Online shopping is the new norm in the world of retail. Malls are continuously closing all over the US and more and more people are turning to their phones and computers rather than physical store locations for even simple day-to-day purchases. On top of all this, the COVID-19 pandemic has pushed shopping culture even further down the road toward online shopping as people have attempted to limit their own exposure to others over the last year. Because of all these factors, having a strong online presence is becoming more critical for businesses than ever before, especially on the platform that is the reigning king of the e-commerce realm, Amazon.
Because of the sheer amount of traffic Amazon draws, more and more businesses have been turning toward it every year to try maximize their growth and revenue. When this is done properly, Amazon can become a major revenue stream for businesses and help them climb to new heights. However, when thinking about taking a business to Amazon, the question is often asked, Is my brand right for Amazon? In all honesty, the answer to this question may be more complicated than one might realize. Based on our experience helping dozens of brands build their presence on Amazon, here are four of the most important factors to consider when it comes to answering that question:
1 – Amazon is an Investment, NOT quick money
The first thing a business should consider when thinking about listing their products on Amazon is that, contrary to popular belief, Amazon is NOT a platform where you can list a product and expect to make money right away. According to BBS CEO Dan Meszaros, success on Amazon is “the result of doing the fundamentals of Amazon correctly for a long period of time.” Overall, Amazon is an investment that requires constant attention. Before venturing onto Amazon, brands need to make sure that they are ready to play Amazon’s game for the long haul, patiently building their presence in the marketplace. If a brand isn’t ready for this kind of commitment, you may find yourself disappointed with your experience on Amazon.
At the same time, some brands don’t take Amazon seriously. They believe they can assign “Amazon duty” to one of their existing employees or make a single new hire to manage their Amazon channel—which is misguided. What these brands may not realize is just how multi-faceted Amazon is and how many hands it takes to manage one account effectively. Because of this, more and more brands are turning to expert agencies like BBS to manage this complicated channel for them, streamlining their own workload and growing more efficiently in the space.
2 – Remarkable products win on Amazon
One of the reasons it takes so long to build a presence on Amazon is because of how competitive of a space the platform is. Because of this, if a brand is too bland or generic, it will probably be buried by competition within the category. Amazon puts all of its efforts into making sure consumers click “buy”, so they make huge efforts to put products in front of consumers’ eyes that they are most likely to purchase. This means they have an easily understandable product that has fantastic branding, beautiful photography, and professionally written copy to make their listings look elite in the space. Within competitive categories, BBS has seen that the brands that break through on Amazon tend to be the “disruptors” or those that are revolutionary among their competition in some way, including product quality, user experience, and pricing. The products that truly appear to be one of a kind will win out on Amazon.
3 – Preparation and Launch Strategy are CRITICAL
Along with having a revolutionary or remarkable product, your brand also needs a launch strategy that has been thought through very thoroughly. Doing extensive category research and understanding your own industry on Amazon backwards and front are key to success because each category and product type comes with its own share of problems. These can cause absolute havoc for a seller’s account when not planned for carefully.
For example, in the category toys and games, children’s toys have to go through a very strict approval process that can take months to complete, potentially pausing revenue entirely for whatever products are under review. At the same time, toys and games is an extremely competitive category on Amazon, and it is very easy to be buried by the mountains of other listings fighting to be seen. Another example of a category that has its own share of problems is clothing and apparel. Beyond the sheer competitiveness of the category, sellers also have to consider factors such as seasonality of items, sizes to match an extremely diverse audience, and the TERRIBLE return rate for clothing items on Amazon.
As these examples illustrate, sellers need to be ready to hit the ground running on Amazon no matter what category you sell in. If you walk in unprepared, you can get tied up in issues for months.
4 – Product Sizes and Amazon Fees
Interestingly, even item size is an important factor on Amazon. Since Amazon charges FBA fees and storage fees based on the size of items being sold, large and heavy items are at a distinct disadvantage since margins can be hurt so badly by those fees. At the same time, Amazon scrapes sites outside of itself to make sure pricing is consistent for Amazon shoppers, so trying to raise prices to offset those fees could get your listings flagged. Because of this, it’s important to take the time to understand how your products will interact with the Amazon system, and what kinds of FBA and Storage fees you will deal with on the platform. If you do, you will have a much better understanding of how your brand will perform in the space and what your margins will look like in the long run.
In response to the question, Is my brand right for Amazon, BBS wishes to pose a question in return: Can you afford not to have a presence on Amazon?
As we stated above, Amazon is the king of the world of ecommerce, so how could a brand that is taking its own growth seriously ignore such a prominent channel? However, as we have illustrated with the points above, success on Amazon isn’t as simple as listing a product and waiting. Real growth takes serious planning, as well as time and attention. Brands need to carefully manage their expectations to accept the reality of Amazon as it stands today, which means investing in their Amazon presence in the long run.
Because of the complicated nature of Amazon and the myriad of mazes to navigate on the platform, including many we did not mention in our tips above, more and more brands are investing in their futures on Amazon by hiring agencies like BBS to help. In reality, this is the BEST strategy for brands to grow on Amazon because of the experience we have on the platform. We know what the recipe is for Amazon growth, we have seen the potential hiccups, and we have navigated the mazes hundreds of times. Knowing what we know, we believe that your brand can succeed on Amazon, especially with the right guide!