during a layoff, but Bezos himself saved his job by acknowledging that he had a lot of potential.

He then became Uncle Jeff’s “shadow adviser,” which means he had to accompany his boss to all corporate meetings for a year or so. This was way back in 2002, and this experience definitely helped his chances of being Jeff’s successor.

Andy Jassy at a Glance
Full Name Andrew R. Jassy
Date of Birth January 13, 1968
Place of Birth Scarsdale, New York
Education Harvard University (MBA and AB)
Work Experience Project Manager for MBI (5 years)
Amazon Marketing Manager (1997)
CEO of Amazon Web Services (2016)
CEO of Amazon (2021)
Wife Elana Rochelle Caplan
Number of Children 2

Jassy made a name of his own when he headed one of the company’s most important revenue streams, Amazon Web Services (AWS). Even if you aren’t familiar with AWS, you should recognize some of its customers: Netflix, Twitter, ESPN, etc.

Related Reading: This Is the Biggest Threat to Your Amazon Business

Before Andy Jassy became CEO of Amazon, he was already CEO of AWS. He was largely responsible for the creation and success of the department, which served as his training ground for higher office.

Despite his success, he is known to be down-to-earth and private. However, he is vocal about his views on social justice issues.

His many years in Amazon, his close relationship with Jeff Bezos, and his work ethic has made Andy Jassy the perfect successor. But will he just be a more gentle version of Uncle Jeff or should sellers expect more from the new CEO?

Let’s Review: Third-Party Sellers Under Jeff Bezos

Amazon has been a blessing to many third-party sellers in the sense that it became a platform that allows even ordinary people to build and grow their own brands, with some eventually leaving their day jobs.

Bezos himself said that 3P sellers are kicking Amazon’s butt when it comes to sales on the platform. The company has always been proud about how it’s helping small and medium-sized businesses, but some sellers were “sick to their stomachs” when he talked about supporting sellers with the best tools available.

Jeff’s Wins with 3P Sellers

  • Opened Amazon to third-party sellers
  • Established FBA
  • Created more fulfillment centers
  • Made his email public (this worked for a while)
  • Launched Amazon Prime

Issues Involving 3P Sellers

  • Unexpected account and/or product suspensions
  • Surprise restock limits reductions
  • Alleged illegal use of sellers’ data to develop their own private-label products
  • Lost inventory and delayed refunds
  • Fake reviews
  • Increased PPC rates

We can all agree that FBA revolutionized ecommerce by providing a system for order fulfillment with predictable rates. Amazon leveraged their growing number of fulfillment centers and constantly evolving delivery systems to do so.

However, we still want to see more improvements with how third-party seller issues are handled by the company. Even top sellers can be suspended without warning, and we don’t have to tell you how stressful that is especially when you have hundreds of thousands worth of inventory left to sell and you bought them with borrowed money.

Related Reading: Another Mass Amazon Account Suspension Sweep Could Be Coming

We can point to so many great things about Amazon allowing 3P sellers to operate on the platform, but there’s so many things wrong in the current system that it’s hard to see the positives.

While Amazon can go on and on about their desire to help small businesses, history tells us that the welcoming of third-party sellers on the platform was created for this main reason: Amazon wants a huge selection of products for its customers and it can’t do this alone.

Not to mention that third-party seller services are slowly becoming more economically significant that it may even compete with Jassy’s AWS.

Statistic: Share of paid units sold by third-party sellers on Amazon platform as of 2nd quarter 2021 | Statista

Source: Statista

But among all the ways Amazon makes money off of 3P sellers, copying products and the alleged use of seller data (which Uncle Jeff can’t even deny outright) stand out. Frankly, if Amazon can provide the huge selection on their own, they wouldn’t even think about letting more business owners in.

Jassy’s Leadership Style and What He Thinks About Breaking Up Amazon

Jassy was an athlete in his younger days, and that experience was a big influence on how he tackles problems. He loves to innovate and move quickly and doesn’t like playing it safe. He is just as exacting as Bezos, but he has fewer haters.

He demands and expects a lot from his team, and employees spend months preparing for The Chop (the term used to refer to important meetings with Jassy) because they know their boss doesn’t tolerate incompetence.

Despite how huge and influential the company has become, Jassy still thinks Amazon is small.

Recently, there have been talks about breaking up Big Tech companies. Naturally, people were looking at AWS separating from Amazon. A former AWS senior engineer thinks it’s a good move especially with the government paying close attention to the retail side of things.

However, the new Amazon CEO disagrees. Jassy thinks it’s unnecessary and will result in more logistical and operational problems.

What Should Third-Party Sellers Expect from Andy Jassy?

Overall, we can assume that sellers are not high on Jassy’s priorities. Here are some of the reasons why:

He Hasn’t Been Too Involved in Retail

Since the creation of AWS, Jassy hasn’t been that involved in the retail side of Amazon, so don’t expect him to prioritize sellers, especially this early.

An article says that Tim Bray, a former AWS vice president, agrees AWS was “almost run like a stand-alone business.” Jassy was almost in another world altogether although he remains inside Amazon.

New York City: Amazon Web Services AWS advertisement ad sign closeup in underground transit platform in NYC Subway Station, wall tiled, arrow, side

Moreover, Jassy doesn’t seem to be off to a great start with third-party sellers. Just more than a month after assuming office, Amazon is sending out emails to ask for support against a proposed law that, when passed, can potentially level the playing field between Amazon’s own brands and that of 3P sellers.

However, David Risher, who was Amazon’s senior vice president of retail from 1997 to 2002, said Jassy was one of his go-to guys and that he leads from the heart as well as the head. Hopefully, he’s still well-versed about third-party seller problems, but it will take time for him to catch up, especially with all the other problems he’ll be dealing with.

He Has So Much on His Plate

Amazon is currently facing a lot of legal battles and is dealing with the government’s prying eyes. While Jassy is rewarded $200 million in extra stocks, he’s also inheriting so many problems.

The company has to answer antitrust issues, liabilities concerning product defects, and worker unrest, among many others.

It doesn’t help that the new FTC chairperson, Lina Khan, wrote a paper entitled Amazon’s Antitrust Paradox and President Biden is adamant about looking into Big Tech (especially Amazon).

It’s hard to go on the offensive when it comes to growth when you’re busy defending your gates.

He’s Obsessed with Customer Experience

Unless Amazon sees third-party sellers as its own customers, we shouldn’t expect much from a new leader. Customers are and always will be the center of the Everything Store.

This video of a younger Bezos who seems to be unable to break eye contact with his interviewer shows how much he cares about customers, and Andy Jassy is the same. In a CNBC interview in 2018, Andy said they’re customer-focused, not competitor-focused. And because Amazon also has its own private-label products, 3P sellers are more easily seen as competitors.

Jassy understands that Amazon’s customers are both demanding and are not shy when it comes to being vocal about what changes they want to see.

He Has to Maintain the Momentum and Has More Competition to Worry About

COVID changed the world, including how buyers behave. The year 2020 saw significant growth in ecommerce, and Amazon was ready to reap the benefits.

Related Podcast: E333: The Present and Future of Ecommerce Amidst the Pandemic

It will now be up to Andy to try and maintain the momentum and to keep competition at bay. Because while people were forced into lockdowns, brick-and-mortar retailers were hard at work to keep their businesses afloat, growing more and more like Amazon with their own fulfillment centers, delivery systems, and subscription services.

Walmart built local fulfillment centers or LFCs. Stores like Target, Kohl’s, and Best Buy are setting up so-called anti-Prime Day events.

And while Jassy said they won’t focus on competitors as mentioned earlier, he can’t completely turn a blind eye to competition.

Andy Is Calling the Shots But. . .

Jassy is CEO, but as mentioned earlier, Bezos will still be heavily involved in major decisions, especially those that cannot be taken back. Yes, this may include government-related issues, but if Jassy drums up a new seller program that’s big enough to warrant Uncle Jeff’s attention, he may just come out of the shadows, Split-style.

It’s Not All About Jassy

When it comes to FBA and selling on Amazon, we shouldn’t just be looking at Andy Jassy. We should also pay attention to Dave H. Clark, who recently became the CEO of Worldwide Consumer.

amazon prime driver

Clark was largely responsible for many of the improvements and transformations in FBA. In fact, it was his idea to acquire Kiva robots for use in fulfillment centers.

While Jassy is seen generally as a nice guy, Clark is more intimidating. Those working under him would rather guess what he wants to be done rather than ask him directly. He’s nicknamed The Sniper because early in his career, he liked lurking in the shadows to catch underperforming employees.

Clark was actually considered for the CEO position along with Jassy, but whether there’s animosity between the two is unreported.

Conclusion

Overall, third-party sellers can’t expect Andy Jassy to prioritize them immediately. When he has to choose, he’ll most likely prioritize customers and Amazon’s own brands over those of third-party sellers.

But we’ll give him the benefit of the doubt for now. This new CEO has to put out fires while still trying to innovate. If you have any concerns about Amazon’s services, he was nice enough to share his email address just like his predecessor did. So if you want to contact him directly, shoot him an email at [email protected].

What do you think about Andy Jassy? Are you more hopeful with this new CEO?

  • About The Author: Christine Gerzon

    As EcomCrew's content writer, Christine has developed a love for all things e-commerce and a constant need to imagine Jeff Bezos with hair. Although now accustomed to the noise of Cebu City, she remains a country girl at heart and longs for the deafening silence of her home province.

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