Selling on Amazon: Weighing the Pros and Cons for Your Brand's Success
TL;DR: Brand presence on Amazon is a crucial part of a brand launch… but it’s just that, a part. To make Amazon work for you the funnel has to start with awareness outside Amazon (paid social media, PR, etc), and include grassroots engagement (organic social, email reminders/ promotions, etc) to feed conversion on Amazon when you launch. And when you’re ready to list on Amazon, make sure you’re ready to commit ample time and money to set yourself up for success. When in doubt, hire out!
As CPG Marketing and Amazon consultants working with a wide array of Brands, we often get asked the question: Should we launch on Amazon? Does Amazon need to be part (or all) of our strategy? Clients may be looking to either launch their product for the first time or use Amazon as a platform to break into the US market. While Amazon is a no-brainer for 200 million prime shoppers, Brooke Shapiro suggests looking at how Amazon fits into the larger marketing plan so that expectations and goals are in line.
Over the past decade or so, customers have exceedingly come to expect that the products they love will be available on Amazon. But what does that mean for new Brands (or Brands new to the US market)? It means that Amazon should absolutely be part of your strategy when it comes to growing your brand presence. But here’s the caveat, there’s a lot to consider before diving in. Here are a few factors to bear in mind:
You Need Resources (and not just $$). Amazon is not simply a financial investment. It also requires a substantial commitment of time and resources, and many Brands fail to realize this when first jumping into the platform. Before you even start selling, you will need high-quality, compelling content, social evidence/reviews, a plan for logistics, profit analysis, and a strategy that will allow you to truly stand out amongst the tough competition on Amazon. We must emphasize - this isn’t a fallback strategy. You can’t simply throw up a listing and start making money. Nor is it a cheap or free option - while you can set up an account for next to nothing, the path to potential success requires a well-reasoned strategy and a deep understanding of the complex Amazon landscape. Amazon is notorious for fee structures that leave many businesses blind to how much money they’re making (or losing). It’s crucial to understand that financial component, first and foremost. Once the finance strategy is in place, the real fun begins - listing your products. Complications are a given when you are dealing with product upload files that have over 200 columns of data to fill out, category/product gating, brand registry, and more. Not to mention, if the listings are set up incorrectly in the beginning, you may have to deal with long-term problems and potentially have to start over. You can either spend countless hours banging your head against a wall in frustration, often creating more problems that you are solving, or you can hire an expert to bypass the headache and help you carry the load. Once on Amazon, you can shift your focus to advertising spend, gaining visibility, and growing sales. As you can see, Amazon isn’t a “list it and sales will come” engine anymore.
Lack of 1st party data or communication with your customers. The traditional marketing funnel goes out the window when it comes to Amazon’s strict communication guidelines. Amazon does not provide access to first-party data to identify who is buying your product (e.g. customer names, addresses, etc). You aren’t able to send customers follow-up emails (such as reminders to reorder or cross-sell other products), engage with them on social, or use their demographics to target similar audiences. It’s best to jump in knowing that Amazon is a customer-centric environment that limits communication between buyers and sellers.
Brand Education and Discovery. Unlike brick-and-mortar sales, Amazon shoppers can’t discover your products by simply wandering down the aisles of their favorite store. They need to know about you to search for you. And while advertising can help expand your visibility, there isn’t built-in functionality to target your like-minded customers. This results in an inevitable challenge for new, innovative, or nice products launching on Amazon - not to mention that if Amazon doesn’t see sales momentum in the first few months that your listings are live, the algorithm makes it very hard to ever change that trend. This means that it’s crucial to launch strategically - with well-stocked FBA inventory, aggressive ad budgets, and off-Amazon strategies to let your customers know where they can find you.
What does this mean for you? Well, it doesn’t mean you should abandon Amazon as a pipe dream. Instead, you’ll just need to adopt a strategy that includes expert Amazon guidance like the team at The AmaZone and diversify your sales channels and marketing by working with a strategy expert like Brooke Shapiro.
If you’re looking for a more DIY approach, just be aware that social media, influencer marketing, and other channels to educate shoppers on your Brand will be necessary to achieve success on (and off) Amazon.
All this is to say that Amazon is a great channel within your holistic marketing funnel. But, to make Amazon work for you the funnel should start with awareness outside Amazon (paid social media, PR, etc), and include grassroots engagement (organic social, email reminders/ promotions, etc) to feed conversion at the level of Amazon or your website when you launch.