As Amazon’s expansion continues into new markets, are you ready to optimize the sales opportunities it brings and avoid the pitfalls? If you’re new to selling on Amazon, here are a few of our experiences that might help you prepare for Amazon success.
Today, Amazon operates in 17 of the world’s most digitally-advanced markets. As e-commerce accelerates around the world, Amazon continues to expand its geographic reach. When Amazon comes to town, it will stir up the status quo, requiring e-commerce practitioners to step up their game and become familiar with the unique sales process this highly-competitive, digital marketplace offers to manufacturers.
The experiences e-commerce managers gain working with the e-retail arm of brick and mortar stores, and even with other pure players, will still be lacking when it comes to Amazon and its unique vendor platform. Fundamentally, Amazon’s growth strategy is built on three pillars: low prices, wide portfolio and speed of delivery. With this in mind, what should your sales strategy look like for Amazon and how can you execute it with success?
Three rules for winning on Amazon.
Amazon is different from other retailers and, on top of basic sales fundamentals tracking, it requires retailer-specific metrics analysis. Some of the key challenges in navigating the Amazon marketplace include the (growing) presence of 3rd Party (3P) sellers, Amazon’s unique algorithms, a highly dynamic environment, and competition from thousands of other products. It may feel a bit overwhelming at first but in the course of supporting brands across the world in the Amazon quest, we've identified three areas you need to focus on to succeed:
1) Stay on top
- List your products fast to own the ASIN. First comer sells first and search positions are estimated on historic sales so start building your base for the future
- Monitor your key metrics in a dedicated dashboard to be able to visualize dynamic activity, monitor trends, predict outcomes and act quickly to close gaps.
- Increase the frequency with which you harvest your data - scanning up to 12x per day during Amazon’s peak events, and turn on Alerts to inform you of vital changes that require immediate attention, prioritizing your actions.
- Know your Sales and Share on Amazon to track progress and understand the competitive environment.
- Closely monitor stock level to avoid your product being unavailable for purchase and as a consequence dropping in Amazon’s search rank.
- Look out for newcomers to your category, evaluate their PDPs, and monitor key metrics on their pricing and promotion strategy.
2) Win the Buy Box
- Eighty-two percent of Amazon sales go through the Buy Box, so it is vital to win it. The percentage is even higher for mobile purchases.
- Understand why you lost it - was it because your product was out of stock or a 3P’s offer was better?
- Understand who won it to be able to step up your offer.
- Quantify the loss to focus your efforts on the gaps that yield the biggest sales lost. Avoid CRaPping out (Cannot Realize a Profit).
3) Win shopper attention
- Focus on search - monitor paid search and optimize your keywords.
- Ensure you are listed in the right category and sub-category.
- Convert more sales with engaging and enhanced A+ and A+ Premium content and make sure you track that it has been implemented as specified.
- Aim for Amazon Choice and Amazon Bestseller positions in your category as they will amplify your product in listings.
- Monitor your promotion execution (Deal of the Day, Lightning Deals) and track competitors to maintain advantage.
- Make sure you dedicate time to take care of consumer Ratings & Reviews as these not only influence shopper choice, they also impact Amazon’s search algorithm.
In time, when you build high volumes of reviews, you can consider leveraging this source, “listening” to the feedback from your shoppers and responding with product innovation, communications, or portfolio choices. But that’s a topic for another blog…
There is a lot to think about to win on Amazon and we are here to help! Starting from the basic trainings, through help with listings, content creation and pricing strategy to monitoring the sales fundamentals and empowering to win search and Buy Box. So if Amazon is launching in your country and you need support, please get in touch with us to discuss how our digital shelf analytic tool eStoreCheck and eStoreLabs e-merchandising competencies can help you. Drop us an email at firstname.lastname@example.org.