Picture this: You’re a product manager working for a leading cosmetics company. You know your product, and you know the beauty industry. Customer expectations and preferences have become second nature to you. You’ve made the most of your experience built over a long career, first in the brick-and-mortar environment of the 1990s, then in the brave new world of ecommerce as your company set up its first internet-based marketplace in the 2000s.

Then, after 25 years of internalizing business lessons and best practices, a disruption: A single platform has emerged as the dominant ecommerce entity, the one internet marketplace to rule them all. Let’s call it Nile. You’ve seen the data, and you know selling on Nile represents a revenue boost you can’t ignore. But now you have a choice.

You could simply act as a wholesaler, selling your products to Nile and calling it a day. All your instincts built over a decades-long career fight against that approach — your experience has taught you the value of control over your brand, customer experience, inventory management, and fulfillment, not to mention carving out a bigger slice of the revenue pie. But, like its namesake, Nile is an often-bewildering environment to navigate, and you quickly realize you’ll need a guide if you want to survive and thrive.

Amazon may be named after a different river on a different continent, but that’s the only distinction between our hypothetical scenario and the reality in which many ecommerce professionals find themselves. Likewise, a guide who knows what lurks beneath the water’s murky depths is just as important, and following our analogy to its conclusion, Recom is that guide.

But first: Why Amazon? And why are more companies taking control of their brands on the platform?

Well, let’s focus on the beauty and cosmetics industry. Three years ago, 89% of more than 300 brands in specialty brick-and-mortar stores were sold on Amazon, but only 48% were actively managed. Today, 91% of those brands are on Amazon, and 55% of them are actively managed. What's more, revenue for prestige beauty brands on Amazon grew by more than 44% in 2023, totaling more than $3.4 billion dollars. For anyone in the business of making a profit, that’s a hard number to ignore, but it gets better. Actively managed brands grew by 49% over 2022. The data is clear: Active management is the clearest path to maximum growth.

Prestige brands are the growth engine for the beauty industry — an industry that, unlike others in the current macroeconomic situation, grew by 14% in 2023, according to Circana data. It’s the basis for new collaborations we’re seeing today, including Walmart and Space NK. While economic pressures resulted in a slowdown during 2024, those partnerships continue to form within the prestige beauty space. In March of this very year, for instance, Estée Lauder announced that Clinique will be the first of a select few brands within their portfolio to launch with Amazon in Premium Beauty.

“We are thrilled to be strategically expanding our consumer reach in the U.S. as a select few Estée Lauder Companies brands open dedicated storefronts in Amazon’s fast-growing Premium Beauty destination over the coming months, starting with Clinique today,” Fabrizio Freda, president and chief executive officer of The Estée Lauder Companies, said in the announcement. “Clinique launches with its dermatologist-guided skincare and makeup products, which can be quickly delivered to consumers’ doorsteps, along with engaging and educational features such as our Clinique Skin Analysis tool.”

Brands like Estée Lauder recognize the power of the Amazon platform, which alone represents a significant shift in the beauty industry’s center of gravity. That’s because Amazon supplies an excellent toolset for understanding consumer trends and demands that perfectly complements a brand’s existing resources like social media and direct-to-consumer websites. Taken together, they allow brands to be dexterous and reactive to consumer demands and preferences while homing in on critical demographics, shaping perceptions, changing sentiments, and creating desire.

Consider the cost, effort, and time required to develop your own suite of tools to achieve what Amazon offers right out of the gate. Perhaps now, the picture of Amazon as an unexpected innovation hub is coming into focus.

And that’s just the beginning. We haven’t even touched upon the power of data analytics, AI, and other emerging technologies to further drive growth. And growth is what Recom specializes in — if you’re intrigued by the power of the Amazon platform and its potential impact on your brand growth, give our experts a call or email today.

Editor's Note: This is the first of three articles on the power of the Amazon platform for growing brands online. Look for Parts Two and Three in the coming weeks.