Amazon has become a retail behemoth in the last 15 years and its influence is growing year on year. What was once an online bookshop now allows you to buy anything from luxury beauty to everyday shopping. Amazon’s recent deal to buy Whole Foods Market for $13.7 Billion shows that they are not going away. Over time more and more brands of an increasingly premium nature are accepting that they need to be selling on Amazon. It is also clear an Amazon strategy is beneficial across the marketing mix, as Nike’s recent announcement demonstrates. Nike which has famously avoided selling directly through Amazon (unlike it’s competitor Adidas) has acknowledged they want (and need) greater control over the content which appears on the site. Their new partnership will allow them to do this whilst increasing their overall revenue. However creating a successful business on Amazon isn’t just for global brands, and there is plenty of retail space for everyone. With this in mind, here are our top benefits of selling on Amazon.
Incremental Revenue
It doesn’t need to be said twice, selling on Amazon presents a very lucrative commercial opportunity. Given that over 50% of consumers start their journey with a search on Amazon and that Amazon’s sales last year hit $128 Billion, this is a great opportunity to grow your sales as you build a multi-channel strategy. Amazon offers services such as their own pay per click service and lightning deals which get featured on their specialist deals page. These allow you to complement your organic sales and win retail space from larger brands. Amazon also offers their subscription service – Amazon Subscribe and Save – which allows you to capture continual revenue by customers subscribing to have your products delivered on a regular basis. With subscription customers on average being worth twice the lifetime value of individual purchasers, it has never been easier to grow your ecommerce sales.
Create / Control Your Brand Image
If you don’t sell on Amazon, others will and they will control how your brand appears on there. This often results in poor, pixelated imagery, poorly written descriptions and may result in poor fulfilment or customer service. Customers relate these back to the brand rather than the seller, potentially resulting in the loss of a customer for life. This could lead to negative reviews, meaning that other potential customers buy competitor products instead, therefore creating a ripple effect. By selling on Amazon yourself you are able to bring these “rogue” 3P sellers in line allowing you to control how your products appear. This enables you to maintain your brand identity and experience online.
Largest Number of Product Searches Done on Amazon
By the end of 2016, 55% of customers were starting their online journey on Amazon. Compare this to 28% using google and 16% using a manufacturer’s own website. Getting your Amazon content strategy right is imperative, regardless of whether the consumer’s goal is to buy from Amazon itself. There is an increasing number of customers “shop windowing” whilst in a physical store. These increasing numbers of retail customers are looking on Amazon for reviews before deciding whether to make their in store purchase. This means having strong content and good reviews is important and has the potential to help increase your sales through other channels.
Get Exposure to Customers Who Wouldn’t Know About you Otherwise
Many customers shopping on Amazon won’t be looking specifically for your brand (they may not have heard of you). They may be searching for your product category and therefore, in the process discover your products. Getting your Amazon strategy correct means visitors to Amazon have an opportunity to purchase products they may not have discovered otherwise, or that they may have purchased from a competitor historically.
Selling via Amazon Adds Validity to Your Brand
Marketplaces add validity through strength in numbers. This is as true for online marketplaces as it is for real world examples like farmer’s markets. The variety and all-in-one nature of Amazon draws in a volume of visitors. If a product is seen on Amazon, it is seen as being endorsed by the largest retail giant in the world. Amazon also provides customers with the additional layer of seamless checkout and fulfilment support creating an enhanced shopping experience for buyers.
Opportunity to Build a Constant Revenue Stream
Once you’ve got a customer in the door, even if it is through Amazon, you’ve got a chance to win repeat business through excellent service and fulfilment. This is especially the case if you’re selling products in a category that encourages frequent, repeat purchases, such as food and drink. Leveraging services such as Amazon’s Subscribe and Save allows customers to sign up to repeat purchases at pre-defined intervals. With research showing that the lifetime value of customers who subscribe is twice of those who make standalone purchases, this is a great opportunity to grab incremental revenue.
In conclusion there are plenty benefits of Selling on Amazon. There may be internal reasons for not selling on Amazon. Making sure that Amazon fits in with your full retail strategy is important.
Expert Edge can help you with all things amazon if you don’t have the time or resources to do it yourself. Our team is made up of former Amazon employees, vendors and sellers who have experience in doing this for multi-million dollar/pound brands as well as smaller startup brands. Find out more about our Amazon Consulting services.