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From the Electronic Retailing Association, by Rick Petry, this is one of an occasional series featuring direct marketing leaders who will share key insights they have learned from their career in marketing and advertising. Wendi Cooper, a prominent direct marketing industry creative director, marketing director, award-winning content producer, podcast host and producer speaks to the opportunities and pitfalls that Amazon presents to brands and marketers.
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First and Foremost, says Wendi, You Must Sell on Amazon.“A 2016 study from BloomReach indicated that 55% of consumers start their product research on Amazon. With the growth in PRIME membership and its services, it is likely that the number is now much higher. That means that over half of your prospective customers are initiating their product research on Amazon and not having your brand on Amazon is foolish when most of the world shops there! As marketers, we’d like to think that our leads generated by SEM, social media, TV ads, radio and print will drive customers and sales on our branded websites, says the report, but it’s proven time and time again that the purchase will take place on Amazon.”
“Let’s assume you agree that you need to be selling on Amazon, and for the purposes of this discussion, the author is talking about Brands and not third-party sellers. First, it’s critical to understand the differences between being a {Brand} Seller and a Vendor, because each of these classes of sellers has unique opportunities and threats. Seller Central means you are selling directly to the consumer through the Amazon marketplace via either Fulfillment by Amazon (FBA) or dropship. Vendor Central means you are effectively a wholesaler to Amazon, which is by invitation only, or through Vendor Express which is opt-in and strongly not recommended.”
“Amazon’s algorithm allows them to track successful products and work with those brands as invited Vendors, giving them an unfair advantage. Being a Vendor may cause a Brand to lose 80% of the control but Amazon looks to the Vendor for updated and current detail page content. Plus Amazon allows third-party sellers to list against the item, whereas with Gated Brand Registry it is 100% restricted to the Brand. A brand may establish MAP pricing with Amazon so the pricing is fair for all retailers including Amazon.
If you are seller central, know you are competing with your distributor.“By selling direct-to-consumer on Amazon (Seller Central), you are putting yourself in the position of competing with your distributor (Amazon). Remember, says Wendi, prospects coming to Amazon are never ‘your’ customer even after purchase. While it is an incredible marketplace, one once with low barrier to entry, and a place to build a Brand, it can be a Faustian bargain where you give up a lot to gain a place at the table.”
Set up gated brand registry, enhanced content page and the new storefront.“…if you elect to sell directly to the consumer, set up your Gated Brand Registry which gates your brand from third-party sellers on Amazon, and will allow you to create a new Amazon Storefront which gives you a direct URL, (i.e., amazon.com/easypro) that can be embed in ads or social media as a direct link without any competition appearing on the page. With Gated Brand Registry, you will be the only company selling your product on Amazon. Prior to the Storefront option, your marketing dollars would drive consumers to an easyPro detail page that was laden with competitor products. With the new Storefront, the only catch is that consumers must click a direct link to get there, as it does not appear through normal search results within Amazon’s algorithm.
Beware of fees, says the report.“Another challenge with regards to Amazon is mounting fees for sellers. If you have Vendor status, all fees are paid by Amazon, which is effectively the cost of giving up control of your brand. For example, says the report, as a seller you always want your product to qualify for PRIME, free shipping (under $35.00), which also gives you ranking preference and will not affect your ability to win the Buy Box. While we may believe, as a consumer, that the shipping is free and how nice of Amazon to do that for us, it is the Seller that is paying for it in their FBA fees.”
“Over the past two years Amazon FBA centers have exploded, says the report, and Amazon has had to learn how to work its supply chain more efficiently. Inventory levels are now recommended by Amazon, and you cannot exceed them.”
Wendi concludes, “We just have to be equally innovative with how we navigate these marketplaces so we don’t get squashed beneath the footprint of these mighty giants. At the same time, it’s incumbent upon us to acknowledge what they can do for our brand, yet not ignore that we are ultimately responsible for our success.”
To read the complete, un-edited version of this interview and report, please visit here.
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January 3, 2018 at 07:09AM
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