Amazon Going To ISC West

By John Honovich, Published on Apr 05, 2018

Move over ADI and Anixter?

Amazon will not have a booth at ISC West but they will be there meeting with security companies, offering Amazon's distribution services.

Inside this note, we examine what Amazon is offering, how it compares to conventional security distributors like ADI and Anixter, where it might compete and how to meet with them.

Amazon ******* ******** ********

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Pricing *** *****

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Prime **** ********

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Contrast ** *** / ******* - ***********

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  • ** ****** **** ***** - ****** **** *** enforce ******** ***** ** dealers ****.
  • ******* ************ - ********, project ************ ** ****** for ******** ************ *** from *** ************* *** as ****** **** ******.
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  • ******* - ***** ****** Business ******* ******* ******* to *** ******** ****, we *** *** **** how ** ***** **** with *** **** ******* RMA (********) ******* ** the ********.

Work ** ********

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Meet **** ****** ** *** ****

*** *** **** ****** Business ** *** **** page ** ******** * meeting. ** *** ******* to **** **** ****** think ***** **** ******.

Poll / ****

Comments (23)

It won't take 5 years if Amazon really wants in this game. 

If Amazon is really motivated to dominate this space, then this will be one, maybe two years in realization. The only real issue is whether security vendors that want to protect Channel and not allow erosion of their product. I am thinking of more complicated products to set-up / configure that require some level of certification.

Amazon will sell the lower-end products and quickly dominate that market space with their low-cost shipping and quick fulfillment - most cameras will eventually fall into this category if they even hope of competing with the Chinese manufacturers. Cameras will become commodity.

Ultimately, the only place you're ever likely of maintaining margin is in the professional services portion of installs. The only thing ADI / Anixter (who sells to end-customers today with impunity) have going for them is their internal expertise. This can be replicated in the amazon digital workforce - thereby rendering them moot.

The future is here, people, and it's automate the hell out of everything and push out all individual skills and make everyone a tool-pusher.

Fatalistic much - sorry - yes. I've seen industry-after-industry marginalized by the dominant force that is Amazon. They enter, whittle away at the base with their deep pockets and wait for the eventual end of another industry that they will own.

Unless you hold technology that people want and desperately need, then as a commodity installer, you're going to be at the whim of Amazon for your supplies and eventually, installation services (which they will contract out and take a piece).

Have a cheery Thursday everyone.

 

 

 

How ironic that a corporation like Amazon who relentlessly mines data from end users is entering a field that traditionally would not accept that practice. I wonder how that will play out as the fallout from facebook, CA and god knows who else continues. Their biggest hurdle may be that their brand name is almost synonymous with spyware. 

I'm waiting for the day when I can order a door strike or a camera online, and have a drone drop it off at my desk the same day. Living in the future is amazing, haha.

Michael they will not drop it on your desk - they will drop it on your former customer's desk. 

Mark, Michael is an end user, so...

That awkward moment when I realize I may have said something insensitive in a room full of integrators. Ah, live and learn. :)

Say it isn’t so!

Amazon already has varying pricing structures for existing items. As a Business member, I get small discounts on many items I buy. While I don't buy cameras or similar items on Amazon today, I would in a heart beat if they were authorized by the manufacturer and offered the same pricing I get from my current distributors.

I have yet to have an issue with Amazon that wasn't handled above and beyond my expectations. Sure, sometimes items arrive defective, or don't meet the description. You will have that with 3rd party sellers on occasions. But knowing that Amazon has my back and will instantly fix these types of mistakes is huge.

As a counter, I have had NUMEROUS issues with ADI that take months (if ever) to fix. I still get charged sales tax on any order that doesn't cross state lines. I have to request a sales tax credit on any pickup or electronically delivered order. It wouldn't even be as bad if my rep was proactive and I didn't have to ask for this on every single order.

And on top of that, it's not like my branch has everything I need in stock anyways. Most of the stuff I order comes from their KY warehouse. Even worse, the entire ADI corporation doesn't stock all makes and models I use. For instance, a Hikvision camera with an 8-32mm lens, instead of the standard 2.8-12mm lens, won't be a stock item. They order it from Hikvision in CA, who ships it to KY, who repackages it again and ships it to me. This is usually a two week process.

And on VMS licenses, I can't have them on the same order as physically shipped items. They will fall into purgatory and never get fulfilled. I have to keep them on a separate order and choose pick up as the shipping option. This in turn ends up charging me sales tax, since it isn't crossing state lines. If I choose to use Ground shipping, I don't get charged sales tax, but instead Ground shipping fees. Either way, I have to proactively ask for a credit of those fees.

And even worse, I usually have to be proactive about even receiving the VMS licenses, which are simply emailed to me. When I did order them by phone with my previous rep (who left ADI), he would follow up and make sure I got the licenses. But the new guy hasn't even reached out to introduce himself, so I simply order online. This leads me back to having to ask for both a refund of the sales tax and the licenses.

In contrast, I have bought many digital delivery items on Amazon and have never had one issue getting the licenses instantly. Amazon does not offer the VMS licenses I need today, but if they did, I would never order anywhere else.

I believe the industry is trying to catch up to the "Amazon Experience" which delivers cheaper, faster, more informative and reliably.  Very hard to compete with when foot soldiers are your only ammunition.

There's very little you can't already buy online, from large and reputable websites like Grainger or B&H Photo. Amazon just gives these products a slightly more prominent platform, that's all. 

We can talk about protecting the channel all day long, but that ship sailed long ago. 

Holy crap! Someone actually wants to stock a product? I thought distributors just dropped shipped from manufacturers these days. 

 

We will sell you the high moving $600 cameras, but good luck finding the $15 mounting accessory. 

#4, that's an interesting point.

Manufacturers, any of you can comment on whether Amazon's fulfillment / stocking would be appealing for your companies? (Undisclosed and unofficial obviously)

I won't feel bad for them if Amazon eats their lunch. Scansource was pretty good to deal with, but the rest of them seem like they are only in it for the low hanging fruit. The corporate purchasing people let an algorithm decide the backbox or pendant isn't worth stocking and rely on manufacturing inventory that doesn't have it's ear as close to the ground, often resulting in long lead times. 

your accessory bracket and 10,000 clones of it will be available, very nearby through the ever so friendly Amazon UI.  And you'll learn to wander aimlessly through the review thread to find tech support on that 600 dollar camera.

Unless of course the AI in the delivery drone offers to install it for you?

 

That's fine, as long as the distributor isn't pointing fingers at everyone else for the excessive lead time...

 

Another note, I'm interested how they would handle RMA process. Differentiating from a defective unit and user error is a major pain point when the channel weakens. I'm not sure what policies Amazon usually has between them and the manufacturer. 

how they would handle RMA process. Differentiating from a defective unit and user error is a major pain point when the channel weakens

My understanding is that Amazon is not currently providing any services or triaging of such return requests, which should be an advantage for traditional distributors.

I wish more manufactures post on their website the risks involved (i.e., voided warranty, technical support limitation, etc.)in purchasing their product from online sites. For example, Hanwha warns consumers about the risks in buying their product from online stores, one of them being specifically amazon. 

 

I recently had had a client call me out on the “overpriced” Hanwha PTZ I was offering vs the average online cost he found. After I explained the value of purchasing a security product from an approved dealer/distributor and showing him the link below, immediately my quote was approved.

Hanwha Techwin unauthorized reseller list

As far as their fulfillment services, I actually did a test run on this in December for some promotions we had going as I was considering making this part of an actual full-time business plan. I am glad I did a test run because I noticed several issues when going this route. The plan was to stock inventory in Amazon's warehouses, and when someone places an order on our site, we tell amazon to ship it out to the customer. Our actual items were not listed on Amazon for sale though.

I sent about 100 pcs each of 5 different models. These are some of the problems I encountered:

- The Amazon employees who receive the products continually screw up and count the wrong amount items. Its evident that they are either over worked or just don't care. For example, we sent 100 items of SKU A and 100 items of SKU B. We put the Amazon SKU stickers on each item prior to shipping so it should be a no brainer for the employee to receive. Well, whenever they got it, the counted 70 pcs of SKU A and 130 pcs of SKU B. And it takes forever to get stuff like this corrected.

- Matter of fact, Amazon required that I do a removal order which means they pick all the stuff off the shelf and send it back to me. Herein lies another problem. If you ever need to do a removal order on some items that you have a decent amount of qty on, expect it to take a month or more to get all the items back. Funny thing is when get our items back, we understood why they counted the items wrong whenever they received them. Some Amazon employee stuck a SKU B sticker on some of the SKU A items, basically put the sticker right over the original sticker we put on. 

- Main reason I looked at this venture was to offer my customers free 2 day shipping. Because it would have cost me only about $8 to ship a camera 2 day air to any customer in the USA thru Amazon. Pretty sweet. Except for the fact that your items won't always ship out when you want them to. Matter of fact, If I told Amazon to ship an item 2 day air, the item sometimes would not go out until 3 or 4 days later. Reason being is that Amazon constantly shifts your inventory among their many different fulfillment centers, so if your inventory is not setting in a FC that makes sense for them to ship out out 2 day air to that particular custy, then you will have to wait. Basically, in order to make this work, you have to have tons of inventory at Amazon at all times.

I still think this is a great opportunity but if you want strict inventory control, this is not a good route. Unless they get some of the above problems resolved, I do not see this as a viable option. If you want to use Amazon, you are better off just simply listing the items for sale on Amazon, shipping your inventory to amazon, and letting them fulfill the orders. Any items you list on your own website, you have much better control fulfilling them yourselves out of your own warehouse.

Can we change the survey? Maybe make it like 5 months or something like that....

Update: new email from Amazon about ISC West with another pitch:

I am also interested in any open-box returned units from various channels you are currently holding as well as refurbished inventory you may possess or to which you have access.

Anyone interested in selling return or refurbish units on Amazon?

Anyone turned in that sales rep to Amazon security yet?  Are you camera vendors watching this?

 

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