Going D2C: Why Amazon Right Now?
There are several real and false conceptions surrounding listing and getting involved with Amazon. Here are a few pointers if currently utilizing Amazon or considering adding Amazon as a new distribution channel. By properly having a listing strategy, managing your advertising spend correctly, and considering a 365 day fulfillment strategy, there is the potential to 2x, 3x, or 5x sales performance in a matter of months.
Understanding Amazon Performance Marketing (Amazon PPC)
On Amazon, over the first weeks of the Covid-19 outbreak - lower impressions combined with lower conversion rates has increased overall costs. It’s in these times the importance of having the ability to quickly adapt spend becomes critical. Being able to either increase or decrease spend by individual SKU and to have the ability to compare trends across a particular vertical at a given point in time will ensure optimization on ad spend performance. Amazon differs from other pay-per-click models as you can’t just BUY your way to the top. Results are based on buyer intent (further down the funnel) and based on the relevancy on how Amazon views your product versus available search.
Consider hiring an Amazon consultancy agency that has programmatic advertising capabilities such as Channeled.net.
Reviewing Your Fulfillment Strategy
During critical sell periods such as the build-up to BFCM have you considered having both a Seller Fulfilled and Amazon FBA Strategy? Specifically, in Q4 when demand heightens, Amazon may not be able to process your inventory replenishment. This can be particularly concerning if you run out of inventory on one of your top performing SKUs and due to demand not having the ability to restock in an Amazon Fulfillment Center. As such, having a back-up 3pl that can sell on Amazon using either Amazon FBM (Fulfilled by Merchant) or if using Prime (Amazon Seller Fulfilled) to ensure that you can meet the demand of your customer base.
Consider reviewing additional fulfillment options - some great options include ShipBob (US) & eShipper (Canada + US) for Amazon Fulfilled by Merchant. Rakuten Super Logistics for Amazon Seller Fulfilled, or AMZ Prep Canada (Prep, Pack, Fulfillment & Solutions Company for Brands on Amazon).
Look at Diversifying your Channel Mix
Really solid direct to consumer brands can potentially be short-sided on making an investment in just a singular sales channel. Potentially, you may have tried expanding to a new sales channel but had been unsuccessful in terms of:
- Ensuring listings and attributions are set-up correctly
- True understanding of profitability metrics
- Ability to properly control out inventory from multiple sales channels
Customers are looking for your product and if not your product the competition. Being across more than one sale channels provides the greater potential of retaining and growing your customer base.
Consider reviewing potential inventory and order management tools to better organize your product listings/order management (Cin7, Skubana, TradeGecko & Fulfill.io), profitability & performance tools to understand your underlying metrics (Order Metrics & Inventory Planner)
Disclaimer: The article was originally published on LinkedIn Pulse
Mark is a 15-year veteran in the software and technology space. Most recently, led partnerships at TradeGecko, a global ERP for SMBs, developing a multi-million dollar in-direct sales channel.