If you’ve been considering starting an eCommerce business, now is actually a great time to jump in. Of every single product sold online, over half of them are sold on Amazon. And thanks to their Fulfilled by Amazon (FBA) program, you can run a physical products business without worrying about fulfillment or customer service.
Like almost every other element of our society, COVID-19 has affected Amazon. However, the eCommerce giant is taking big steps to ensure its third-party sellers (or, people like you) are still able to start and build profitable businesses from the comfort of their homes.
For you, that means there’s a great opportunity to launch products that meet growing demand while still obeying Stay-at-Home orders. Let’s walk through 3 reasons why it makes sense for you to start selling on Amazon during this time, plus what steps you can take to get started.
3 Reasons to Get Started with Amazon FBA
If we know one thing for sure, it’s that people will continue to purchase products online… now more than ever before. Here’s why it makes sense to meet that demand through Amazon FBA.
1. It takes time to learn the process.
The journey of selling on Amazon involves quite a few steps. In order to get real results, it’s important that you’re informed of rookie mistakes and best practices along the way. For many of us, COVID-19 has provided some extra time at home. (If you’re an essential worker, we thank you for your service!).
A great way to spend that free time is to dive into learning what it takes to be successful as an Amazon FBA seller. In fact, we created a Free A-Z Amazon Course with two entrepreneurs who grew 7-figure FBA businesses from scratch in a few short years. They started in your shoes, learned the process, took action, and now provide for their families on their own terms. Check out the free course and see if Amazon FBA is a good fit for you.
2. There is increased demand.
With many states under strict Stay-at-Home orders, Americans (and people all over the world) are turning to Amazon to meet their physical product needs. At first, Amazon struggled to meet this increased demand. However, they have recently added 100,000 workers and plans to add 75,000 more, and now they are once again accepting all products – whether they’re essential or nonessential – into their FBA warehouses across the country.
Essential items are obviously seeing a dramatic increase in sales. But there are other products that are seeing positive movement, too. This includes home workout equipment, homeschooling activities, gardening products, and more. Now is the time to analyze which markets are being positively affected and which are hurting. A research tool like Market Intelligence shows you graphs of sales movement for individual products and across entire markets, so that you can make predictions about the future to determine which markets you may want to enter and which markets you want to steer clear of. Start your free trial to begin researching.
3. The supply chain is stabilizing.
The Coronavirus originated in China, which is where a majority of third-party Amazon sellers source their products. With China on lockdown earlier this year, most warehouses were unable to produce products. However, China has been stabilizing, and many manufacturers are back up and running… Many of them are even working overtime.
Once you decide on which product you want to sell (and remember, it’s crucial to get into a market with high opportunity and low competition), you’ll want to find a reliable manufacturer to produce it. By reaching out to suppliers on Alibaba, you can see which factories are fully operational and begin bringing your product to life.
How to Get Started with Your First Product
There are quite a few steps that go into this process, but we’re going to lay it all out for you. Afterall, it’s important to know what you’re getting yourself into! At a high level, here’s the what it looks like to successfully launch a product on Amazon:
Research different markets
Pick a product with high opportunity and low competition
Find a few manufacturers who could produce the product
Order inventory from the best manufacturer
Ship your inventory into Amazon warehouses
Create a listing optimized for SEO and conversions
Drive external traffic to the listing to boost your keyword rank
Run Amazon advertisements
Solicit reviews for social proof
Of course, there are steps within these steps. In order to feel confident in how you should move forward as you’re building your business, we highly recommend following a course. The best way to set yourself up for success is to follow in the footsteps of someone who has done what you’re trying to do. Like mentioned earlier, we put together a free Amazon course alongside two veteran sellers, and it will aid you along your entire journey.
You’ll find that your first step is to choose a product with high opportunity (or, one that will make you money) and low competition (or, one that you can become dominant with quickly). There are many methods of finding product ideas. You could browse Amazon to see what’s hot, or you could use software that identifies stand-out markets for you. For example, Product Discovery pinpoints markets that are ripe with opportunity now so that you can make the most out of an otherwise crummy situation.
Join the Amazon Seller Family
COVID-19 has certainly shifted the way we live and work, but it’s also opened opportunities for those that are bold enough to seize them. As someone who has been considering Amazon FBA, now is a great time to take action and get started. More and more Americans are shopping online. Amazon is reducing fees and making sure the infrastructure is strong. And with the internet at your disposal, you can learn what to do at every single step in your journey.
Feel free to join our Facebook community of thousands of Amazon sellers. You’ll find people just like you who are agile, resourceful, and ready to take on a challenge that will ultimately provide for them and their families. Here, you can make friends, keep up to date on the latest news, and be supported in your journey with Amazon FBA.
The team here at Viral Launch is dedicated to supporting you, whether it’s business as usual or not. Let us know how you plan to take advantage of the online revolution that COVID-19 has only accelerated. We’re pumped to equip you with everything you need to succeed!
If you’re an Amazon seller with nonessential products ready to ship into FBA, we’ve got some good news for you. This week, Amazon will start accepting shipments of nonessential items into their warehouses once again.
In fact, some sellers reported that they have been able to create new shipping orders as early as last week (the freeze started on March 17 and was supposed to end on April 5). Like most changes, Amazon seems to be gradually rolling out this ability.
Here’s what a company spokeswoman shared, “Later this week, we will allow more products into our fulfillment centers. Products will be limited by quantity to enable us to continue prioritizing products and protecting employees, while also ensuring most selling partners can ship goods into our facilities.”
Amazon is taking these steps so that we can move forward with our businesses, even amidst the uncertainty and frustration. It’s time to buckle down, take action, and ensure your business endures (and hopefully even gets stronger) during this season. Luckily, there are some small steps you can take to set your business up for success now and in the future. Let’s get into exactly what you can do.
How to Check if Your Products are Eligible
You’ll first want to see if your products can be shipped into Amazon. To do this, you will create a standard FBA Inbound Shipment in Seller Central. As you’re selecting your Shipping Plan options, you may see the following message:
The alert reads: We are temporarily prioritizing household staples, medical supplies, and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and deliver these products to customers. For products other than these, we have temporarily disabled shipment creation. We are taking a similar approach with retail vendors.
Through our testing, we were still able to create an inbound shipment even while this message was present. If you can complete each of the steps below without getting an error message, your product is once again eligible for inbound shipments to FBA.
7 Steps to Creating an Inbound FBA Shipment
Go to the Manage Inventory Tab
Select Send/Replenish Inventory for the chosen product
Create a new shipping plan
Set the quantity of units
Select who will prep the goods: you or Amazon
Print labels, if needed
Review the assigned Amazon warehouse
If you do get an error message, try lowering the number of inbound units. Due to the increased demand from Stay-and-Home orders during COVID-19, Amazon is placing limits on how much inventory can be shipped in.
We recommend testing this every day until you’re able to successfully create a shipment, especially if you have inventory waiting to be sent into FBA. You never know when the company will flip the switch for your specific products, though you should have the ability within the coming days (if you don’t already).
Other Notable COVID-19 Updates for Amazon Sellers
COVID-19 has rapidly changed the way we live and operate as a country… and as a world. Sometimes it feels hard to keep up with the news, the changes, and the best practices moving forward.
Here at Viral Launch, we’re dedicated to helping third-party sellers navigate the Amazon seller journey, no matter how messy it may get. Here is a condensed list of the most important Amazon updates you should be aware of.
Keeping Up with Demand: You may have noticed that Prime delivery dates have been pushed back by up to one month. Amazon is slowly gaining control and reinstating 2-day delivery as they’ve filled 100,000 new jobs since March are adding 75,000 more to keep up with demand.
Waived Fees: In March, Amazon announced they would waive the April 15 long-term storage fees plus two weeks of inventory fees for products stored in the U.S. and Europe. In addition, Amazon Lending direct loan repayments are on pause until at least April 30.
Account Suspension Pause: Earlier this month, Amazon temporarily paused suspensions related to supply chain and fulfillment issues. This is in effect until at least May 15.
Delayed Prime Day: Amazon normally hosts its annual sales extravaganza in mid-July, but this year Prime Day will be delayed (likely until August 2020 at the earliest).
Major updates are typically added to the “COVID-19 Related Announcements” News thread in Seller Central, and we will be sure to update the community frequently with pressing information.
How to Move Forward
If you’re a little bit uneasy about the state of the market right now, don’t worry. You’re not alone. COVID-19 has put all of us in uncharted territory, and so moving forward, all you can do is your best. As always, the team here at Viral Launch is here for you with the latest news and advice on which steps you should take to ultimately see success. In the wake of this pandemic, here are three ways you can make the best use of your time:
1. Study the process.
While some things have changed, the principles of success have remained. Think about it… there are more people than ever shopping online right now. And Amazon is doing everything it can to support the infrastructure that allows you to meet that demand. As an Amazon seller, you should familiarize yourself with the strategy behind a successful Amazon operation. This may look like brushing up on your skills with a free A-to-Z Amazon Course, or it may look like networking with like-minded people in an Amazon seller Facebook group. There is always something to learn, and like Oprah says… when you know better, you do better.
2. Research the impacts.
Essential items are obviously seeing a dramatic increase in sales. But there are other products that are seeing positive movement, too. This includes home workout equipment, homeschooling activities, gardening products, and more. Now is the time to analyze which markets are being positively affected and which are hurting. A research tool like Market Intelligence shows you graphs of sales movement for individual products and across entire markets, so that you can make predictions about the future to determine which markets you may want to enter and which markets you want to steer clear of moving forward. Start your free trial to begin researching.
3. Add to your product line.
Lots of countries are completely shut down, but many Chinese manufacturers are back up-and-running. And as Amazon gets a better grip on the magnitude of orders coming through, now actually isn’t a bad time to add to your storefront. It’s also more important than ever that you understand exactly what to expect in a market, so you’re not selling out in the first week or left with hundreds of products left sitting in a warehouse. With a reliable product finder and a robust market research tool, you can pinpoint markets that are ripe with opportunity now and make the most out of an otherwise crummy situation. Start researching for free now.
How has COVID-19 affected your business? And what are your plans moving forward? We’d love to hear from you in the comments. Remember… we’re all in this together.
Being an Amazon seller has always come with its hurdles, but as the world grapples with the Coronavirus (COVID-19) outbreak, sellers face a new kind of challenge. This guide will walk through what changes have arisen, how all of this affects you as a seller, and what you can do about it.
The Coronavirus has caused lawmakers at state and local levels to encourage and enforce that citizens stay inside their homes for anything other than essential activities. As the world works from home out of necessity, the eRetailer is the go-to source for delivered goods (the eCommerce giant already owned 52% of all online sales in 2019). Household staples and medical supplies are running low, and Amazon is racing to keep their digital shelves stocked to meet surging demand. “Getting a priority item to your doorstep is vital as communities practice social-distancing, particularly for the elderly and others with underlying health issues,” said an Amazon representative in an Operations blog post.
Amazon has recently made a few drastic changes that impact millions of third-party private label brands. While it’s something to definitely understand, don’t lose hope. There are still options, and you can get through this. You are an entrepreneur, after all. And we are relentless.
Changes that Amazon has made amid COVID-19
With its origins in China, Coronavirus has been on Amazon’s radar since mid-January 2020. The company announced changes to its fulfillment network and workforce in mid-March to address growing concern and meet surging demand.
1. Sellers cannot initiate a new FBA shipment for non-essential products
Amazon sent the following notification to all active sellers:
Temporarily prioritizing products coming into our fulfillment centers We are closely monitoring the developments of COVID-19 and its impact on our customers, selling partners, and employees. We are seeing increased online shopping, and as a result some products such as household staples and medical supplies are out of stock. With this in mind, we are temporarily prioritizing household staples, medical supplies, and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and deliver these products to customers. For products other than these, we have temporarily disabled shipment creation. We are taking a similar approach with retail vendors. This will be in effect today through April 5, 2020, and we will let you know once we resume regular operations. Shipments created before today will be received at fulfillment centers. You can learn more about this on this Help page. Please note that Selling Partner Support does not have further guidance. We understand this is a change to your business, and we did not take this decision lightly. We are working around the clock to increase capacity and yesterday announced that we are opening 100,000 new full- and part-time positions in our fulfillment centers across the US. We appreciate your understanding as we prioritize the above products for our customers. Thank you for your patience, and for participating in FBA.
For third party sellers, this means that you cannot create shipments to be received at an Amazon fulfillment center in Seller Central until at least April 6th. Only essential items will be accepted as inbound shipments. Essential items are listed within the following categories (but not all items are considered essential):
Beauty & Personal Care
Health & Household
Industrial & Scientific
If your inbound shipment was created before March 17, Amazon will check it in. For existing non-essential inventory in Amazon’s warehouses, you can still expect Amazon to pick, pack, and ship your products, but the process will likely be delayed as essential items are prioritized and shipping carriers race to keep up with increased demand.
If you do sell essential items, beware that Amazon has a zero tolerance policy for price gouging. The marketplace has removed thousands of listings and even threatened legal action against sellers seeking to profit from a global pandemic.
2. Amazon is strengthening its workforce to meet demand
With the surge in online shopping, Amazon is experiencing unprecedented labor needs. Because of this, the company is opening 100,000 new full-time and part-time positions in their fulfillment centers and delivery network across the U.S. Amazon extended an employment invitation to those who have been economically impacted in industries like hospitality, restaurants, and travel.
Amazon will also pay their employees an additional $2 per hour worked from their current rate of $15/hour or more, depending on the region, at least through the end of April. The company seeks to keep health and safety a top priority. “We continue to consult with medical and health experts, and take all recommended precautions in our buildings and stores to keep people healthy. We’ve taken measures to promote social distancing in the workplace and taken on enhanced and frequent cleaning, to name just a few,” said an Amazon representative.
How Coronavirus is Affecting Amazon Sellers
Amazon sellers have mixed feelings about the recent changes. Some are angry with the eCommerce giant, convinced that the moves will put them out of business. Others respect the decision and see all of this as an opportunity to pivot and grow. And most are somewhere in between, hoping for the best and making operational changes with each announcement.
Here are a few of the varied Amazon seller comments posted in response to Amazon’s inbound shipment freeze:
Amazon just put tons of businesses out of business. Destroyed thousands of jobs amidst a crisis. Horrible joke. Absolute joke. No warning. Expect major lawsuits coming from sellers who now will go bankrupt.
This virus is not a joke, and I am sure Amazon didn’t take the decision to suspend FBA shipments, just because they felt like it. Have you considered the fact that the Amazon employees are affected also? Some of them might even be sick, quarantined, have kids at home because of closed schools? It is not about you, it is not time to be selfish. This is a matter of life and death for many people around the globe.
It is not doable. Most of us do not have the infrastructure in place. We do not have the boxes or packing material to do this. Amazon should have had the basic integrity to give us a few days notice so that items that were low or out of stock could be sent.
Overall, it seems that Amazon sellers are unsure of how the future will play out. With online sales rising but no opportunity for non-essential products to reach their normal fulfillment avenues, there will definitely need to be pivots made in the short-term for sales to continue.
Many sellers are calling on Amazon to pause inventory loan payments and selling plan fees for those who are ineligible to fulfill through FBA. But because Amazon’s focus is always on the customer, it’s unlikely (though not impossible) that this will be prioritized.
Because there seems to be new developments every few days, it’s important that Amazon sellers keep an eye on the news and Amazon announcements in the coming weeks. Just as we are all making decisions based on the information we have, Amazon’s executive team is pivoting as needed.
For now, here are a few action steps you can take to sustain your business and prepare for the future.
1. See if your products are still eligible for FBA shipments
Many products in the following categories are still eligible to be sent into Amazon’s fulfillment centers: Baby, Beauty & Personal Care, Grocery, Health & Household, Industrial & Scientific, Pet Supplies. If you sell within these categories, head to your Shipping Queue within Seller Central and attempt to create an inbound shipment. This way you’ll know what products you need to enact (or create) a Plan B for. Please note that many sellers are experiencing hang times when creating shipping plans because of the increased number of people trying to do this in a short period of time.
2. Outline your path(s) forward
Whether it’s pivoting your sales strategy for your existing business, planning for your future product, or even exploring options like dropshipping, you need to understand your options so that you can make an informed decision on how to move forward. It’s okay to wait and see how things unfold in the next week or so, but outline your possible paths forward so that when it comes time to make a decision, you’re ready to act. Big changes like this affect everybody, and someone is going to come out on top. But it’s going to take a dedication to the process and pushing through obstacles for you to be that one.
3. Pivot your fulfillment method
For those of you with non-essential FBA products, you’ve got three options when it comes to fulfillment: find a Prime-eligible third-party fulfillment partner, switch to Fulfilled by Merchant, or pause operations until Amazon opens their fulfillment centers to your products. Again, do your research now so that you can make the best decision for your business. You may find that a third party fulfillment partner is just as cost effective as FBA was, or you may discover that it’s best for you and your family to wait out the storm.
4. Prepare your next product
Although Amazon is only allowing certain products right now and there have been disruptions in the supply chain, this won’t last forever. Now, especially if you have some extra time on your hands, is the perfect time to use historical data to research which product you might bring to market. If you’re an existing seller, keep an eye on how your competition is handling the situation using Competitor Intelligence. And if you’re a new seller, begin the process of sourcing your very first product. The first step of the Amazon seller journey is finding a product that sets you up for success. Product Discovery makes that process incredibly easy, and it can be completed during this time. That way, your product is ready to stock when the shelves are ready.
We’re in This One Together
The fact that this blog post exists means you are not in this alone. There are a lot of uncertainties right now, but there are also new opportunities to take advantage of. Maybe the excuse used to be, “I don’t have time to work on my business.” Many of us now have time, but the circumstances have shifted. If there were ever a time to buckle down and figure it out, it’s right now.
Find out how your products have been affected. See how sales are trending in your market. Map out your options. Dig in and figure it out because that spirit is exactly what got you into this business in the first place. We’ll be here for you along the way updating you of the news. If you want to see how other Amazon sellers are handling the situation, get advice, and stay up to date on the most recent changes, join our community on Facebook: Amazon FBA Data Hunters. We’ll see you in there.
With 2020 well underway. I thought it would be fun and insightful to look back at our 2019 Amazon predictions in anticipation of our annual predictions post coming later this week. 2019 proved to be a rollercoaster of a year, offering up some scary changes and unexpected loops. Let’s go through our predictions together and see what we can learn from the year.
1. Major Brands Get Smart About Amazon Organic Ranking & Sales
In what can only be described as a continuation of previous years’ policies, major brands made surprisingly little progress on this front in 2019. A majority of top brands continue to express trepidation with Amazon’s inability/refusal to properly regulate or restrict unauthorized sellers. In addition to lax regulation, major brands (particularly apparel brands) continue to struggle with counterfeit or knockoff products that persistently flood the Amazon marketplace.
Despite Amazon taking additional steps to regulate these unauthorized activities, the delicate balance between increased revenues vs increased costs, coupled with the burden of brand exposure at the risk of brand dilution, creates a perceived Faustian wager which often prevents the worlds best-known brands from fully embracing Amazon…for the time being.
A telling example of major brand woes is Nike’s decision to withdraw in November of 2019 after a 2-year pilot program. Nike’s decision comes despite the apparel juggernaut being one of the few brands shoppers explicitly search for…“Nike shoes for men”. Even with this incredible keyword advantage, Nike and Amazon failed to create the synergy needed to justify the shoe giant’s wholehearted commitment to the Amazon space. For example, when searching for the keyword phrase “men’s shoes” on Nike.com results yields 741 options compared to 28 with the same “keyword phrase” on Amazon.com. This disparity in selection is primarily attributable to Nike’s resistance to committing their full product line. Nike feared Amazon undermined the brand by eliminating elements of product exclusivity and unique customer experience. These worries, coupled with the frustrations of unauthorized 3rd party sellers, forced one of the world’s largest brands to make the difficult decision to withdraw from the space for the time being.
As Amazon continues to make improvements in both UI, branding, customer care, and the catastrophe of counterfeiting, it is likely that brands like Nike will eventually be forced to negotiate a detente in the months and years to come. This being said, the democratization of delivery and logistics, paired with the diversification and globalization of the e-commerce shopping habits displayed in younger generations, will force Amazon to justify the rising costs of advertising while continuing to improve their customer experience if they expect to further seduce the world’s largest and most sought after brands to their platform.
2. Amazon PPC Becomes Less Profitable But More Important
If Amazon trends for 2019 could be summed up in one sentence it would be: “The year that advertising activated.” This sleeping giant of dormant revenue has long been seen as a vast, untapped, oil fieldof pure profits for Amazon. After many years of prospecting, Bezos and Co. began to drill in 2019, creating both fear and uncertainty for newcomers and veteran sellers alike.
In reaction to this seismic shift, 2019 saw brands and retailers spend close to 10 billion dollars on Amazon advertising in the US alone (the equivalent of 14% of Amazon’s 2019 3rd quarter retail sales), an increase of more than 33% compared to 2018. As PPC costs began to rise in the early part of the year, many sellers found themselves in the midst of fierce bidding wars for the most competitive keywords within their products’ unique categories. The accompanying decrease in ROI for cost per click ads sent ripples through the community, forcing sellers to rethink advertising budgets and more closely evaluate risk in competitive or oversaturated markets.
In anticipation of this market disruption, Amazon opened up new analytics and built out a full learning console to educate sellers on the parameters and realities of this new paradigm. With advertising revenue estimated to grow in excess of 17 billion dollars by 2021an estimated 9.7% of the Admarket), Amazon is poised to join Facebook and Google in what will be a triumvirate of ad giants for years to come.
As early as 2018 Viral Launch anticipated this change and was proud to launch Kinetic in an attempt to guide our customers through the shifting sands of this new PPC landscape. Kinetic offers our customers detailed PPC analytics, as well as managed PPC services, to help ensure the maximum competitive advantage in this ad-driven reality. As 2020 gets underway, we are excited to iterate, improve, and update this software in the coming months to offer our customers more features and powerful, data-driven results.
In years past Amazon has often been compared to the wild west of online retail. With the reality of these new advertising demands and cut-throat economic constraints, it’s clear that a new sheriff has come to what was once a lawless internet boomtown. This being said, if history has taught us anything it’s that every time a once rough and tumble boomtown grows into a more ordered and lawful city, that growth only brings with it more opportunity for those who can anticipate the changes and adjust accordingly.
3. The Reign of Building Brands Off Amazon
2019 saw US e-commerce grow an estimated 17.3% in the 3rd quarter alone. This growth constitutes the largest spike since the 4th quarter of 2011. Online retailers generated $145.7 billion in online sales in the third quarter compared to $124.2 billion a year ago, according to the Department of Commerce. To no one’s surprise, Amazon was at the vanguard of this growth with 29.4 billion dollars in retail revenue. Retail giants such as Walmart and Target also saw significant growth, surpassing analyst’s initial projections for the year.
This being said, the building of brands outside of the Amazon space was hampered by a combination of both lack of innovation and Amazon’s sheer market domination. E-commerce storefronts such as Shopify have become popular sales channels for emerging brands but have struggled to make significant brand breakthroughs for sellers looking to differentiate themselves from the Amazon pack.
Adding to the stagnant growth of non-amazon brands is the entrenchment of consumer behavior as it applies to a growing (Amazon only) default mode, particularly when it comes to buying behavior in Q4. Smaller sites have continued to struggle with ways to break consumer’s growing dependency on Amazon to fulfill both their personal shopping needs as well as their family and friends wishlists. This dependency is only fueled by the increasingly common practice of giving Amazon gift cards for Holidays, birthdays, and special events.
Despite the many uphill challenges facing smaller e-commerce sites, Viral Launch maintains a bullish outlook for emerging brands’ opportunities to develop a customer base apart from Amazon in the coming years. Case studies like that of Nike (mentioned previously) demonstrate that larger brands are keeping Amazon accountable to change, while smaller more boutique brands will continue to benefit from improvements in online marketing platforms, improved mobile apps, and a leveler logistical and shipping ecosystem.
4. Successful Brands Will Continue to Grow Significantly
People often say that “success breeds success.” I’ve also heard it said: “More money, more problems.” The dichotomy of these two truisms neatly encapsulates the difficulty facing many successful Amazon sellers. With greater success comes the desire to capitalize on increased revenues. At the same time, potential market capitalization and expansion comes at the risk of overreach or glut.
For the most part, “successful” brands did see significant growth or at least marked stability in 2019. The market disruptions caused by additional PPC costs and ranking fluctuations surely caused concerns for many top sellers, However, the data seems to indicate positive growth. Over the past decade third-party sellers have grown from 30% of total sales on Amazon to 60% in 2019. The number of sellers with $100,000 in sales reached 280,000 in 2019, up from 200,00 in 2018. This influx in competition does indicate a struggle to sustain market supremacy for some top-level sellers, however, we maintain the belief that better and deeper performance is outpacing wider participation.
The latest figures show that only 5% of the top sellers joined in 2019, while only 30% of top sellers have joined within the last 3 years. The reality remains that less than 20% of active sellers do $100,000 in yearly sales and only 2% surpassed 1 million dollars. This by no means indicates that the window of opportunity for Amazon selling has closed. However, it’s becoming increasingly clear that the competitive advantage of deep experience will only increase in the years to come.
5. Fewer New Entrepreneurs Begin Selling On Amazon
Amazon reached 3 million active sellers worldwide in 2019, an increase of 17.7% from last year. The global marketplace saw 1.2 million new third-party sellers join one of 16 global marketplaces after both Singapore and the United Arab Emirates were added to the platform. These numbers indicate a steady and robust global growth trend for Amazon, who has become increasingly aggressive in exploring untapped markets. However, a closer look at the domestic numbers does indicate a potential cooling in the number of new entrepreneurs who are entering the US market.
2019 saw 250,000 sellers join the US space, which adjusted for churn comes closer to 54,000 additions to the overall seller pool. The United States is currently the slowest growing market on Amazon despite its outsized 38% active seller share. Last year’s additions constituted only 5.1% of the global growth for Amazon as a whole. Now these numbers in no way indicate that the fervor amongst potential new sellers has died out However, there are some indications that a large majority of entrepreneurial-minded men and women who may be drawn to Amazon have either already started to sell, or more likely churned out of the system.
The likelihood that the US market will see a resurgence in new sellers is contingent upon a number of unknown and unpredictable factors, chiefly, sustained low unemployment numbers and the continued stability of the US and global economy. A sustained period of economic growth has doubtlessly encouraged new entrepreneurs to take their chances selling on Amazon. However, if the economy begins to show signs of weakness in the months or years to come, we may see an even greater decrease in the number of new sellers who throw their hat into the ring.
The good news for current sellers is the possibility of less competition and again: the deepening of performance. If, as some metrics indicate, the pool of sellers becomes even more narrow in the years to come, it will present an opportunity for current sellers to bolster their positions and rankings while growing their brands.
6. Major Changes in Reviews and Rankings
Shakespeare once asked…”What’s in a name? That which we call a rose By any other name would smell so sweet.”
This age-old question of what’s in a name could never have been more true then when Amazon elected to change its classic naming convention in 2019 from reviews to ratings. Of course, this simple, semantical twist held a far more important and disruptive change. The ability to leave ratings without a written review (one-click rating), coupled with a variety of changes to the ranking algorithm, threw the system into what at times felt like chaos this year. Reliable methods for bolstering rankings, such as product giveaways and coupons, became less and less effective and the reality of a world of PPC predominance became abundantly and at times painfully clear.
Wild fluctuations in rankings were experienced by both newcomers and established sellers alike as Amazon seemed to endlessly tinker with their ranking systems and established protocols. (INSERT BLOG POST AND PODCAST ADDRESSING THIS PHENOMENA)
Veteran sellers have (for the most part) grown accustomed to Amazon making major changes to rankings over the years, and in due time resourceful sellers and consultants have always learned to adjust. This being said, 2019 will surely be looked back upon as a watershed moment for ranking changes, as the culmination of years of subtle tectonic shifts suddenly crest, taking sellers on a wave that left many dizzy and some drowned.
7. Facebook Begins Its Path of Becoming The Second Largest Ecommerce Site
I imagine that Mark Zuckerburg and the executives at Facebook won’t look back at 2019 with the fondest of feel-good memories. Thrust into a firestorm of controversy regarding the companies privacy policies beginning in 2018, Facebook continued to court controversy throughout 2019. However, as anyone who tracks markets knows, there is a wide chasm between public perception and publicly traded profits.
Despite widespread fears of anti-trust legislation in the early part of the year, 2019 saw Facebook make huge gains, surging back to a near-record stock price just weeks ago. The ability of Facebook to absorb such huge public scrutiny while continuing to display investor confidence is precisely why Viral Launch remains so bullish on the social media giant. While the media continues to argue (about what I would personally characterize as legitimate concerns), Facebook is quietly making gains in the e-commerce landscape and beyond.
In 2019 Facebook acquired a number of small media and technology companies to help expand its Marketplace platform. Plans have been put in place to develop live shopping features as well as expansive updates to Checkout, their new Instagram shopping platform. The unsurpassed mixture of loyal and engaged subscribers, coupled with a multi-quadrant demographic, makes Instagram the holy grail of endorphin-fueled impulse shopping. The secret, of course, is leveraging these technologies to create a unique market position that can begin to cut into Amazon’s bottom line. I don’t know about you, but I’m not counting Zuckerburg out from being able to convert some of their huge market capitalization into technologies and tools that set Facebook apart from Amazon in 2020. Besides, I would not be surprised if Facebook wants to gain back some of those precious ad dollars they lost to Amazon last year!
8. International Markets are the New Gold Rush
Continuing our theme of political and social uncertainty in business, this past year brought a slew of unknowns in many aspects of our global, economic, and political landscapes. Escalating uncertainties concerning Brexit, China, and the Middle East have kept businesses, investors, and entrepreneurs on the edge of their seats. A mutual disdain for Chinese tariffs showed that these obscure financial instruments might be the one thing in this world that can bring Wisconsin farmers and Wall Street financiers together in fear and disgust.
The devastating effects of tariffs, coupled with risk-averse investors, created a landscape that caused this prediction to not fully manifest. No doubt international markets still present a huge growth opportunity in the coming years. This being said, for the time being, many sellers are waiting for the results of a slew of international trade talks to conclude and uncertainty within political landscapes to calm before wading into these potentially bountiful waters.
On a further international note, 2019 saw the year that Amazon pulled the plug on its Chinese operations. Amazon entered China in 2004 and after much consternation and disagreement, the ill-fated partnership finally dissolved in July of last year. Below is an excerpt from an email sent to multiple publications.
“We are notifying sellers we will no longer operate a marketplace on Amazon.cn, and we will no longer be providing seller services on Amazon.cn effective July 18th. Sellers interested in continuing to sell on Amazon outside of China are able to do so through Amazon Global Selling.”
Obviously, this announcement in no way severs relationships with China based sellers who constitute 42% of all active sellers across all 16 marketplaces.
9. Seller Fulfilled Prime Comes Into Vogue
Many top-level sellers entered 2019 with high hopes for Seller Fulfilled Prime. This program which enabled 3rd party warehouses to fulfill prime orders was seen as the natural evolution for high-level sellers who had invested heavily in warehouse facilities and third-party logistics providers for their businesses. The hope for this program was to generate significant savings for sellers by tailoring various logistical and shipping needs thereby reducing overhead and unneeded expenditures.
Unfortunately, due to an array of quality control issues, coupled with a high barrier to entry, the program was suspended in 2019. At the time of publishing, Casey spoke with an SFP customer who informed him that Amazon plans to parlay this program into what is being called FBA Onsite. Details about this program are not yet known at this time, however, I think it’s safe to assume that it will contain many of the aspects of SFP with perhaps more regulations and stricter qualifications. Regardless of what name the new program settles upon, it’s safe to say that the concept of seller fulfilled shipping is not going anywhere. Far too much money is on the table for Amazon to resist mitigating a portion of the risk in favor of equitable partnerships with high-level sellers as the benefits of same-day or two-day shipping will not be strictly limited to Amazon products in the near future.
10. More Amazon-Owned Brands
This particular prediction presents an interesting case study in the difference between the profitability and success of AmazonBasics and the growth of Amazon Owned brands. As stated in last year’s post, some countries such as India have banned Amazon from creating further Amazon-owned brands, citing monopolistic practices. This, of course, has not stopped Amazon from continuing to expand both their Basics brand and Amazon-owned brands through their Accelerator program. Amazon added more than 100 brands in 2019 and shows no signs of slowing down. This being said there are some misconceptions about the profitability of these brands and their long-term viability in the future.
AmazonBasics constitutes 58% of all “Amazon-owned brands” and represents the bulk of Amazon brand revenue. In fact, 81% of all total sales come from just the top 10 Amazon brands, including Basics, Essentials, and Collections. Basics thrive in niche markets such as batteries or paper products, markets where fragmentation and price-point pressure fuel their success. On the contrary, many Amazon private label brands such as Belei hope to exist in the much more competitive worlds of beauty and skincare. After launching in March of 2019, Belei began to receive a swath of negative reviews, forcing Amazon to not only adjust their price points but give the prominence of the product within the search results. None of these actions had a great effect and the brand continues to languish in warehouses unsold and for the most part unknown.
What is the lesson here? For all their data and all their power, Amazon has never been particularly good at fostering brands. Their basics lines do great business because consumers are not invested in battery brands or toilet paper the way they are invested in their skincare routine or health drinks. 2020 will surely see Amazon continuing to leverage its power to create countless new brands, and they have the cash flow to allow the majority of these loss leaders to fail. What I’ll be looking for in 2020 are Amazon-owned brands that are invested in marketing brands that use their unbelievable prominence and page positions in a way that breaks through the noise and create devotees. If Amazon can display the ability to do this, well then anti-trust laws might actually be in the conversation.
11. Less Ads Showing on Page 1 of Search Results
In my role as a brand consultant for Viral Launch, I log onto amazon.com anywhere between 30 and 50 times per day. Every time (and I mean every time) I do, my heart sinks a little at how truly ugly the sight actually is. I know that might sound a little hyperbolic but you have to understand the little graphic design nerd in me, the one that cannot stand mixed typefaces and cluttered images. For me, these visual sins are akin to fingers on a chalkboard. Of course, I say all this tongue in cheek and Casey knew he was being a bit bold when making this prediction last year. However, when forecasting the possibility that Amazon might reduce ads on page one, Casey was tapping into the hope that Amazon might embrace one of its core values…delighting customers! If you’re anything like me, you’re equally bummed about this prediction being so, so wrong.
Perhaps we did not fully account for the lengths which Amazon would be willing to go to maximize those precious new ad dollars. Or perhaps we thought they would invest in creating new user interfaces to provide aesthetic experiences without the need for more Ads. Alas, we got this one wrong and the world is uglier for it.
12. Amazon Significantly Outpaces Other Retailers in an Economic Downturn
To conclude our journey through 2019, we end on this final and gratefully wrong prediction for 2019. Despite a slew of economic forecasts in 2018, the economy held strong and outpaced many economists’ (and brand consultants’) predictions. This, of course, does not mean that the current climate will last forever. An economic downturn is inevitable in the coming years. For the purposes of our discussion here, how ready is Amazon for that downturn?
I will leave you with this parting data point. In the first quarter of 2019, Amazon’s online sales accounted for less than 50% of the company’s total revenue. For the first time since the company’s founding in 1994, AWS, Prime, third party marketplace, and advertising, outpaced the retail sector of the company. Amazon sold 29.4 billion dollars worth of product, which only constituted 49.4% of its revenue.
I don’t know about you, but to me, this seems like a strong case for Amazon’s future regardless of the economic forecast. Retailers such as Wal-Mart and Target have made valiant efforts and significant gains within the last year. We have seen competitors innovate and iterate in every conceivable contortion all in an attempt to catch the king. But I ask you this: if I took away 50% of any of these competitors’ revenue in 2020, do you think they would live to see 2021?
Jeff Bezos is obsessed with providing the best customer experience possible. In fact, he was recently quoted saying, “We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.”
As a shopper on Amazon, this means an overall better experience. We can all appreciate a seamless shopping experience and super-speedy shipping. But as an Amazon seller, every update to the algorithm, every policy change, and every feature roll-out can directly impact your bottom line. In order to adapt, maintain sales, and grow your business, you should always understand how recent changes are affecting you.
Here at Viral Launch, we live and breathe Amazon. And right when they make a change, we set out to help you understand what it means for you. In today’s news roundup, we’ll go through 4 updates you should know about. And if you want to keep an even closer eye on changes,follow along on social media where we share the latest news and success tactics in real-time.
1. Product Inserts Policy Mixup
The news: Many sellers were shocked and frustrated after receiving an email on 10/31 reminding sellers that product inserts may not ask for a review of any kind. This email contradicted the official policy on their site that only prohibits product inserts that ask for a positive review. Amazon quickly corrected the error with a follow-up message reading: We want to remind you that Amazon policies prohibit box inserts and product packaging that direct consumers to write a positive review, even if no incentive is offered for a review.
What it means for you: Because Amazon corrected the error, there is no change in policy here. However, it’s a good opportunity to ensure you’re in line with Amazon’s terms when it comes to product inserts and reviews. Your product inserts cannot ask customers to take an action based on a positive or negative experience, which means you can’t ask them to contact you instead of leaving a negative review. And remember, you cannot review your own product, incentivize reviews in any way, or use third party services that offer free or discounted products tied to a review. If you have any products already in fulfillment centers and are in violation of the policies, you’ll want to create a removal order to proactively remove your inventory and avoid any trouble.
2. Communication Guidelines Simplified
The news: Effective on December 3rd, Amazon has updated its Customer Communication Guidelines. The company says they’re not changing the policies but are refreshing the language to make it clearer after hearing complaints from many sellers. In summary, the guidelines state that you may contact a buyer who has purchased from you on Amazon only to complete an order or to respond to a customer service inquiry. You may not contact buyers in any way for marketing or promotional purposes, including via email, physical mail, telephone, or otherwise. Read the full policy.
What this means for you: This is another scenario where Amazon is making it crystal clear that it is not allowed to contact buyers for anything other than support. While no drastic action is needed, you’ll want to review the policy to make sure you’re not in violation. Historically, Amazon has made small changes that lead to suspension sweeps, so if you’re currently promoting your brand to past Amazon customers, take this as an opportunity to make changes that align with TOS.
3. Request a Review Button
The news: In Seller Central, you may have noticed a new button on the “Order Details” page labeled “Request a Review.” When you click it, you’ll see the following message:
And after clicking Yes, you’ll see a popup that says, “A review will be requested for this order. (Note: We will suppress this request if a review has already been requested for this order).” For now, it seems Amazon is testing this button on the Amazon US marketplace, and it’s only available once per sale.
What this means for you: Amazon has also recently removed sections of a customer’s contact information, such as last name and shipping address. The “Request a Review” button falls in this same effort to keep buyer-seller messaging in-house. It’s definitely worth requesting reviews from your buyers to see if you’re able to generate reviews quickly. With the ask coming from Amazon, customers may be more inclined to act. However, as more and more sellers become aware and abuse this button, it could mean that Amazon pivots again or simply that the button will lose effectiveness. Either way, we’ll keep a close eye on how the market is responding and will update via our social media channels.
4. “Posts” in Beta
The news: Under the Amazon Advertising umbrella, Posts let Amazon sellers use curated photos to inspire shoppers to engage with their brands and products on Amazon. Focused on a brand-shopping experience, Posts help shoppers discover new products and see what’s new from brands by browsing feeds of brand-curated content. They’re currently US only, free to participate in, and include engagement metrics, including views, clicks, and clickthrough rates. Learn more.
What this means for you: Amazon understands the power of social selling and branding. They’re putting resources behind it, so as a seller on their platform you should too. You’re probably no stranger to the value of growing a following early on a social media platform. Of course, Posts may not explode the way Instagram did or TikTok is (in fact, they just shut down Spark, a discovery shopping feature launched in 2017). But, if you’re running social media for your brand anyways, it may be worth testing whether or not Posts will pay off for your brand. They show up on your own detail pages, detail pages for related brands, feeds for related posts, and category-based feeds… all of which are prime real estate.
Make Small Changes for Big Results
By being the first to know about Amazon updates, you can stay ahead of other Amazon sellers and ensure your products are positioned for success. But you’ll also want to make sure you’ve got all your bases covered when it comes to the basics. For example, are your Amazon advertising campaigns adding to your bottom line, or are you confused about how to make them work? We understand how important it is to get the basics right, so we recently launched two free Amazon courses. Yep, they’re free!
Prime Day is right around the corner, and in true Amazon fashion, they’ve rolled out a brand new feature just in the nick of time.
As an Amazon seller, you’re probably quite used to visiting the Advertising tab in Seller Central. For US accounts, you’ll now see sub-tab called Prime-Exclusive Discounts. This is a new way to offer a discount on your products exclusively to Prime members. These discounts can be offered all year long, and they’ve been unveiled just in time for Prime Day (which has been rumored to be July 15th, 2019). But hurry up… the deadline to run these new discounts on Prime Day is July 5th!
Prime Day will provide sellers with an incredible opportunity to jolt their sales. We even put together a step-by-step guide to help you prepare. Now is the time to take action, and Prime Exclusive Discounts are an easy opportunity for you to set your product apart from the pack… or at least to make sure you’re not left behind if everyone else sets them up too.
What are Prime-Exclusive Discounts?
Prime-Exclusive Discounts are offered on Prime-eligible products sold through FBA, which are only available to Prime members. These products will show strikethrough pricing plus a savings message in the search results and in the buy box.
Amazon is giving sellers like you the ability to create Prime-Exclusive Discounts specifically for their upcoming holiday: Prime Day. You can do this by checking the corresponding box during setup. On Prime Day, these discounts will even include an extra badge that reads “Prime Day Deals” in the search results and on the detail page.
What are the requirements for Prime-Exclusive Discounts?
Many Amazon.com products are going to be eligible for Prime-Exclusive Discounts, and they are free to create. In order to set one up, your product must meet the following criteria:
Prime shipping eligible in all regions in the US
No rating or 3+ stars
The discount must be 10%-80% off of your listed price. For a Prime Day discount, it must be 20%-80% off
The discount must be the lowest price in the past 30 days
How do I set up a Prime-Exclusive Discount?
The process for creating Prime-Exclusive discounts is quite manual, but it only takes a few minutes. Don’t forget: the deadline for Prime Day discounts is July 5th, so take action now before it’s too late!
1. Find the discounts in Seller Central
Sign into Seller Central and navigate to the Advertising tab. Inside, you’ll find the option for Prime Exclusive Discounts. To get started, click “Create Discount.”
2. Name your discount
A name is required, and it will be used internally for your reference. Give the discount a name that corresponds to the product(s) you’re setting it up for so that, in the future, you can look back and quickly recognize what the discount was for.
3. Decide whether or not to run the discount on Prime Day
From what we can tell, you cannot uncheck the box labeled, “Is this a Prime Day discount?” So for now, it seems the Prime-Exclusive Discounts are being initially rolled out for Prime Day specifically. We assume that, in the future, you will be able to set a timeframe and date range for these deals. (If you’re seeing something different, please let us know in the comments below!)
4. Upload your product template
This part is a little bit manual, but don’t let it scare you away. It’s pretty easy to set up. Click the “view upload template” link, and it will download a spreadsheet for you to read through and fill out. There are three tabs:
Instructions: Learn how to use your Price Loader Template. This is pretty straightforward, but read through it so that you’re fully informed.
Data Definitions: Get specific instructions on what exactly to put into each field.
PrimePriceLoader Template: Enter your discount information, including SKU, amount off vs. percentage off, price discount, minimum discounted price, and the action (whether you’re adding, editing, or deleting the discount).
Don’t worry about deleting or renaming any tabs. If you do, it will cause an error. Simply fill out the information, save the Excel document, and upload the file. In the next step, you will find out if your inputs are valid.
5. Validate products
Here, you can make sure you’ve filled out the template correctly, along with seeing any issues that may make your product ineligible. If there are issues, the status will show why. You can edit the Discount Type, Prime Discount, and Minimum Price to resolve the problem. From here, you can add more products or Submit the Discounts. Next, you’ll be taken back to the main page where you can view discount details along with the status of each deal. Amazon states that if your start date is today, then the discount may take up to 120 minutes to go live.
Do Prime-Exclusive Discounts overlap with other deals?
Yes, they do overlap! Regular promotions or coupons will stack on top of these Prime-Exclusive Discounts. Please review your products carefully before scheduling to prevent customers combining them for significant discounts. And keep in mind that if you are running a Lightning Deal during the Prime Exclusive Discount, it will impact the maximum Deal Price of your Lightning Deal.
What do you think about Prime-Exclusive Discounts?
Prime-Exclusive Discounts are brand new, so we’re not sure how they will impact conversions. Some sellers are frustrated, calling this another way for Amazon to make money while sellers dig into already-slim margins. Others are hopeful this will help set their products apart.
What’s our suggestion? Well, we know that shoppers will be flocking to Amazon in mid-July during Prime Day, hungry for the best deals on products across all categories. And honestly, the more you can appeal to these shoppers, the better. So, our suggestion is to try these out. The volume here will hopefully make up for the cost (of course, this depends on your market, your conversion rate, and your visibility). If your margins are already pretty thin, consider raising your price and then discounting it to appeal to the discount-nature of Prime Day. The extra badge on your listing should help draw some meaningful attention to your product (especially if you missed the Lightning Deal deadline). And since you cannot set these up for Prime Day after July 5th, schedule them now and keep an eye on your clicks and conversions during the holiday.
To make sure you’re fully prepared for Prime Day, check out our free guide: How to Jolt Sales for Prime Day 2019. We’re excited to see the results for those of you that take action on these new discounts, and we can’t wait to hear of the successes that Prime Day brings.
We’re interested… what do you think of these new Prime-Exclusive Discounts? Will you be using them in your strategy?
The “strange and remarkable” rise of third-party Amazon sellers is expected to be a major factor when it comes to Amazon strategies for enterprise companies.
Major brands are now facing some serious competition on Amazon from what has up until now been an unlikely source. Third-party sellers now account for over half of the paid sales on Amazon and this momentum has been gradually building for the last two decades.
In a recent letter to shareholders, Amazon CEO Jeff Bezos’s stated that, “Third-party sellers are kicking our first party butt. Badly.”
The letter starts off with some data showing how third-party sales have increased from 3% in 1999 to 58% in 2018. Bezos describes this massive increase as “strange and remarkable.”
It’s definitely remarkable, but if we take a look at what’s behind the data, it’s not really that strange. It’s also not a fluke. Third-party brands have been able to find success on Amazon for a number of reasons, in part due to their own ingenuity and the array of tools Amazon and emerging software companies are providing them.
How 3P Sellers Are Winning
In Bezos’s letter, he acknowledges Amazon’s role in the rise of third-party brands: “We helped independent sellers compete against our first-party business by investing in and offering them the very best selling tools we could imagine and build” (emphasis original). In other words, Amazon itself has given these independent sellers the means to grow their business and become competitive with enterprise companies.
He goes on to specifically mention Fulfillment by Amazon (FBA) and the Prime membership program, which have both played a role in third-party success. Yet the Brand Analytics feature has also provided major advantages, along with the tools available within Seller Central.
Third-party brands have taken full advantage of these features to broaden their products’ visibility and increase their sales. Using Seller Central’s product-targeting capabilities, brands can focus on the product pages where they want their sponsored ads to appear. When a third-party brand’s ad appears on an enterprise brand’s page, and that third-party has a better offer, consumers will likely check out the ad and leave the larger brand behind. It’s these kinds of opportunities that the smaller brands are stealing from enterprise companies.
As third-party brands increase their sales, this in turn boosts their product rankings, which increases their visibility. This helps drive more sales, and a self-perpetuating cycle is under way.
Smaller brands also have an advantage over enterprise companies in that they can take a nimble approach to making pricing adjustments. Since large brands have to keep their retail and e-commerce prices consistent, their hands are tied when it comes to price adjustments. Third-party brands, however, can adjust their prices based on seasonality or special offers. By being able to take these kinds of actions they can position themselves to better reach consumers and outpace larger competitors.
Additionally, a big reason why third-party brands are doing so well is due to what the larger brands are not doing. They’re missing opportunities that they may not even be aware of. The advertising channels within Amazon and the growing ecosystem of solution providers can enable a business to get its products in front of its target consumers and increase their potential for sales. As long as the major brands neglect these opportunities, they’ll see their paid Amazon sales continue to drop to smaller percentages. Larger brands may also have a narrow view of who their competitors really are, without realizing that their market could be a mix of both first- and third-party sellers.
It’s Not All Bad News for Amazon
Despite Bezos’s characterization of this as a butt kicking, the success of third-party success is also a success for Amazon. They’re collecting a lot of FBA fees from the third-party sellers who choose to use that program, which hands over product fulfillment responsibilities from the seller to Amazon.
Amazon also seems to be preparing for more third-party brands to join their marketplace. Brand Analytics has recently expanded to include two new features, enabling sellers to gain data about their competitors and customers. It’s possible that further features will be on the way to help brands of all sizes devise new ways to drive ranking and sales. By providing third-party sellers with more pathways to drive success, Amazon is setting the stage to boost their own growth and profitability.
How to Revise Your Amazon Strategy
The time for enterprise companies to rethink their Amazon efforts is now. Learning, adapting, and improving are important for success in any field, and first-party brands will have to start practicing some new tactics, including efficient advertising campaigns, to maintain leadership in their market.Those who take a static approach and rely on previously successful approaches may see their profits stagnate, or if growth occurs, it likely won’t be as great as it could be.
Viral Launch’s recently published white paper, The Enterprise Brands’ Guide to Improving Amazon Sales, covers how large brands should reconsider their Amazon strategies. It outlines how third-party sellers have taken advantage of Amazon’s features to rank for the top keywords, expand their visibility, and take market share away from larger brands. Based on our wealth of data and experience, the white paper also outlines our strategy for increasing rank and sales for brands of any size.
By this time next year, we’ll likely see whether that first-party brands are taking this recent news seriously or if third-party sellers are continuing to drive the majority of Amazon sales. This gradual dominance of the small- to medium-sized brands may become the new normal, unless the larger enterprise companies find a way to learn some new, more agile approaches and reduce the sales of smaller competitors.
For those enrolled in the Brand Registry program, you’ll likely already be familiar with Brand Analytics. It’s a free analytics reports located within Seller Central and has been set up to provide brand owners with helpful data they can use to be more competitive. It provides a feature, Amazon Search Tools, which gives sellers a list of the top one million searched keywords across Amazon as a whole. The list also provides the top three clicked ASINs for each of those keywords.
That feature is now being joined by two brand-new ones, Item Comparison and Demographics, each of which give sellers some wildly insightful data on the market and potential customers that we wouldn’t have expected Amazon to share. All of this can serve as a foundation for boosting sales and rank, and potentially help you grow your audience outside of Amazon as well. Let’s examine how you can take advantage of what each new feature has to offer.
Note: If you’re part of Brand Registry but don’t have a Brand Analytics account, you can create a ticket with Seller Support requesting access. Anecdotally, this has worked for a few sellers but may not work for all.
Item Comparison: Get to Know Your Top Five Competitors
Success doesn’t occur in a vacuum. Knowing how well your products are performing hinges on understanding the market you’re competing in.
What Item Comparison Provides
The Item Comparison feature shows your product along with the top five products that consumers also viewed during the same session. The feature also provides, as Amazon describes, the “percentage of times this product was viewed by the customers who viewed your product within the same day.” If it’s 50%, that means half of the time throughout the day, consumers checked out both your product and a competitor’s.
By scrolling horizontally through the list, you can see which ASINs are getting the most attention and even compare title keywords.
How to Benefit from Item Comparison
The feature provides sellers a helpful advantage for product-targeting ad campaigns. It offers exact data on which products consumers are considering for purchase in your market, so you’ll know where your sponsored ads should appear. Placing sponsored ads on those product pages should increase your visibility, and if you have a better offer, you have a great pathway toward boosting sales.
Note: For more information on how important product-targeting campaigns are and how to start one, check out our in-depth Amazon Product Targeting guide. To learn why product targeting is the most efficient traffic source, watch this video hosted by Viral Launch CEO Casey Gauss and R&D specialist Andrew Field.
The list of top five ASINs may include products that might not be obvious competitors, allowing you to expand the scope of products to target. With a greater number of products to consider targeting, you have a greater chance to get your ads in front of more consumers, increasing your chances at driving conversions.
By comparing your product with others, you can also get an indication of your overall performance. If it’s clear that you’ve been left in the dust by competitors, you can revisit your price, product photos, or descriptions.
Keep in mind that if your product has variations, such as items in different colors or sizes, you’ll likely see these variations appear as compared products in the Item Comparison list. This will allow you to see your most popular products and how they’re faring against the competition.
Demographics: Get to Know Your Consumers
Knowing your audience is a crucial task for any business, and it’s a never-ending process. Amazon is known for not providing audience data to its sellers, forcing brands to use tactics outside of Amazon to gather information on their customers. That’s changing now with this unprecedented Demographics tool within Brand Analytics.
What Demographics Provides
The Demographics feature provides the following data on your customers:
Sales per age group: You have a breakdown of six different age groups (shown below), ranging from 18-24 up to 65+, along with their sales totals.
Sales per household income: The stats here start with <$50,000 and end with those who make over $250,000.
Education: The categories here cover people at all stages of education, from “Less than High School” to those with Master’s degrees.
Gender: Do men and women equally buy your products or does one gender dominate? The graphs and table will give you an answer.
Marital status: The age, income, and education data will hint at your consumers’ marital status, but this section provides percentages of how many of your customers are married or single.
How to Benefit from Demographics
With the above characteristics, you can assemble a portrait of who your customers are and understand what stage of life they’re in.
Although the demographics data may not be directly actionable, there are two useful applications. The first falls to new product development. When building out additional products for your brand, you now have a much better idea of who is purchasing current products and, likely, who will be purchasing future products.
The second application is advertising outside of Amazon. Running Facebook ads based on better insights into your target demographic can help you run more efficient and effective campaigns with a more targeted audience. YouTube and Instagram also provide advertising options to consider, or you could go the search-engine-based route, such as using Google AdWords. By combining this feature’s data with a creative approach, you have the opportunity to increase your product’s visibility.
Note: The Demographics feature isn’t an exact science. It includes an Information Not Included category, for any instances in which it can’t provide a complete range of data. As an example, it might convey that 33% of your customers are married, 15% are single, and then the other 52% will fall into that Information Not Included category.
Brand Analytics: Building Your Data Foundation
For third-party sellers who are a part of the Brand Registry program, Brand Analytics can be a valuable data resource. In conjunction with Amazon Search Terms, Item Comparison and Demographics give businesses a massive foundation that they can then build on.
With this power trio of features available, one can’t help but ask, how do I make all this useful? Navigating the Amazon marketplace is a challenge and in the months to come Amazon may be rolling out even more Brand Analytics features aimed at giving brands the opportunities to gather more data.
The challenge is being able to extract insights from this data and craft an actionable plan. The team at Viral Launch specializes in creating effective data-driven strategies and delivering results that increase ranking and conversions. Our suite of software tools can help you determine the markets where you can compete and earn long-term profits, not short-term gains. Whether it’s PPC management, listing optimization, or keyword-focused product launches, our team will partner with you to achieve (and possibly exceed) your business goals.
To learn how we can help you gain insights from this Brand Analytics data and drive your brand’s success, contact us at Solutions@Viral-Launch.com
After launching a new product and implementing strategies to generate reviews and early sales, in time, you will have established a great foundation for long-term product growth. At this point, it’s time to begin building on that foundation to achieve favorable keyword ranking and drive considerable sales growth.
Though you may have a mountain to climb to make your listing the ‘top dog’ in your category, the beginning of this journey is the slowest and most difficult part. Now that you’ve laid the groundwork for a successful product, it’s time to start implementing tactics to accelerate your momentum.
While you still may have a ways to go before you can consider this product a success, after you’ve gathered some initial reviews and are driving some sales, that momentum can be utilized to drive accelerating growth with the following tactics.
Establishing a low price is a great metric for generating sales in the early stages of a listing, providing a tangible value proposition to lure price-conscious buyers away from your competition. That said, while it’s critically important that you price appropriately for the market, you may have not started at a price which provides you with a healthy margin for profit.
Considering that Amazon is first and foremost a search engine for products, ensuring that you’re favorably ranked in search results should be your key objective. In order to rank well, you need to sell well. Keep this in mind when experimenting with price.
Assuming that you’ve gathered a reasonable base of reviews and that you’re consistently driving some sales, you may be able to experiment with different pricing options.
As you’re able to position your product more competitively in the market, the instinct may be to immediately raise your price to the ideal level. That said, your conversion rate may still be relatively price contingent, meaning that you can experience a steep drop-off in sales. Additionally, Amazon’s algorithms are typically not favorable towards dramatic price swings and a steep price increase can sometimes result in a loss of buy box control (even if you are the sole seller on the listing).
Instead, it’s recommended that you slowly step-up price over a longer duration while closely watching your performance and conversion metrics. The main priority is to retain forward momentum so if you start to see sales engagement decline as your price rises, you may consider reverting to a low price or experimenting with coupon offers as a means of maintaining your progress.
While you may have more flexibility in pricing as your listing matures, sales velocity and ranking should still be at the forefront of your mindset. Selling more units at a thinner margin should trump your price point in order to continue to establish your listing in the market. This is once again an instance in which you should be thinking about the long-term strategy for your product.
Aggressive PPC Tactics
Assuming you had established some advertising campaigns shortly after launching your product, you should now have a foundation of data from which to more aggressively pursue PPC. While the purpose of PPC in the early phases of your listing was to gain some visibility and give your product the opportunity to sell, as your listing becomes more established, that strategy should begin to shift to more aggressive tactics centered around driving ranking.
The endgame of establishing and maintaining favorable SEO ranking is the listing’s ability to obtain a growing quantity of organic sales. Because of this, it’s important to review your campaigns in tandem with organic performance.
To provide some perspective, prior to e-commerce, if a brand wanted to advertise their product, they would purchase a tv/radio/print ad and develop a message to be distributed through the channel. In order to gauge the value of that investment, they would need to review sales data to see if there was a correlation between their advertising and an increase in sales.
When advertising on Amazon, you’re able to see an exact return on your advertising spend (ACoS). While this is a great metric to review, it’s easy to get fixated on this spend amount. If your ACoS is high, it’s an easy justification for ending your campaign. The problem is that ACoS doesn’t show you the full impact of your advertising efforts.
It’s also important (and contrary to Amazon’s position) to note that Amazon is not an adequate platform for driving brand awareness. Because PPC provides you with very limited creative capability, it’s exceptionally hard for a private label seller to establish an adequate brand voice. Some of this can be done through social media engagement and more traditional advertising tactics but your on-Amazon advertising strategy should be focused on SEO and sales growth rather than trying to build a base of loyal customers.
At this stage in your product’s lifecycle, it’s important to begin to compile high performing keywords to focus ad spend on while simultaneously understanding the less tangible benefits of advertising. Attention should be placed on both maximizing profitable revenue from easy wins, and developing strategic tactics to advantageously position you across your entire market.
When spending on advertising, rather than thinking of it in the context of spending to increase sales, it can be valuable to understand it as buying data from Amazon. When you allow an advertising campaign to run, you’re able to collect a large amount of information about how shoppers perceive your listing. By using your advertising reports as a resource, you can better understand what keywords are most effectively luring buyers to your account and how to more efficiently direct your spend.
Assuming that you’ve been running automatic, discovery, and product targeting campaigns, you should progressively be collecting a large amount of data around your campaign performance. To access that data, you’ll want to download advertising reports from the Business Reports tab in your seller central account.
There are different types of reports which provide different information but one of the most valuable is the Search Term report for sponsored products. From this data, you can determine which keywords are driving sales and how effectively.
As you collect more data through the use of PPC, you should begin to isolate terms that convert well for your product. These terms can be the basis of developing effective and profitable campaigns. Essentially, if a keyword is consistently generating sales at a relatively low ACoS, there can be some assumption that it will continue to perform in that manner. It’s important to note that you’re still going to want to regularly review the data to ensure that it’s maintaining performance, but if keywords are consistently performing at a profitable ACoS, you can assume that they will continue to do so.
In these instances, breaking these keywords out of your automatic or discovery campaigns and placing them in their own manual targeting campaign with a dedicated budget can be advantageous. In this way, you can ensure that a dedicated budget is being implemented to drive a continuous return. Ideally, performance for the keyword will remain stable, meaning that you’re effectively putting one dollar in to get two dollars out.
If this trend continues and ACoS continues to be profitable, the next step is to simply ensure that the campaign isn’t running out of budget on a daily basis. If you’re running out of budget on a profitable campaign, it means that you’re missing the opportunity to maximize sales and revenue from it. That said, the number of impressions that your ad receives is contingent on how frequently a term is searched. For lower volume keywords, a term may only be searched a few times per day, meaning that your ad can generate profitable sales, but not at a high volume. Essentially, this means that there is a limit to how much you actually can spend when directly targeting a keyword, but assuming it’s profitable to do so, it’s advantageous to make sure you’re maximizing that potential.
Ideally, in time, more of your budget will be tied to singular high performing keywords, effectively playing to your strengths and driving a decent volume of profitable sales. As you drive more sales, your listing will continue to climb in ranking, accumulate reviews, and establish a extensive sales history. This may afford you opportunities to convert better and gain more relevance with higher volume search terms for which your product previously didn’t perform as well for. In other words, as your product receives more reviews and is better positioned in the market in terms of competitiveness, you may consider running advertising on higher volume and more competitive search terms.
Search Engine Optimization
The first benefit of advertising (beyond the direct sales driven through your ads) is that it contributes to Amazon SEO. Typically, and while sales obviously have a stronger impact, any engagement with a listing positively impacts keyword ranking. An accumulation of clicks, add-to-carts, and sales in time will help to drive your listing closer to the top of relevant search results. This is especially true when your ad is engaged with through a specific search term. However, keywords that get an excess number of clicks with few to no orders will likely result in negative rank movement. Simply spending hundreds of dollars inefficiently on a single keyword is not the magic bullet to rank improvements; you must convert for the term as well.
While it’s not advisable to spend money blindly on inefficient campaigns, when monitoring keyword ranking improvement and organic sales growth alongside campaign performance, you may find that there is a net benefit to a campaign with a higher ACoS. A keyword tracking tool such as Keyword Manager can be extremely helpful for monitoring ranking changes in correlation with ad spend.
Spending to Facilitate Organic Sales Growth
Along with driving organic ranking for your product, advertising spend can in-turn influence organic sales growth. This somewhat follows the logic of traditional (pre-e-commerce) advertising.
While obviously, establishing better keyword ranking establishes better visibility in the market, which correlates to more organic sales, there is also the less calculable idea that running advertising increases your visibility with consumers. Because repetition influences mental processes, it’s possible that by running advertising, a shopper may overlook your paid ad spot but end up purchasing after viewing the organic listing. In this way, PPC can partially function similarly to a billboard.
Additionally, while this happens more heavily with higher cost products, it’s common for shoppers to browse and consider a purchase over a period of time. As a result, it’s possible that shoppers are viewing (and possibly clicking on) your ads without making a purchase at that time. At the point where a purchasing decision is made, it’s possible that they would click on your organically ranked listing and/or searched for your product directly.
Defensive Ad Spending
Particularly in instances where you’re performing well and/or have enough of a brand presence where people search directly for your brand or products, using ads as a defensive measure can be an effective way to maintain market share.
When a shopper is searching for a product, on any given page there is a limited number of ad spaces available. Though you may be in an advantageous organic positioning for some of these terms, aggressively advertising can be an effective way to suppress competition and ensure a better probability that your product is purchased. With this tactic, the focus may not be on profitable spending (particularly though the campaign performance itself) but rather as a method of affirming broad performance for your product by dominating the paid digital shelf space.
Especially in instances where you have several products that are relevant to a search term, defensive ad spend can help influence shopping decisions by establishing high visibility for your brand. By holding multiple ad spots within the search results, repetition can help to lure buyers into exploring your brand more thoroughly while simultaneously preventing others from gaining the same degree of visibility.
Putting in the effort to source a product strategically, thoroughly research the keyword market, and lay the foundation for sales and review generation should put you in a position to eventually reap the rewards of your hard work. With that context, at this stage in your listing’s life on Amazon, you can begin to shift your strategy to more aggressive tactics. By reviewing your performance and campaign data, you can begin to isolate profitable keywords which you can exploit in order to maximize profitable revenue while simultaneously looking at the total influence of PPC spend with relation to organic sales and ranking.
Using these tactics, you can begin to push your listing to visible and favorable ranking position, grow your organic sales potential, and attempt to minimize the visibility of your competition.
These tactics will, in time, help to drive a listing from the back of the catalog to a major contender in the market. While this process can take time, money, and effort, this long-term strategic play will eventually help a listing to truly dominate the market.
By maintaining some aspects of the traditional school of thought on the benefits of advertising while also appreciating the depth of data that PPC provides, advertising on Amazon can provide you with a wealth of advantages in a congested market.
You’ve spent countless hours researching markets. You’ve found a product and a supplier to make it. You’ve ordered samples, finalized the design and packaging, researched the keywords, built an awesome listing, and now your product is finally live on Amazon.
In the endless sea of products being sold on Amazon, it’s unlikely that your product will magically float to the top, but you also need to take steps to ensure that it doesn’t sink to the bottom.
Further keeping with the metaphor, Amazon’s sea can be cruel and unfair, but it demands respect. Established products frequently have reviews that were purchased or incentivised, providing a continued advantage over the competition. Today, several sellers still obviously violate Amazon’s thorough and complicated policies in an effort to get a leg up on their competition. There are regularly new tactics and services to buy reviews, influence metrics, and sabotage listings, and while some sellers seemingly exploit these options with impunity, Amazon does serve as an aggressive judge, jury, and executioner when black-hat tactics are discovered. In the blink of an eye, Amazon can shutter your store and revoke access to their marketplace, and it’s not uncommon that honest sellers find themselves caught in Amazon’s net and hit with account suspensions. Despite all of this, Amazon’s dominance over e-commerce continues to grow, providing unparalleled opportunity for sellers.
Assuming (and highly recommending) that you are playing by Amazon’s rules, when launching a new product, you’re faced with the task of cutting through all of the more established competition to get your product in front of customers. While it’s hard to definitively prove, and while you shouldn’t expect a major influx of sales, it’s commonly believed that Amazon does provide a ‘honeymoon period’ to new products, in which they are given a bit of a boost in visibility and performance to help them gain traction. That said, it’s important to implement every tactic possible to drive sales in the first few weeks of activity. If you are unable to drive any account activity, in time, your poor sales history can begin to weigh on your product’s ability to gain favorability with Amazon’s search engine.
The following article will walk you through the first actions that should be taken when launching a new product. Whether you’re a new seller with your first product, or simply adding an additional listing to a large catalog, these universal strategies can help you to build the necessary foundation of sales and ranking traction to succeed long term.
The first step in developing an effective strategy for launching a new product on the Amazon marketplace is to develop a deep understanding of your competition. When releasing a brand new product, your listing will have no reviews or sales history and your competition may be well established in the market. Therefore, it’s likely that in a head-to-head comparison, your competition is going to have the upper hand.
That said, there are a number of tactics that can be implemented to either circumvent your competition or exploit their weaknesses. In order to do this, you must first understand your competitors and how they are interacting with the market. Using Competitor Intelligence, you can easily analyze the tactics of your competition to build a thorough strategy.
The primary benefit of Competitor Intelligence is that it provides you with in depth keyword data for a competing listing. This data enables you to view relevant keywords for the market in relation to their performance. You can see the listing’s organic ranking and advertising rank (PPC positioning) for each keyword, alongside search volume metrics, opportunity score, and relevancy score.
By comparing search volume to organic ranking and ad strategy, you can start to develop an understanding of what keywords are driving the bulk of sales for your competitor and see an overview of where they’re focusing their advertising budget.
Along with this, you can also observe the keywords that your competitor is not indexing or ranking for. This data can also be important as you may be able to note keywords which are being overlooked, implying that these search terms can be efficient opportunities for driving additional sales!
You’re also able to select and track individual keywords in order to receive updates on rank change, indexing changes, etc., allowing you to quickly adapt to any fluctuations in the market or strategy of your competitor.
On the Product Analysis page, you can directly compare metrics with your competition while reviewing historical trends. With a new product, this data can be a quick and easy method of understanding any competitive advantage that you may be able to emphasize in order to persuade buyers.
When first launching a new product, you will have no reviews and no sales history. While your product may be the best product in the market, you will have no explicit advantage over established product listings.
Although you can (and absolutely should) implement quality images and use your copy to highlight features that demonstrate superior value or quality in comparison to your competitors, ultimately the search results on Amazon provide shoppers with:
This means that your ability to provide a complete value proposition to potential shoppers is relatively limited. Through this lens, one of the easiest ways to begin to build traction for a new product is to start off by pricing competitively.
Setting a product’s price point below your competition is one of the best methods to draw sales away from more established listings. While it’s very unlikely that your product is review competitive, and similarly unlikely that you will have better ranking than much of the competition, appealing to value can help to draw in more budget minded shoppers.
The social proof provided by reviews helps to provide quality assurance to shoppers, meaning that even if your product is objectively better, a competitor’s review status makes their product less of a risk. Because of this, beating your competition on price provides an alternative comparable tangible value, which has the potential to objectively influence sales.
While it can be a difficult decision for any brand owner to cut into their profit margin, one of the most fundamental mistakes that a seller can make is thinking in the short term. It takes time, effort, and money to build a business. You may not obtain the expected return from your first run of inventory, but taking measures to steadily gather sales in the early stages of your product can be a strategic investment to build a foundation for long term success.
Although traditional business rhetoric would suggest that lowering your price immediately tarnishes the perception of premium branding, this is not the case on Amazon. In a crowded marketplace with limited control over your brand’s messaging, a low price is a powerful asset for driving traffic to the listing.
Keep in mind through this stage that your price is not permanent. As your product begins to gain momentum, you can start to raise price until you hit the amount that you’re ideally shooting for. That said, it’s important to understand that the market dictates price. While you (more or less) have the ability to sell your product at any price you wish, the overall field of competition really establishes the fair market value. At every stage of your product’s lifecycle, it’s crucial to consider this when deciding on your selling price. In order to sell effectively, you will always need to remain competitive with the market.
Additionally, testing a few price points can be worthwhile. In certain instances/markets, an aggressively low price may work against you as it can create the perception that a product is of lower quality. For instance, an extremely low price and no reviews may be a cause for caution with an ingestible product such as a supplement. It’s important to make sure that you’re monitoring data to ensure that you’re getting improved click through and conversion rate (unit session percentage) to develop evidence to support the effectiveness of your price point.
Also, lowering price alone will not help to put your product in front of consumers. It will only help persuade shoppers to select your listing over a competitor. You need to combine a low price offer with marketing and advertising strategies to drive sales. For these reasons, it’s extremely important to make sure that you’re monitoring performance. If you’re failing to keep a close eye on performance and the overall effects of any variable changes on Amazon, you could be missing out on critical data to help you sell more efficiently.
Providing a value appeal to shoppers can be an effective strategy in response to the review quantities of competing products, but that still begs the question: How do you generate reviews?
Prior to an October, 2016 change to Amazon’s terms of service, building a base of reviews was a simple process. Sellers could simply give away a quantity of products to receive ‘honest, unbiased reviews’, effectively buying a review base. However, in time, consumers and (probably more importantly) news outlets, began to notice that a vast quantity of products being sold on Amazon had massive quantities of reviews that appeared to be purchased or positively influenced, thus implying that consumers cannot trust the statements that are intended to provide them with quality assurance. Because Amazon very transparently prioritizes customer experience over all else, they quickly enacted policies to forbid any incentivized reviews as a response to the criticism.
Unfortunately, sellers quickly learned that typical shoppers don’t leave reviews, meaning that this policy change quickly created a divide between established products with large review quantities, and new products which were subject to organic review growth rates.
Review generation, however, was (and is) an extremely important aspect of selling successfully. Practices for driving fraudulent reviews continues to be driven further and further underground; with Amazon playing cat and mouse, enacting stricter policies and liberally doling out account suspensions.
Reviews are a social currency on Amazon and a review quantity and rating alone can largely make or break a product listing. Like any blackmarket good or service, where there is demand, there are entities who look to profit through offering a supply. To this day, some sellers do venture into black-hat tactics to drive reviews, or use reviews to sabotage competition. And while some sellers are able to slip through the cracks, Amazon typically catches up and dispenses swift justice.
As a (hopefully) honest seller, who is looking to avoid the Amazon’s punitive wrath, opportunities to compliantly stimulate review growth are limited, but extremely valuable.
Entering Amazon’s Early Reviewer Program is the best way to quickly get a start on your review generation. This program was seemingly developed by Amazon as a means of compensating for their strict policy changes by allowing new listings some opportunity to gain momentum. The Early Reviewer Program is eligible to SKUs that sell for more than $15 with less than 5 reviews. Amazon charges $60 per SKU and will run their program for a period of one year, or until five reviews are generated. Through this period, shoppers who purchase the product will receive an email from Amazon offering a $1-3 Amazon gift card in exchange for a review on the product.
While it’s not a magical solution to make you review competitive, the Early Reviewer Program is an affordable opportunity to help get a new product listing started. This small advantage enables you to establish some social proof to help sway customers.
Beyond this, and while it’s somewhat of a grey area with regards to Amazon’s policies, sellers also utilize product inserts and email follow-up campaigns to generate reviews.
With either of these tactics, it’s critical that you utilize completely unbiased language and stay away from statements implying or steering the customer towards positive feedback (ex.: “If you love our product, please leave us a review on Amazon.”). You cannot attempt to route negative reviews to your own customer service and you similarly cannot use language that only encourages reviews based on positive reception. You also cannot offer any sort of gift, coupon, or incentive in exchange for a review (ex.: “Please leave us a review to receive a coupon for a 50% discount on your next purchase.”). Even if you’re looking to provide a free gift or coupon to all buyers, regardless of reviews, it’s advisable to not offer any type of promotion, incentive, or gift while requesting a review.
It’s also worth noting that Amazon is deliberately vague about the overall compliance of follow-up email campaigns. It is directly stated that you cannot incentivize or influence reviews in any way and there are restrictions as to how you can utilize email campaigns (i.e. you cannot use emails correspondence to pull traffic from Amazon or market other products to buyers). We have not encountered any issues with use of unbiased email and insert language but Amazon has been known to test buy products to monitor these tactics.
Building a review base for a new product is quite possibly the biggest challenge that you will face when selling on Amazon. While shoppers place an extraordinarily high value on rating and review quantity when making purchasing decisions, less than one percent of shoppers will leave a review for a product they purchase. That said, in most markets, you don’t need thousands of reviews to effectively sell. You just need enough of a review base to provide confidence to your customers.
The value of reviews definitely can’t be understated and it’s important to use the tools at your disposal to stimulate growth. That said, it’s definitely worth it to abide by Amazon’s policies and approach your product with a long-term perspective. Reviews help to drive sales, but in order to drive reviews, you need people to buy your product. Use the Early Reviewer Program to your advantage but also prioritize strategies to generate sales first, and let the reviews develop over time. While it’s not necessarily fast, this strategic perspective will help to ensure that you’re able to facilitate some sales activity which will continue to build momentum as you progressively accumulate more reviews and better ranking.
While it’s definitely valuable to understand your market and competition, along with review generation and the use of price as a variable to persuade buyers, it’s equally important to understand how to place your product listing in front of potential shoppers. After all, if the best, lowest priced product has a listing on Amazon, but shoppers can’t find it, can it make a sale?
It’s not good enough to have the best price or the best offering if your listing is buried in the results. You also can’t generate reviews without sales. So, considering the reality that Amazon is an extremely crowded marketplace, and that it’s unlikely that your brand new listing will automatically end up on the first page of relevant search results, you’ll likely need to pay for visibility through Amazon’s advertising platform.
However, before you jump into setting up campaigns, there are a few methods that you can utilize to collect important data and work towards efficient campaign performance.
Using your understanding of the competition and your competitive price point, you can delve into product targeted advertising. A product targeted campaign is a campaign that specifically focuses on another listing. Typically appearing on a listings detail page, a product targeted ad can seek to lure buyers to it’s listing by appealing to a shopper interested in a related product. There are two main tactics to explore when using product targeting.
First of all, you can run campaigns directed at competition. It’s important to note that in order to be effective with this strategy, you need to find products that have good visibility and traction (thus allowing you to piggyback on their traffic) and you also need to have some competitive advantage (lower price, better reviews, features, color etc.) in order to reach and lure shoppers.
For instance, if you’re selling a hammer, and a shopper is viewing a listing for a hammer, in order to pull their interest, your hammer has to be cheaper, better liked, or have visibly better features in order to draw the shoppers focus away from the product that they’re currently viewing.
The second main tactic involves using product targeting to align your product with complementary listings. The same concept applies to selecting complementary products to target in that it’s advantageous to look for products that have a large quantity of sales and page one ranking for valuable keywords. The difference is that instead of trying to pull sales from your competition, with complementary targeting, you’re ideally seeking to have your product purchased in addition to the targeted complement.
An example of this would be running ads for your same hammer, targeting items such as tool belts, tool boxes, or boxes of nails. The idea is that while someone is shopping for a box of nails, they may realize that they also need a hammer, and your ad placement may result in a convenient purchase.
To easily identify competing and complementary products to effectively target through this campaign type, you can use Listing Analyzer by Viral Launch. After running an analysis on your listing, you can use the Competing and Complementary Products tab to view and sort related listings. By filtering these results to meet your objective (higher sale price, high sales volume, etc.) you can quickly identify ASINs to hone in on with product targeted campaigns.
While both of these tactics may result in lower engagement, and typically won’t assist organic visibility growth as much as keyword targeted campaigns, they can help you drive some additional sales. Additionally, product targeting can be helpful when first launching a product because you’re able to specifically align your ads with individual products, allowing you to hone in on products that your listing has a competitive advantage over.
Another method to effectively cut your teeth in with PPC and gain some additional visibility is through an automatic campaign. Auto campaigns are more or less the ‘easy’ format for running PPC. While manual campaigns provide you with the ability to target specific keywords and products with varying degrees of specificity, an automatic campaign will defer to Amazon’s algorithms to establish targets for your advertising.
While you may instinctively think that it’s a better strategy to fully control your campaign spend and targeting, an automatic campaign can be a helpful way to hit on a broader range of keywords and drive some wider visibility. Additionally, there may be specific keywords that you convert surprisingly well for. Also, because there is less of a targeted approach, your advertising spend will tend to be algorithmically dispersed, which can result in a lower cost per click, meaning that it’s possible to continue running very efficient automatic campaigns over a long-term period as a means of increasing and rounding out traffic.
In addition to this, it’s important to regularly review your advertising reports. When running ads, it’s easy to get caught up in the concept of spend vs. return. Obviously, inefficient advertising can feel like wasted money. That said, it can be advantageous to instead look at advertising spend as a means of purchasing data. Though it’s far from perfect, Amazon provides access to a number of reports which can give insights into your campaign performance. These reports can be valuable resources for understanding how your product is reacting in the market and how to effectively compete. For instance, using the Advertising search term report, you can review which keywords are getting impressions, driving clicks, and converting into sales.
As you continue to run automatic campaigns, regularly reviewing data can provide you with insights into which keywords are driving revenue, inevitably allowing you to create more focused manual campaigns focused on well performing keywords.
Using automatic campaigns is a great way to familiarize yourself with Amazon’s advertising platform if you are a new seller, and it’s also a great way to begin to generate some sales and visibility if you’re a launching a new product.
Assuming you’ve done thorough keyword research, running some more specific advertising campaigns, which we refer to as discovery campaigns, is another way to drive focused traffic. A discovery campaign is essentially a manual campaign which is established to test the PPC performance of your high value keywords.
Ideally, you have a list of keywords used to write your product’s listing. Within this list, there should be a range from high competition/high value terms down to low competition/high opportunity terms. Pulling from this list, you can begin to test small groups of keywords (around 5 per campaign) with manual testing to monitor their performance.
By closely reviewing reports, you can begin to determine which keywords are generating interest (by receiving clicks), and which keywords are generating sales. It’s also important to monitor how your budget is being allocated. You may find that a few of your keywords are receiving a very limited amount of impressions (implying that other keywords are consuming your campaign’s budget). If this is the case, you’ll want to restructure your campaign or increase budget to ensure that you’re adequately testing each term.
If a keyword is spending without generating sales, it may be worth removing it from the campaign. That said, the fact that it is spending implies that it’s receiving clicks. For this reason, it may be worth reviewing the competition for this keyword to determine any tangible values that are hurting your listing’s ability to drive a sales.
On the flip side, if a keyword is effectively driving sales, it may be worth breaking the keyword out into its own campaign with a dedicated budget. In this way, you can ensure that you’re dedicating a thorough budget to the terms that are most efficient. If you’re able to maintain ACoS, you may more or less be able to reliably generate profit by fueling these campaigns with spend.
If keywords are not performing, you typically will want to rotate them out of your discovery campaigns, however, you may not want to completely throw the keywords out. As your product begins to build momentum and generate reviews, it’s likely that your listing will convert differently. Therefore, as your listing becomes more competitive in the market, some targets that were previously inefficient may become more relevant.
When launching a new product on Amazon, there are three major variables that you should immediately begin focusing on:
Competitive advantage: Understanding how to position your product with a tangible value proposition (most commonly achieved by pricing below your competition)
Review Generation: Given the Amazon’s restrictive policies around reviews in parallel with their importance to consumer decision making process, using every policy compliant tactic to your advantage in order to grow a review base is critically valuable and continues to improve your listing’s ability to sell effectively.
Visibility: You cannot expect shoppers to find your product simply because you’re listing it on Amazon. Using PPC to drive visibility is one of the only ways to truly get your product in front of consumers when launching a new product. Knowing how to set up some basic early campaigns to begin to target keywords and advantageously align your product with other listings in the market is the best way to begin to drive revenue.
Keeping these three points in mind when launching a new product can help you to contextualize an overall strategy for effective product growth. Amazon is crowded and your competition won’t always play by the rules. But by approaching the market strategically, and with thought towards the long term, there is still limitless opportunity to be successful.
As more of a moral point, reviews are consistently the most challenging aspect of beginning an Amazon based business. That said, while our increasingly Amazon-based society relies on reviews to inform our purchasing decisions, most of us are guilty of not contributing by adding our own opinions after purchasing products. If it were a cultural norm for shoppers to leave a review, consumers would benefit from more well rounded recommendations, and small businesses would more easily be able to establish themselves.
While lofty and idealistic, maybe reviews should almost culturally be viewed as a tax; a few minutes taken to write your opinion in exchange for the overwhelming convenience of e-commerce. While that may be too ambitious to actualize, taking a few minutes to think about how much a review can mean to the plethora of small business owners who are grinding to achieve success is worthwhile. Though it’s easy to forget, lending a hand by leaving a review makes it that much easier for someone to overcome one of the many hurdles that come with deciding to start your own business.
If you are in the process of launching a new product or are interested in selling on Amazon, Viral Launch is always willing to assist. Feel free to contact us at firstname.lastname@example.org with any Amazon related questions. Our expert team of coaches are excited to help you dominate!