Expert Advice: Tips for Selecting the Right Amazon Consultant for Your Business
Authors - Jeannie Stamberger, CEO/Founder The AmaZone & Betsy McGinn, CEO/Founder McGinn eComm
Selling on Amazon FBA requires more hands-on work than traditional retail channels. When CPG companies consider getting help for their Amazon sales channel, there is a wealth of Amazon consultants to choose from. Here we break down different common types of firms, fee structures, and the minimum services you should be getting from your Amazon consultant. Armed with this information, hopefully, you can find the help you need, with the right fit and budget.
Types of consultants. Amazon consultants come in all shapes and sizes. Some firms like betsy@mcginnecomm.com specialize in helping brands map their strategy and get all essentials in place to successfully launch or optimize their eCommerce business, which covers everything from packaging to pricing and promotion strategies to align with all of a brand’s other sales channels. She believes this is the most important work a brand can do so they do not have to walk back mistakes that cost brands time and money. This approach also prevents potentially wasted money on an Amazon Brand Management Agency, prior to being prepared to provide their partner with everything they need to successfully manage their brand on a day-to-day basis.
Brand Management Agencies, those that manage your day-to-day business on Amazon, like The AmaZone, function like an arm of your company, managing everything from troubleshooting to PPC Advertising and ongoing advisory. There is a wide range of Brand Management firms – in regard to cost, focus, and areas of expertise.
For example, The AmaZone best serves medium to large firms, who typically need unique services when they scale. Other firms are best suited for start-ups that need to pioneer on the platform. Some firms focus on specific aspects of selling on Amazon, such as Amazon advertising; these PPC firms can manage the complex task of optimizing your ad spend and sales goals within the continuously changing Amazon advertising programs and landscape. While PPC is vital to success on Amazon, it is most effective when managed in conjunction with all components of your account – such as listing optimization, inventory management, and the often-needed troubleshooting. It doesn’t make sense to have a great PPC partner when they are not positioned to help track down that lost inventory you shipped in so that you actually have product to sell against your advertising.
There are firms that just focus strictly on Amazon, like The AmaZone, and others that combine the management of Amazon with other eComm sales channels, like Walmart.com and your own DTC platform. There are others that provide an even wider range of marketing services like social media, social media Ads, and influencer marketing. This is where you may need to exercise a bit of extra caution since there can be widely varying Amazon expertise levels in a one-stop shop. Just know that there is a wide range of types, service offerings, and prices to match your needs.
Here is what to look for:
Fee structures and terms. We see all sorts of structures - some we think are fair and some, not so much. There are those using retainer OR commission; retainer AND commission, retainer plus a fee on the amount of ad spend, and many other variations. Our take is that we are a bit like lawyers - you want to invest in good services upfront because there is a lot of work to get started on Amazon, so commission isn’t an adequate incentive to ensure expert onboarding. We also commonly see misaligned incentives when management fees increase as ad spend does. At The AmaZone, we prefer to fold all management fees into the original fee structure so brands are not being penalized for increasing ad spend that will ultimately result in the overall growth of the account. As service terms go, we have seen everything from annual contracts to month-to-month contracts, but most are somewhere in between. For example, at The AmaZone we have a 60-day out clause which we think provides a good compromise.
Services. We think at the very minimum you should have the following services provided by your agency or in-house to make your business run smoothly.
Account Management. Your agency should provide a competent and stable account manager who knows the ins and outs of your Amazon business. The number one complaint we get from new clients is that their previous agency did not assign them a strong point of contact that could answer day-to-day questions and solve commonly occurring problems. This is the bare minimum you should expect from your agency partner.
Profitability Metrics. Your new agency or consultant should be working with you upfront to help you understand your potential profits on Amazon. We see many clients who don’t realize that they are losing money on each sale. Loss leaders can be a part of a larger strategy but complete clarity on the bottom line is crucial.
Optimized Listings. Listings must be correctly set up with best-in-class optimization. We highly recommend working with professional Amazon consulting services for set-up. Last we looked, one Amazon product file had 210 columns of information to fill out and the required information was not obvious due to the opaque Amazon language.
Inventory Management. The greatest risk to your Amazon business is running out of stock. An out-of-stock on Amazon negatively impacts the search algorithms, meaning you drop like a stone in product ranking, and recouping relevance in search can take 90-120 days. Help with managing your inventory can be your most valuable resource.
Routine Reporting. Reporting is the key to understanding your business and making informed decisions. Data must be clear and user-friendly. Reporting should be on a consistent basis, likely monthly, and include the following metrics: Total sales, Ad Spend, ACoS, CAC, LTV, inventory status, and recommendations to improve your Amazon business.
Selling on Amazon FBA requires more hands-on work than traditional retail channels. Having an experienced agency partner that is well-aligned with your Brand and your company can make all the difference in the world to your success on Amazon.