10 Dos and Don’ts of Selling of Amazon

Selling on Amazon can be challenging. The platform has changed significantly over the last few years and is constantly innovating and improving on its offering. It can be hard to keep up with the latest best practices of what to do and what not to do.

What are the dos and don’ts of selling on Amazon?

#1 – Do advertise on Amazon

As you would implement a PPC strategy for your owned site, you should do the same with Amazon Advertising. Invest in paid search advertising on the Amazon platform to make sure your products can appear for relevant search terms and audiences.

At the bare minimum, you should be running brand protection campaigns to make sure you can compete against others who may be running campaigns on your brand terms. 

#2 – Do invest in high quality imagery

High quality product imagery is one of the cornerstones of best ecommerce practice whether this is on your site or on your Amazon store.

Some customers will still have a level of mistrust against some Amazon products and will use imagery to identify if the product is authentic or not.

Customers will use your imagery to visualise the product and help them understand if they would like to make the purchase, so you need to make sure it is high quality.

#3 – Do use A+ content

Amazon uses its A9 algorithm to organically deliver the best product to the right search term (although it does affect paid advertising too). 

You need to optimise your product descriptions, bullet points, imagery etc. to make sure your products have all of the right information and so that the algorithm can deliver your products accurately in search results.

#4 – Do create an Amazon Brand Store

An Amazon Brand Store can act as a ‘homepage’ for your store on the marketplace, where you can promote content, products, videos and more.

On this page you can promote your USPs as a retailer, commonly asked questions about your products, your history and heritage and more, to effectively communicate your brand positioning to potential customers.

Amazon Brand Stores are also one of the places on the marketplace where clients will not see ads of your competitors.

#5 – Do encourage reviews

Reviews are the backbone of Amazon and you need to make sure you have a reviews strategy when selling on the marketplace.

You want to make sure that you minimise the number of negative reviews by encouraging positive reviews, improving the customer experience through purchase to delivery, and providing all of the relevant information for customers so that they have well-managed expectations about the product.

#6 – Don’t forget to register your brand

Don’t forget to register your brand on the Amazon Brand Registry. To be able to enrol in the registry, you need an active registered trademark and you need to be able to prove ownership of the brand. 

Once you have a registered brand, you will have greater control over your product listings and also have proactive brand protection from suspected infringing products or inaccurate content.

#7 – Don’t ignore Amazon rules and ratio targets

Amazon has criteria you need to meet in order to win the ‘buy box’ and be a respected Amazon seller. If you do not meet some of this criteria, then Amazon will undoubtedly punish you in your search rankings and ‘buy box’ win rate.

These vary from ratios about product pages and imagery through to rules about delivery

Make sure you are familiar with all of the relevant rules and make an active effort to ensure your team is following them.

#8 – Don’t add text to images

Don’t add medium or small text to your product images. Those images will be sized down to fit different areas of the marketplace and sized down again to fit small mobile devices. 

Your original message will be a blurry cheap creation to run away from.

#9 – Don’t launch products too late

Don’t launch products a few days before their expected top-selling period. Amazon uses algorithms. They need data and time to understand your product and you need time to optimise the listing and advertising to achieve the highest ROI.

Seasonal products rarely do well on Amazon regardless, but if you are launching new products only occasionally, make sure you speak to your Amazon agency to best manage the timing of the launch. 

#10 – Don’t expect Amazon to work like other platforms

Finally, don’t expect Amazon to work like any other of your platforms and distributors. They have their own rules, their own customer behaviour patterns and their own risks.

Whilst there are similarities with other marketplaces, you should not rely on your knowledge of those other channels to help you achieve ecommerce success on Amazon.

Work with experts and seek guidance from other retailers selling on the platform.

The world’s biggest ecommerce marketplace

Amazon is the world’s biggest ecommerce marketplace and a huge opportunity for retailers. Some retailers find selling on Amazon challenging, whilst others use Amazon as a second retail channel to rival their owned store. However, you need to understand the dos and donts of selling on Amazon so you can best achieve ecommerce success.

If you’re looking to grow sales and win market share on the platform through Amazon marketing and are looking to work with Amazon experts, then get in touch.

If you’ve never used Amazon Advertising before, or only ever on a single account, it’s hard to know what the benchmarks are for success, or how much you should be investing.

This is true for any paid spend, but advertising on Amazon is new for many retailers and so it can be challenging to understand what a good ROI is. What does success on Amazon look like?

First, for the uninitiated, here’s an explanation of some key metrics in Amazon Advertising.

What is ACoS?

ACoS (Advertising Cost of Sale) is calculated by dividing ad spend by ad revenue. For example, a spend of £100 generating £1000 would give you an ACoS of 10% (pronounced A-Coz, in case you have to use it in conversation). This is just the reverse formula for those who normally calculate Return On Ad Spend (ROAS) by dividing revenue by spend.

What is TACoS: 

TACoS (Total Advertising Cost of Sale) is calculated by dividing ad spend by total revenue (including organic). This isn’t a metric you’ll find in the interface. While it’s not an exact measure of advertising performance, it gives insight into how much you’re spending in proportion to the size of the account. It also gives an indicator of how reliant you are on paid advertising and how much impact your ads have on overall performance.

Starting out on Amazon

When starting out with Amazon Advertising, you probably won’t know what a good or bad ACoS looks like. Sure, you might be achieving a 10:1 return on Google Ads, but Amazon is a very different place. You can’t necessarily measure performance against the benchmarks from other platforms.

As a rule, you can expect your ACoS and TACoS to start pretty high when you launch your brand on Amazon initially. This is generally due to lower conversion rates, as your products will be yet to build up positive reviews and your content might be a little unpolished. You’ll also likely be bidding aggressively, knowingly paying over the odds, in order to drive as much traffic to your products as possible.

But what are high metrics?

It’s tempting to give the default digital marketing answer of ‘it depends’ (it does), But I’m going to attempt to provide more concrete guidelines.

What is a high ACoS?

  • >50%: Extreme. You might accept this for a limited time when launching new products, it’s almost certainly not profitable.
  • 30 – 50%: High. Potentially appropriate for aggressive growth depending on your margins.
  • 15 – 30%: Medium. Somewhere in this range is usually the sweet spot for growing over time while running ads profitably.
  • <15%: Low. You expect this from mature accounts with well established products, or from campaigns with narrow targeting. You can achieve this in broader campaigns with very low bids, but at the expense of traffic/sales volume.

What is a high TACoS?

When deciding on a TACoS target, you should consider what the margins are after COGS, and the various Amazon fees. You can then decide what portion of the remaining profit is reasonable to reinvest into growth via paid advertising.

TACoS differs from ACoS when it comes to setting guidelines because what’s high or low is dependent on how much of your revenue comes from ads, and what you’re trying to achieve. The best way to view TACoS is to consider both organic and paid as one conjoined effort.

Both organic and paid sales contribute to rank, and users are just as likely to leave reviews regardless of the source of the sale (typically 1 – 5% of customers leave a review). As long as you’re not exceeding the target, even unprofitable ads can be benefiting the account long term. You might tolerate a much higher ACoS, which could facilitate expanded or experimental targeting in aid of incremental growth rather than restricting it to only the tried and tested keywords.

If you’re using sponsored products specifically to build rank for certain keywords, that can sometimes get expensive. A restrictive ACoS target might result in having to back off, whereas in the context of TACoS it may actually be proving a strong source of organic growth.

Using TACoS, you don’t worry as much about the immediate return, because that ad spend is viewed as a longer term investment in growth.

Of course, every account should still have an ACoS target for day-to-day management. But it can be informed by a higher level TACoS goal that can also dictate your budget.

What should retailers aim for?

Over time, you should see your ACoS decreasing naturally as products become more established and you refine targeting. If growth is your aim, you actually shouldn’t let it. While a low ACoS is more profitable, if that means that your TACoS has decreased it could be a sign that you’re underfunding products and missing out on sales that could be helping develop your best sellers.

For example, let’s say you adhered to a rigid £1000 per month budget. Over time you optimise and this improves your ACoS. During this time, your organic performance is also improving.

These wouldn’t be bad results, but assuming your TACoS target is 10%, what would happen if you were to maintain a more aggressive strategy and increase spend as your total revenue grows?

The above is simplistic, but demonstrates that fixating on a better ACoS alone can lead to missed opportunities to the tune of thousands.

Using a TACoS target doesn’t mean making excuses to run with a very high ACoS. It’s about keeping your advertising investment in perspective, and often equates to giving your ads just a little more room to manoeuvre. 

Healthy TACoS and profitable ACoS

On Amazon, keeping sales growing over time is a big part of ranking well. As Amazon Advertising develops and the number of paid placements increases, maintaining a healthy TACoS as well as a profitable ACoS will become crucial to attaining, and retaining best sellers status.

Selling (and advertising) on Amazon can be challenging and it can be difficult to understand where you need to prioritise your efforts. If you’re interested in how we could help you with your strategy, then get in touch.

What do you need to be ‘retail ready’ on Amazon?

If you’re selling on Amazon and not seeing as much success as you’d like, or if you’re about to start selling on Amazon and want to know what you should prioritise, then this 9-point checklist will point you in the right direction.

The checklist includes an overview of:

  • Title
  • Bullet Points
  • Description
  • Backend Keywords
  • Imagery
  • Customer Reviews
  • Ratings
  • A+ Content
  • Product Stock

Download ‘The Amazon 9-Point Retail Readiness Checklist‘ to help you achieve Amazon retail readiness.

Amazon can be a fantastic driver of growth, but the truth is that not every product is well suited to the platform. Here are four diagnostic measures you can use to assess your product’s potential, as well as four categories that are a perfect fit.

What should you consider?

A healthy amount of competition

Look for a well established category with plenty of products, with top ranked products having 100+ reviews. While it might seem counterintuitive to seek out competition, a healthy amount signals viability. If your particular sub-category is sparsely populated on Amazon, it may be telling you that there is little to no demand for your product on the platform.

While users do explore Amazon for new products, the search bar is the primary method of finding products, meaning the selection effect is strong. If they aren’t already looking for your type of product on Amazon, a significant shift in awareness will be needed to change that.

Conversely, be wary of categories filled with big name competitors, as well as Amazon private labels. It may be possible to carve out a niche for yourself, but you’ll always be battling against big competitors and much sought after positions on the first page of search results will be crowded for the highest traffic keywords.

Amazon friendliness

What Amazon really sells is the customer experience. Shopping on Amazon is fast, convenient and reliable. From a consumer perspective, think about whether your products fit this model. Amazon’s ranking algorithm is designed to promote products that are sold in high volumes, and fulfilled quickly and reliably (ideally Fulfilled By Amazon). For example, if you sell bespoke marble dining tables, it will be hard to satisfy these markers of performance.

Some products are better suited to online shopping than others. Consider the process your customers go through when buying your products. People are happy to buy a laptop based on technical specifications without physically inspecting the product as opposed to a blazer where finding the right fit is important. Naturally, cheaper products carry less risk, so customers are more likely to gamble on them if they’d normally prefer to buy in-store.

Margins

Retailers accept that they give up a portion of their margin selling on Amazon, and do so because it allows them access to millions of active shoppers. Nevertheless, number crunching is required to assess viability. Most categories pay a 15% referral fee of each sale, and there are additional fees for use of FBA (delivery + ongoing storage costs). If you’re using Amazon Advertising, you’ll also need to factor in ad spend.

Longevity versus popularity

Building your products up to ‘best seller’ status on Amazon takes time. You want near-evergreen products that won’t fall out of favour with changing trends. There’s a reason the Forbes 30 under 30 isn’t populated by fidget spinner moguls. If your products have short lifecycles you will be in for a never-ending loop of launches, always trying to gain traction with brand new products. While some seasonality and rotation is fine, it’s very difficult to run a successful account if you start all over again every 2-3 months.

Retail categories that work well

FMCG

This might be the ultimate Amazon category to sell in. FMCG perfectly fits the Amazon criteria for success. There’s high demand for them on the platform, customers like the convenience. Products are usually an appropriate size for FBA, making for fast and reliable delivery. It’s also Amazon-friendly, no need to try in-store before you buy. FMCG products are not typically one-time trends, they can become consistent best sellers for the long term. At low price points as well, customers aren’t risking too much by trying something new.

FMCG also lends itself to the ‘Subscribe & Save’ program, which is about as close to a win-win as you can get on Amazon. Customers get a small discount and the convenience of automated deliveries, whilst retailers get repeat customers.

The only area where FMCG is more challenging is the level of competition. There are some big players in the category, including Amazon private labels. There’s always a foothold somewhere for more specialised products that can differentiate themselves though.

Toys and games

Toys and games is another category in high demand. Toys and games on Amazon benefit from the homogenous nature of retailer’s product ranges. They all stock the same ranges from the latest kid’s movie or TV show. With all else being equal, the customer’s choice of where to purchase comes down to price, cost of shipping and (if they’ve left their present shopping a little late) speed of shipping. Amazon excels in these areas, bringing in plenty of customers.

The disadvantages of faster product life cycles for toys and games are offset on Amazon, as the desire for them is generated largely by external forces. This is perhaps the one category where you always want to be launching the latest trend, as movie releases and TV ad campaigns whip up demand.

They are brilliantly suited to promotion during events such as Cyber Week, which has become a near month long deal-fest on Amazon. Again though, competition is fierce. Even as a brand owner you will still likely be competing for buy boxes, which is typically driven by price.

Appliances

Home appliances thrive on Amazon. Demand is strong, and price points range from luxury through to bargain, so there’s room for everyone. Most are well enough suited to FBA, with the typically higher prices better for absorbing the increased costs of shipping and storage for larger items. The life cycles of appliances are also generally quite long. New models are of course periodically launched, but that doesn’t generally entail a rapid decline in popularity of the predecessor, allowing more of a transition that keeps sales volume stable as the new version builds up steam.

Appliances are also very easy to shop for on Amazon. While the showrooms of IKEA are great for helping consumers visualise products in their home, appliance purchase decisions lean toward technical specifications and reliability. All product information is readily available on the detail page, images can be used to give exact scale, and reviews provide reassurance that the product won’t blow up on first use.

Gifting

Amazon does stand out for gifting, because the selection of possible gifts is huge, and you can have them delivered directly to the recipient (and if you’ve left it a bit late you can rely on the next day promise). There’s also specific ‘Gift Ideas’ and ‘Find a Gift’ sections to help users narrow down what to buy, often focusing on upcoming events like Mother’s Day or Father’s Day.

Gifts are naturally well suited to the massive sales that occur through Cyber Week and in the lead up to Christmas, and advertising strategy is often as simple as swapping out your seasonal keywords.

The best part of gifting on Amazon is the flexibility. You don’t so much need to fit into an already established category, as you gain visibility and create demand by targeting the gift related search terms that everyone uses. Create a new category and be the first mover, like one of our clients, Celebrate Gifts. Rather than just selling boxes of chocolate or flower bouquets, they sell bouquets of chocolate.

Selling on Amazon can be hugely successful

Launching your brand on Amazon can be a daunting prospect. Take the time to understand where your product fits into the unique Amazon ecosystem and identify what your best route into the marketplace is. 

If you want to find out more and explore selling on Amazon, then get in touch and our Amazon experts can help.

What’s new in the world of Amazon? In February, Amazon released its quarterly earnings for the last quarter of 2018 and updated their accreditation model for agencies working with the platform. They have also released a new program, Transparency, for preventing counterfeit goods and continued to expand into the pharmacy market.

Take a look at the most recent updates from February on the world’s biggest marketplace.

 

#1 – Amazon Advertising increases by 41%

Amazon’s Q4 earnings report showed that their advertising business grew by 41% YoY as it continues to challenge the Google-Facebook duopoly and cement its place as the third largest paid advertising platform.

Amazon Advertising is quickly a growing platform for retailers and is one that should not be overlooked by ecommerce businesses selling on Amazon.

 

#2 – Updated Amazon Sponsored Ads Accreditation

Amazon’s Sponsored Ads Accreditation program has been updated. While the original accreditation is still valid, the new exam awards the Sponsored Ads Fundamentals Certification. While it seems only a small semantic change, it looks as though additional ‘levels’ will be added for higher competencies and specialisms.

Fluid Digital has this certification and is one of the things you should be looking out for when finding the right Amazon agency.

 

#3 – Amazon prevents counterfeit products with Transparency

Amazon has rolled out a new program to help prevent counterfeiting. Called Transparency, it allows merchants to apply unique codes to their products for verification by both Amazon warehouses and the customer.

A customer can scan the Transparency code on their product through a Transparency app. Amazon will then be able to authenticate the product by crossmatching this with their database. Amazon will also scan Transparency codes to make sure only authentic products are shipped to customers.

This follows new US legislation that will hold Amazon much more accountable for the sale of counterfeit products.

 

#4 – Acquisition of PillPack and trademark applications for Amazon Pharmacy

Amazon acquired PillPack, a US prescription home delivery service, in 2018, and in November last year the name was updated to PillPack by Amazon Pharmacy.

In late January, they filed trademark applications for Amazon Pharmacy in numerous countries including the UK, Canada, Australia, Brazil, Turkey, United Arab Emirates, Egypt, Singapore, China, Japan, Taiwan, India, Israel as well as the EU.

This expansion into the pharmacy market is an interesting one for Amazon, and we will wait to see how this affects the UK market specifically.

 

Selling on Amazon

If you’re exploring selling on Amazon and need an experienced agency to offer insight, advice and support with managing your Amazon campaigns, then get in touch.

Celebrate Gifts is a leading gifting retailer of chocolate, candle and wine bouquets, built on the Shopify platform. The retailer also sells through the Amazon marketplace, through their two brands, The Chocolate Bouquet Company and Cndle.

In 2019, Celebrate Gifts engaged us to grow their business on Amazon, with a specific focus on an effective paid advertising strategy. In only the first three months of working together, we achieved a 201% YoY increase in revenue from Amazon Advertising.

How did the brand experience such high growth on the world’s biggest marketplace?

 

#1 – An Amazon Brand Store

Amazon Brand Stores were created for their two brands to better showcase the product ranges as well as functioning as landing pages for Sponsored Brand Ads.

 

Celebrate Gifts Amazon Brand Store

 

We looked to user search behavior to inform the structure of the brand stores, in order to make it as intuitive as possible for customers. The home pages were used to feature the best sellers and new product launches, with category pages for each distinct product type, and sub-category pages for each brand of chocolate, such as Galaxy, Cadbury and Ferrero Rocher.

 

#2 – An Optimised Content Strategy

Titles were streamlined to be more readable, feature relevant product information, and include the most relevant keywords to the user. It was especially important to capture the user’s attention with the product title as on mobile devices, additional product details appear much further down the product page.

Backend keywords were missing in some cases, so keywords not already present elsewhere in the content were added per product. This allowed each product to be indexed on, and shown for a wider range of search queries.

 

Celebrate Gifts Product Description

 

Seasonally relevant terms were also added to the content when appropriate, such as ‘Halloween’ during October.

 

#3 – Amazon Advertising Strategy

Automatic Campaigns were used from launch to discover effective keywords and ASINs for manual targeting, alongside manually targeted campaigns based on historical conversion data.

Each product was uniquely relevant to vastly different search queries in its own right, meaning the only way to control this effectively was a single product campaign structure for Sponsored Product Ads. Over the course of the first three months, this grew to a total of over 500 campaigns.

Amazon’s Brand Analytics tool was used to discover the competitor products that were most often compared to the brand’s products, which were subsequently targeted with Sponsored Product Ads in order to win market share.

Comprehensive brand protection campaigns were created to provide complete coverage of every product the client sells, taking up as many ad placements on the detail page as possible with their own related products, rather than those of competitors.

Sponsored Brand Ads were then used to target a combination of brand, generic and competitor keywords per product type to gain visibility on high traffic search queries, drive additional sales and protect market share. We also commonly matched up the targeting with Sponsored Product Ads in order to dominate search result pages for the top performing keywords.

 

Success on the Marketplace

The brand has seen incredible success on the marketplace to date with a 201% increase in revenue from Amazon Advertising year-on-year. This is supported by a 65% increase in conversion rate and a 91% increase in overall online revenue. You can read the full case study here.

If you’re looking to explore how you can use Amazon Advertising as a strategy to grow your sales and boost revenues on the marketplace, then get in touch.

Well optimised content is the foundation of success when selling on Amazon. For each product, you need to create a finely tuned balance taking into account both relevance to the A9 and to the user in order to positively impact the likelihood of getting the sale. Fundamental to this is understanding that on Amazon, the customer must come first. This is because what Amazon really sells is the customer experience. When people want to buy, they go to Amazon knowing they will have an extensive range to choose from, they will find competitive prices, their payment will be secure and delivery will be fast and most likely free.

Content optimisation on Amazon focuses on the first stage of the experience for the customer, which is their search and decision making process for buying a product. The listing must be relevant enough to get their attention in the crowded search result pages, and then showcase the features and benefits well enough to convince them to buy.

 

Relevance to the A9

This part of content optimisation focuses on visibility, ensuring that your content includes numerous relevant keywords in order for the A9 (Amazon’s search algorithm) to match your products to applicable searches. In many cases, the keywords to include will be obvious, and you can simply use a tool such as Sonar or Google Keyword Planner to fill out your list with synonyms and closely related terms. A real handy tool is Soovle, which shows the most common auto-completes for search terms on a variety of search engines, including Amazon. It’s easy to use and is especially useful for identifying longer tail search terms.

Once you’ve identified your relevant keywords, you’ll want to include them in your titles, bullet points, descriptions and backend keywords. The A9 no longer weights keywords based on where they appear in your content, however a good rule of thumb is to include the terms that best describe your product most prominently (in the title), and then include synonyms and related keywords elsewhere. This means you can still be indexed for all the relevant keywords, but you’re also providing an optimal user experience by showing product titles in the search result pages that customers will easily recognise. For example, most people would describe a pair of Levi’s as “Jeans”, rather than “pants” or “trousers”.

One practice to avoid is creating keyword-spammed titles that not only confuse the customer, but convey a poor brand image and damage trust.

Spam Amazon Product Title

In comparison to…

Optimised Amazon Product Title

 

Relevance to the user

The focus of this is to showcase the features and benefits of your product that your customers care about and will influence their decision. Quite often, what brands believe their most compelling features to be, are not what customers see as the most important. It’s important not to simply make assumptions and instead put the customer experience first. You should look to what customers are actually saying about the product. What they rave about in the 5 star reviews, what they complain about in the 1 star reviews, and what they are unsure of in the Q&As.

 

Below is almost the ideal review for informing content optimisation. The customer has listed numerous features that they both like and dislike, in this case for a wireless keyboard.

Amazon Review

 

And here is an example of some Q&As for a pair of bluetooth headphones, highlighting some key points such as durability and connectivity that they could address in bullet points, descriptions or EBC/A+ content.

 

Amazon Q&As

 

In many cases, negative feedback is due to a buyer using a product incorrectly, so taking note of where customers are finding fault with your products will give you some great insight into what you need to clarify for them to improve their experience both before and after purchase. This will not only encourage customers to buy, but will also help to prevent any further negative feedback in the future.

Naturally you should look at the reviews and Q&As of your own products, however if you are new to Amazon, or simply don’t have many to look at just yet, look at those of comparable products both on Amazon and on other sites.

 

In conclusion

Optimising the content of your Amazon listings is an ongoing process as you learn more about how customers find your products and what features and benefits really matter to them. If you keep the customer experience as your focus, you can reap the benefits of increased visibility in a highly competitive marketplace and boosted conversion rates on your detail pages to help drive your brand forward on Amazon.

If you need help with your brand’s Amazon marketplace strategy or navigating the rapidly developing Amazon Advertising platform, get in touch.

The ever-expanding marketplace is becoming more and more competitive, and businesses are having to look harder and harder to gain an advantage. One of the big questions for brands on Amazon is whether they are better off as a Seller or Vendor. If you’re a seller who has just received an invite to become a Vendor, or a Vendor who is wondering if the grass is greener in Seller Central, there are some key differences to understand before deciding what’s best for your brand.

 

Some quick definitions

  • 1P or Vendor: A brand that sells directly to Amazon. Amazon acts as the retailer, setting prices, warehousing and shipping the products to consumers. Vendors operate using Vendor Central.
  • 2P or Seller: A brand that sells their products direct to consumer on Amazon via Seller Central. They control their own prices, storage and shipping method. They have the option to use Fulfillment by Amazon (FBA). They have (or should have) their brand enrolled in the Amazon Brand Registry.
  • 3P or (also) Seller: Sells another brand’s products on Amazon, with the same conditions as the 2P seller. They cannot enrol the brands they sell in the Amazon Brand Registry as they do not own them.

 

The Downsides Of Being A Vendor

The terms won’t get better

Your initial terms from Amazon may be very attractive, offering reasonable pricing and often coming with some complementary marketing budget to get you on board. These terms will never improve from your perspective however, and in fact Vendor Managers are ‘KPI’d’ on getting a better deal for Amazon with each successive negotiation.

 

They control the pricing, and they only like moving it in one direction

Amazon will set the retail prices for your products, which may undercut other channels that you sell through. Amazon really want to win the buy box for products that they own the inventory for, and their most common strategy for a product that is lagging is dropping the price. However, once there’s some traction the price rarely comes back up, especially when it’s secure in the buy box and selling well at that level.

 

There are extra terms

As part of your negotiations, they may start asking for additional commitment of marketing budget, as well as something they call “damage allowance”. Roughly translated, this refers to product loss incurred during warehousing or shipping. This is a bit cheeky considering once you’ve shipped it with their preferred partner there is nothing you can do to prevent this.

 

There is zero sympathy

If your costs change, ie. if a product Amazon orders from you becomes more expensive for you to source or manufacture, they are very unlikely to amend your terms to accommodate you. At best they will give you a small percentage adjustment, but usually on the condition that the difference be reinvested into marketing with them.

 

There will likely be conflict with Google Ads

If you sell through your own site in addition to Amazon, and run Google Ads as part of that, they might be running competing ads. You’ll essentially be competing against yourself, which is bad for a whole host of reasons we’re sure we don’t need to explain.

 

The CRaP list

Under performing products that Amazon Can’t Realise any Profit on (CRaP) will suffer. If you only hold a Vendor account, your hands are tied if you want to continue to sell these products as when they stop ordering it and it goes out of stock, it can’t be sold.

 

You get charged late fees when they’re late

Some relatively recent changes to their shipping requirements mean that it will likely now be more costly for you to fulfil their POs. They also charge some rather hefty fees when an order arrives incomplete or late, even when using their recommended shipping partners.

 

The Upside Of Being A Vendor

You have someone to talk to

As a Vendor, you have a Vendor Manager. This is your point of contact at Amazon for any issues that you may be having and can be a valuable avenue for resolving problems that arise. As part of this, it’s possible to gain access to Senior Category Managers for the purpose of gaining additional insight into your market.

 

You have ‘free’ Google Ads

If products from your catalogue are deemed suitable, Amazon will advertise them using Google Ads. Your contribution to marketing budget as per your terms aside, this is free marketing done on your behalf by Amazon.

 

You can get involved in marketing initiatives

As a first party seller your products may be eligible to participate in the various marketing initiatives that Amazon offers. This can provide you with a huge amount of exposure to all kinds of customers.

 

The Downsides Of Being A Seller

You’re on your own

As a Seller, you have no dedicated point of contact at Amazon, the best you get is Seller Support. While they’re generally quite responsive, the assistance you receive can be limited dependent on the nature of your problem.

 

You may have little to no category insight

As a Seller, you have very little insight into your performance within the category besides that which is available through Brand Analytics, which is useful, but somewhat limited.

 

It’s all you

Unless you exclusively use FBA, customer service, shipping and returns are your responsibility. This can cause issues if your business is unaccustomed to servicing this side of your account or if you are short on internal resource. Failures in this area can be particularly detrimental as it can take you out of the buy box (disabling your Sponsored Product Ads) even if you’re the only seller for the product. Being entirely responsible for the customer service process however, can provide you with an opportunity to go above and beyond to create brand loyalty with your customers.

 

The Upsides Of Being A Seller

You control pricing

As a Seller you have complete control of your pricing, allowing you to move with your competitors as required without being forced to drop so unreasonably that you become unprofitable. You can also avoid undercutting yourself if you sell through other channels.

 

You have control over shipping

You have complete control over how you choose to ship your products. While naturally you can use Fulfillment By Amazon (FBA), which comes with both fees and benefits, you can ship products yourself if that makes more sense for your business.

 

You sell on your own terms

One of the most common complaints from Vendors is the nature of their negotiations with Amazon. As a Seller, this is never a problem for you, you get to do what you want (within the confines of Amazon policies of course).

 

You can still maximise Amazon Advertising

You have largely the same access to Amazon Advertising as Vendors if you’re a brand registry enrolled seller. The only arrow missing from your advertising quiver was Product Display Ads, however they are now being made available to Sellers as Sponsored Display Ads.

 

Shifting from Vendor to Seller

In conclusion, there are a lot of challenges associated with a shift from vendor central to seller central, and it’s not always clear which is the best option for your brand. If you want further advice and insight, or need extra support with your Amazon marketing strategy, then get in touch.

Amazon is a fast-changing marketplace and undeniably a powerful force in ecommerce. As we kickstart 2020, Amazon has seen many updates already, with changes to their Amazon Advertising setup, globalisation of the marketplace and improved law enforcement of counterfeit products.

Here are six of the latest updates and news from the world of Amazon from January 2020.

 

#1 – New Manchester Office!

Amazon have just opened a new 600 person office in Manchester’s Northern Quarter, which will be made up of software development engineers, solutions architects, applied scientists, business development specialists and finance analysts. Amazon’s UK Country Manager, Doug Gurr, says “Manchester offers an incredible talent pool, a thriving hub of fast-growing UK tech start-ups and is a centre of academic and intellectual excellence.”

 

#2 – Improved Amazon Advertising Reports

Amazon Advertising reports have become a whole lot more insightful. Previously restricted to the past 90 days, Campaign Reports can now be downloaded with all data back to 1 April 2018, which can be segmented by day, week, month or quarter. This dramatically reduces reliance on the Amazon Advertising API or third party tools for reporting over longer date ranges.

 

#3 – Product Targeting for Sponsored Brands

Product Targeting for Sponsored Brands has reached the UK. Previously only available to Sponsored Products Ads, the ability to target categories and products rather than just keywords is now available for Sponsored Brands Ads. This follows recent changes including the availability of search term reports for Sponsored Brands as well as negative keywords. While it has hit the US first, video options for Sponsored Brands also appear to be on the way, along with custom images.

 

#4 – Investment in Indian Businesses

Bezos has come under fire in a recent visit to India, and the Competition Commission of India recently began an anti-trust investigation. Amazon will invest what seems to be a $1B USD olive branch to help bring Indian businesses online, in a rapidly growing ecommerce market set to reach $120B in revenue this year.

 

#5 – Crackdown on Counterfeit Products

In the never-ending war against counterfeits on the platform, Amazon will now more actively inform law enforcement across the US and Europe when it confirms a counterfeit product has been sold. It wouldn’t be outrageous to speculate that Nike’s recent departure from the platform might have influenced this shift, as one of their biggest challenges was the high volume of counterfeit products being sold.

 

#6 – Amazon Fashion Platform?

Amazon are planning a luxury fashion platform. This platform is reported to operate more like a concession within a department store, with brands having a store within the store that they will have far more control over compared to selling on Amazon. Reportedly they have 12 brands lined up for a US only launch before expanding internationally.

 

Amazon Marketing

Selling on Amazon can be difficult if you don’t fully understand the platform. If you’re exploring selling on Amazon and need an experienced agency to offer insight, advice and support with managing your Amazon campaigns, then get in touch.

Amazon is transforming ecommerce and we’re seeing more agencies offer Amazon marketing services designed to help retailers succeed in the marketplace, whether this is paid advertising, content optimisation, brand store management or more.

It pays to think carefully about why it is you need an agency, and find the one that best solves that problem for you. For you, it may be a lack of internal resources to manage selling in multiple countries, or it could be a requirement for specialist advertising skills.

Whatever your needs might be, here are some things to look for when you’re searching for an Amazon agency.

 

#1 – Asking Questions

Prior to delivering a proposal, a good Amazon agency will take the time to thoroughly understand what your current challenges are and what you want to achieve. They should also ask about the wider business, not just about Amazon, in order to understand where their work would fit into the big picture, and what support you require.

 

#2 – Realistic Expectations

The world of digital marketing is competitive, and unfortunately many agencies resort to simply telling prospects what they want to hear in order to win their business.

If, after receiving your brief, an agency tells you that what you want is not achievable, or may take much longer than you expected, this is actually a sign they are sound practitioners. They should however be able to give you an idea of what is achievable and timeframes for different performance milestones.

 

#3 – Strong Case Studies

An experienced agency should be able to provide you with case studies demonstrating the quality of their work. They may not divulge all the details to protect the privacy of the clients, but they should clearly show how their methodology drives success and what results were achieved.

Look for case studies where the client is in your vertical or has a similar challenge that you have.

 

#4 – Sponsored Ads Certification

While being certified in Amazon Advertising Sponsored Ads isn’t a guarantee of excellence, it demonstrates two key aspects of an agency. One, they know enough about Amazon Advertising to know that there is a certification for Sponsored Ads. Two, they are sufficiently invested in the platform to take the time to achieve the certification and display it on their site, in proposals and on marketing collateral.

 

#5 – Amazon Expert Team

This may seem like a no-brainer, but with the rise of Amazon Advertising (Amazon’s PPC advertising platform) many Google Ads focused agencies are offering to run campaigns on Amazon as well and just applying the same strategies as they would on Google.

Amazon is a very different platform to Google, and whilst they may not be an Amazon exclusive agency, they have specific Amazon experts on their team dedicated to the service.

If you see generic titles like “Paid Search Manager” there’s a strong chance they aren’t specialists and may have a very limited understanding of the Amazon marketplace. Look for ‘Amazon Strategists’ or similar titles.

 

#6 – Thought Leadership

A good agency will be producing informative content about the Amazon marketplace to demonstrate their expertise and help others learn from their insights, whether as articles, videos, podcasts or live talks. While doing this alone doesn’t mean they’re experts, it raises questions if an ‘expert’ agency never attempts to showcase their knowledge.

 

#7 – Flexible Contracts

If an agency wants to lock you in for six months to a year, it’s a potential warning sign. A good agency will be happy to rely on the quality of their work to keep your business from month to month.

 

The Right Amazon Agency

Amazon marketing services are fairly new and many agencies are adopting new services with new offerings for retailers. However, it’s important to look at which of these agencies are truly committed to the platform or not and meet the above criteria.

If you’re interested in speaking to us about your Amazon strategy, get in touch with our expert team.

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