This article has been contributed by Jeff Cohen, an executive at Seller Labs and a highly sought-after international speaker. Seller Labs works with more than 15,000 Amazon sellers who did over six billion in sales on Amazon in 2016.
Top brands are slowly waking up to the fact that Amazon doesn’t work like the retail world they are familiar with. These brands spend piles of money for prime shelf positions in big box stores to catch the eyes of shoppers. But Amazon works differently. The online retail giant gives no-name brands the opportunity to win market share and drive sales ahead of household name brands.
Have you ever heard of Bear Paws, Firmstrong, Anker, DeeBot or Kayizu? These are some of the top-selling brands on Amazon, and they are beating brands like Huffy, Schwinn, Hanes, Fruit of the Loom, iRobot, and Hamilton Beach. While these brand names might rule in the department store, they play second fiddle on Amazon.
“Being successful on Amazon requires hard work. But if you know the right formula and understand your customers you’re preparing yourself to win”
Every year I partner with Eric Heller, CEO of Marketplace Ignition, for a pre-conference workshop at Retail Global where we focus on recent Amazon trends. The trend of new brands hitting it big on Amazon is what Eric has named “No One Knows You’re a Dog on Amazon.” Eric’s company works with Fortune 1000 brands to position their products on the Amazon Marketplace.
These brands are always surprised that they are losing market share to small, no-name brands. On Amazon, nobody cares about the brand name. Shoppers care about quality and value – while search position rules all. If you can create a better product, a better listing and provide value, you can be hugely successful on Amazon.
The magic formula
I recently returned from China. While I was there I was asked ad nauseam for the “secret formula” or the “magic bullet” to win on Amazon. I usually responded with simple answer: “The secret formula is hard work, and the magic bullet is understanding your customers.” But if you spend the time to study Amazon, you can actually find a magic formula. It’s pretty simple. You need a quality product at a great value to win. There…I said it…. now go off and get rich! But we all know it is not that simple. Let me break it down a bit more.
What is a quality product? A quality product is something that exceeds a customer’s expectations. On Amazon, it’s clear how you can determine a customer’s expectations, it’s called the product review. If you look at your competitor’s products and you read their reviews, you will find a blueprint to a better product. Customers will share exactly what they like and dislike about a product. All you have to do is innovate to create a better mouse trap.
If you’re just placing the same product in the same market, you won’t be providing anything that’s improving the customer’s experience; you’re not giving your customers a reason to buy your product over your competitors.
When I mentioned value, I hope you noticed I didn’t say “lower price.” Price isn’t always king. If you have a better product, you can typically sell it for a higher price. One successful client I work with sells a high-quality Bluetooth speaker. They created a better product with a sleek design and sell it for $299 in a category dominated by products selling below $30, yet they still have a category rank below 100. My client will probably never dominate the top of the category, but that isn’t what they are seeking to do. They are seeking profitability.
“Price isn’t always king. If you have a better product, you can typically sell it for a higher price.”
Set realistic expectations
Brands must set realistic expectations for the customer they are seeking and the sales they want to generate. While Amazon is the largest shopping site in the US, there is a limit to the number of people who are searching for a particular product. Meaning that you can’t generate demand unless you are driving outside traffic. The easiest way to test demand for your product is to follow your competitor’s best seller rank (BSR) and track it over time. By understanding where BSR rank is over time and how that changes in different seasons, you will get a realistic expectation for how many sales you can generate.
Another great data point to track is keyword ranking. Understand which keywords your product ranks for, as well as your competitors’. Understanding top-performing keywords will provide you with a guide as to how well you rank in Amazon search. You can track your keywords and your competitors’ keywords manually, or you can use a third-party software program like Scope to help you collect the data.
Know your numbers
Now that you have a realistic expectation for how many sales you can generate, you need to determine where to focus your time. Before jumping into this process, you need to know a few additional numbers to identify where you’ll get the best results.
Understanding the metrics for these four areas will help sellers discover more about their products, their customers and any performance issues.
Impressions are the total number of times your product shows up for a keyword or in a Sponsored Products ad. Impressions are search result views, and if you are not showing up then consumers will never find your product.
Sessions are the number of unique daily visits to your product detail page. On Amazon, customers must go to a product detail page before they can add an item to their cart. Sessions give you a clear understanding of how many people are moving from search results (impressions) to your page (sessions). If you see low sessions, this is an indication that you need to work on keyword optimization to increase the number of keyword terms a shopper would use to find your product. You may also want to consider a product promotion to increase your sales velocity. Both of these factors will improve your BSR and the total number of impressions your product receives.
Conversions are simple to understand and essentially mean that the people who are landing on your product page (sessions) are making a purchase (conversion). The higher your conversion rate, the stronger the indication is to Amazon that buyers are finding what they want. If you see high sessions and conversions, then your effort is best used to improve your landing page either by updating your title, bullets, descriptions, photos or upgrading your detail page to Enhanced Brand Content (A+ Content for Vendor Central).
Reviews are the social proof. They explain to shoppers that the product they are researching is what they really want and its quality meets or exceeds their expectations. Amazon places the customer’s experience before everything and reviews are an indication as to whether a shopper is delighted or displeased. If you are getting negative reviews on your product, you should consider making product updates or enhancements. If you are not getting reviews, then you should be contacting each buyer and asking them to review your product.
Being successful on Amazon requires hard work. But if you know the right formula and understand your customers you’re preparing yourself to win. Amazon is designed to place the best product in front of the customer that it believes will exceed their expectations. Selling on Amazon is like an algebraic equation. If you know the formula and how it works then all you have to do is place the right values in the right places to get the right solution.
This article appears in E-Commerce Solutions magazine. Want more tips to grow your e-commerce business? Download the magazine now for expert advice, case studies, and more!
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