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.

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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. 

 

3 Ways To Improve Profit Margins On Amazon

The top brand managers know that in today’s competitive world of online retail, promoting a national brand across multiple channels is pivotal to any successful marketing strategy. In fact, many brands balance their own Ecommerce store with traditional brick and mortar retail partners and other online marketplaces like Amazon or Shopify. 

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In 2017, Amazon customers totaled over 300 million, making it one of the most popular online retail marketplaces. Their Prime program provides incredible reach and exposure, making the marketplace a goldmine for many national brands across various industries. 

However, a growing multitude of selling and fulfillment fees are narrowing profit margins, making selling on Amazon more and more costly. 

Fortunately, the top national brands have found ways to increase their profit margins when selling on this mega-retail channel. 

Relative to a national brand’s own Ecommerce website, selling on Amazon can be expensive, especially when using Fulfilment By Amazon (FBA). Amazon’s fees include commissions, pick & pack costs, inbound shipping, labor, and more. 

One way to prevent these fees from eating away at profits is to identify which fees can be reduced or avoided altogether. Here are 3 ways brands can reduce fees and other costs to increase their profit margins.

 

#1 MAKE SURE AMAZON ISN’T CHARGING YOU INCORRECTLY

One of the easiest ways for brands to increase profit margins is to identify inaccurate charges by making sure Amazon is charging correctly for shipping costs. For example, FBA shipping fees vary based on package sizes, but automatic categorization or human error can dramatically impact Amazon charges. 

For example, there are cases of one item having two shipping weights simply because an order was filled at different Amazon fulfillment centers. Sometimes, a color variation on identical products results in disparate descriptions because the weight information is input separately, also leading to variable shipping costs.

It’s up to brands to check the size, weight, and description of their Stock Keeping Units (SKUs) regularly so they don’t waste money on inequitable charges. Brands that discover inconsistencies should contact Amazon and ask them to re-weigh items, saving substantially across multiple orders.

 

#2 ALLOW DYNAMIC LISTINGS TO DRIVE PROFITS

Slow moving products on Amazon dip into profits, making inventory another critical area to examine. 

How much inventory is stored with Amazon and how long does it stay there? 
A shocking number of national brands don’t know the answers to those questions. 

Experienced brand managers know that storage costs are substantial if product turnover is drawn out too long. In fact, Amazon recently changed the way they structure inventory storage fees, making this an even costlier expense in 2018. 

They’re now discouraging inactive product inventory by increasing storage fees and changing their long-term storage fee structure from billing every 6 months to every single month. By moving from a semi-annual assessment to a monthly basis, fees have increased by a whopping 6% on average.

The bottom line is that Amazon has fulfillment centers, not warehouses. 

Amazon doesn’t want to store your products a second longer than they have to, so they use penalization fees to motivate brands to move inventory quickly. As a result, brands that take up valuable real estate in their packaging centers risk a higher loss on profit margins. 

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National brand managers need to identify sluggish items that leach into profits and then discontinue them on Amazon. 

A far better strategy is to promote a diverse catalog of SKUs on a brand’s company website, and keep only the most effective SKUs on Amazon. 

If a brand already has hundreds of listings on Amazon in an effort to maximize reach and exposure, then start by optimizing the best performing items through advertising and quality reviews. Increased visibility on profitable items can offset the extra cost from listings with slower activity.

 

#3 CULTIVATE THE MOST APPROPRIATE CONTEXT FOR MEASURING SUCCESS

As any national brand worth their salt already understands, profitability and sales tell two different tales. The main concern for most brands is profit, but measuring success based on this number alone is a mistake. 

While profitability is undoubtedly important, it may not be the main focus for a company 100% of the time. For example if a brand is working towards other growth objectives, such as developing their brand equity or customer loyalty, then additional variables will need to be considered. 

To see the true measure of profitability and success when selling on Amazon, companies also need to consider: 

  • Brand equity - Some customers prefer certain brands and will seek them out on Amazon, regardless of promotional or competitor prices on the same type of product. If a brand isn’t available, they risk losing those preferred sales to the competition.
     
  • Market share - If brands want to stay competitive and maintain their market share, they need to perform in every arena - including Amazon. Brands should remember that competitors face the same challenges, so dropping out in this major retail space counts as a loss in the overall market. 
     
  • Acquisition costs - The way a brand earns a customer’s business differs across every sales channel - from Amazon, to their Ecommerce store, to their brick & mortar partners. This variability makes customer acquisition costs a vital component to consider when looking at profitability. Lower costs to earn new customers may justify smaller profits per item. 
     
  • Customer lifetime value -  CLTV refers to the frequency of purchase, multiplied by the profit of each purchase (CLTV = Purchase frequency x Purchase Profit). This means that brands need to track CLTV across different purchase channels. While Amazon doesn’t report this data natively in its dashboard, brand managers can cobble together their own system to calculate CLTV using a combination of Amazon reports and their own tracking spreadsheets. By comparing this data across various sales channels, brands will be able to offer consumers the choice of shopping on their preferred channel. 

As you can see, overall profits tell only one part of a larger equation. Brands need to remember that profitability comes in numerous forms, which can be harder to measure. If they can adjust their thinking, they’ll be better equipped to handle selling on this retail marketplace. 

 

STAY PROFITABLE BY CONSIDERING CONTEXT WHEN SELLING ON AMAZON

The cost of selling on Amazon often leaves national brands questioning the ROI of directing more resources to this marketplace. What brands need to realize is that, unless they want to risk losing a major portion of Ecommerce sales, neglecting Amazon isn’t a viable option.

A better solution is for brand owners to approach each sales channel uniquely and shift their views on marketing, customer acquisition, sales, and profitability appropriately for each marketplace. 

For example, traditional Ecommerce sales leverage email campaigns as part of their marketing strategy. However, that methodology doesn’t translate well to Amazon since brands aren’t allowed to remarket to their consumers. 

Once brand owners adjust their thinking, they can develop tailored strategies to maximize profits for each marketplace appropriately. 

Part of the strategy for brands to improve profit margins on Amazon is to verify all listing descriptions and check for inaccuracies. Brands should only keep items with fast turnover times in their Amazon catalog and remove sluggish inventory. 

Along with maximizing profits, it’s also important for brands to expand their understanding of profitability to get the full value of selling on Amazon. In the overall picture of a brand’s success, immeasurable elements like reach and exposure can far outweigh profits alone.

 

Special programs that bobsled has participated in - fashion accelerator program & luxury beauty

Amazon is no stranger to branching out, and doing it with precise intention. That’s why they have created a whole host of programs to attract and assist brands on the platform. From programs to help market your products, to new marketplaces, and programs designed for specific categories; these programs indicate where Amazon sees opportunity in the market, and as a result, opportunity for sellers.

Bobsled has a unique viewpoint on these programs, as we help our client brands navigate the choices and make use of programs where there is a match. As a result, we’ve had the opportunity to learn more about and harness the features of several programs, from beauty, to fashion, and more. 

This landscape is an ever-changing one, and we make it our business (quite literally) to keep up with what’s new, what’s changed and what Amazon has decided to shut down. In this blog post we’ll dive a little further into a few of Amazon’s special programs and our experiences with them in the hopes of making more brands aware of the opportunities available to them.

 

The Fashion Accelerator Program

Fast fashion is a term we’re hearing more all the time, so it’s no surprise that Amazon is a big proponent of this trend. When you look at the ease of adding new products on the Seller Central platform you can see why it’s such a great avenue for testing new products quickly. As a result, Amazon has approached the fashion industry very intentionally with the Fashion Accelerator program.

Amazon invites fashion brands to the program and helps them identify the types of products they should be testing on the platform. The brand can then create styles, size runs and quantities based on Amazon’s provided data and advice and start selling them on Amazon. This program allows fashion brands to test new products and then react to results by quickly creating larger runs of successful products.

If a product is successful in the Fashion Accelerator it could then potentially be sold as a part of Amazon’s private label. So, Amazon is essentially using the Fashion Accelerator program to feed their private label, but the brand can also maintain their own listing of the product through SC.

Amazon shows they are serious about making this program work as each account is assigned a rep to help move the account through the different phases of setting up product. A wealth of tools are shared with accounts to help them optimize pages, copy, and their Seller Central account, and Amazon handles so many aspects of this program, from product photography all the way through to marketing, making the Fashion Accelerator a very different kind of program for sellers who are already familiar with Amazon’s selling ecosystem. 

Photography is extremely high-quality, but can take weeks to complete, once Amazon receives product samples. Marketing is exceptionally good, with high-value placements all over Amazon, but no data is given to explain how that marketing is performing, which - for anyone who has used the advertising portal in Seller Central - will feel like a disadvantage. 

The good news is that the marketing help and tools unique to this program can drive much higher sales than a seller might be used to. The bad news is that these higher sales can lead to stock-outs. Amazon will try to help sellers keep inventory levels high, but it helps to stay on top of this as early as possible, and to identify which styles are really taking off, as part of the test and react model. Finding those early bestsellers, and then using those as templates for additional styles, is a key to success for future iterations of product within Fashion Accelerator.

 

Luxury Beauty

The beauty market is a multi-billion dollar opportunity, and Amazon is pursuing a good chunk of those dollars. That’s why they have created the Luxury Beauty category, to operate alongside the standard beauty category.

Bobsled has been learning about the Luxury Beauty category a fair bit in recent months, as it has changed the way that different types of brands sell on the platform. Amazon is pursuing large beauty brands to feature in this category, alongside many high quality, niche products. Brands like Stila and Dermablend set the tone for the kinds of brands you find in this program.

Here at Bobsled we have the opportunity to work with several beauty brands that produce high quality (often on-trend, natural) beauty products. These products are a great fit for the Amazon Luxury Beauty program, because they cater to a higher end market. 

With average CPC among our beauty brands brushing a relatively high $0.80 and ACoS averaging out at just over 25%. There are no free rides in the beauty category, but there is also a lot of opportunity to be had here. One of our beauty brands increased sales by 1551% same week Year Over Year (YOY). January 2017 (sales $879.69) - January 2018 ($14,527.61).

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While Amazon’s Luxury Beauty category has long been an exclusive group known to be “invitation-only”, Bobsled recently learned that this may be changing. Bobsled works with a brand that focuses on high end face moisturizers and is currently in the Beauty category. We opened a case with Amazon to request consideration for admission into the Luxury Beauty category based on the brand’s placement as a high-quality, niche product. Instead of the expected Amazon response that we must wait for an invitation to the coveted Luxury Beauty category, Amazon responded with the following: 

"I have investigated the issue with our internal team and they have informed us that for this restriction their is no invitation process you need to go through the approval process.

To seek approval to sell in Amazon Luxury Beauty category, please follow the below mentioned process:
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> I would request you to send all the proof to this team via email: notice@amazon.com this team deals with Luxury Beauty category restriction.

>I have reviewed the screen-shot which you have provided as a proof I would suggest you to submit in PDF format.

> The manufacturer has to write an email to this team: notice-dispute@amazon.com approving you to sell this product."

Instruction on how to apply for the Luxury Beauty category was not expected as, at this point in time, Bobsled had not seen official instruction on a change in this process. Application to the Luxury Beauty category is currently in progress for this brand, based on Amazon’s instructions above and this can be a game changer for other beauty brands that seek admission into Luxury Beauty. 

 

Vendor Express

The Vendor Express program is a program that Amazon has now phased out, but while it was still live, it served brands wanting to have a wholesale relationship with Amazon without needing an invitation.

This program allowed any brand to hand over their product and have Amazon fully manage the listing, selling, shipping and customer service. You could say that this program operated somewhat like a junior version of Vender Central; handing over control of a product to Amazon, but wasn’t a fully fledged wholesale situation.

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We’ve never been huge fans of this program as it seems to contain the cons of both the Seller Central and Vendor Central platforms. As Kiri mentions in her recent commentary on Forbes “It was a halfway house with all the cons of both models - unlike with the full Vendor Central platform where brands are assigned a real human being to negotiate wholesale terms, pricing, and to workshop other issues - brands on Vendor Express were relegated to algorithmic pricing of their products and no human support. And unlike on Seller Central, brands on Vendor Express couldn’t access many of the new promotional tools and programs like Brand Registry 2.0.”

It seems that Amazon has learned its lesson with this program, as it has now been taken offline. This shows that they are pushing to have two defined platforms (SC and VC) and that a halfway program like this was not beneficial for Amazon or for brands.

Amazon has also implemented a hiring freeze on representatives for VC as they work to push more brands towards SC, with the addition of marketing tools previously only available to VC and Vendor Express members. This indicates that Amazon is looking to grow their revenue with less human capital by encouraging more of a self-serve environment on the more fully-featured, SC side.

 

Find the Right Amazon Program for Your Brand

Amazon continues to expand their variety of programs and capabilities for brands wanting to sell on the platform. If your brand has been hesitant to try this selling channel the Bobsled team can say for certain that opportunities exist for all kinds of products. Contact us to learn about how we can optimize those opportunities for your brand.