Amazon’s second annual Prime Day is July 12, when Prime customers, who pay $99 a year for special deals, free shipping and other privileges, get an extra discount.
Montreal-based Sahah Naturals began selling PB&Me, a peanut butter powder, at dozens of London Drugs stores in B.C. in December last year and on Amazon.ca. Its products are now in more than 1,000 stores across Canada but its relationship with Amazon.ca has proved profitable and educational. The firm is owned by childhood friends Matthew Battah and Mark Santin.
Santin, company vice president, spoke with Canadian Grocer about the benefits and challenges of working with Amazon.ca.
First off, what is powdered peanut butter?
We take the oil out of the peanut, a mechanical process, which decreases the calorie content and brings the protein level up 50%. It can be mixed with water, used in smoothies and shakes and used as a gluten-free flour for baking.
How did your relationship with Amazon begin?
We simply listed our products on Amazon. They take 25% of the retail price—200 gm for $7.99. They set the shipping price at $5. We would receive the retail and shipping price, minus the 25%, from Amazon and shipped ourselves from Lachine (Quebec). The difficult part is the $5 Amazon sends you may or may not cover the costs of shipping, depending on where the customer is.
What are the benefits of being listed on Amazon Prime?
With Amazon Prime, Amazon fulfils the shipment. We ship as many pallets as we like to Amazon in Delta, B.C., and Toronto. Amazon dictates to which fulfilment centre it will go. It’s on consignment. They don’t pay until it’s sold.
What’s interesting with Amazon Prime is it’s free shipping on orders over $25. We had a tremendous leap in sales once on Prime. A $12 dollar order drops to $8. Suddenly it makes sense. We’re shipping a pallet a month to Amazon; an average of about 1,000 jars.
We also demo quite often to help consumers understand the product, In IGA, Metro, Rachelle Béry, Popeye’s Canada.
How would you characterize your relationship with Amazon?
I think it’s been very positive to date. But you have to be cautious and do our background work, watch videos on Youtube, know what you’re getting into… Amazon receives your product, but they want to do the least amount of work possible.
With Amazon Prime there are other fees, unforeseen costs. We sell multipacks—three packs, three flavours—but have to package it into a box, have to put a sticker “do not separate,” and have to print an Amazon label. It’s a lot of work from the manufacturers’ perspective.
Amazon doesn’t get as involved as you’d like. But they monitor how you’re product is rolling, get you feedback. Basically it’s been positive and profitable.
What’s next with Amazon?
We’ll start with Amazon vendor central in a couple of weeks. It then becomes the same as any retailer. They sell at the price they choose. We just signed up. Odds are it’s going to be more than we’re selling now.