Backordered. Shipping soon. Coming this fall. Invariably, whenever you come across a nifty new product idea on Kickstarter, it won’t be shipped to you any time soon, even if you back it. Amazon wants to change this. Its new LaunchPad program will allow startups and crowdfunded projects to sell on the world’s largest online retailer.
Before, startups would encounter a bunch of hurdles if they tried to sell their products on Amazon. Jake Levine, the founder of Electric Objects—a startup that makes digital screens for art—told Quartz that the operational requirements of working with Amazon would traditionally have been too high for his startup. Established companies that work with Amazon might normally be able to receive an order for 100,000 units of a product, and if Amazon returns most of them, they won’t go bankrupt—startups don’t tend to have that sort of financial flexibility. They aren’t usually able to deal with what Levine called Amazon’s stringent supply demands, and the fees associated with not delivering on time.
“When Amazon places a purchase order with you, you can’t be late,” Levine said. ”In the world of hardware manufacturing, in your first run, that’s not a given.”
But Electric Objects are one of Amazon’s launch partners for its new service, and the company’s EO1 screen is now available for purchase. As a result of Amazon’s partnership, Electric Objects will be able to fulfill orders for its screen as soon as someone orders them, which is not something that would’ve been possible before. “My vendors move a lot faster when they know that Amazon is buying.”
Amazon said it will handle some of the hard parts of selling products that startups can’t manage at the same scale it can, such as managing inventory, marketing, customer service, and shipping. Levine said that he’s been impressed with how Amazon has “held our hand” through the process of selling on Amazon. “Their systems are exceedingly complex,” Levine said. “You click the wrong button and you owe them $10,000.”
Levine said that Amazon’s involvement has allowed him to update his sales forecast for the year, and he believes Amazon is serious about hosting startups on its site. Amazon has redesigned its product pages to allow LaunchPad startups to include their product stories—some of which are lifted right from their Kickstarter and Indiegogo pages—within their Amazon listing. “It’s a meaningful signal that they’re taking this thing seriously,” Levine said.
In effect, Amazon is recognizing an emerging world of product startups that have funded prototypes on Kickstarter which are “dominating a ton of mindshare” with consumers, according to Levine. There is currently a gap between an idea getting funded on Kickstarter and something going into mass production. By joining LaunchPad, Amazon gets a new set of niche products with proven interest from customers, and the startups get exposure. “As the pace of innovation continues to increase within the startup community, we want to help customers discover these unique products and learn the inspiration behind them,” Jim Adkins, a vice president at Amazon, said in a release.
While Amazon still retains the right to drop any product that doesn’t sell well, Levine is bullish on the program. “This has the potential to totally change the hardware startups’ toolset,” Levine said.