HUMAN vs AI…ChatGPT

Last week Betsy McGinn Amazon and eCommerce Expert and I started a newsletter with solid information on launching and scaling on #amazon. Now, we have deep experience, and are pretty proud of sharing tactics based on data and experience. We like to think we offer information worth your time instead of generalized fluff. So, for kicks, we decided to test ourselves by putting the same prompts into ChatGPT and seeing what popped out (article).

Read it, and comment on what bad advice you find or just the drivel. I particularly got a kick out of it suggesting the Vendor Express program... which is long dead...

As far as we can tell, AI hasn’t replaced us yet…or has it????

Thanks to Joe Hobbs for the ChatGPT prompts!

ChatGPT Prompts (February 6, 2023):

Pretend you run an Amazon brand Management Agency. Create a LinkedIn article based on the below titles. The short title is the header, and each numbered sentence should be a different topic and 3 paragraphs. 

Short title: Listicle for New to Amazon Food Brands

1. Market size doesn’t matter.

2. Second-to-market is the sweet spot in a category.

3. For optimum visibility, it’s best to have both brick-and-mortar and Amazon presence.

4. Being profitable on Amazon takes some know-how. 

5. Know which Amazon selling model is right for you. 

ChatGPT Result (February 6, 2023):

"Listicle for New to Amazon Food Brands: Maximizing Your Success on the E-commerce Giant"

1. Market size doesn’t matter:

When it comes to establishing your brand on Amazon, it can be tempting to focus on the size of the market. However, it's important to remember that market size doesn't dictate your success. The e-commerce giant is home to a diverse range of products, from niche to mainstream, and there's room for brands of all sizes.

What matters most is having a unique and well-differentiated offering, a strong value proposition, and a focused go-to-market strategy. This can help you stand out in a crowded marketplace and capture the attention of your target audience. By focusing on these key elements, you can establish a strong presence on Amazon, regardless of the size of the market.

Another important factor to consider is the quality of your product. A well-made, high-quality product that meets the needs of your target audience can go a long way in establishing your brand on Amazon. This, combined with a strong brand image, can help you gain traction and build a loyal customer base on the platform.

1. Second-to-market is the sweet spot in a category:

Being the first to market in a particular category can be challenging, especially when it comes to food brands. However, being the second or third to market in a category can be a sweet spot.

You can learn from the pioneers in the category, identify gaps in the market, and differentiate your offering to capture a share of the market. For example, if the first-to-market brand is focused on natural, organic ingredients, you could differentiate your brand by offering gluten-free or vegan options. This can help you carve out a niche in the market and establish your brand as a leader in your category.

Another advantage of being second-to-market is that you have the opportunity to learn from the mistakes of the pioneers. This can help you avoid common pitfalls and streamline your go-to-market strategy, leading to a smoother and more successful launch on Amazon. Additionally, with a successful first-to-market brand, you have the advantage of an established customer base in the category, making it easier to reach your target audience.

1. For optimum visibility, it’s best to have both brick-and-mortar and Amazon presence:

Having a brick-and-mortar presence can be an asset when it comes to establishing your brand on Amazon. It not only helps you build a local following but also provides a platform for customer feedback and product testing. This can be invaluable in fine-tuning your product offerings and ensuring that you're meeting the needs of your target audience.

Having both a brick-and-mortar and Amazon presence can help maximize your brand's visibility and increase your reach to a broader audience. By having a physical presence, you can create a personal connection with your customers and build a loyal following. This can help drive traffic to your Amazon store and increase sales, helping you establish your brand on the platform.

Additionally, having a brick-and-mortar presence can help build credibility and trust with your target audience. This is especially important in the food industry, where consumers are concerned about the quality and safety of their food. By having a physical store, you can demonstrate your commitment to quality and safety, helping you build a strong reputation and establish trust with your customers.

1. Being profitable on Amazon takes some know-how:

Making a profit on Amazon can be a challenge for new food brands, especially with the increased competition. However, with the right knowledge and strategies, it ispossible to achieve profitability on the e-commerce giant.

One key factor to consider is your pricing strategy. You want to set a price that is competitive in the market but also allows you to make a profit. This can be a delicate balance, as you don't want to price yourself out of the market, but you also don't want to undervalue your product. To determine the right pricing strategy, it's important to conduct market research and understand the pricing of similar products in your category.

Another important factor is to understand Amazon's fees and charges. These can include referral fees, storage fees, and fulfillment fees, among others. By understanding these fees, you can ensure that you're pricing your product correctly and that you're not losing money on the platform.

Optimizing your product listings is also crucial in achieving profitability on Amazon. This includes having clear and concise product descriptions, high-quality images, and keywords that accurately describe your product. These elements can help improve your product's visibility and increase sales, which can ultimately drive profitability for your brand.

1. Know which Amazon selling model is right for you:

There are several selling models available on Amazon, including the Vendor model, the Seller model, and the Vendor Express model. Each model has its own unique set of benefits and challenges, so it's important to understand which model is right for your brand.

The Vendor model allows you to sell your product directly to Amazon, who then takes care of storage, fulfillment, and customer service. This model is ideal for larger brands with a established supply chain and a significant volume of product to sell.

The Seller model, on the other hand, allows you to sell your product directly to the customer, with Amazon acting as a facilitator. This model is ideal for smaller brands with a lower volume of product and a more hands-on approach to customer service.

The Vendor Express model is a hybrid of the Vendor and Seller models, offering the benefits of both. With this model, you can sell your product directly to the customer, but Amazon also provides fulfillment and customer service support. This model is ideal for brands that want to take advantage of Amazon's fulfillment network but also maintain a level of control over their customer service.

Conclusion:

In conclusion, understanding the right selling model for your brand is crucial in maximizing your success on Amazon. By carefully considering the benefits and challenges of each model, you can make an informed decision that aligns with your brand's goals and objectives.

Top 3 Considerations For Selling Your Food or Beverage Brand On Amazon

This is the first article of the series “Launching & Scaling on Amazon” by Betsy McGinn and Jeannie Stamberger, primarily geared for Food and Beverage Brands in the US marketplace (Amazon.com) - but most tips apply to other CPG Brands..  Betsy McGinn (founder of McGinn eComm) scaled Seventh Generation eCommerce from $0 to millions and now prepares major Brands for success on Amazon. Jeannie Stamberger runs The AmaZone, an Amazon Brand Management Agency that has facilitated over $100M+ in Amazon sales. We pull on our extensive backgrounds preparing, launching and scaling sales on Amazon, to bring you tactical tips and tricks to sell on Amazon.

1. Contrary to popular belief, size doesn’t matter.

Unlike retail markets, Amazon has endless shelf space and untapped opportunity! 

Knowing the existing market size for your product is a traditional strategic tool for making retail placement decisions, but Betsy McGinn of McGinn eComm (https://www.mcginnecomm.com/) preaches that metric and mindset doesn’t apply to the Amazon ecosystem.  Amazon has endless shelf space and no category is mature online. When you get into a retail store, you’re trying to squeeze into a set of 45,000 products (<4,000 for Costco), and landing on the shelf involves either kicking someone else out, or replacing one of your own products. But not on Amazon. Looking at the dollar value of sales for the existing sellers in your market on Amazon tells you what’s happening now, not what’s possible. Many brands use Amazon as a way to sell their entire product line which they are unable to do in retail stores. They list “longtail” products that may not be widely distributed on the retail shelf, but fill a consumer need and gain instant national distribution just by being available on Amazon. 

2. Second-to-market is the sweet spot in a category.

Brand-new and competitive categories have greater hurdles. It may seem counter-intuitive because of Amazon’s revolutionary reputation, but highly innovative products face challenges on Amazon. Average customers might not be searching for new brands that don’t fit in a standard category. As the largest search engine in the world, shopping on Amazon is a search term driven experience so highly innovative products may not fit the mold for the terms consumers are using to search for their desired products. This means cool new products can have a hard time getting found on Amazon: people don’t know how to look for them, especially if they’ve started out with Amazon as the only selling channel. If this is your category, we recommend building your community of followers (grassroots efforts, influencers, social media) first so you have enough pull for Amazon to start showing you to potential customers on the Amazon platform. 

On the other hand, highly competitive, saturated categories may be even more challenging. Yes, you have an established volume of target customers. But the increased competition can make finding newly launched listings a challenge. On-platform advertising can help curb this problem, but it’s important to note that in competitive categories, you can expect to pay high CPC (cost per click) rates to outbid the multiple brands competing for the same space. This is how brands can be driven to compete on price and become profit negative. And as we know, in the grocery category, profit margins are already the leanest of most any category. If you have questions about where your Brand falls, reach out to us!

3. For optimum visibility, it’s best to have both brick-and-mortar and Amazon presence.

If your brand is on Amazon, it helps your brick and mortar sales. Your customers will expect you to be on Amazon. It validates their purchase, and in fact, it indicates that you’ve “made it” as a brand.

Amazon is a great place to get instant national distribution, immediate customer feedback on your product, and to use it as a marketing tool and for long term sales success. But because it’s highly competitive, it can be tricky to grow quickly as your primary sales channel without some coinciding brick and mortar or grassroots presence.
Amazon’s competitive search driven advertising makes it tricky to get visibility for new products. Even though only a small percentage of searches on Amazon begin with a brand name, products and brands with a history on Amazon are challenging to eclipse in search. This is why many brands use Amazon as not just a selling platform, but also proof of concept on products, and as a vehicle for getting immediate feedback from customers on products through reviews – something you just can’t get from a retail store. 

The bottom line is that while selling on Amazon has become more complex over the years, if you put in the essential pre-work and come to the marketplace prepared, it provides your brand a fantastic opportunity. There is just no other platform that provides instant national distribution, a limitless retail shelf, a built-in consumer panel, 148 million loyal “Prime” shoppers, a robust marketing platform and the freedom to manage your brand’s destiny.