Winning On Amazon - The 4 Parts Of The Iceberg

Bobsled Marketing is a full channel Amazon agency. What does this mean exactly?

Unsurprisingly, this is a question we hear a lot. Amazon is becoming increasingly important for thousands of brands and there is a lot of mystery surrounding what it takes to effectively master the channel.

We thought it would be useful to break down our approach to Amazon management aka “The 4 Parts Of The Iceberg”.

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Our Credentials

Before we dive in, here’s a little background about Bobsled:

  • Established in 2015 by Australian entrepreneur and former commercial banker Kiri Masters
  • Headquartered in New York City
  • As of July 2018, we manage the Amazon channel for 55+ brands on Amazon North America, Europe and Australia
  • Our clients include third-party sellers (Seller Central), vendors (Vendor Central) and “hybrid” sellers (Seller Central & Vendor Central)
  • We represent branded manufacturers and retailer private labels across all of Amazon’s product categories
  • Proud member of Amazon’s official Solution Provider Network
  • Accredited agency for the Amazon Media Group  (AMG) display ad network
  • Official Amazon content contributor on Forbes.com

Every Amazon account is unique, and our extensive experience has taught us that there isn’t a one-size-fits-all approach.

However, there are specific areas of Amazon management that every seller or vendor needs to be on top of. It doesn’t matter if you’re selling makeup, jewelry or toys; you will simply not succeed on Amazon if you don’t manage certain aspects of the account efficiently.

 

The 4 Parts Of The Iceberg

A picture paints a thousand words, so without further adieu, here’s a visual representation of how we view Amazon account management: 

As you can see, the iceberg is broken down into four different sections; Operations, Brand Protection & Customer Service, Organic Marketing and Paid Advertising.

In this post we’re going to break down exactly how we manage each chunk.

 

 

Part 1 of 4: Operations

Day-to-day operational management forms the backbone of every Amazon presence. This section sits at the very bottom of our iceberg as the tasks involved are typically behind-the-scenes. But such tasks are incredibly vital as they keep the entire account afloat.

At Bobsled we define Operations as maintaining excellent Seller and/or Vendor metrics. This is perhaps the easiest part of Amazon account management as Amazon will help you track all critical metrics, and if there’s an issue you’ll receive a performance alert.


Third-party sellers (Seller Central) have different operational metrics compared to brands selling to Amazon in a wholesale capacity (Vendor Central). Here’s a brief checklist of the main operational metrics we look for on Seller and Vendor:
 

Vendor Central

  • Incomplete or pending shipments
  • Product Submissions page to track approval status of new products
  • Problem Receive Rate %
  • Vendor Operational Performance alerts for any issues
  • Chargebacks and vendor returns
  • Case Log, assess the status of any existing disputes
  • Purchase Order submissions and confirmed quantities
  • Customer Packaging Ease Of Opening and Protection Ratings
  • Invoicing issues


Seller Central

  • Performance notifications
  • Respond to Buyer Messages
  • Check Account Health status
  • Inventory review
  • Case log updates
  • Incoming-FBA shipments status
  • Stranded inventory
  • Unfulfillable units
  • Catalog review
  • FBA fees
  • Inventory management
     

It’s important to note that some tasks needed to be completed daily, whereas others should happen on a weekly or monthly basis. For example, Sellers should look for Performance Notifications every day because if you miss an important notification, such as an A-Z Claim, it could lead to an account suspension.
 

Inventory Is Key

The greatest challenge from an operational point of view is typically inventory management. Ensuring that you have Prime-eligible inventory available at all times is a simple and effective way to grow Amazon revenue.

Sellers have more control over their inventory levels compared to Vendors. This is because Sellers can decide exactly how much inventory to make available on Amazon, whereas Vendor inventory levels are determined by Amazon’s wholesale PO’s (Purchase Orders).

Shoppers love the convenience of Amazon and if your product is unavailable they will likely go with a competitor or an unauthorized third-party seller. Analyzing YOY data and closely tracking sales velocity are two things every brand should be doing to help accurately project required inventory levels and avoid costly stock-out situations.

Here is more information about Bobsled’s recommended inventory management strategies.


Part 2 of 4: Brand Protection & Customer Service

Due to Amazon’s growing market share in the eCommerce space, protecting your brand and providing exemplary customer service is of extreme importance. Once again, a lot of the work is “back-end” heavy, but completely necessary due to the dog-eat-dog manner in which Amazon functions as a marketplace.

We define brand protection and customer service on Amazon as:


Controlling Buy Box Threats

For every unique product on Amazon there is only one product listing. This means that if your product is sold by multiple sellers, they will all be competing for the same Buy Box.


Every brand has a slightly different policy when it comes to other parties selling their products on Amazon. Here are the three most common scenarios:
 

  • Scenario 1 - brand has complete control over distribution, and no other parties sell their product line across any other channels. Such brands generally don’t have to worry about other parties trying to win their Buy Box on Amazon.

  • Scenario 2 - brand has select authorized resellers who are allowed to sell their product line on Amazon. Such brands need to ensure the authorized resellers respect the MAP agreement on Amazon to preserve pricing integrity across all online channels. It should also be noted that authorized resellers may on-sell large quantities of inventory to other parties who may end up becoming unauthorized Amazon sellers (unless there’s a specific clause in the agreement preventing the authorized reseller from engaging in this activity).

  • Scenario 3 - brand sells to multiple other parties, and has no authorized Amazon resellers. As a result a brand in this situation will likely have to contend with a huge number of unauthorized resellers competing for the Buy Box on the Amazon marketplace.
     

In our experience, prevention is always better than a cure when it comes to dealing with Buy Box threats. Carefully vetting wholesale partners and creating watertight agreements can save you from numerous headaches further down the line.

This issue unfortunately impacts both Sellers and Vendors. Amazon wants wide selection and fierce price competition on their marketplace so it’s up to the brand owner to control the Buy Box on each product listing.
 

Responding To Customer Questions & Product Reviews
Promptly With Helpful Information

Failing to respond directly to Customer Questions and Product Reviews can have huge ramifications for your brand.

On your own ecommerce website you completely control the shopping experience. Amazon is a little different. You control the product listing content for your own branded products but customers can leave feedback right on the page. If this feedback is negative or inaccurate it can impact conversion and revenue negatively.

For Bobsled clients we respond directly to this type of feedback in order to preserve the integrity of product listings under our management.

 

Part 3 of 4: Organic Marketing

Many brands have great content but it’s simply not optimized for the Amazon marketplace. Organic marketing is about giving both the A9 algorithm and the Amazon shoppers all the right information about your brand and product line.
 

Ensure That All Your Product Information Is Correct

Often times product listings on Amazon have been “hijacked” by other third-party sellers. Or perhaps there are counterfeiters selling fake versions of your product line. There is often misleading information floating around on Amazon, particularly for brands with large catalogs that sell across multiple channels.

It is your responsibility as the brand owner to review the catalog and update any false information.


Are Your Product Listings Designed To Convert?

The first step is starting with the framework of the product listing; back-end search terms and metadata, product title, images, bullet points and product description.

Secondly, Sellers and Vendors should be considering boosting the quality of the product listings with EBC (Enhanced Brand Content) and A+ Pages. These enhancement features offer a great way to differentiate your products from competitor offerings.

Finally, brands should be considering ways in which they can offer more value to shoppers with Promotions. Simple offers include Percentage Off, Free Shipping (if you always Merchant-fulfill) and Buy One Get One promotions. If you want to get more advanced, Product Bundles and the Subscribe & Save program might be ways in which you could edge out the competition. We’ve published a blog post on Amazon Promotions, you can check it out here.


Part 4 of 4: Paid Advertising

In our iceberg graphic we put Paid Advertising at the very top. Once you’ve built an account with solid foundations, you can use PPC advertising to drive more awareness to your brand and product catalog.
 

Do I Really Need To Advertise My Amazon Products?

Every Amazon marketplace is becoming more and more crowded with each passing month. Therefore, it becomes more of a challenge to rank organically (even for established brands) due to the increased competition across every product category.

By utilizing Amazon’s paid advertising tools a brand can rent pieces of prime real estate across the ecosystem in an attempt to gain more impressions, clicks and conversions. By not investing in PPC you are giving competitors an opportunity to eat into your market share.
 

How Do I Allocate Spend & Track Performance?

There is no simple answer to this question due to the fact that each Amazon account varies so wildly. Some factors that should impact your paid advertising strategy include; Amazon fees, inventory levels, seasonal trends, state of listing optimization and competitiveness of your product category.
 

It Starts (And Ends) With Profit Margin

At Bobsled, our starting point for ascertaining the recommended PPC budget is always profit margin on a SKU level. Amazon is a great channel for exposure, but if you’re aren’t turning a profit then what’s the point?

Once we have a ballpark idea of what the ad spend level should be, our advertising team builds PPC campaigns and begins to track performance. Our ultimate goal is to reach the point of diminishing returns across the catalog. This means spending just the right amount on advertising to see the most optimal results overall.

Check out our blog post “How Much To Spend On Amazon PPC In 2018”.

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Conclusion: When We Say Full Channel, We Really Mean It

Bobsled’s full channel Amazon management service is a complete package. In a nutshell; our clients ship inventory, and we handle everything Amazon related on their behalf.

This service overview is just the “tip of the iceberg”. To learn more about how we can help your brand scale on Amazon please schedule an appointment with a Bobsled representative below.

What's Changed in 2 Years of Selling on Amazon?

In November 2016 I published my book, “The Amazon Expansion Plan: Learn how to skyrocket your sales, sell globally and make your brand an international success” in kindle version on Amazon (naturally). 

It was an attempt to document all the best practices and processes that we had learnt at my agency Bobsled Marketing, as well as some of the lessons I’d learnt as a seller myself before starting Bobsled. 

The book covered the various platforms for selling on Amazon either as a wholesale supplier to Amazon or on the marketplace, various marketing techniques, how to initiate an international selling strategy, and the basics of brand protection. 

Fast forward to June 2018, when I am releasing the 2nd edition of this book. I’ll be honest, updating this was almost as much work as writing it the first time. So much has changed with Amazon in less than 2 years, and outlining the myriad new programs, policy changes, and best practices, took a lot of effort. Here are a few of the major changes that have occured over the past 2 years. 

The book will be FREE to download on Kindle from June 27th until the 1st of July, 2018.

 

Vendor Express closes and the Hybrid selling model emerges 

I never liked Vendor Express - Amazon’s fully automated wholesale supplier portal - and was pleased when Amazon announced its eventual closure earlier in 2018. Now we are left with two primary platforms: Vendor Central (VC, for wholesale suppliers) and Seller Central (SC). But with Amazon automating as much of the buying process as possible on VC and pulling back human support, many brands which have historically been Amazon Vendors are now looking at selling on the SC marketplace. Many find that it affords more control over pricing, inventory, and the customer experience than being a Vendor. It can also be more profitable, with Amazon taking a 15% cut of sales across most categories, plus fulfillment fees. Still, Vendors aren’t always prepared to cut all ties with VC, so are opting to set up an additional SC account and access the best of both worlds.

 

Advertising is a significant revenue driver for brands
...and Amazon

The 2016 edition of The Amazon Expansion Plan provided an overview of the various PPC campaign types on Amazon, acknowledging that paid traffic can boost organic marketing efforts on Amazon. Today, advertising on Amazon is part of most digitally-active brands’ playbooks. Amazon themselves are seeing the revenue potential of digital advertising and have been quickly rolling out new features and tools to drive more spend and brand engagement. They have hired thousands of new employees for their display advertising division, Amazon Media Group. Analysts view Amazon as an ultimate third challenger to the Facebook/Google duopoly. We have certainly given PPC pride of place at Bobsled, in terms of methods to drive revenue for our clients with almost immediate ROI. 

 

Brand protection is more important than ever

Selling products on Amazon has become a new business model for entrepreneurial types almost overnight, and for good reason - the size of the market and ability to quickly capture revenue is highly unique. Thus, Amazon has also captured the attention of bad actors and those wishing to make a quick buck. Unfortunately Amazon is limited in their willingness or ability (depending on the situation) to play policeman in their own neighborhood. Brands have learnt that they must actively defend their product catalogs against unauthorized sellers, counterfeiters, and black hat tactics that attempt to erode the revenue and reputation of incumbent brands.

These are some of the major themes I have observed in updating the 2018 edition of The Amazon Expansion Plan. But there have been many more changes, both strategic and tactical in nature, that are important for any Seller or Vendor, aspiring or current, to be aware of.  

The new edition goes live on June 27th, 2018, and the book will be FREE to download on Kindle from June 27th until the 1st of July, 2018. For the first time a paperback version of the book will be available as well. It’s somewhat painful to recognize that in just another 6 months, there will be new material to add and changes to make - that is the nature of Amazon. But for right now, you can trust that this is the most comprehensive, up-to-date playbook that’s penned specifically for established brands looking to launch or improve their Amazon game. I hope you enjoy it!

Interested in the new edition of The Amazon Expansion Plan? The book will be available on Kindle & Amazon and in Paperback right here.

Navigating Amazon’s New Rules Around Product Variations

Navigating Amazon’s New Rules Around Product Variations

Amazon have updated their policy around parent/child listing variations, which will affect how reviews appear for certain parent products with multiple child variations, and how products with variations will rank in search results.

Traditionally, all product reviews for each individual child ASIN were combined to give a grand total that would appear uniformly for each child variation. Moving forward, it seems that for select parent products each individual child ASIN may display unique review data separately.

Bobsled Amazon Prime Day 2018 Playbook

Amazon Prime Day has become one of the biggest events on the e-commerce shopping calendar, and at Bobsled we’re predicting Prime Day 2018 will leave past years trailing in its dust.

Prime Day is a global event that will be held sometime around mid-July where thousands of short-term deals will go live on various Amazon marketplaces. Sellers and Vendors are contacted by Amazon in the lead up to Prime Day and are asked to submit for various Prime Day deals (the first deadline is tomorrow, Friday May 18th, more on deadlines below). In order to access the deals, shoppers need to become Amazon Prime members.

Find our recap of Prime Day 2017 here.

  Image Source:   Amazon  .  com

Image Source: Amazon.com

Amazon capitalizes on the event by gaining more Prime subscriptions and an untold amount of publicity. Sellers and Vendors have the opportunity to capitalize by selling through a lot of inventory and acquiring new customers in the often patchy summer selling season.

Since its inception, Prime Day has been criticized by brands and customers alike for three main reasons:
 

  1. Duration of deals. In past years, customers have logged on to Amazon on Prime Day and found an attractive deal, only for all units to be sold in a matter of seconds, leaving thousands of disappointed customers.
     
  2. Lack of value-for-money. In 2017, Amazon suffered some social media backlash in the aftermath of Prime Day from customers who felt the hype of the economic holiday outweighed the actual quality of deals on offer. 
     
  3. Technical Glitches. Last year a technical glitch on Amazon’s end apparently caused several sellers’ Lightning Deals in North America to be “suppressed” and ultimately “cancelled,” causing them to lose potentially large amounts of money in pre-paid fees and over-stocked inventory.

In 2018, we predict Amazon will address the above concerns in a couple of ways.

Last year, Amazon started spacing deals out around the week leading up to Prime Day. We suspect that they will take things a step further this year with deals start popping up on Amazon in the weeks leading up to Prime Day, giving shoppers plenty of time and opportunity to snag a bargain, increasing overall customer engagement. Rather than a single day or week, think of it more as Prime-Month.

  Image Source:   Amazon  .  com

Image Source: Amazon.com

Secondly, Amazon will undoubtedly be using it’s wealth of historical sales data to ascertain the right price-point and inventory levels for the 2018 Prime Day deals. Amazon uses the event as a tool to get more Prime subscribers, who according to research will spend twice as much on Amazon over the long-term as non-Prime users. However, the trade-off is that Amazon has to provide real value-for-money deals (that actually function as advertised), otherwise the occasion comes off as a PR stunt for it’s Prime service.

As a full channel management agency, we provide our clients with Amazon support across four key service areas: Operations, Customer Service & Brand Protection, Organic Marketing and Paid Advertising. We’ve developed a Prime Day 2018 playbook across each service area in order to help our clients win big on this hugely important day.

 

OPERATIONS

Deal Deadlines

In order to participate in a Prime Day deal, the first step is submitting an expression of interest. Here are the various deadlines:

  • May 18th – Deadline for Third Party (Seller Central) Sellers to submit for Amazon Prime Day Lightning Deals.
  • May 31st – Deadline for Vendors (Vendor Central) to submit for Amazon Prime Day Lightning Deals, Spotlight Deals, Coupons, & Category Deals.
  • June 15th – Deadline for Vendors to submit category page merchandising & marketing packages.

The above deadlines may vary based on the Amazon marketplace.

All the different types of deals function in essentially the same way. Amazon asks Vendors and Sellers to provide short-term product discounts that are predetermined by Amazon in exchange for increased visibility and exposure on the marketplace. There is also an obligation to assign a certain number of Prime-eligible units to the deal. Even if a brand agrees to Amazon’s proposed discount and inventory levels there’s no guarantee Amazon will approve the deal, and there is also no guarantee Amazon will actually run approved deals on Prime Day.

In order to figure out the right type of deal, a brand should have an intimate understanding of the profit margin of each SKU sold on the Amazon marketplace. Prime Day is ultimately a pay-to-play experience, and every Seller and Vendor should make an informed decision about how to reconcile profit margin with increased exposure.

 

Inventory Planning

Perhaps the biggest consideration for sellers and vendors in the lead-up to Prime Day is inventory planning.

In order to qualify for Prime Day deals a brand may have to manufacture more inventory than what’s historically anticipated and ship this inventory to Amazon’s DC’s (Distribution Centers) on a very short turnaround.

Existing levels of inventory will also inform which Prime Day deal to go for. For example, if a brand is planning to eventually discontinue an item, it may make sense to utilize a Lightning Deal to sell through remaining inventory very quickly. In this situation a brand might take a hit on profit margin, however by selling remaining inventory rapidly they may be avoiding future long-term storage fees. 

In addition, it’s extremely important for brands to think about the type of impact Prime Day might have on their entire Amazon catalog. A successful Prime Day typically may result in a huge spike in traffic and conversion, which in turn boosts the BSR (Best Seller Rank) for impacted products. This means that in the aftermath of the event the demand for certain SKUs may be heightened, and therefore you need to ensure you have adequate inventory to capitalize on this surge of interest.

We discuss this ‘halo effect’ in Episode 1 of Bobsled’s Ecommerce Braintrust podcast.

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For Sellers this may mean sending in additional FBA inventory, and strategically reserving units that you can decide when to bring back online. If sending more FBA inventory to Amazon is not an option, having the capacity to Merchant-fulfil orders is the next best solution. 

Here is more information about Bobsled’s recommended inventory management strategies

Vendors are a little more constrained as their inventory levels are controlled by Amazon’s Purchase Orders. However, if a vendor is anticipating a serious inventory crunch in the aftermath of Prime Day, it may be worthwhile investigating the possibility of pursuing a hybrid model (operating a Vendor and Seller account simultaneously). By selling in a hybrid capacity, a brand can ensure that even if all Vendor inventory is sold out, customers will still able to find and order Prime-eligible inventory.

 

Impeccable Account Admin on Prime Day

As experienced Sellers and Vendors know all too well, technical issues can seriously hinder progress, especially on high-stakes occasions like Prime Day. Such problems include product listing pages appearing incorrectly, credit card payment failures and stranded inventory.

Failure to fix such problems in a timely manner on Prime Day can result in thousands of dollars of lost revenue. Therefore it's critical brands allocate resources to ensure everything is running smoothly.

We recommend triple-checking all the crucial moving parts at the start of Prime Day, and revisiting the account every hour to ensure everything is running according to plan.

 

CUSTOMER SERVICE & BRAND PROTECTION

Post-Purchase Email Sequence

A huge advantage of Prime Day is that your brand and product has the opportunity to get in front of thousands of new eyeballs. Making a lot of one-time sales is great, but turning new Prime Day customers into long-term supporters of your brand is even better.

With this goal in mind, Sellers should be looking at their post-purchase email sequence. At Bobsled we recommend a post-purchase email sequence that satisfies three criteria:

  • avoids negative product feedback
  • promotes positive product feedback 
  • adds extra value for each customer

By implementing such an email sequence Sellers will be doing everything to ensure quality customer service experience for all Prime Day customers. This should result in more product reviews, which will help build your catalog’s BSR.

customer-service-feedback-amazon.jpg

 

Prepare For A Higher Volume Of Customer Service Inquiries

For Sellers, more orders generally means more direct interaction with customers. A customer who finds your product on Prime Day is probably ecstatic about the deal and potentially has some follow-up questions, hence a higher volume of inquiries is to be expected. The last thing you want as the Seller is for the customer to be left in the dark if there’s been some type of issues with their order. Poor customer service on and around Prime Day could have lasting ramifications for your brand.

The solution is simple; Sellers should ensure adequate customer service resources are dedicated to their account in order to preserve perfect account metrics.

Vendors, on the other hand do not have any ability to interact directly with customers as this is something Amazon handles on their behalf. 

Another thing both Vendors and Sellers should be watching during this critical period is product reviews. Negative product reviews are often the result of a simple misunderstanding regarding how to use a product or perhaps an issue with the shipping carrier. It’s important for brands to respond directly to any negative product reviews in order to try and find a solution for that particular customer, and also allay similar concerns for any potential future customers.

 

Monitor The Presence Of Unauthorized Third-Party Sellers

Unauthorized third-party sellers are a huge problem for both Vendors and Sellers on the Amazon marketplace. These sellers compete for the Buy Box on product listings, and could be making a serious dent on your gross Amazon revenues.

During a period like Prime Day, traffic on Amazon will spike, and this surge of customers will be trying to find the absolute best deal for every product on their wish list. If an unauthorized third-party seller is undercutting you on price, or you’re faced with a stock-out, this seller may win the Buy Box and reap the rewards.

Unauthorized sellers don’t merely impact products that are getting boosted with Prime Day deals. A customer may find your product through a deal on Prime Day, and then decide to review your entire product catalog. Therefore a comprehensive brand management approach is recommended.

You can read more about Bobsled’s best practices in respect to Amazon brand management here.

 

Organic Marketing

Are Your Product Listings Designed To Convert?

A Prime Day deal is designed to generate a huge quantity of clicks, but that’s only half the battle. Ensuring your product listings are optimized for conversion will allow you to reap the full benefits of the Prime Day buying frenzy.

The first step is starting with the framework of the product listing; back-end search terms and metadata, product title, images, bullet points and product description. In the lead up to Prime Day it’s worthwhile to check the traffic and conversion percentage across the catalog to ascertain which listings may require a tune-up.

Secondly, Sellers and Vendors should be considering boosting the quality of the product listings with EBC (Enhanced Brand Content) and A+ Pages. These enhancement features offer a great way to differentiate your products from competitor offerings. 

Summarized, Sellers and Vendors need to ensure their product listings are designed to turn browsing bargain-hunters into buyers on high-reward occasions such as Prime Day.

Optimizing+your+product+listings+for+Amazon+-+Bobsled+Marketing.png

 

DIY Prime Day Deals

As mentioned earlier, in order to qualify for Amazon’s official Prime Day deals, a brand needs to accept Amazon’s non-negotiable discount demands and inventory prerequisites. For whatever reason, the nature of the deals are simply not going to work for many Vendors and Sellers.

The reality is that due to the huge amount of PR Amazon will be doing there is going to be a lot more traffic on Amazon during Prime Day. And once a user is on the site, there’s nothing stopping them from finding your products, even if you aren’t running an approved Prime Day deal.

Therefore, brands should be considering ways in which they can manipulate their product listings to provide more value for money for the Prime Day customer. Simple ways to do this include Percentage Off, Free Shipping (if you always Merchant-fulfill) and Buy One Get One promotions. If you want to get more advanced, Product Bundles and the Subscribe & Save program might be ways in which you could edge out your competitors, even if they are running official Prime Day deals.

We’ve published a blog post on Amazon Promotions, you can check it out here.


Prime Day 2018 presents an opportunity for every brand selling on Amazon. If you’re interested in learning more about how Bobsled could ensure your brand is ready for a successful Prime Day you can set up a consultation here.


Using Other Channels To Promote Your Prime Day Deals

Every brand has a different perspective on how they view their Amazon channel, but some Vendors and Sellers are in the fortunate position of being able to send qualified existing traffic to their Prime Day deals.

If you are a brand manager in this position, we’d strongly recommend scheduling email blasts and social media posts for Prime Day, alerting existing customers to your deals. There is going to be a lot of noise on the day, therefore it’s crucial you can reach your existing customer base with your offer before a competitor beats you to the punch.

 

PAID ADVERTISING

Test And Analyze Your PPC Performance In The Lead-Up To Prime Day

Whether you are planning to run sanctioned deals, or whether you simply want to capitalize on the event by manipulating product listings on your own terms, the performance of your PPC campaigns will make a big impact on your Prime Day results.

In the lead-up to the event it’s important to closely review your AMS and/or Sponsored Products campaigns in order to gauge performance. Looking for opportunities to add any missing negative keywords and closely reviewing the bid amount and daily budgets for all campaigns can be hugely advantageous, as it will allow you to take stock and establish a baseline.

The existing PPC data contained within your account is hugely informative and will inform how to approach Prime Day from a paid advertising perspective.

analyze+performance.jpg

 

Carefully Monitor PPC Performance In The Lead Up & On The Day

Every brand’s Amazon presence differs wildly, therefore it’s impossible to develop a one-size-fits-all approach when it comes to Prime Day paid advertising.

In 2018, we’re expecting more total marketplace traffic in the lead up to Prime Day, and as a result it’s important to monitor PPC performance closely in order to capitalize.

In 2017, we noticed a 46% average increase in spend on Prime Day across our clients’ campaigns compared with the average spend from the first 10 days in July, however it was not uncommon for some of our clients’ daily budgets to be spent within just a few hours. Curiously, on average, CPC (Cost-Per-Click) only increased 2.72% on Prime Day, as compared to the days leading up to the event. Just 1 out of 3 clients saw an increase in CPC of more than 50% on Prime Day, versus the period of July 1-10.

Stefan Jordev, PPC Manager at Bobsled, has compiled his main Prime Day takeaways:

  1. Check your account every few hours. Campaigns run out of budget very quickly. 
  2. Get ready with bids and budgets before Prime Day.
  3. CPC rates do not necessarily increase during Prime Day.
  4. Every single account saw increased sales on Prime Day.

If you’re interested in learning more, we have more Prime Day PPC analysis here.

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Good Luck!

Prime Day 2018 presents an opportunity for every brand selling on Amazon. If you’re interested in learning more about how Bobsled could ensure your brand is ready for a successful Prime Day you can set up a consultation here.

Amazon Weekly News: May 1, 2018

Time for the weekly recap of Amazon news! It's always good to keep up with events related to the fast-moving world of the Amazon ecosystem. I select the most important news updates to share with subscribers each week, which you can sign up to receive right here.

 

Prime Membership Bumped Up To $119, But Will People Care?

Amazon+Prime.jpg

Last week, Amazon announced that it will increase the price for Prime membership from $99 per year up to $119. The Prime program is central to Amazon’s growth “flywheel,” locking consumers into an ecosystem that provides free, 2-day delivery and digital services like Prime Video.

So will the price hike affect Amazon’s ability to attract new members and customers?

Past experience tells us that this price hike isn’t likely to have a material impact on membership and loyalty. Amazon raised the fee for Prime in 2014 from $79 to $99 per year, and membership is estimated to have increased by from 40 million to 54 million from 2014 to 2015.

Similarly, Netflix has increased their monthly subscriptions twice: a $1-per-month increase in 2017, and $2-per-month in 2015 across their most popular plans. The hike seemed to have had no effect on membership growth, with an estimated 125 million customers today. 


In the same way, Prime has become such an integral part of the daily ritual for so many people, that they couldn’t fathom life without it. Eighty-five percent of Prime members browse for products at least once a week, and nearly half (45%) make a purchase at least once a week, according to a Feedvisor survey of 1,500 Amazon shoppers. 

 
  eMarketer cites research from Feedvisor which found that Prime members are more frequent visitors and make more frequent purchases than non-members.

eMarketer cites research from Feedvisor which found that Prime members are more frequent visitors and make more frequent purchases than non-members.

 

Amazon recently announced that they have more than 100 million subscribers and that the number is growing. Many equity analysts also believe that Prime membership will continue to grow. Even after this price hike, the utility that Prime offers is still good value for money, especially for consumers who have come to value the convenience and ease of use.

It would be a stretch to assume that the price increase will make the Prime program profitable for Amazon. There are massive costs associated with offering free 1- or 2-day shipping nationwide, which few consumers appreciate. But with a higher price point, Amazon will be able to offset the increasing operating costs of the service as they build up their fulfillment infrastructure in the United States and abroad. 

 

Global sellers account for 25% of third party marketplace sales

In its first-quarter earnings report on Thursday, Amazon announced an increase of 50% of sales from global sellers from the previous year. This comes with mixed blessings for other suppliers and sellers on Amazon. Unvetted overseas sellers are sometimes claimed to be largely responsible for counterfeit goods and fake product reviews. And the huge number of new global sellers entering the market means it’s imperative for all Amazon sellers to differentiate their own offering from the growing pack.

 

Chico's will start selling on Amazon

Chico’s will start selling its clothes and accessories on Amazon in May, and potentially add its sister brands White House Black Market and Soma later. The brand will make all of its products Prime-eligible -- presumably through a direct vendor relationship with Amazon, or through using the Fulfillment By Amazon program. Amazon has been investing heavily in its apparel division, forging partnerships with brands like Nike and Calvin Klein to prompt them to sell more of their assortment on Amazon. The company has also been launching its own private apparel labels too.

 

Amazon testing advertising pixel

According to interviews that AdAge conducted with advertising agencies, Amazon is testing a pixel that will track conversions on Amazon.com from display ads. Brands would place the pixel within their external (non-Amazon) ads, which would track users who viewed or clicked the advertisement to see if they eventually bought the product on Amazon.This kind of tracking and conversion data could potentially allow Amazon to prove a stronger, more direct ROI than incumbent advertising platforms from Facebook and Google.

"Advertisers can leverage Amazon's specific data for targeting, there's unique access to inventory through Amazon properties, and there are unique analytics by virtue of its sales data," said a source quoted by AdAge.

 

This is all the news I have to share with you this week. Subscribe to our newsletter to make sure you receive my news recap next week!

The Updated Guide to Selling Food & Beverages on Amazon

Amazon is taking big steps forward in the world of food & beverages. Splitting the category previously named Grocery & Gourmet into three categories named Food & Beverage, Organic Products, and Chilled & Frozen Foods to help further define the types of products they will sell.

The splitting of the categories also comes with heightened requirements for sellers that ensures quality and accuracy of origin and ingredients. This is especially obvious in the Organic Foods category, where Amazon is now requiring all of the official certifications to prove the product’s organic status. 

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At Bobsled, we suspect that many of these changes were motivated by Amazon's acquisition of Whole Foods in 2017, which is no big surprise. Whole Foods has been the leader in the natural and organic food space for decades, and therefore an extremely attractive target for the market-share focused Amazon.

 

Documentation & Certification

Requirements surrounding FDA certifications, Order defect rate (< 1%), Pre-fulfillment cancel rate (< 2.5%), and Late shipment rate (< 4%) are still applicable for all categories. There are additional category requirements that we describe in detail in “The Updated Guide to Selling Food & Beverages on Amazon”

In the guide we’ll help you determine what documents and certifications you need to provide to Amazon in order to sell products in each category. We’ll also dive into additional requirements for Organic Products, as this new category holds brands to a high standard to ensure quality.

Previously, a seller, once approved to sell in Grocery & Gourmet could label any product they wanted as “organic” without needing to provide certificate proof to Amazon. That’s definitely changed with the introduction of the Organic Products category.

 

Packaging & Labelling

The guide will also go over some best practices and requirements for packaging and labelling your food and beverage products. Including proper types of packaging, expiration date limits, and any dietary or allergen related information.

bear naked packaging amazon.png

 

Chilled & Frozen Foods

Creating this new category will allow brands to sell a much wider variety of perishable foods on Amazon, but it also means that they will need to prove that these products have been maintained within a certain temperature range throughout the entire supply chain.

There are a couple different ways a brand can prove that they have maintained the correct temperature. We’ll present the different processes in our guide.

frozen+chilled+amazon+foods.png

 

 

Marketing Strategies for Food & Beverage Brands

Getting your brand approved to sell in any of the Food & Beverage categories on Amazon is just the beginning. This category is one of the most competitive on Amazon and requires effort from the brand in order to promote products and increase sales.

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In “The Updated Guide to Selling Food & Beverages on Amazon” Bobsled presents insider information on how to get your food & beverage products seen and sold. From how to create optimized listings and titles, to PPC campaign ideas, product bundling, and special programs Food & Beverage sellers can take advantage of.

Download the Food & Beverages Guide

 

 

Food & Beverage remains a highly competitive category and Amazon’s increased standards mean that brands need to be more on top of their requirements than ever. If you’re ready to expand your market and make your products a success on Amazon, Bobsled is here to get you started on the right foot.

Amazon Weekly News: April 24, 2018

Each week I share the top news that impacts brands and merchants who sell on Amazon. My digest for this week includes what 100 million Prime members means to merchants and how fake product reviews continue to proliferate on Amazon despite a ban since 2016. Also, Amazon will now deliver packages to the trunk of your car, and the company finally reveals criteria for "Amazon’s Choice"...then takes it away.

 

What 100 million Prime members means to merchants

  Image Source:&nbsp;Lionel Bonaventure - Getty Images

Image Source: Lionel Bonaventure - Getty Images

Amazon’s prime program is at the center of the company's “flywheel” for growth. Research from Consumer Intelligence Research Partners found that Prime members spend almost twice as much per year on Amazon than non-subscribers.

With an estimated 40-60% of U.S. households already having Prime membership, Amazon needs to look to new segments for growth in the program. Thus, Amazon has taken steps in recent years to appeal to low-income customers, according to Recode.


Amazon also started targeting teens within Prime households late last year, allowing them to shop on Amazon with their own login.

What does this mean for brands selling on Amazon? As Amazon targets these new demographic segments with smaller wallets, merchants who can offer lower-priced products will benefit. Amazon recently launched a “$10 and under” storefront, and also reduced the selling fees on products priced under $7, to make selling these products more profitable. Prime-eligible products are still the most successful on the platform, so brands on the Seller Central platform should also consider enrolling low-priced products in the FBA "Small and Light" program.

 

Fake reviews continue to plague Amazon

Despite Amazon suspending the accounts of hundreds of customers over the past month on the basis of review fraud or suspicious activity, Amazon still has a big review problem, according to The Washington Post. “The vision Bezos popularized, of a review and ratings system that serves as a guide for consumers to make smarter choices, has given way to a system in which some consumers are manipulated and misled,” the article says. 

The Washington Post cites research from Data for Democracy, a nonprofit group of technology researchers dedicated to promoting integrity online, which went undercover in Facebook groups where merchants offer to pay Amazon customers to write reviews of their products. Amazon banned incentivized reviews in late 2016, but the practice still proliferates as a grey-hat marketing technique.

The Washington Post also tells the story of an Amazon seller, Atgoin, which began ranking #1 for bluetooth headphones. In November, the product had zero reviews, but gained 300 reviews within a five-day period during December. Analysis from the online review monitoring app ReviewMeta found more than 90% of the product reviews to be suspicious. Amazon removed Atgoin as a seller after The Washington Post made inquiries.

Sadly, this is not an isolated incident. Many brands complain not only that competitors are using underhanded techniques to obtain reviews, but that competitors are initiating fake negative reviews on their own product pages. 

 

Amazon delivers packages to the trunk of your car

Amazon today launched a new program for Prime members called Amazon Key In-Car. Amazon delivery drivers bring the package to the car, unlock the vehicle and then stow the package inside, and then re-lock the car.

The program is currently available in 37 cities in the U.S., and works with most 2015 model year or newer Chevrolet, Buick, GMC, Cadillac and Volvo vehicles with an active connected car service plan.

“We were really happy with the response to in-home delivery,” Peter Larsen, vice president of delivery technology at Amazon, told The Verge. “What we wanted to do — and it was part of the plan all along — is how we take that beyond the home.”

Amazon published a video today that features the first customers of the service. The customers cited ease of use, and being useful to families who want to receive their orders quietly or privately.

What does this mean for brands and retailers selling on Amazon? This new program is part of Amazon’s mission to target new customer segments and rolling out features to attract and retain Prime members. Following the launch of the in-home ‘Key’ secure delivery product, Amazon is looking for more ways to make online shopping convenient for customers. With package theft rates rising, and some employers banning online shopping deliveries to their offices, Amazon needs new ways to get products into the hands, or trunks, of consumers.

 

Amazon finally reveals criteria for ‘Amazon’s Choice’
... then takes it away

A couple of weeks ago Amazon started publishing the criteria for the coveted "Amazon’s Choice” badge. On product detail pages within the mobile app, three reasons were provided for why a particular product has been awarded the badge for a given search term. For the first time, it shed light into Amazon’s criteria for awarding these badges.

  Netgear product detail page on Amazon's mobile app. The above image shows the criteria for the Amazon's Choice badge on April 15. The below image shows the same page two weeks later without the criteria for the Amazon's Choice badge.

Netgear product detail page on Amazon's mobile app. The above image shows the criteria for the Amazon's Choice badge on April 15. The below image shows the same page two weeks later without the criteria for the Amazon's Choice badge.

Geekwire first reported on this change on April 15. However, in looking at the same product pages this week, the reasons for the badge are no longer displaying. It’s unclear why Amazon would remove this feature, but A/B testing has always been part of Amazon’s DNA.

During the time when Amazon published the criteria for the badge, the reasons cited centered around average customer ratings of at least 4 stars, low return rates compared to similar products, popularity in Amazon search results, and eligibility for Amazon Prime delivery.

The "Amazon’s Choice" badge is important to brands for several reasons. It lends credibility to a given product, since Amazon has bestowed a literal badge on the product. It also means the product is the default item chosen in voice search with Amazon Alexa. As more customers turn to their voice assistant for shopping and re-ordering, the default #1 rank will become an important factor in a product’s success.

 

This is all the news I have to share with you this week. Subscribe to our newsletter to make sure you receive my news recap next week!

Is your vendor central account "asleep at the wheel"?

Having your brand on Amazon’s Vendor Central platform is exactly the same as any other wholesale relationship with a retail outlet. Or is it?

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While some elements of the vendor relationships with Amazon look like they would with brick-and-mortar retailers, there are some differences that actually put more control back into the hands of the brand. Your brand may be surprised to realize that VC is not just a set-it-and-forget-it situation, and that’s a good thing.

If you suspect that your Amazon VC account has been “asleep at the wheel”, there are a few things to look out for to confirm if that’s the case. You can also use these tips to start managing your VC account more actively, and ultimately, drive more sales.


How optimized are your Amazon Marketing Services campaigns?

Vendor Central brands have access to Amazon Marketing Services (AMS) and will want to take advantage of the platform to help promote their listings. If your brand hasn’t even touched AMS then you’ll want to keep reading.

AMS gives brands the ability to create paid advertising campaigns to help promote their product listings. Sponsored Products, Headline Search Ads and Product Display Ads can all be created and managed through this platform. AMS also provides powerful reporting to see how shoppers are finding your products, so you can use that data to create even better campaigns (and product listings).

AMS is a powerful tool that Bobsled recommends all Vendor brands use in some capacity. You can learn more about the platform and ad types in our previous blog post. This should give you a good idea of where to get started on the path to better promoting your product listings on Amazon. There’s no need to be intimidated by AMS, because your brand has total control over all campaigns at all times.

The more sales you can generate through AMS will help improve both the Best Seller Rank and total number of product reviews, which in turn will drive more organic sales (sales generated without any paid advertising). Therefore, at Bobsled Marketing, we recommend brands try and reach the point of diminishing returns with their AMS campaigns; speculating just the right amount on PPC advertising to achieve optimal total results.

 

Are you using Promotions?

While Amazon determines the selling price of items sold through VC, brands can create promotional offers and bundles to drive awareness and sales. 

It’s likely that your company already runs promotions across some sales channels. If there’s an existing offer that’s generated profitable results in the past, you can attempt to replicate that offer on Amazon. For example, if your product sells well in bundles, you can create offer that right on the detail page and make it easy for customers to ‘buy more, save more. 

Many brands have had success with Flash Sale-style promotions on websites like Groupon and LivingSocial. Did you know you can run similar short-lived promotions on Amazon, which creates the same sense of urgency? Amazon calls these types of promotions Lightning Deals.

The trade-off with many of Amazon’s Promotions is that they can squeeze profit margins, therefore they may only be suitable for a select subset of your product catalog. If your brand hasn’t tried using any of these tactics, now may be a good time to investigate further.

 

Are your product listings optimized?

Just like with ranking algorithms on popular search engines, Amazon also has its own ranking algorithm called the A9 which is constantly being tweaked and updated. If you created a product listing months (or even years) ago and haven’t kept track of any updates, you could be missing out on sales because of poor listing optimization.

In this Bobsled blog post you can find some tips on how to build your listings to ensure they are set up for success within the Amazon ecosystem. You’ll want to be as descriptive as possible in your titles and descriptions, without misleading shoppers. You’ll also want to keep track of your sales rank and make periodic improvements to stay ahead.

If you’ve been looking at your product listings and thinking they could use a boost, they probably could. Things like poor quality images, uninspired product copy or limited keyword usage could be hurting your sales, so these things are better dealt with sooner rather than later.

 

Who is taking care of operational tasks?

Running an Amazon store isn’t all advertising and algorithms. There are also some operational elements that often get neglected. You should be on top of PO (Purchase Order) status compliance, product submission status, case logs, promotion recommendations, reviews, inventory, and reporting. 

In some ways, Amazon will do a lot of the work for you, by suggesting opportunities for promotion, items to add to your catalog, and detail page aspects that should be improved upon, such as more images. However, it’s ultimately your responsibility to sift through and implement any recommendations.

Amazon may also charge you a penalty called a chargeback if you fail to meet their compliance standards. You can fight these charges if you believe they have been unfairly given, so you’ll want to watch out for them and assess each situation to determine whether you want to fight the charge or make some operational changes to avoid similar charges in the future. Chargebacks are one way Amazon brings inefficiencies to a brand’s attention, so it’s in the best interests of both parties to fix the issues they highlight.

 

Does your brand negotiate with Amazon?

Amazon is in the business of helping shoppers find what they want and need. They are also in the business of turning a profit. This means that they are not particularly loyal to any brand and are prone to asking for a better deal from vendors (just like any brick-and-mortar retailer out there). 

You, the brand, need to be prepared for Amazon to ask for discounted bulk orders, and then you need to push back! As a vendor, you do not have to simply agree to the terms and prices that Amazon has put forward. You can negotiate, but you need someone that is familiar enough with your brand and how it fits into Amazon’s landscape in order to do that negotiating. Without that person you’ll likely be stuck with whatever price and terms Amazon presents.

Every year Amazon sends updated terms to the vendor. With Amazon's ever advancing technology, they are increasing MDF (Marketing Development Funds) at a higher rate than ever. It will help you in your negotiation tremendously to understand the reasons behind the increase and request a meeting to discuss terms. Leveraging Bobsled’s negotiation tips will help prepare you for for a successful, and mutually beneficial partnership with Amazon.

 

Are unauthorized resellers beating you to the buy box?

If you’ve just been letting your VC account run itself, then you may not be on the lookout for other sellers promoting and selling your products. If you have authorized third-party resellers selling your products on Amazon, then you probably have this covered.But if you don’t,and another seller is undercutting you or simply promoting their listings first, they could win the buy box without you even knowing it.

Some Vendors are not even aware that certain products they do not wish to be listed on Amazon are being sold by other third-parties. Often times there are issues with the product listing content and price-point of such products, creating serious brand-perception issues.

Considering the sheer volume of loyal Amazon customers, it’s in your best interest to stay on top of unauthorized sellers and authorized resellers that list your products before you do or sell at a sharper price. We’ve developed some tips on how to handle this brand management process.  

 

Is there someone in the driver’s seat?

If your Amazon VC account is suffering from some (or all) of these issues, it could be that no one in particular is in charge of them. If your brand is selling on Amazon through Vendor Central, but no one is really paying attention to what’s going on, you are likely losing out on a lot of potential sales.

In order to get things moving a little better, you’ll need to put someone in the driver’s seat. Someone who understands your brand, product line, and the marketing and operational elements of an Amazon vendor account. 

As a start, there are great resources in your Vendor Central account you may not even know exist. Once signed in, under “Help,” you are able to browse various topics for more information and even watch short videos that provide an overview.

In addition, we’ve developed a free Bobsled Marketing Vendor Central training course.

It’s time to wake your Amazon VC account back up and start making the most of this booming sales channel!

Amazon Weekly News: April 17, 2018

Each week I share the top news that impacts brands and merchants who sell on Amazon. My digest for this week includes new estimates for how many consumers use their phones to comparison-shop while in store, Amazon dominates wallets in the UK as well as the teen market, a landmark sales tax case goes to the Supreme Court, and a seller fee promotion to boost sales of products priced under $7.

 

Seventy percent of shoppers use their phones for comparison shopping while in-store

  A customer uses his iphone to photograph the new HomePod during the launch of the HomePod at the Apple Store on February 9, 2018 in Sydney, Australia.     Photo Source: James D. Morgan/Getty Images)

A customer uses his iphone to photograph the new HomePod during the launch of the HomePod at the Apple Store on February 9, 2018 in Sydney, Australia.

Photo Source: James D. Morgan/Getty Images)

A survey from UPS on online shopper habits revealed that almost all (96% to 99%) of online shoppers surveyed in the U.S., Asia, Europe, Canada, Mexico, and Brazil, have made purchases from online marketplaces (Amazon, eBay, etc). Not groundbreaking news, but what was interesting were the findings that 70% of shoppers in all regions are using mobile phones for comparison shopping while in-store.

This is important for brands selling on Amazon and other marketplaces because it confirms the need for consistency across sales channels. A large discrepancy in price point can cause channel conflict for brands and put a strain on relationships with retail partners who find their customers are completing their purchases on Amazon because the price is lower.

But this phenomenon also reinforces the need for brands to provide detailed product information on their marketplace product listings. It could be that a customer is unable to get help from an associate while in the store, or wants to check out product reviews from other customers before completing their purchase. Whether the final transaction is completed in store or on a marketplace like Amazon, it’s in brands’ best interest to have their online product listings fully optimized.

 

Amazon dominates UK retail scene

Analysis from GlobalData has found that Amazon is the fifth largest retailer in the UK, accounting for 33.5% of all UK spend online in 2017, versus 29.6% in 2016.

GlobalData says that Amazon continues to outstrip online spending growth in the UK, with revenue estimated to have risen by 22.5% compared with total online spend increasing 8.4%.

Amazon has invested heavily in the UK market over the past few years, challenging well established grocers and department stores with the Amazon Prime service. The Fulfillment By Amazon (FBA) program allows merchants from there countries to send inventory to Amazon in the UK to be fulfilled locally. Amazon confirmed at the retail industry's Shoptalk conference in April that there are 175 fulfillment centers worldwide.

 

Amazon promotes low-cost items with minimum fee promotion

Amazon is offering a $0.30 discount on referral fees paid by Third Party merchants for products priced under $7.00, and a discount of $0.50 on products priced under $3.50.

The promotion is limited to new products that are launched between April 10 and August 15 this year. Grocery & Gourmet and Media products are also excluded.

  Amazon's "$10 and Under" storefront.

Amazon's "$10 and Under" storefront.

A few months ago, Amazon launched a microsite for products priced at $10 or less. Some speculated that this was a direct swipe at the dollar store market, which seems to be relatively immune to Amazon. By widening their low-priced selection, Amazon is able to attract and retain more value-oriented customers, including teens (more on that below). And the fee discount makes if more attractive for merchants to offer products at this price point.

 

Ongoing threat of sales tax reform spooks retailers

Today, the Supreme Court will begin hearings from retailers who are challenging a South Dakota law that requires out-of-state retailers to collect sales tax in the state. The decision will have implications for other states who are looking at updating sales tax laws.

Amazon already collects and pays sales tax on orders for its own inventory, but more than half of all Amazon orders are sold by third party merchants, who are responsible for complying with states’ requirements. The issue of which states to collect and remit sales tax in is further complicated for merchants who use Amazon’s FBA program, which distributes inventory to various states depending on customer demand and warehouse capacity. If laws are passed that require only a physical presence in a state in order to be taxed, merchants may unwittingly end up with sales tax obligations in dozens of states.

The ultimate cost of administering the often complex filings of each state is a cost that many merchants--large and small--are concerned with.  According to the publication Accounting Today, Max Behlke, director of budget and tax at the National Conference of State Legislatures, calls this case the "tax case of the millennium."    

 

Amazon’s R&D investment soars

According to FactSet data reported by ReCode, Amazon spent $22.6 billion on research and development in 2017, 41% more than the prior year. This includes spending on AWS, Alexa, and technology used in the cashierless stores that are being rolled out.

This investment is promising for brands selling on Amazon. Voice commerce is widely cited as being the next major technology that consumers will use to search and buy products, along with a whole host of other activities. And AWS is a cash cow that Amazon can use as a buffer with the capital intensive retail business. Amazon is setting itself up for the future.

 

44% of teens call Amazon their favorite retailer

New research from investment bank Piper Jaffray finds that Amazon is the clear leader in the teen market. 44% of teens say that Amazon is their favorite shopping website, with Nike a distant second at 8%.

A shift to online shopping was a broader trend seen in this year’s survey, with teens spending 2% more than a year ago, and online shopping accounts for 19% of shopping a compared with 17% a year ago. This was at the expense of department store shopping, which was down to 38% of shopping time versus 41% a year ago.

Today's teens represent an important market for Amazon--winning the hearts (and wallets) of this group ensures a strong customer base going forward.

 

This is all the news I have to share with you this week. Subscribe to our newsletter to make sure you receive my news recap next week!

How National Brands Can Compete With Amazon’s Private Labels

National brands have competed with private labels from the beginning of retail history, and the emergence of a digital retail giant like Amazon doesn’t mean brands should cower and run for the hills. 

Here’s how companies can compete on the giant retailer’s turf when Amazon is already ahead in the game. 

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BUILD STRONG CUSTOMER TRUST

Jason Goldberg, SVP of Commerce & Content at SapientRazorfish, called the new wave of private labels an ‘owned-brand’ strategy on a recent episode of his podcast. His advice is to avoid making “a carbon copy of the national brand and just put it on the product detail page.”

Instead, he says, the strategy should be to “create a product that has its own value proposition, and in many cases has competitive advantages versus the national brand. And then let’s market the hell out of it and make people want it.”

Goldberg’s podcast co-host Scot Wingo, Executive Chairman at ChannelAdvisor, agrees. “If you’re a brand, and you don’t believe your brand has enough value to stand out against a private label, then why are you even a brand?” 

In order to compete, national brands need to focus on building brand equity and make themselves a more trustworthy option than other labels, including Amazon’s private labels. One way to do this is to provide value-driven or comparative content to show why consumers should choose your brand over the competition.

 

PROMOTE YOUR BRAND STORY TO BUILD CUSTOMER LOYALTY

By selling in their own marketplace, Amazon gains advantages that no one else has, including:

  • The ability to rank their own products higher than other brands in search results
  • Using competitor sales data to drive their own strategy and determine what’s popular
  • Developing their own product lines to compete with the top contenders
  • Getting valuable insight into buyer’s behavior that other brands don’t have access to


Since Amazon has access to an incredible amount of raw competitor data, they watch what national labels do, and then use this advantageous perspective to turn around and do it even better. 

The strongest way for national brands to compete is by promoting their brand story. 

Take Burt’s Bees for example. Their story began with a couple who turned their love of candle making and beekeeping into the iconic natural skin care brand it is today. By harnessing the power of their brand story, Burt’s Bees increased revenue to more than $153 million in 2017. 

This success was fueled by the brand’s commitment to natural ingredients and premium product quality, which customers know about and may choose over competing labels like Amazon’s ‘Beauty Bar’ cosmetics.

Thanks to the constant promotion of a congruent brand story, when potential customers search on Amazon for quality skin care products with natural ingredients, they’re more likely to type in ‘Burt’s Bees’ instead of more generic terms such as ‘beeswax lip balm’ or ‘natural hand salve.’ 

This renders much of Amazon’s private label power irrelevant in the niche that Burt’s Bees operates in. Other brands can leverage the power of their brand’s story in their own niche using this success as an example.

 

LEVERAGE AMAZON’S OWN TOOLS TO DOMINATE SEARCH RESULTS

Do you remember when Amazon ONLY sold books?

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Believe it or not, it’s been 20 years since Amazon first expanded their offerings and became ‘The Everything Store’ before growing into a massive Ecommerce giant with products competing in nearly every space imaginable.

Many national brands respond to Amazon’s encroaching presence by running a promotion - hoping it will drive sales. In response, Amazon uses lightning deals, coupons, and snags valuable advertising spots and preferential placements in search results to compete with even the most successful competitor promotions. 

Amazon makes sure their products are seen first, and they offer the best deals as often as they want to. In order to compete against this advantage, make sure your brand name is as visible as possible by reaching for top search results with the tools already provided by Amazon. 

For example, Amazon’s PPC (Pay Per Click) advertising platform allows brands to run sponsored products and headline search ads. This means you can pay to be in the top search spots so consumers find your brand first when they’re looking for specific products.

 Image Source:&nbsp; amazon.com

Image Source: amazon.com

Brands should also make sure they understand how Amazon’s search algorithm works, and then target the highest volume keywords within their budget.

 

CREATE CONGRUENCE BY CONTROLLING HOW YOUR
CONTENT APPEARS IN AMAZON

Some national brand owners make the mistake of abandoning Amazon completely to avoid proprietary data sharing. Unless you’re an exclusive name with high-end products that most people can’t afford, chances are someone else will post your brand on Amazon and they’ll obtain your sales data anyway. 

The truth is that people want to shop on Amazon. Taking your label off Amazon will not only lose you sales, but you’ll also relinquish control of your image and reputation to third-party sellers who may not set the correct standards when listing on Amazon. 

Instead, accept selling on Amazon as part of your larger strategy so you can control your content. 

For example, some products are categorized by Amazon incorrectly, which can affect the number of shoppers that see your listing. Make sure you check your listing categories carefully so you can control how your content appears on both Amazon and in the search results.

 

AMAZON HAS CHANGED THE PLAYBOOK, BUT IT’S NOT THE END

According to Goldberg, “if you’re in a world where the only way you can survive is if no one else competes with you, you’re at the end of your life.” 

Your name has survived (even thrived!) against strong competitors before, and Amazon is just another contender.

With these key strategies in mind, staying competitive becomes much more manageable and you don’t have to accept crippling drops in sales. Not only will a solid, targeted strategy help boost your national brand’s potential, it also helps maintain the brand equity you already have.