Amazon Flywheel Strategy for Your Business Growth

Nov 18, 2022

What Is Amazon Flywheel?

The most successful Amazon sellers live up to the philosophy of the marketplace. Are you one of them? Today you will learn more about the Amazon business model and its influence on the platform’s sensation. Then, you can take a working technique and implement it into your business processes.


Table of content:



What is Amazon Flywheel


Amazon Flywheel (or Amazon Virtuous Cycle) is a value-based strategy. Perfect values synchronization allows you to strengthen the company’s position in the market and increase revenue.

Jeff Bezos came up with this strategy in 2001, taking customers’ interests first. Its distinguishing feature is the simplicity of business processes which may seem surprising for such a giant as Amazon.


Amazon Flywheel Cycles


Amazon Flywheel is all about growth, but the main focus is on the customer, not profit. And due to Amazon’s estimated cost (which today is about $912.95 billion), we can note that this strategy is doomed to success.

The bottom line is: the company provides affordable prices and excellent customer service, and clients return to the company, accelerating the sales cycle.

The Amazon Flywheel consists of two interconnected cycles.


The initial loop works like this:

1. Third-party sellers on Amazon increase competition and expand the product range.

2. Competition and a rich assortment lead to lower prices and better customer service, which certainly pleases customers.

3. Satisfied customers return to the marketplace, increase its traffic, and make repeat purchases.

4. High traffic attracts new sellers and boosts marketplace growth.


Then the second loop starts:

1. Marketplace growth allows you to reduce costs.

2. Lower costs stimulate decreased product prices.

3. Low prices improve the customer experience and encourage repeat sales.


Amazon Keeps Growing


Amazon Flywheel helped Jeff Bezos become the second most prosperous entrepreneur in the world.

Today, Amazon is not only an eCommerce but also a streaming service, cloud solution, and entertainment option. Since 2005, the company began to overgrow: in 2020, its revenue was $386 billion, and its net income was $21.33 billion. Even the pandemic could not stop the company’s growth — in 2021, Amazon reported a net income of $33.36 billion.

Many companies have already adopted the Amazon Flywheel strategy and achieved good results.


Implementing Amazon Flywheel


Putting the customer first means thinking more about meeting their needs than your profit. And this is an excellent opportunity to create the best product that will be out of competition. Check your and your competitors’ reviews to get valuable information about customers and their desires.


So here is what we suggest:

  • Prioritize customer needs, build a great product, and let it lead you to sales, positive reviews, and high rankings.
  • Identify your strengths and customer pain points.
  • Think about what your brand and its products have to say to the world. Create content that shows your vision, mission, and values.
  • Conduct A/B testing to understand consumer preferences better. This data will save you time and money.
  • Research your audience and conduct surveys — it will come in handy when launching new products.
  • Constantly improve customer service — word of mouth is the best advertisement.
  • Deepen your Amazon listing optimization and advertising knowledge, and invest in A+ content and other advanced features.
  • Expand your product line as much as possible.
  • Link business processes so that they reinforce each other.


Final Thoughts


Amazon Flywheel is a strategy where the cycle gets more robust with each new circle. So, whoever adopts this vision has every chance to grow a business from a garage into a successful company.

And if you need help with advertising promotion, contact us. We will do our best to help you achieve your business goals.

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