Ignore Amazon.com at Your Own Peril

---

Readers of my Service Savvy column know that I invest lots of time behind the wheel of my pickup.  All that dashboard time makes listening to audiobooks a terrific learning opportunity.  One of the best books I heard this year is entitled: The Everything Store:  Jeff Bezos and the Age of Amazon, by Brad Stone. 

This book is a three-pronged history of the man (Jeff Bezos), his vision for worldwide market domination (the everything store) and the platform on which he plans to achieve his goals (amazon.com).  The author delved deep into the logistics and supply chain challenges that Bezos and his team overcame.  This accomplishment ensures in-stock availability of whatever consumers wanted on any given day.   

Air-conditioning contractors might maintain inventories for a few thousand parts and that can be a struggle.  However, the scale on which Amazon accomplishes this feat seems unimaginable. 

Then, Amazon took it a step further with same day delivery.  Clearly Amazon has tapped into what customers want.  Very simply, customers want convenience.  Amazon invests heavily in making their customer’s buying experiences more convenient. 

Amazon is already a threat to numerous retail stores in many product categories.  Retails chains such as Radio Shack, Sears and J.C. Penney have been impacted by Amazon’s aggressive growth.  Most recently, a new threat has emerged from Amazon’s business practices.   

Among the stores being affected by Amazon are the supply houses that sell air-conditioning, heating and plumbing parts. Amazon will sell these parts to anyone. 

Not only is Amazon selling the parts, Amazon connects their customers with a local professional who will install the part.  During the last year or so, Amazon has been building a list of tradespeople.  Yes, Amazon has been inviting electrical and mechanical professionals to sign up as product installers for everything from flat panel televisions to water heaters. 

So if you buy an 80 gallon water heater on Amazon, you are given two purchase choices: choice one is, “Buy Without Expert Installation” and choice two is, “Buy With Expert Installation.” 

Selecting choice two renders user-friendly options for your preferred date and time for the water heater installation.  In addition, Amazon confirms your phone number so the installer can contact you beforehand.  The installation fee includes hauling away your old water heater.  All this happens from the comfort of your chair while you click the options that work best.  This is customer convenience. 

Naturally, Amazon collects a percentage of the installation fee.   

My own experience, as an Amazon vendor (Amazon sells my HVAC Customer Service Handbook) is bittersweet.   

How so?   

It’s bitter because Amazon keeps 55 percent of each sale.  Sweet are the high volume sales and new market penetration with the help of Amazon’s adwords. 

Any industry that feels insulated from Amazon’s business practices is in denial.  Jeff Bezos is on a mission for worldwide domination of every industry and Amazon’s logistics and supply infrastructure give him an edge.  In addition, Amazon’s laser sharp focus on convenience keeps their customers coming back for more. 

Today’s air-conditioning contractors would be smart to put more effort into their customer’s convenience by focusing on the whole experience.  Put yourself in your customer’s frame of mind and consider each and every touch point by which a customer interacts with your employees, your website, and your products. 

When it comes to sales and installation, customers want more than a box.  Smart contractors sell experiences, not boxes. 

---

Posted In: ACCA Now, Management