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Is Amazon Your Competitor? Not if You Have the Right Strategy in Place

It’s hard to talk about online retail without the conversation winding its way back to Amazon. With 44% of all online sales, and 4% of total retail sales in the US1 , Amazon is the elephant in the room. But that doesn’t mean online retailers are at a disadvantage. It simply means you need to make Amazon’s existence work to your advantage. In fact, Amazon has several programs to help you do just that and more than 40% of Amazon’s total unit sales come from third-parties2.

Product Discovery on Amazon

An Amazon shopper is someone who prefers to shop in one big, online market place where everything from jeans, to s shoes, to a dog bed, to batteries can all be ordered at once and shipped within a day. Fortunately, this type of customer can be yours as well.

For loyal ecommerce customers, product discovery begins on Amazon. It’s the first place they will go whenever there is a need or want.  In turn, Amazon is a great way to grow your business by getting your brand in front of millions of consumers. When an Amazon shopper is looking to fulfill their needs or wants, why not have your best-selling ones included in the Amazon search results?

You don’t need to offer your entire catalog on Amazon. Many brands offer their evergreen and classic styles there in order to build brand awareness.  Rather, they reserve their complete catalog and newest styles for their ecommerce site. For these retailers, Amazon serves as the first point of contact, and they use that sale to promote their own ecommerce sites by inserting marketing materials or special onsite offers in the packaging (more on packaging later).

Tip: Something to keep in mind – Amazon wants to be the place where consumers get a wide selections at lower prices. You can prevent a race to the bottom by establishing a minimum advertised price (MAP), which bars any outlet from selling your products below that minimum.

From Product Discovery to a Holistic Strategy

Let’s start by defining what a holistic strategy for your business, which should be to offer a portion of your products on Amazon. In other words, you’re managing a marketplace channel, just as you would a reseller, wholesaler or brick-and-mortar channel. If you’re new to the Amazon marketplace, you probably fulfill your orders yourself.

Once you begin to gain some traction and begin reaching new customers, it may be time to consider the Amazon customer’s expectations. In the US alone, there are 90 million Amazon Prime subscribers — people who are accustomed to fast delivery of orders. Slow delivery can affect your Amazon Seller Rating, a metric that measures overall customer satisfaction of your buyers, and help you identify customer service improves that can lead to more satisfied buyers. A straightforward way to improve your Seller Rating is to join the Fulfillment by Amazon (FBA) program. This program means that Amazon will warehouse your products and fulfill them on your behalf. There are fees, of course, but you get a lot of advantages. For instance, your products are eligible for Amazon Prime free two-day shipping, and your product listings are displayed with the Prime logo, telling all those diehard Amazon shoppers that Amazon will handle all packing, delivery, customer service and returns.

If you sell products that are common or widely available, you can opt into Multi Channel Fulfillment by FBA – a program where  in which Amazon already warehouses those products, but you serve as the merchant of record. Because the products are already in the Amazon warehouse, this arrangement is a de facto dropshipper relationship. Dropshipping is a retail fulfillment method in which you don’t keep any of the products you sell in stock. When you sell a product, you buy it from a third party — in this case, Amazon — who then ships it directly to the customer. As a result, the merchant on record, you never see or handle the product. This program is intriguing because you can build your store’s brand, get sales, and boost your Seller Rating by relying on Amazon’s incredible fulfillment operations.

Amazon Exclusives Program

As I noted in the beginning of this post, Amazon is keenly interested in promoting product discovery in its marketplace (a self-serving goal, to be sure, but one that also benefits third-parties like you). The Amazon Exclusives Program is one way the marketplace helps you win new eyeballs. Amazon describes it as, “best destination for innovators to launch and build a brand by providing increased brand discoverability, marketing opportunities, and self-serve brand tools.”

Don’t let the word “exclusive” scare you. Participating in Amazon Exclusives doesn’t mean you need to abandon your existing ecommerce site. Amazon defines “exclusivity” as “selling through Amazon, your own websites, and your own physical stores.” In other words, the only secondary-channel outside of your direct-to-consumers is Amazon Exclusives.

Mind you, don’t have to expose your entire product catalog; you can sell just one product. What’s interesting about Amazon Exclusives is that Amazon will actively market your products on your behalf. It’s marketing channel is robust, encompassing onsite marketing, email campaigns that include your products, deals, giveaways, branded content and video. It’s very difficult to get your products included in the marketplace email and on-site Deals of the Day recommendation channel because there’s many people playing in there, but this program increases your chances.

Engagement Opportunities

When you sell via the Exclusives or Marketplace programs, you have one opportunity to engage directly with the end consumer, and that’s to request feedback from the customer. This email is your opportunity “to close the deal” and make them loyal to your brand (from a digital perspective).

Asking for Seller Feedback is essentially asking for an review and the amount of positive feedback you receive will have a direct impact on your products appearing in the product recommendation areas and winning the Buy Box (the display on a product detail page with the Add to Cart button that customers can use to add items to their shopping carts).

This means that feedback is important and you should ask for it, but you should also email the customer to introduce them to other areas of your product line. Just take care how you word that introduction, as Amazon frowns on selling products offsite in that feedback message. Think long and hard on the best way to initiate a direct relationship with a consumer who is likely to be a faithful Amazon shopper.

Sellers who do their own fulfillment have a second opportunity to touch the customer: the product packaging. The box your product arrives in is an opportunity to put your brand in a good light, which means you should really consider upping your packaging game.

You can buy short-run custom packaging from numerous suppliers, or at the very least, use a branded packaging tape with your logo, so there’s no reason to throw your product in a USPS box. (I’ve received products in packages the sellers created out of USPS boxes all duct-taped together. It took me a long time to access my product. Never again!)  Remember, first impressions count and effect your seller rating. Amazon shoppers are different from your other customers, and you need to approach them differently. They’re accustomed to an Amazon out-of-box experience, and it’s worth an investment to replicate that.

Finally, offering an in-box incentive is a great way to entice shoppers to your website and to establish a direct relationship with them. Offering a best-in-class, exclusive to Amazon shoppers, is even better. In other words, don’t offer the same promotion you offer to your affiliate channels. Your customer is already your customer, thank them for it.

Once that customer arrives on your website the world of marketing opens up to you. You can engage them via email marketing, retargeting, and make them profitable through the lifetime value of that customer.

1 https://www.cnbc.com/2018/01/03/amazon-grabbed-4-percent-of-all-us-retail-sales-in-2017-new-study.html
2 https://services.amazon.com/selling/benefits.htm/ref=asus_soa_hnav