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1P Vendor or 3P Seller, Survival on Amazon Starts with these Seven Strengths

The Amazon marketplace is home to products from both first-party (1P) vendors and third-party (3P) sellers. A 1P relationship features items that Amazon buys and resells directly to customers. The 3P model is a direct-to-consumer sale using Amazon as the conduit between seller and buyer. While first-party arrangements with Amazon are less common since they are by invitation only, third-party selling is open to virtually any company willing to do the work required to list their product on Amazon. 

It’s clear that each approach comes with pros and cons for the brand. But regardless of how a company’s products are sold on the platform, success can depend on how well they manage each of these critical aspects of Amazon survival. 

Inventory

Keeping products in stock is vital for both vendors to Amazon and the sellers utilizing the platform to reach consumers directly. As a 1P Vendor, brands are invited to supply products to Amazon that the company subsequently sells in its marketplace. In this scenario, Amazon manages the inventory in its fulfillment warehouses and places orders to its 1P partners via a purchase order when it wishes to re-stock. While this may seem simpler than the responsibilities of a 3P Amazon seller, it does come with some drawbacks to keep in mind. For example, payment for product orders can take longer, 60 to 90 days in some cases. In addition, access to vendor managers at Amazon can be inconsistent, making it more difficult to manage the relationship. 

In the case of 3P sellers, they retain complete control of their inventory management and have the flexibility to choose the best approach for their business. Many opt for the Fulfillment by Amazon (FBA) model and pay for space in Amazon’s warehouses to store their products, as well as paying fees to have the company ship to Amazon customers. Others keep their inventories stored elsewhere. Regardless, products have to be in stock to fulfill customer orders. Companies using FBA face steep fees for inventory that sits in an Amazon warehouse for too long or can risk losing a hard-earned Buy Box if products are unavailable for purchase. This delicate balance makes inventory management one of the most important aspects of a successful Amazon relationship. 

Fulfillment

While the fulfillment process is drastically different for 1P and 3P relationships, it’s still equally important. Since 1P vendors are fulfilling a bulk order from Amazon rather than a small order from the end user, the focus shifts to meeting the guidelines placed on vendors by the marketplace. It’s critical that the companies supplying Amazon with products understand the labeling, packing and shipping requirements to avoid expensive chargebacks that can be hugely detrimental to profits. 

Alternatively, a third-party seller may have an array of fulfillment responsibilities to consider. Direct fulfillment by the company will require close attention to shipping and tracking options and ensuring the packaging used is appropriate to keep items in good condition during transit. If a company chooses to use Amazon Fulfillment Centers for Amazon orders and a traditional approach for sales that originate elsewhere, they will need to be concerned with complying with Amazon’s FBA requirements, similar to 1P Vendors. Whether an Amazon Vendor or Seller, companies can simplify their fulfillment logistics by using Amazon’s Multi-Channel Fulfillment for all of their customer orders.  

Marketing

Once a first-party vendor delivers their products to Amazon, control of the marketing is limited. However, 1P brands are eligible to complete the Amazon Brand Registry process, giving them access to A+ Content to support their products on the platform. Vendors also have access to Amazon advertising, such as Product Display Ads, Sponsored Product Ads, and Sponsored Brand Ads to attract customers to their products. Beyond the in-platform content control and advertising options available to some brands, the marketing focus for 1P growth should be on developing the vendor relationship with Amazon and maximizing the wholesale orders. 

Third-party sellers, on the other hand, are responsible for the entirety of their marketing efforts. From product listing optimization and customer-facing efforts to pricing and Amazon Storefronts, there is a much more robust menu of options to ensure brand protection. While there’s much more potential to drive sales via a well-executed marketing strategy, doing so can be overwhelming for companies without the in-house expertise to design and implement a successful plan.

Pricing

The simplicity of a 1P relationship may be most evident when it comes to pricing. As an Amazon 1P vendor, products are sold to the online retailer at a wholesale price. Amazon can then set the retail price that customers will pay without consultation or approval from the vendor. Typically, this lack of price control is less attractive for products with high retail margins. 

3P sellers have complete control of their pricing strategy on Amazon. However, their decisions can impact a product listing’s performance within the platform’s algorithm and, in the case of products with competing sellers, the likelihood of capturing the Buy Box. Therefore, managing price effectively as a third-party marketplace seller requires a clear understanding of your margins and the ability to maximize both profits and Amazon optimization. 

Vigilance

The rapid growth of the e-commerce industry and the dominance of Amazon has made it more important than ever for both 1P and 3P partners to stay aware of changes to the platform’s policies and be vigilant for threats from competitors, legitimate and otherwise. 

First-party vendors have experienced difficulty ensuring that Amazon complies with its MAP policies. Since Amazon places a substantial emphasis on offering shoppers a competitive price and has total control over pricing in 1P arrangements, it’s not unusual for them to discount items below a brand’s declared minimum advertised price. 

Meanwhile, Amazon 3P sellers need to be particularly aware of the problems they may face from opportunistic and unauthorized retailers. These competing retailers can also undercut an otherwise effective MAP program, use fraudulent reviews to gain an algorithm advantage, or harm the brand by selling counterfeit products. Third-party partners need to have a process in place to identify these types of activities and be deeply familiar with the tools available to combat them. 

Customer Service

Customer service can make or break a brand in the highly-competitive world of e-commerce. While a positive customer experience can create loyalty and repeat buyers, a negative review can have repercussions that extend well beyond the unhappy buyer. 

A first-party relationship with Amazon can allow a company to minimize customer service duties since the role of fulfillment, contact and returns processing becomes the domain of Amazon. Still, a 1P seller should plan to monitor product reviews closely to catch product quality issues or other problems before the damage to the brand is too severe. 

Like so many of the aspects covered here, 3P selling is more involved. Often, it means facing the daunting task of meeting customer expectations alone. While third-party retailers can share customer service via an Amazon FBA agreement, they will otherwise have to manage inquiries, refunds and returns independently. Regardless, creating the best possible customer experience should be a priority for brands seeking growth. 

Forecasting

Unfortunately, a vendor relationship with Amazon can be even more unpredictable than direct-consumer sales. Re-orders are often based on the company’s demand algorithm, which can change quickly. In a worst-case scenario, 1P brands could be dropped from the platform with little or no notice. Data on consumer sales through Amazon are also more limited for vendors compared to third-party sellers, and the availability of data reporting via Amazon Vendor Central has declined in recent years. In addition to the usual difficulties in forecasting what lies ahead for a brand, 1P suppliers these circumstances can create even more hurdles than other direct-to-consumer brands. 

3P sellers with the capacity and capability to analyze it effectively have a wealth of data available to them to help plan for the future. While the usual caveats that accompany the fast-moving e-commerce industry apply, it can be easier for third-party partners to access the resources necessary to identify and address threats to their sales. As mentioned, forecasting can also be critical to minimizing warehouse costs for FBA participants due to Amazon’s efforts to discourage slow-moving products. Similarly, understocking can lead to a loss of sales and optimization if a product is out of stock for prospective buyers.

Make Amify your brand’s strongest asset

1P and 3P businesses in every product category face hurdles when trying to grow on the Amazon platform. Find out what’s holding your brand back and let the experts at Amify create a plan to streamline your responsibilities and increase profitability. Start a conversation that can enhance your company’s future on Amazon today. 

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Answers to your Biggest MSRP and MAP Pricing Questions

Driving sales and maximizing profitability requires an environment where an authorized retailer doesn’t feel pressure to sell a product for the lowest price possible. Instead, taking steps that maintain the item’s profit margins and convey the brand’s value is a much more effective approach to support those goals. 

Fortunately, brands have several tools at their disposal to attract resellers and give prospective buyers confidence in their products. Two of the most common are MSRP pricing and a MAP agreement. Still, there’s plenty of confusion about their differences and how to integrate them into a broader pricing strategy. Find some much-needed clarity with answers to the most persistent questions below. 

What is MSRP?

MSRP is shorthand for the manufacturer’s suggested retail price. It is the price that a brand sets and recommends that retailers charge customers for a particular product. While a retailer, whether brick-and-mortar or online, can sell the item for less, the MSRP indicates the value that the manufacturer believes an item has. 

A company will set its product’s MSRP by considering all of the costs required to manufacture and distribute the product, along with factoring in a margin that allows resellers to make a profit when selling at that price. Premium brands may feature a significant margin to indicate the added value or quality that the product offers over its competitors. 

As the name makes clear, MSRP is not the price that a reseller must use to sell an item, and it’s not necessary to use the suggested retail price in promotions or advertising of the product. In fact, most customers will consider MSRP the upper limit of what they would pay for a product and will look for advertised prices that provide a discount off of the recommended retail price. Many retailers will use the MSRP to showcase the markdown they are offering to potential customers. 

What is MAP Pricing?

Minimum Advertised Price or MAP differs from MSRP in that it is designed to exert more control over the actions of resellers. True to the name, MAP is the minimum price a retailer can advertise for a product they sell. It is set by the brand and should include a margin allowing retailers to profit reasonably. It applies to any retailer who carries the item and is intended to level the competition among sellers and avoid a price war. It can also protect against devaluation in the process. 

It should be noted that a MAP pricing policy does not dictate the final sales price of a product. It only addresses the advertised pricing used by a retailer. In the case of brick-and-mortar stores, a lower price can be offered once the customer visits. Similarly, an online retailer can comply with MAP agreements by requiring additional clicks, such as adding a product to the shopping cart to see a final price that includes discounts. 

Implementing MAP pricing is a more in-depth process than setting an MSRP. Brands need to produce a written MAP policy to provide to retailers and often benefit from legal expertise to help draft the document. In any event, the MAP policy must be consistently enforced across all of a manufacturer’s sales channels and should include specific consequences for any violations. 

Does my brand need a pricing policy?

Absolutely. Regardless of the details, a brand should take a deliberate approach to price. As e-commerce continues its rapid growth, pricing policies will become more important for both retailers and manufacturers. Online sales are likely to continue their growth trend while also consolidating among the largest online retailers, including Amazon. As this happens, the desire of smaller resellers to compete with industry leaders is more likely to lead to destructive price wars for products that aren’t backed by effective pricing strategies. 

Instead, implementing effective pricing policies can help companies create mutually-beneficial relationships with retailers and shoppers. Resellers will appreciate the support from the brand that protects their margins. At the same time, consumers will enjoy more confidence in the value of a product and a less frustrating shopping experience due to the consistency across both e-commerce and brick-and-mortar stores. 

How will a pricing strategy impact my brand?

In addition to the positive impacts that a successful pricing strategy can have on a company’s retailers and customers, there are also substantial benefits for the brand. Prioritizing margins and protecting retailers from price wars increases a brand’s value in several ways. 

First and foremost, an effective pricing policy can enhance profits by avoiding short-term price wars and making the company a more attractive partner for retailers. The market awareness required to implement and monitor pricing policies can also result in less competition from businesses that will likely seek out more vulnerable targets. Relatedly, well-executed pricing policies will likely lead to greater market share as brand image improves and accessibility increases. 

Do I have to choose just one?

Fortunately, no. A company is typically best served by utilizing both an MSRP and a MAP policy since they address pricing in different areas of the manufacturer-reseller relationship. 

An MSRP showcases the value of a product and demonstrates a brand’s commitment to the profit margin of its resellers. It provides the foundation of a pricing strategy but does little to discourage tactics that most manufacturers, and their distributors, would like to avoid. Combining a suggested retail price with a well-defined minimum advertised pricing policy is a much better way to avoid pricing volatility. 

Instead of focusing on just one type of pricing policy, brands should pursue a comprehensive strategy that will be continually evaluated and adjusted as necessary. Together, an MSRP and MAP policy has a stronger potential to create the advantages a manufacturer should be seeking from their pricing strategy. This includes a fairer environment for competition, discouragement of unauthorized sellers, support for more sustainable growth, and an increase in profitability. 

How do I enforce a pricing strategy?

The most effective pricing policy is an enforced pricing policy. Crafting an appropriate MSRP and a solid MAP policy also demands a commitment to monitor multiple marketplaces. Sometimes, a brand opts for a dedicated person or team to take on this responsibility. Others may turn to software options designed to check for violations and respond to them automatically. 

Regardless of how a violation is discovered, there needs to be a plan to deal with them once they are identified. If the problem is an unauthorized reseller, there will likely be a way to report them to the host platform and have them removed from the site. As mentioned, it’s critical that pricing policies include specific consequences for violations when it comes to an authorized seller. And it’s even more crucial that those provisions are followed as laid out in the policy whenever an issue is identified. Uneven MSRP or MAP enforcement can lead to legal consequences for the manufacturer and result in unenforceable pricing strategies. 

Keep in mind that Amazon is unlikely to intervene in pricing disputes with an authorized reseller. Amazon’s position is that these are internal business issues that don’t negatively affect the marketplace or consumers. In fact, the company has stated it believes an Amazon seller competing on price will benefit customers. In their view, even if it upsets the manufacturer, it is still good for the marketplace.

How can Amify help?

Amify has a team of more than 60 experts waiting to help lead your company to success on the platform. Trust our 11-plus years of Amazon experience and decades of work in e-commerce to provide the brand protection and growth strategies that get results. Don’t wait. Start a conversation about your brand’s future on Amazon today.

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Simplify your sales with Amazon Multi-Channel Fulfillment

Even as Amazon grows its share of online sales, the company continues to pioneer ways to disrupt the e-commerce industry beyond its retail marketplace. First, its huge network of distribution warehouses made fast shipping a mainstay of customer expectations. Now, a relatively new service invites brands to turn to an Amazon fulfillment center for orders from multiple sales channels. 

Not surprisingly, Amazon’s Multi-Channel Fulfillment option is growing in popularity, particularly among brands that already rely on FBA inventory for their Amazon sales. In many cases, brands are finding this approach to order fulfillment can simplify the sales process and increase customer satisfaction. 

What is Amazon Multi-channel Fulfillment?

Many Amazon businesses already take advantage of the platform’s Fulfillment by Amazon (FBA) program to support their efforts to get products ordered on Amazon to the buyer. However, fewer companies may realize that Amazon also offers similar fulfillment services for products that are ordered from other websites. With this option, Amazon Multi-Channel Fulfillment (MCF) can simplify the logistics of order fulfillment by providing the same features and services of Amazon FBA to fulfill orders that originate from most online merchants, including a brand’s direct-to-consumer (DTC) website. 

Much like any other third-party logistics (3PL) company, Amazon allows sellers to store their inventory in their vast fulfillment network. Once products are in one or more of the company’s warehouses, order fulfillment can be automated by integrating Amazon’s services with other e-commerce platforms. Amazon will then handle the picking, packing and shipping of products even when they are ordered via a sales channel other than Amazon. These orders remain fully trackable, and Amazon Multi-Channel Fulfillment can also manage customer returns according to the seller’s preferences. 

While brands can use Amazon’s MCF and FBA programs simultaneously, it’s worth noting that the company will always prioritize Amazon orders over those from other sources. However, the Multi-Channel Fulfillment program is not restricted to sellers who use Amazon as one of their sales channels. Even brands that use only their own DTC site or alternative e-commerce solutions can still choose to have Amazon handle their order fulfillment. 

Establish your eligibility

Unlike some of the more exclusive features and tools that Amazon offers sellers, Multi-Channel Fulfillment is a relatively accessible option for any e-commerce company. As mentioned, it is even open to sellers who don’t want to list their products on Amazon at all, though brands will need to create an Amazon Seller account to use Amazon MCF to get products to customers. 

For those new to Amazon’s fulfillment network, the first step after registering for the service is to get inventory into Amazon’s warehouses so that it is available to ship. Amazon sellers who already utilize Fulfillment by Amazon can use MCF almost immediately simply by integrating Amazon’s order fulfillment into their other e-commerce platforms. 

Beyond registering for the program and stocking Amazon’s warehouses, the only other eligibility requirements are geographical. In addition to the United States, Multi-Channel Fulfillment is available in Australia, Canada, France, Germany, Italy, Japan, Mexico, Spain and the United Kingdom, but not in other countries.

Save money on shipping and inventory management

For most companies, the primary appeal of Amazon MCF is in the simplification and cost savings it can provide. There are two primary components to the expenses that come with Amazon Multi-Channel Fulfillment: storage fees and fulfillment fees. Brands have to pay to store inventory in an Amazon warehouse, as well as pay for the picking, packing and shipping of each order that’s fulfilled. However, unlike FBA orders, transactions originating outside of the Amazon marketplace don’t result in an additional referral fee.

MCF Storage Fees

The storage fee portion of the Amazon MCF service is identical to the inventory costs of Fulfillment by Amazon and is ultimately determined by the number of cubic feet the inventory takes up inside Amazon’s facility. Determining the exact cost requires accounting for a product’s relative size, the time of year, packing requirements, how many products are stored, and product classification. Each plays a role in the final price, and Amazon fee changes are not unusual. Besides the storage fees, Amazon can also penalize sellers for products that remain in their fulfillment centers for too long, with escalating fees for inventory that remains static for more than 271 days. 

Fulfillment fees

For those familiar with Amazon FBA, the fees for MCF is where the differences become more pronounced. Obviously, Amazon charges a fulfillment fee for each order that it fulfills. With Multi-channel fulfillment, that fee is based on the weight of the item, the shipping speed selected, and the number of products in the order. 

The smallest, lightest items sent via standard 3- to 5-day shipping incur a fee of $4.75. Expedited 2-day shipping for the same product would cost $8.10, while the 1-day priority shipping rates more than double to $16.64. 

Savings Potential

Customers who order more than one product at a time deliver some relief from these fulfillment fees. Multi-item order discounts can reach a peak of 60 percent off the usual cost when five or more items are shipped in a single order. 

Active Amazon FBA participants that are also selling via other channels can reap significant rewards from using the company’s Multi-Channel Fulfillment. The additional inventory movement from other e-commerce avenues can reduce the risk of an Aged Inventory Surcharge and positively impact the brand’s Inventory Performance Index (IPI) score. 

Otherwise, the savings from using Amazon MCF will depend on how the storage and fulfillment costs compare with other 3PL alternatives or the expense of in-house inventory management and order fulfillment. In many cases, companies with a high quantity of sales and substantial margins will find that Amazon MCF offers a lot of value for their business. Conversely, businesses that face the probability of additional fees for inventory that remains in Amazon’s warehouses for too long or that have minimal margins may be better served by other options. 

The logistical advantages of Multi-Channel Fulfillment

In addition to the potential cost savings a company can realize with a Multi-Channel Fulfillment strategy, there are several other advantages that Amazon MCF, in particular, provides. When Amazon first launched its Multi-Channel Fulfillment option, limitations such as branded packaging and an inability to process returns were significant hurdles for some companies. However, as the service has evolved, those deficiencies have been addressed, making it a much more viable option for more retailers. 

Shipping Speed

As mentioned, Amazon MCF offers users more than just the two-day Amazon Prime shipping that has become ubiquitous. Instead, participating brands can choose from Standard (three to five business days), Expedited (two business days) and Priority (one business day) delivery speeds. Assuming the inventory is in stock, an order submitted to Amazon via another sales channel will ship within two business days if using Standard shipping or by the next business day for expedited and priority deliveries. 

Packaging

Amazon’s multi-channel service currently features a Blank Box packaging program for all of its participants. As a result, orders shipped on behalf of MCF sellers are automatically packaged in unbranded boxes rather than Amazon’s FBA packaging. However, non-sortable inventory, apparel, footwear, and any items larger than 56 inches or 49.9 pounds are not eligible and cannot be shipped with this program. It’s also possible for an order to be shipped in branded Amazon packaging to avoid shipping and delivery delays, but multi-channel participants can require unbranded boxes at all times if they are willing to accept the risk of a delay. 

Returns

While Amazon MCF would not handle a returned order when the program initially launched, that is no longer the case. Now, brands using Multi-Channel Fulfillment from Amazon may choose to either have orders returned to an FBA warehouse or directly to the seller. An order returned to Amazon will be returned to the seller’s MCF inventory if it is still in good condition. Unsellable items will need to be removed from Amazon’s inventory at an additional cost. Unlike FBA sales, the seller or customer will be responsible for the return shipping cost, and the seller will need to generate a Return Merchandise Authorization (RMA) via Seller Central to begin the order return process. 

Customer Service

Similarly, a company that opts for Amazon’s Multi-Channel Fulfillment service remains responsible for all of the customer service interactions related to those sales. For example, the seller must handle customer communication regarding an MCF order, including refunds and returns, even though Amazon provided the packing and shipping services. While this may be an additional responsibility compared to FBA transactions completed within Amazon, it is typical of most 3PL relationships. It can also provide more control over the customer experience and valuable insight into customer satisfaction. 

Channel Limitations

In most cases, the carrier used to ship an order fulfilled via Amazon fulfillment will vary depending on the destination and shipping speed requested. In some cases, items will be transported using Amazon Logistics. Unfortunately for some sellers, certain e-commerce channels, such as Walmart and eBay, prohibit the use of Amazon Logistics to deliver to customers of their sites. In the past, this made it impossible to integrate these retailers into an Amazon MCF plan. But recently, Amazon gave its Multi-Channel Fulfillment users the ability to block the use of Amazon Logistics for all or some orders shipping through the service. Still, sellers with a significant sales volume from channels that restrict Amazon Logistics may need to consider another method since Amazon adds a costly five percent surcharge to any order that requires the blocking of their proprietary shipping. 

Streamline your Amazon business with Amify

Meeting the diverse challenges of managing an Amazon business is hard, especially when the platform is not your only sales channel. Boost your company’s growth by capitalizing on Amify’s full-service Amazon expertise and trusting a partner with proven results. From optimizing your brand’s presence on Amazon to managing FBA inventory, we have the knowledge and tools to help your company reach its goals faster and more efficiently. Contact us today to see the difference Amify can make.

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Boost Sales with Amazon Product Videos

Every Amazon business looks for ways to attract new customers and grow its sales. In recent years, many have found that incorporating video into a product’s amazon listing can increase conversion rates and improve the overall health of an Amazon seller account.

Unfortunately, it’s not as simple as grabbing the closest smartphone and tapping the record button. The benefits of video in an e-commerce marketplace result from having a solid strategy, understanding Amazon’s product video guidelines, and executing the plan with professional standards that will strengthen your brand. 

The value of product videos on Amazon

Of course, the appeal of adding video production to your brand’s list of marketing assets isn’t limited to the Amazon marketplace. Videos can be valuable for direct-to-consumer websites, social media campaigns and even customer service efforts. However, product videos can be uniquely effective on Amazon due to the multiple ways they can impact listing performance and influence the buying decision in your product’s favor. 

Videos provide more details and context
Two of the primary reasons shoppers rely on Amazon are the platform’s selection and convenience. With tens of millions of products available, it’s hard not to find what they’re looking for. But, in many cases, the bigger conundrum can be choosing the product that best meets their needs among all the competition. 

An effective product description video can address this issue for brands hoping to find an edge against other sellers. While the listing copy and images also play an important role, a well-made video can provide better insight into every aspect of a product and do so more efficiently. The amount of time a prospective buyer invests in your listing is limited, and a video can quickly communicate key features to impatient shoppers. The ability to see a person interacting with or utilizing a product on video also conveys valuable context for a purchasing decision that is difficult to replicate with words or still pictures. 

Videos can support your SEO
Any path to success on Amazon has to go through the site’s algorithm. Fortunately, adding video to a product listing can support Search Engine Optimization (SEO) efforts. In addition to increasing the chance of converting a shopper to a buyer, videos can keep people on your page longer and create another opportunity to include relevant keywords in your Amazon product listing. Videos can also result in more appropriate expectations that can reduce negative reviews. These advantages all work together to improve Amazon listing optimization and can help a product rise in the rankings.

Videos can increase conversion
Why are additional details and better Amazon SEO important? Because they can positively impact sales. The main reason to make product videos a part of an Amazon listing is to increase conversions for that item. Videos demonstrate confidence in your product and can be tailored to address any hurdles that are holding back sales. Use them to be sure customers are using their purchases correctly or to address past concerns from unsatisfied customers. A high-quality product video can also strengthen your reputation as a serious seller who goes beyond the minimum requirements to reach customers and will stand by their product. All these factors can influence Amazon shoppers and be the difference between those who “add to cart” and those who move on to other listings.

Integrating product videos into your Amazon content

There’s no question that content is crucial for any Amazon business. That’s why it’s essential to understand the value of Amazon A+ Content. It’s your chance to provide fantastic product details for your product listing pages, integrating high-quality images, comparison charts, and more. In a world of e-commerce often driven by social media, shoppers now expect enhanced brand content that exhibits personalized service, captivating content, and a flawless user experience. While video additions are only available to sellers with access to Amazon’s Premium A+ features, those utilising Basic A+ content still have opportunities to integrate videos into their listings. 

For example, compelling Amazon product videos is one of the ways to build an effective Amazon Storefront for your brand. Using videos in product detail pages, Storefronts and, when available A+ Content, is among the best tools to create a satisfying shopping experience on your Amazon store and attract loyal customers. Whether it’s an Amazon product image, the words in your description, or a product video, these pieces should work together to communicate your product’s unique advantages over the competition.  

However, before you can join the countless Amazon sellers who are already using video to promote their products, you’ll need to decide what types of videos make sense for your brand and will be most engaging for your audience.

Showcase product features
A product highlight video prioritizes the product’s features. They are among the most simple and effective types of product videos. Typically, they display the product from every angle as well as in-use. Think of this as a video version of the key features from your listing. 

Provide a how-to video
A how-to video is often similar to one showcasing a product’s features in that it is short and to the point. However, beyond just demonstrating the product in use, these explainer videos can be helpful when a product is complicated to use or designed to aid in completing a task. They can feature step-by-step instructions or be a tutorial on a relevant topic that includes the product in part of the process. 

Strengthen your brand
Despite what some Amazon sellers may fear, reaching the hundreds of millions of shoppers who use the marketplace does not have to come at the cost of sacrificing your brand. In fact, the video feature of a listing is one of several ways a seller can reinforce their brand identity on Amazon. Creating a brand or lifestyle video can tell a product’s story and reach the customers most likely to be interested in it. These Amazon videos shift the attention to the brand’s personality, and the experience users can expect. They may share your company mission or attempt to create a connection with shoppers.  

Capitalize on the unboxing trend
With the evolution of social media and the increasing ease of video production, product unboxing videos have become a staple of the internet. Often hosted by consumers and influencers on their personal channels, these videos feature products being removed from their original packaging and initial impressions of the item. This type of product video can be beneficial for products that require assembly or feature multiple accessories. Additionally, brand owners can consider an unboxing video on Amazon to set expectations and avoid confusion among buyers. 

Offer a comparison
If a product stacks up well against a popular competitor, a comparison product video could be the fastest route to more sales. Rather than focusing on the product’s features and functionality alone, these videos do so in comparison to similar products. Be warned that creating a comparison video must be done carefully and deliberately to avoid violating Amazon’s policies against denigrating other brands. Don’t mention any other company’s products by name, and be sure to include evidence for any claims you make. It’s best to keep the focus on the positive aspects of your product than spend too much time on negativity toward the competitor. 

Create an effective product video for your Amazon listing

Regardless of the goal of your Amazon product video, some tactics will raise its quality and effectiveness. Thanks to advances in video technology, brands have the ability to manage production in-house and on a minimal budget. Still, bringing in an experienced team to script, produce, light, voice, and edit your product video can often pay dividends when it comes to time and expectations. 

If you decide to stick with a do-it-yourself approach, you’ll want to abide by some tried-and-true video production tactics. Keep the video short and to the point, typically under a minute, whenever possible. If you hope to use the final product in a Sponsored Brand Video ad, you’ll need a version that is under 45 seconds. 

When developing the plan for your video, try to put yourself in the position of a shopper and be sure you’re addressing the questions they will be hoping to answer. 

While video quality from phones can be excellent, a professional product video will need to be done using a stand that keeps your footage stable and smooth. Likewise, capturing quality audio may require an additional microphone to ensure the clear sound and crisp narration that a proper video requires. Utilizing natural light can overcome the costs and learning curve that accompanies studio lighting, but in either case, your product must look good on the screen. 

Finally, consider adding useful on-screen text in post-production that gives your product video value even when watched without sound. Be mindful of the source of any music you include, as royalty-free will likely be your only realistic option. 

Upload your product video to Amazon
Once your product video is complete, the final step is uploading it to Amazon for video review. It’s a relatively simple process for those familiar with the Amazon Seller Central interface. The video file format should be either .mov or .mp4, and Amazon recommends keeping the file size below 5GB. Within those limitations, it’s best to upload the best quality video you can, up to 1080p resolution. 

You’ll also want to give some consideration to the thumbnail, or static image preview, that will display to customers before the video plays. Amazon will automatically select a frame from the product video for this purpose, but you can replace it with a higher-quality product photo or other relevant .jpg or .png. Finally, you’ll need to give your video a concise, keyword-optimized title and identify the Amazon Standard Identification Number (ASIN) the video is promoting. 

Avoid these Amazon product video mistakes

Knowing what factors create successful Amazon video content is essential, but don’t overlook the mistakes that can derail even the best intentions. As with most parts of being an Amazon seller, there are important rules to follow. Unfortunately, stepping outside these guidelines can cost you time and money by delaying the time it takes to get your video added or forcing you to start from scratch. Here are a few of the potential pitfalls that you want to avoid:

  • Of course, you will need to be the brand owner of any product you are trying to feature in a video, and access to the video option will require completing the Amazon Brand Registry process. Don’t start your video-planning process until you’ve completed this critical step.
  • Resist the urge to feature any time-sensitive promotional messaging in your product video. Terms like “limited-time sale” or the inclusion of discount codes will likely prevent your submission from being approved. 
  • Don’t use the video to direct shoppers to your company’s website. Amazon won’t allow a video that lures visitors away from the platform. 
  • Keep the focus on the product you’re attempting to sell. It’s okay to mention competitors, but don’t make defamatory statements. Any direct comparisons must be objective, accurate and backed up with clear evidence to support claims. 
  • Steer clear of health claims, explicit language, politics or any controversial topics. The limitations that apply to your listing copy also apply to videos. 

Amify can give your product a starring role on Amazon

Crafting the perfect product title, directing gorgeous product photography, and scripting an effective listing video are just a sampling of the skills businesses need to bring to their Amazon listings. If it seems overwhelming, a full-service Amazon partner could be the answer. Amify has experts ready to assist with all the demands that listing, optimization and fulfillment place on your business. Contact us to discover how our experience can address your Amazon challenges and grow your brand.

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Choosing the Best Amazon Business Model for your Brand

Since the birth of e-commerce almost 30 years ago, customers have been steadily increasing their spending online. The U.S. e-commerce market hit nearly $600 billion in 2021 and accounted for roughly 20 percent of total retail sales. The undisputed leader in the e-commerce game is Amazon, which accounted for 43 percent of the total U.S. e-commerce market. With continued growth on the horizon, it is more important than ever for brands to understand how Amazon works and how a brand should capitalize on its Amazon opportunities. 

Amazon accounts for more than 40 percent of e-commerce sales.

The evolution of the Amazon marketplace

Long ago, product manufacturers wanted to distribute their products across the country. These manufacturers would make their products, then sell them at a wholesale cost to retailers, who would then market them to customers in their geographic market. This partnership between product manufacturers and retail stores flourished for hundreds of years. 

When Amazon began as a bookseller, it became an “internet retailer” where they would buy books at wholesale prices, sell them at retail prices, and pocket the difference. This business model is commonly referred to as a first-party relationship or 1P. 

From 2005-2010, Amazon looked to expand beyond selling just books and realized the fastest way to offer more selection was to let third parties sell directly to customers via the Amazon platform, similar to what occurs on eBay. This third-party marketplace is known as 3P. 

Since launching a 3P market on Amazon, it has become a vibrant and thriving destination for shoppers, with the majority of product revenue and sales going through the 3P side of sales rather than being supplied by Amazon directly. It is now widely reported that the 3P marketplace accounts for between 60 and 70 percent of all sales on the Amazon platform. Essentially, Amazon is now both the operator of the marketplace with millions of sellers and also the largest seller on its own platform. 

In addition to contributing to Amazon’s growth, the decision to offer a 3P sales channel meant that brands could start to decide how they wanted to approach the market. 

The three Amazon business models

Today, Amazon businesses can choose from three different sales models depending on their resources and goals. Each model has unique advantages and disadvantages that are important for a brand to understand.

Businesses have three ways to utilize Amazon to sell their products. 

1P Vendor Central model

In the 1P Vendor Central Model, a brand sells its product directly to Amazon at wholesale prices. Amazon then lists the product for sale as Amazon and sells it to the end consumer. However, this model is an invite-only program and is usually limited to larger brands with $10M or more in revenue on the Amazon marketplace. When it comes to smaller brands, the vendor model is unlikely to be a realistic option. 

For eligible businesses, the 1P option has some attractive advantages:

  • It’s easy to understand. Since it’s similar to any other relationship between a vendor and retailer, a brand does not need to have any internal Amazon expertise. 
  • It’s Purchase Order-based. The brand receives large purchase orders from Amazon, which pays for the inventory. 
  • As a retailer, Amazon will often accept lower profitability than a 3P seller, as they compete with Walmart and other retailers on price. 

But, there are disadvantages of operating within a 1P model:

  • By selling to a retail middleman, a brand is giving up margin. 1P is often far less profitable for premium quality brands
  • Amazon provides little guidance. The platform does not assist in your overall strategy, brand positioning, merchandising, or provide technical support. Amazon simply buys the products. 
  • Amazon is very aggressive at negotiating lower costs from their 1P suppliers by tacking on co-op advertising fees, return fees and chargebacks. Negotiating with the company is notoriously difficult. 
  • Amazon does not always follow Minimum Advertised Pricing (MAP) guidelines and may sell products for less than a supplier expects. 

With this set of pros and cons, the 1P model is often a good fit for low-priced and highly competitive Consumer Packaged Goods (CPG). It can also work well for heavy products with high shipping costs, brands that sell through many distribution channels, and brands that do not attempt to enforce a MAP program. 

More expensive products with high margins and brands that want significant control over the customer experience should probably not pursue a 1P arrangement with Amazon. In addition, businesses that are invested in enforcing their MAP agreements should also consider alternatives. 

Tide laundry detergent is one example of a 1P product on Amazon.

Retailer-based 3P model

In the retailer-based 3P model, rather than selling to Amazon, a brand will sell its products to one or multiple other retailers, who will then list and sell the product to shoppers on the Amazon platform. The retailer-based 3P model is evolving away from retailers who simply buy and sell products and toward an “exclusive retail” model where retailers provide added services on Amazon, such as advertising, content and strategy, in return for being the exclusive seller of the product on Amazon. 

It’s essential for a brand to realize that under this model, the retailer still needs to make a profit on the difference between the price they buy the product for and the price they sell it for after fees. If there is not enough margin in the product for the retailer to also make money, they will not be willing to purchase or provide services on a listing. 

The advantages of a retailer-based 3P model include:

  • Like 1P, it’s a relatively simple relationship to manage since the brand does not need to have any internal Amazon expertise. 
  • It is also a Purchase Order based fulfillment process. 
  • A Retailer-based 3P model can be a viable option for smaller brands that are not invited to participate in a 1P relationship with Amazon. 
  • Finding an exclusive retailer will often result in strategy, content, and advertising services for the products on Amazon. 

Among the disadvantages to consider with this model:

  • By selling to a retail intermediary, a brand is giving up margin. The retailers must make money between the wholesale price the brand sells the product for and the retail price consumers pay to Amazon. This margin could otherwise be going into the brand’s pocket. 
  • Retailers do not care about the brand experience as much as most brands. Therefore their primary goal is to increase profits without concern for the brand’s other objectives.

The brands that find the retailer-based 3P Model most attractive will be those that are too small to become eligible for a 1P partnership but would otherwise be interested in that model. Inventory management and order fulfillment will be similar, and an exclusive collaboration can result in marketing advantages for Amazon listings. Again, brands with high margins or that want to maintain a direct connection with customers should pursue other options. 

Tile, Inc. is one of many brands using the Retailer-based 3P Model to sell its products.

Consumer-direct 3P model

In the consumer-direct 3P model, a brand sells its product directly to the end customer through an Amazon Seller Central account. By avoiding a retailer, brands can realize increased profitability, gain more control over the customer experience, and enjoy increased visibility into data and sales trends. 

Brands that sell directly in this way would typically add a clause to any retailer agreements prohibiting the product from being sold on Amazon by other distributors. Finding success with this type of 3P model can require an experienced team that understands Amazon optimization.

Consumer-direct 3P advantages include:

  • Profitability increases by maximizing margins and avoiding retailer costs
  • Enjoy improved control of branding and the customer experience on Amazon
  • Businesses have more access to data, customers, and information
  • Customers can feel more comfortable when purchasing directly from brand

Disadvantages of Consumer-direct 3P model include:

  • Many brands do not have the internal skills or resources to manage selling on Amazon
  • It could potentially be viewed as competition for other retail partners
  • A brand may face more risk by having to own inventory until it is sold to the end consumer

In most cases, brands with experience selling directly to consumers and with high-margin products can benefit from opting for this model. These companies can use the valuable data to refine their strategy and will maintain control over their customer-facing interactions. Businesses without appropriate margins or the resources to dedicate to Amazon optimization will not be well-served by a Consumer-direct 3P model. 

Hanz de Fuko utilized a Consumer-direct 3P Model. Notice the brand name is the same as the seller’s name. 

Amazon business model comparison chart

The chart below offers an overview of the impact that each model can have on various aspects of a business and which entity manages those responsibilities. A definition of the areas covered is also provided below. 

Brand Profitability – For most brands, cutting out the retailer go-betweens will lead to improved profitability. This causes a direct sales strategy to be the most profitable on an individual SKU level. 

Inventory Owner – When selling to a retailer (either Amazon or another 3P), the retailer purchases and owns the inventory. When selling direct, the brand will continue to own the merchandise until it is sold. 

Inventory Management – It is crucial to have the correct amount of inventory in Amazon warehouses. Too much stock means you will face high storage fees. Not enough means you run out and lose sales. Amazon and other retailers will place purchase orders for inventory to be sent into Amazon warehouses in those models. For brand-direct sales, the brands need to track inventory levels and send in replenishment orders to their fulfillment warehouses.

Listing Control – A brand’s listings need to be high quality to drive conversion rates. In the two retailer models, this content is usually managed by Amazon or the retailer and may not be to the same quality level as a brand would do. 

Brand Strategy – Who is driving the overall brand strategy on Amazon? Amazon does not provide these services, so using a 1P model often yields no comprehensive plan. Some 3P retailers will provide these services in their agreements. However, brands would have complete control over this if selling direct. 

Advertising – Amazon Sponsored Ads are an important part of launching and growing a brand on Amazon. While Vendor Central offers some advertising control, pricing is not among the aspects you can determine independently. 

Customer Service – Customer service is often a way for a brand to differentiate itself. Who is doing the customer service for the brand on Amazon? Frequently, brands are best prepared themselves to manage their own customer service. 

Prime-shipping Eligible? – All models are eligible to take advantage of Prime shipping on the Amazon platform. 

Seller Awareness – Customers like to buy from retailers they recognize. This yields higher conversion rates. When buying on Amazon, customers prefer to buy either from Amazon or the brand directly. It lowers the conversion rate when they must purchase from a retailer they don’t recognize. 

MAP compliance – Minimum Advertised Prices (MAP) are an agreement between a brand and its retailers to keep product prices above a certain level when marketing products to the end consumer. As a retailer, Amazon does not always follow MAP policies, and the company can make it difficult for brands to enforce these policies. 

How a business model can impact profitability 

For many brands, one of the critical advantages of moving to the Direct 3P model is a dramatic increase in profitability. However, this profitability improvement depends on the price point and margin for most brands. The tables below provide three examples that demonstrate how profitability can fluctuate depending on the model used.

Example 1
A $100 product, weighing 1 pound, sold at a $50 wholesale cost (50 percent margin)

This is an example of a high price point product with healthy margins. Using a direct 3P strategy, the brand would realize $80 per unit sold rather than $50 per unit sold using retailers. This $30-per-unit increase in profitability is a primary reason many brands are moving to a direct 3P strategy. 

Example 2
A $20 product, weighing 1 pound, Sold at a $12 wholesale cost (40 percent margin)

Model

This is an example of a mid-price-point product with average margins. The profitability across the three brands is equal due to the lower price point and high shipping cost (25 percent) as a portion of the product’s total price. 

Example 3
A $10 product, weighing 1 pound, sold at a $5 wholesale cost 

The Amazon 3P model works best for high price point products where shipping costs are a low percentage of the sales price. Usually, this means products need to sell for above $15 for 3P to be profitable. In this case, using a 3P model for a low-price-point product is not sustainable. The brand would either need to sell 1P to Amazon or increase its retail sales price to offset shipping. 

Where Amify sees Amazon sales heading

E-commerce is continuing to evolve. As brands continue to compete in a larger and more competitive environment, we feel it is more important than ever for brands to control their own destiny on the Amazon platform. 

Specifically, Amazon is evolving from a retailer for brands into an extension of a brand’s website. Brands need to meet the customer where the customer wants to purchase, and the customer expects an excellent experience from the brand. This is difficult to achieve when a retailer sits between the brand and the end customer. We expect the long-term trend will be for brands to sell directly on Amazon to increase margin, control their brand, manage the customer experience, and have better access to data. 

Switching business models

Fortunately, brands have the ability to control their Amazon channel and choose which model is best for them in this fast-changing industry. But, brands need to understand the necessary steps and have realistic expectations when switching from a retailer-based model to direct sales. When planning this switch, it is critical that your product listings, brand stores, and overall demand on Amazon stay constant, if possible. There are several steps you can take to navigate a smooth transition. 

Understand current dealer agreements

A brand needs to understand existing vendor agreements and when they end. Amazon 1P vendor agreements often have a precise end date, while other agreements can usually be changed as needed. 

Brands should also update their deal agreements to explicitly prohibit retailers from selling on Amazon and spell out clear consequences if a retailer continues to sell. When a brand decides to move to a direct model, it’s vital that sales go to the brand, not a retailer that is no longer needed. 

Create a seller account and build inventory

In order to sell direct, a brand needs to have an Amazon seller account that they control. This can easily be created in Amazon Seller Central. They should also consider building inventory for the expected sales utilizing Amazon’s Fulfillment by Amazon (FBA) services for the most efficient approach. 

Prepare for a ramp-up of sales

When a brand switches to a direct model, the previous retailers will likely still have inventory in stock. This inventory may take several weeks or even months to sell through. As this existing inventory sells through, the brand should experience an increase in sales on their account until all inventory from other sellers is sold through and it begins to level off.  

Amify is your best partner for direct sales on Amazon

Amify’s clients enjoy a long-term partner with more than a decade of experience helping premium brands achieve their Amazon goals. If a consumer-direct 3P sales model awaits your business, you want to have industry-leading expertise on your side. Trust our results-oriented approach to Amazon growth and up-to-the-minute platform knowledge to outperform the competition and unlock your product’s full potential. Contact us today to learn more. 

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Seven Ways to Make the Most of Your Amazon Storefront

Recently, we shared the details about Amazon Storefront guidelines and how to build an Amazon brand store. However, as with most parts of managing an Amazon business, there is always more to be done. 

Leveraging an Amazon shop to support your growth requires continuous focus and an understanding of all the tools available. If you’ve already launched your Amazon Storefront, don’t overlook these seven ways to take advantage of everything it can offer your company. 

#1 Tell your brand’s story

E-commerce success doesn’t just come from selling products online, it also requires selling your brand to customers in a way that strengthens satisfaction and encourages loyalty. You want to relate to your customers as people, not just treat them as numbers on a spreadsheet. 

Creating an Amazon Storefront is an incredible opportunity to raise brand awareness among shoppers, which can lead to more sales. Customers who connect emotionally with a brand name have three times higher lifetime value. And according to Deloitte research, 80 percent of consumers would pay more for products if the company committed itself to being socially responsible, environmentally responsible, and/or paying higher wages.

While there are several ways to share the story of your brand via an Amazon Store, it all starts with clear and concise writing. From the copy on the landing page to the bullet points on each product page, the style and tone should enhance your brand, not compete with it. One way to ensure successful copywriting across all your selling channels is to create a style guide that can help copywriters maintain a consistent voice. 

The images on your product pages and your Amazon store should reinforce your brand story. It’s not just a matter of what these images depict, but how. Professionally shot and art-directed images – by people fully briefed on your brand narrative–will help ensure your pictures do more than just look good but say something too. From the hero image at the top of your brand store to the photos in your slideshows and galleries, the choices of subject matter, angle, lighting, color, etc. should be driven by your brand story.

Nothing packs a storytelling punch quite like video. The rise of YouTube and all the streaming video services make that point crystal clear. As you plan out your Amazon Storefront, lean on video’s particular power to engage people emotionally to showcase your brand story and stand out. When vetting video firms to help you create content, be sure that they have proven storytelling chops. Unfortunately, not all video scriptwriters, directors and producers can deliver on this critical front.

#2 Dive into the data

One of the greatest benefits of opening an Amazon Storefront is the amount of data that becomes available to an Amazon seller. Joining the Brand Registry, a necessary first step to an Amazon Store, provides access to the Brand Analytics Dashboard. Furthermore, creating a Storefront leads to Store Insights about the shop’s performance. 

Strengthening your brand on Amazon and making it easier for shoppers to navigate your online shop aren’t the only reasons to build an Amazon Storefront. This invaluable tool also allows your company to access data that you wouldn’t otherwise be available. Once your online store is active on Amazon, you’ll be able to see the platform’s Store Insights and have a glimpse into the habits and sales conversions originating from visitors to your stores. 

Amazon Store insights also track how visitors are finding the online store. In some cases, the accuracy of this data will depend on your ability to utilize source tags within your digital marketing plan, including in Amazon sponsored ads. Data on the sources of your Store’s visitors can help a company evaluate current marketing efforts and provide direction for new initiatives. 

While Store Insights are specific to the performance of your Storefront, it’s not the only data accessible to Amazon brand owners. Participation in the Amazon Brand Registry program opens the door to Amazon’s Brand Analytics, making even more relevant information available to guide your decision-making.  

The data provided to a brand owner via the Brand Analytics dashboard comes via four types of reports. These include Amazon Search Terms, Market Basket Analysis, Item Comparison and Alternate Purchase Behavior, and Demographics. 

#3 Optimize your listings

Amazon product listings are also fundamental to your Amazon Storefront’s effectiveness. After all, they are the reason an Amazon shopper visits your brand store. While adding products is relatively simple, creating compelling product listings is much more challenging. Often, it hinges on familiarity with the process, an understanding of what Amazon’s algorithm values most, and careful attention to the requirements for every product detail page. Even steps as intuitive as writing the listing title come with nuances that can trip up inexperienced sellers.

You should describe your products with clarity and precision. A well-executed SEO plan calls for integrating keywords into your Amazon product listings and avoiding the wrong search terms that could land your product in the results of an irrelevant search and tank your conversions. The proper keywords should be placed strategically throughout your title, bullets and product description. But they also need to be added to the backend of your listing via Seller Central. Thorough research on your product category and competitors can help you develop a list of specific, long-tail keywords and effective short-tail keywords to include. 

It’s also essential to understand the value of Amazon A+ Content. It’s your chance to provide fantastic product details for your product listing pages, integrating high-quality images, comparison charts, and more. In a world of e-commerce often driven by social media, shoppers now expect enhanced brand content that exhibits personalized service, captivating content, and a flawless user experience. 

Consider A+ Content necessary to showcase your products in the best ways possible. Every Amazon product image and the words in each description should complement your website and social media, in addition to connecting with your customers. Most importantly, you must communicate your product’s unique advantages over the competition and offer customers a satisfying shopping experience on the Amazon marketplace that creates loyalty.

#4 Create a comprehensive campaign

Creating an Amazon Storefront should not be an isolated tactic. Instead, it needs to be part of a broader campaign to develop followers and strengthen your brand. Consider ways to drive traffic to your Amazon shop using your other brand assets, such as social media followers, digital advertising or a Sponsored Brands campaign. 

Take advantage of tagged source links when promoting your store on other advertising channels, whether social media platforms, email marketing or elsewhere. Capitalize on the new data sources that come from Brand Registry and Store Insights to inform your digital advertising campaign. Strategies such as retargeting customers who visit your products or competing listings can be much more effective than trying to convert shoppers who haven’t shown a previous interest in your items. 

Using these strategies can make your Amazon Storefront’s successes part of a comprehensive campaign that can help grow your business exponentially. Remember that just because Amazon is where your sales are happening, it’s not the only place to engage customers. All aspects of your branding and advertising should support your Amazon Store, and your presence on Amazon needs to contribute to your overall brand in return. Fortunately, utilizing an Amazon Storefront efficiently can help you do exactly that. 

#5 Keep it organized

One of the most critical aspects of an effective Amazon Store is organization. In addition to telling the story behind your products, a brand store should improve a customer’s shopping experience on the Amazon platform, not make it more complicated. You also want to create a structure that will introduce shoppers to new products that complement the ones they are already familiar with. 

In many cases, the navigation within your Amazon Storefront should be set up similarly to your direct-to-consumer site, assuming it is already rooted in how consumers shop your products. We recommend setting up the navigation by need or “job to be done.” This approach prioritizes the perspective of customers who typically shop based on a problem they are trying to solve. 

Regardless of the product category, the design needs to be simple and organized. One of the quickest ways to lose potential customers is by presenting them with a confusing layout that frustrates them and makes finding products difficult. Remember that shoppers rely on mobile devices more than ever. You should navigate your brand store from multiple browsers to spot unanticipated challenges that users may face under these different circumstances. 

Opt for simple naming conventions for your Store’s pages rather than trying to cram descriptive details into each one. Save those long-tail keyword efforts for your product listings. It’s also best to create a minimum of three pages for your Amazon Store. More expansive stores make organizing products in appropriate categories easier and keep shoppers in your brand store longer, often increasing sales per visitor. 

#6 Be creative

One overlooked feature of an Amazon Storefront is its flexibility to respond to your brand’s seasonal swings or promotional efforts. Tiles, featured products and categories can be easily adjusted to reflect the changing interests of consumers during holiday periods or when certain products are in higher demand. 

Amazon brand stores even offer a “Versioning & Scheduling” option to support temporary sales. This can be used to capitalize on events such as Amazon Prime Day, Black Friday, or Cyber Monday while minimizing the disruption to your usual Storefront design and the amount of work required to adjust between versions. 

You should also consider that your product presentation within an Amazon Storefront doesn’t have to be limited to an Amazon listing. It’s important to also clearly communicate the benefits that the items you sell can provide to a purchaser. You can make these benefits a key piece of your brand messaging through endorsements from credible reviewers or informative videos. 

Similarly, Amazon Stores can be an opportunity to educate customers more broadly about your brand and introduce them to other products they may be interested in. Rather than focusing entirely on promoting each product individually, consider how the items in your inventory can complement each other and which tools within the Storefront can be used to showcase those relationships. 

#7 Stay vigilant

Much like your other e-commerce tactics, brand stores demand continuous refinement. According to Amazon, Storefronts that were updated within the past 90 days see 21 percent more repeat visitors and a 35 percent increase in sales per visitor. Those statistics mean you can’t afford to neglect your Amazon Store. So, in addition to making sure your latest products are featured appropriately into the structure, you can also monitor your Store Insights to spot problems early. 

Low daily traffic to a Store can mean visibility is lacking. Tweaking the comprehensive campaign discussed above can be one way to address this issue. Social media, off-site digital advertising and Sponsored Brands ads can all increase traffic to your Storefront. It may also be wise to confirm that the brand byline for your ASINs is correctly linked to your brand store. 

A solid flow of visitors but less than expected sales point to an issue with your products. Pricing could prevent conversion, or the path from product to cart may be too complicated. Consider revamping your product listings to include video or other assets that better communicate value or changing the tile types within the Amazon Store to those with an instant “Add to cart” button. 

Another way to ramp up sales is to identify pages that are performing well in regard to conversion but may be lacking when it comes to traffic. These are ideal opportunities to promote via Sponsored Brand campaigns that drive shoppers directly to the pages proven to move your products. Conversely, high-traffic pages with poor conversion can be adjusted to better feature the products customers are most likely to buy from the Store. 

Of course, a complete lack of traffic or sales for a specific page in your Storefront means a significant problem with your content or navigation. You may need to reconsider the strategy for that page or troubleshoot your Store from a shopper’s perspective to identify the root of the problem. 

One more way to boost Storefront success

Executing these strategies can certainly take your Amazon brand store to new levels of success. But if one or more of these suggestions seems overwhelming or beyond your expertise, there is another option to consider. A partnership with the experts at Amify can be the fastest and most efficient way to optimize every part of your Amazon business. 

Contact us today to learn why so many brand owners chose us to help them navigate the complex world of selling on Amazon. You’ll quickly see the results that keep our partnerships growing. From marketing and sales to analysis and logistics, our team is ready to show your company how to win on Amazon. 

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Then and Now: The Post COVID-19 Phase of E-commerce

The immediate impacts of the pandemic

The arrival of COVID-19 shocked the globe and impacted every aspect of our lives. In a very short time, it caused dramatic shifts in consumer behavior and created both challenges and opportunities for the e-commerce industry. While it’s almost impossible to cover all the ways that the pandemic affected online retailers, a few stand out for their reach and what they mean for the future as a return to normalcy arrives. 

Huge growth in e-commerce

COVID-19 forced many physical stores to close down and drove shoppers online for products in record numbers. Obviously, the shift in behavior benefited Amazon, as sales in the broader e-commerce marketplace exploded by nearly 50 percent compared to pre-COVID-19 levels. This remarkable growth, and the fundamental change in consumers’ buying behaviors driving it, led brands to adjust their strategies for reaching customers accordingly. 

The venture capital market was on fire

COVID-19 caused tremendous disruption across many industries, but technology companies were one of the few to actually benefit. Simply put, social distancing meant people spent much more time online. They were working remotely, buying products remotely, and playing more video games remotely. This shift toward internet-supported activities gave rise to a huge crop of venture capital-backed companies to meet the demand, many of whom face uncertain futures as the market shifts back toward normalcy.

Supply chain concerns

The substantial growth in demand for products led to supply chain shortages. Products were out of stock, and the cost to get more to the shelves skyrocketed. The costs of shipping goods from overseas increased exponentially while fuel prices increased last-mile delivery costs substantially. The added expenses immediately impacted brands as they were forced to either raise their prices or reduce their margins. Inflation was real. Many of the brands we work with saw supply chain costs jump from five percent of revenue to 10 or even 15 percent, gutting profitability along the way. 

What comes next?

While the past three years have been dominated by COVID-19, we believe a new phase is on the horizon, and it’s critical for brands to understand how these trends will impact their businesses. Here’s what we think our clients should be preparing for. 

Brands shifting focus to profit more than revenue

With a possible recession on the horizon and business investors for new ventures drying up, brands will begin to value profits more than just seeing their revenue grow. As we mentioned, the VC market funded an enormous number of new direct-to-consumer companies. However, many of these overspent to get ahead of each other. 

With funding for these startups tightening, it’s likely that many will go out of business while the surviving ones will cut costs to reach profitability. We’ve already seen one instance of this in the recent liquidation of Packable, the largest seller on Amazon, which had previously raised over $250 million and had plans for a public offering. As businesses leave the marketplace, we expect to see reduced competition and higher product prices going forward. 

Bigger brands take market share 

Many startups that resulted from the e-commerce boom and ample VC funding also relied on an ability to launch new products on Amazon quickly. Unfortunately, the game plan for some of these brands was to violate Amazon’s terms of service by using black-hat tactics like fake reviews and orders to trick Amazon’s algorithm into treating the products as if they were in high demand. 

Thankfully, this is all changing in the post-COVID-19 world. The combination of Amazon cracking down on these violations, larger companies having more financial resources and better-established supply chains, and fewer investment dollars going into funding startups will lead to bigger and more prominent brands regaining lost market share. At Amify, we are already seeing the positive effects of less competition for many of our clients. 

Amazon is shifting from a retailer to “an extension of a brand’s website” 

In the past, many brands avoided the Amazon marketplace out of fear it would sacrifice their customer relationships or that Amazon would copy their product and they would see their sales crater. However, with Amazon accounting for roughly 40 percent of e-commerce sales in the U.S., brands now realize they need to meet the customer where they want to shop. In fact, in the face of declining sales, Peloton recently announced a new partnership with Amazon to sell its popular exercise equipment via the site. We expect to see this approach continue to flourish, with other companies joining the trend shortly. 

Supply chain moderation

Supply and demand is a simple economic concept. COVID-19 caused a considerable increase in product demand while limiting supply due to the shutdowns it caused in China and other places where numerous products are made. The good news is these issues can be resolved with time, and we are already starting to see some improvements. 

With the world recovering from the impacts of COVID-19, factories are running again and increasing their capacity to meet demand. In other words, the supply is going up. At the same time, demand for products is softening in many areas due to inflation. For example, mortgage rates have risen from three percent to nearly six percent over the past six months. Additionally, the demand for houses in many areas is down by as much as 30 percent. In addition, some companies are announcing significant layoffs. These factors will lower demand for products, which then reduces costs. As a result, it seems likely that supply chain costs will moderate over the next year, giving a much-needed boost to margins for many brands. 

E-commerce returns to trendline growth 

Between 2010 and 2019, e-commerce consistently grew by 10 to 20 percent. Then COVID-19 caused a massive 50 percent jump in 2021, which nearly flattened in 2022. As we look to the future, online retailers should prepare for a return to the expected 10 to 20 percent growth that existed before COVID-19. Of course, this would be welcome news to many brands which experienced stagnant growth in 2022 due to the reopening of physical stores and renewed interest in traveling and leaving the house instead at the expense of online shopping.

Amify can add to your brand’s agility

No one can predict exactly what lies ahead, but failing to prepare for the future is still a mistake that too many businesses make. Whether it’s global events, new technologies or changes in policy, success often hinges on a brand’s ability to respond quickly and effectively. 

Let Amify’s team of more than 60 e-commerce experts be your partner for whatever comes your way next. We help clients manage more than $200 million in merchandise each year and have a proven track record of operating nimbly in a rapidly changing marketplace. Find out how we can guide your business to its next stage of success with a free consultation today.

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Build a Successful Amazon Storefront for your Brand

Harnessing the power of Amazon’s customer loyalty can provide an incredible opportunity for growth among e-commerce businesses. Listing products on the world’s most popular online marketplace clearly comes with the advantage of reach and convenience. However, companies can be understandably wary of losing their brand identity by competing on a site with more than 12 million products and upwards of 350 million products available from all of the sellers on the Amazon marketplace. 

Fortunately, joining the online giant as a seller doesn’t have to mean abandoning your brand identity. Since 2018, Amazon Storefronts have offered a way for brands to showcase all of their Amazon products to the online retailer’s shoppers within a custom-designed and branded store interface. Rather than sacrificing such a significant advantage when selling on Amazon, businesses can opt to create a Storefront that organizes and features their listings in a way that reinforces their unique brand, introduces new products and enhances the customer experience. 

Start with a Seller Account

The first step to selling anything on Amazon as a third-party (3P) seller is creating a seller account and gaining access to the platform’s selling portal, Amazon Seller Central. Similar to the registration processes for other online accounts that have become ubiquitous in our lives, registering for an Amazon seller account is relatively simple. It requires only the most basic information about you and your business. 

While Amazon does offer an individual seller account, it only provides limited access to the full suite of Amazon advertising and reporting tools. In addition, the per-item commission of $0.99 means the cost savings of the individual plan end when sales exceed 40 items per month. Therefore, any business planning to pursue substantial Amazon sales and create an Amazon Storefront to support that endeavor will be better served by choosing the company’s Professional Selling Plan for $39.99 per month. 

The information required to create a professional seller account will vary slightly depending on the structure of your business but will likely require you to provide:

  • Your business address and contact information
  • Details about your business structure
  • An Employee Identification Number (EIN)
  • A mobile or telephone number
  • A chargeable credit card (avoid debit cards)
  • Identity verification documents such as a driver’s license or passport
  • A valid bank account number

Once you have completed the seller account registration process, you’ll still have one more step to complete before you can begin building an Amazon Store. Establishing eligibility for an Amazon Brand Store requires a company first join Amazon’s effort to guard against deceptive sellers or those without the proper authorization to sell branded products. 

Join the Amazon Brand Registry

To join the 30,000-plus businesses currently showcasing more than 2.5 million products in an Amazon Storefront, you must first complete Amazon’s Brand Registry. The program is open to companies with an active trademark from the United States or one of 18 other countries, the United Kingdom, the European Union, or the United Arab Emirates. In some cases, a pending trademark may also be accepted for registration. Beyond meeting the necessary trademark requirements, businesses must also provide any product category they intend to compete in and a list of where their products are manufactured and distributed. 

Unlike creating a seller account, the good news is that there is no fee associated with the Amazon Brand Registry program. Any company that meets the eligibility criteria can join at no cost. In addition, access to the Amazon Storefront feature is not the only benefit of registering a brand with the site. 

The primary purpose of the Amazon Brand Registry is to keep brands secure and create a more attractive platform for legitimate sellers. Participating brands have access to powerful tools that allow them to detect and report suspected intellectual property infringement. Amazon also utilizes the information provided by sellers through the program to improve their ability to block violations before they have an impact. Enhanced marketing and advertising options, as well as expanded monitoring capabilities, also add to the value. 

Add and Optimize your Product Listings

As an Amazon seller, it’s hard to overstate the importance of your products. They will likely be the ultimate driver of your success or failure. But, before you can sell them via an Amazon Store or even protect them with Brand Registry, they will need to be added to the platform as a product listing.

Your vehicle for this part of the process is Seller Central. Products can be added one at a time by inputting the required information for each product or in bulk by uploading a correctly-formatted inventory spreadsheet. The latter can be much more efficient but requires some familiarity with spreadsheets and the ability to adhere to Amazon’s required template. An employee or partner experienced with this option can significantly reduce the frustration that novice sellers often face when trying to add new products in bulk. 

While adding products requires minimal information about each item, optimizing an Amazon listing effectively takes much more knowledge and effort. Of course, producing exceptional Amazon product listings should be a priority for any brand owner pursuing growth and long-term success on Amazon. Effective product listings are built accurately and organized with your customers in mind. They feature detailed information, high-quality images and, in many cases, helpful videos. Check out our recent blog on listing optimization for a detailed guide on creating listings that exceed expectations and convert shoppers. 

Once your current inventory is added to Amazon and the listings are optimized for both Amazon’s algorithm and shoppers’ needs, you’re ready to start planning the most exciting phase of this journey: Designing your Amazon Store.  

Design your Amazon Storefront for Success

As the face of your products on Amazon, brand owners should be highly involved with creating their Amazon Store. However, it’s essential to keep in mind that design and branding are skills and not something to take lightly. While Amazon has gone to great lengths to make Storefront creation simple and accessible to any seller via templates and drag-and-drop tools, the task will undoubtedly benefit from a well-devised strategy and an experienced designer. 

Whether you bring in outside help or tackle the design yourself, it’s helpful to understand some of the fundamental aspects of the process. It starts with the self-service Store Builder, available through the advertising console. 

Amazon Storefronts consist of various pages that feature a brand’s products and organize them in a customer-friendly way. Often, the best Stores will have an engaging homepage that highlights the most popular products, while an intuitive set of sub-pages makes it easy for shoppers to navigate through the shop and find exactly what they are looking for. 

The pages that make up an Amazon Storefront are composed of content tiles. Tiles can contain text, video, images or product listings. Each page has a header section that features a hero image that remains consistent throughout your Store’s pages, a brand logo and a navigation bar. Every page requires at least one additional tile beside the header section, and can only be divided into 20 total sections. In addition, there are further limitations on certain types of tiles used in each section. These per-section restrictions include:

  • Four background video tiles
  • One product grid tile
  • One gallery tile
  • One featured deals tile
  • One recommended products tile

Pre-designed templates are provided to help sellers balance the tiles used on a page and maintain acceptable design standards, but pages can be built from scratch or the templates adjusted to meet a seller’s preferences. Currently, 12 different types of content tiles are available when constructing a Storefront. Many are available in multiple sizes or adjust automatically based on the content to accommodate a vast array of design possibilities.

Of course, there’s no shortage of examples to look to when designing an Amazon Store. Most explorations reveal that captivating images and high-quality photography are consistently found in successful Storefronts. Video is also an underused feature that shoppers rate among the most helpful factors when making a purchase decision. At Amify, we’ve helped many of our clients refine the Amazon shopping experience for their customers. MobyStella & Chewy’s and Because are just a few examples of our proven approach to designing an Amazon Storefront that strengthens a brand and moves products. 

The Amazon Store Approval Process

As you build your Amazon Storefront, you’ll have an opportunity to preview your work as it will appear to customers. The preview function within Store Builder will allow you to review your creation and check all aspects of it for functionality. It’s also wise to have other people explore the Store to spot deficiencies or ways to improve. Remember to utilize both desktop and mobile devices during your review process, as you might need to make mobile-friendly adjustments to your design. 

Before the Storefront can be officially launched to the public, it will also need to be approved by Amazon. Once the Store is ready for publishing, it should be submitted via the Store Builder. The review can take up to 72 hours, so be sure to account for this when planning your Storefront debut. In addition, if Amazon flags any issues that need to be fixed, you will need to do so and re-submit for additional review. This procedure also applies to any future changes to your Storefront design or new pages that you plan to add down the road. 

Amazon Storefront Advantages

Extending your brand onto Amazon and making it easier for shoppers to navigate your online store aren’t the only reasons to build an Amazon Storefront. This invaluable tool also allows your company to access data that you wouldn’t otherwise be available. Once your online store is active on Amazon, you’ll be able to see the platform’s Store insights. These reports cover two different areas of shopper data. First, metrics offer a glimpse into the habits and sales conversions originating from visitors to your stores. Specifically, you’ll be able to see:

  • Visitors – This is the total number of visitors to your store within the selected date range. It is calculated based on daily unique users or devices. A unique visitor can visit more than one page and can visit from more than one traffic source. For this reason, the total visitors by page or source may sum up to a value larger than the total visitors by day to the store or to the page. 
  • Visits – This is the number of visitors who arrived from a traffic source or visited a page within a single day (A visitor can visit from more than one traffic source and visit more than one page) 
  • Views – This is the number of page views your Storefront receives. 
  • Views/Visitor – This provides the average number of page views per visitor to your brand store. 
  • Views/Visit – The average number of page views per visit to a Storefront.
  • Sales – This is the estimated total sales generated by store visitors, in dollar amount, within 14 days of their last visit.
  • Units sold – It is an estimate of the number of units purchased by store visitors within 14 days of their last visit. 
  • Orders – This estimates the total number of orders placed by store visitors within 14 days of their visit. Orders contain one or more units sold. 
  • Units/Order – This tallies the average number of units sold per order.
  • Sales/Order – This displays the average dollar amount of sales per order.
  • Sales/Visitor – This calculates the average dollar amount of sales per visitor.
  • Sales/Visit – This reports the average dollar amount of sales per visit.

Amazon Store insights also track how visitors are finding the online store. In some cases, the accuracy of this data will depend on your ability to utilize source tags within your digital marketing plan. Data on the sources of your Store’s visitors can help a company evaluate current marketing efforts and provide direction for new initiatives. Within Store Insights, data is divided into the following four categories:

  • Amazon Sponsored Brands – Traffic from Sponsored Brands ads on Amazon
  • Amazon organic traffic – Traffic originating from your brand link on Amazon product detail pages
  • Your tags – Traffic originating from your store’s source tags
  • Other sources – All other traffic sources not categorized

While Store Insights are specific to the performance of your Storefront, it’s not the only data accessible to Amazon brand owners. Participation in the Amazon Brand Registry program opens the door to Amazon’s Brand Analytics, making even more relevant information available to guide decision-making.  

The data provided in the Brand Analytics dashboard comes via four types of reports. These include Amazon Search Terms, Market Basket Analysis, Item Comparison and Alternate Purchase Behavior, and Demographics. 

The Amazon Search Terms report provides a numerical rank for search terms and, more notably, the percentage of sales and clicks for the top three items that result from each search term. The report can also be used to identify the most important search terms based on an Amazon Standard Identification Number (ASIN). As a result, it’s an excellent tool for determining appropriate keywords when optimizing product listings and scouting your strongest competition for those search terms. 

Market Basket Analysis allows brand owners to see the other items that are purchased in conjunction with their products. The value of this data can be limited depending on volume and shopping habits, but it can be a helpful resource for finding potentially complementary products. 

Reviewing Item Comparison and Alternate Purchase Behavior reveals the top five items shoppers viewed in addition to a brand’s product listing. While you can’t use this report to view another brand’s products and its chief competitors, you can use the list generated for your products to guide your Sponsored Products or Sponsored Display advertising. In addition, the ASINs of competing products identified in this data can be uploaded to a Product Targeting Campaign for these types of ads. 

It’s always helpful to know who is buying your products. The Demographics report does just that for Amazon brand owners. It provides a breakdown of age, household income, education, gender and marital status based on the Amazon account used to purchase a product. This is similar to the data available from a direct-to-consumer website utilizing a Facebook Pixel but may be less accurate due to households that share an Amazon account. 

We can create an Amazon Storefront that tells your story

Building a successful Amazon business is hard work. A proven partner to help you navigate things like an Amazon Storefront, A+ ContentAmazon FBA logistics and account health can be the difference between flourishing and frustration. Consider the difference Amify can make for your company. 

We know how to build a brand name on Amazon, and our record backs that up. Our team of more than 60 experts has helped drive $400 million in sales and average 100 percent growth for our clients in the first year after they turn to us. Contact us today to find out how we can help do the same for you.

News & Insights

Amazon’s Market Share will Continue to Grow

The e-commerce market is about to hit its 30th birthday and has evolved significantly during the past three decades. According to Statista, e-commerce sales in the United States will exceed $800 billion in annual sales this year. Despite this substantial growth, online sales still account for less than 25 percent of all retail shopping in the U.S., and we expect more growth is on the horizon.

Since its launch in 1995, Amazon has dominated its competition to become the market leader in the e-commerce space, and current estimates suggest it holds between 35 and 45 percent market share. Walmart is a distant second with an estimated six percent, while Apple, eBay, Target, Home Depot and Best Buy account for around 2-4 percent each. In fact, the top ten online retailers combined account for roughly 65 percent of the total market share, with the remaining 35 percent mostly coming from smaller Shopify or BigCommerce types of websites.

Most reports take a top-down view of market share, but it’s equally important to look at it from the bottom up. If you are a brand selling online, you likely sell on your own website, on Amazon, and maybe through retailers who sell on their sites. For most of the brands we work with at Amify, Amazon and their website are the largest two sales channels. While the percentages vary dramatically from brand to brand, the combination of Amazon and their company website usually drive more than 80 percent of their e-commerce sales. Thus, brands should focus on getting those two channels right before moving on to other e-commerce pursuits. 

With Amazon’s aforementioned 35-plus percent market share, skeptics often predict that the platform only has room to go down. As a result, news reports often speculate about the next new company that wants to take on Amazon and potentially beat them at their own game. Anyone remember Jet.com? It’s easy to believe these rumors because they sound exciting, but we fully believe that Amazon is much more likely to add market share going forward as it continues to grow, scale, and differentiate itself from the competition.

No evidence of a peak for Amazon

150 million Prime members out of 124 million U.S. households

The vast majority of American households have an Amazon Prime membership. It’s more than just an indication of the value of free two-day shipping. These paid subscriptions demonstrate the loyalty of Amazon’s customers and their plan to continue shopping on the platform. How many people could name Walmart.com’s competing products to Amazon’s brands? Very few, if any, and most aren’t Walmart+ members – nor do they have plans to join another membership service. Once someone becomes a member of Prime, most continue to buy more and more on Amazon because of the convenience and customer satisfaction the company provides. There is little reason or incentive to go to a competing website when you already have your payment method pre-loaded and free shipping available to you in one click. 

Faster shipping is only getting faster

The practice of purchasing a product online, paying several dollars for shipping and then waiting up to 10 days for it to arrive no longer meets shopper expectations. With 110 warehouses in the U.S., Amazon has an unmatched fulfillment network that no other company can compete with. The massive scale of their logistics infrastructure allows them to deliver products faster and cheaper than any competitor on earth. In comparison, Shopify has less than 10 warehouses, a fraction of the volume and does not have last mile capabilities. As Amazon continues to build out its network, delivery times will continue to decrease. In a relatively short amount of time, we have gone from 10-day shipping to two-day shipping to one-day shipping. Once one-hour shipping becomes more common, the need to physically visit a store for items will be reduced even more. Currently, no one else in the industry has the scale or delivery capabilities to come close to competing. 

Amazon has an unlimited selection 

Many of Amazon’s biggest competitors are internet versions of brick-and-mortar retailers. For example, Walmart.com, HomeDepot.com, Target.com, and BestBuy.com are primarily online extensions of their physical storefronts: If they have it in the store, they have it online. But Amazon is a different animal in that it has the largest and most diverse marketplace by far. It features millions of sellers and a virtually unlimited selection. This long-tail approach is exceptionally valuable for both Amazon and customers since it makes nearly everything available from one place rather than relying on multiple online retailers to complete a shopping list.  

More brands are launching on Amazon

Historically, many brands have tried to avoid selling their products on Amazon due to a perception that it was bad for their business. Many felt it would cannibalize their brick-and-mortar or website sales. The combination of COVID-19 and Amazon’s growing influence has caused many of these companies to rethink their strategy. As physical stores continue to struggle and more people turn to Amazon almost exclusively for their shopping needs, brands now realize if they are not on Amazon, they are losing out on millions of prospective customers. In our experience, it’s not unusual for a customer to visit Amazon in search of a product, not find it, and decide to purchase a competitor’s item via the site rather than buy from a different online store. Thanks to this behavior, more brands recognize they need to be where the customer wants to buy or risk losing them entirely. 

Amazon has lower prices

More and more, we are finding examples where Amazon’s price for a product is less than other retail sites and, in some cases, the manufacturer’s website. Loyal customers will often compare a price found elsewhere to Amazon before completing a transaction. The e-commerce leader’s emphasis on pricing and intense competition among sellers on the site have made it one of the leaders in value. Unsurprisingly, shoppers understand that to be the case and are more likely to start their shopping on Amazon whenever possible. 

Cookie Crackdown

A growing focus on consumer privacy is also having an impact on the ability to compete with Amazon. In the past, brands have tracked potential customers via cookie technology to target their digital advertising efforts better. Improved targeting translated to a lower cost of customer acquisition. However, Apple has recently limited the ability of companies to track user behavior across the internet on mobile devices, making it much harder for brands to target their ideal customers. The result has been increased costs to acquire customer data via Facebook and other platforms. As the price of targeting customers rises, the attractiveness of selling on Amazon will also grow since sellers there are not impacted by the same tracking issues. 

Customer trust in Amazon is improving

As the Amazon marketplace faced exponential growth during the past decade, monitoring all the products going through the network became difficult. This challenge led to a significant rise in counterfeit products and other poor-quality items. But, in the past two years, we have seen a massive shift in Amazon’s strategy to crack down on these issues, thus creating a much better customer experience. There are many reports that Amazon has shut down over one million fraudulent Amazon seller accounts and currently has a considerable team committed to policing these issues. 

Prepare for what lies ahead with Amify

Amazon has proven to be the clear winner among e-commerce companies since the industry began. At Amify, when we look forward, we remain convinced that Amazon will only continue to outperform its competitors and add to its current market share. Brands should be prepared for this likelihood and plan a thoughtful approach for the coming years of growth on the platform before it is too late. 

Take advantage of Amify’s decades of experience in Amazon, e-commerce and direct-to-consumer strategy to help your business do just that. A partnership with us places a team of experts by your side to analyze the data and build an optimization plan that best aligns with your budget, capabilities and goals. Start a conversation today to find out more.

News & Insights

Five Unique Ways a Business can Partner with Amazon

As one of the most successful companies in history, it’s not surprising that a long line of businesses and entrepreneurs are interested in becoming an Amazon partner. Fortunately for them, there are several ways to turn that dream into a reality. While some of these partnerships are relatively simple to begin pursuing, working with Amazon effectively for the long term is no easy task. Instead, growing a business with the help of Amazon requires extensive knowledge and a well-executed plan, regardless of which form the relationship takes. Keep reading to learn about five ways your business can get started. 

1. Become an Amazon Seller

The most common Amazon partnership, of course, is via a seller relationship with the retail platform. With more than 300 million shoppers worldwide and tens of millions of products, the Amazon marketplace plays an integral role in e-commerce in the United States. 

Today, brands and manufacturers have two primary ways to leverage Amazon in their quest to reach customers and increase sales. They can begin a first-party relationship (1P) with the company and sell products directly to Amazon but must be invited to do so. Under this arrangement, they pay a flat participation fee to serve as a vendor to Amazon, which then manages the storing, pricing and delivery of products. While 1P sellers lose control over product pricing, they do still have the ability to promote their products through Amazon advertising and develop A+ Content through Vendor Central. 

The alternative to becoming a 1P seller is taking a more independent route. Unlike a 1P relationship which requires an invitation, any seller can instead choose to become a third-party (3P) seller. Companies opting for this route retain responsibility for managing their inventory and listings, selling directly to Amazon customers via the website. In addition, the fees for 3P sellers are much more complex and based on both the product and fulfillment methods. However, the business has complete control over pricing and all other aspects of its listings. 

Each approach has pros and cons, and the most appropriate option will vary depending on the seller. For example, a 1P seller can enjoy a more hands-off approach to Amazon sales but must face the consequences of decisions beyond their control. Meanwhile, 3P sellers enjoy a more traditional e-commerce experience but may face fierce competition for Amazon’s all-important Buy Box and must dedicate much more of their time and resources to optimizing and monitoring their presence on the platform. 

2. Join the Amazon Business Partner Network

Since launching in 1995, Amazon has become more than a popular way for sellers to reach individual consumers. The online giant has also entered the field of business-to-business services via its Amazon Business Partner Network

While the services under this umbrella vary, the most familiar aspect is the eProcurement program, Amazon Business. Companies who join the partnership network receive access to a marketplace specifically for the needs of businesses. Joining is free and allows participants to access business discounts, create multi-user accounts, define approval workflows and set spending limits. 

Members of the Amazon Business Partner Network can also utilize enhanced data about their company’s spending habits and receive specialized support for public sector businesses. Partner-only content, such as targeted webinars for business owners and SaaS tools, is an added benefit of joining the network, and business partners can enjoy additional savings and perks by becoming an Amazon Business Prime member. 

3. Opt for Fulfillment By Amazon

One of the ways that Amazon sellers try to reach their full potential and land the coveted Buy Box is by opting to use Fulfillment by Amazon (FBA) rather than managing the process alone. Choosing to outsource order fulfillment to the online retailer puts your products inside an Amazon FBA warehouse where they can be picked, packed and shipped by an Amazon employee. Unlike a 1P relationship, the seller retains complete control over pricing and inventory management while relying on Amazon logistics for the rest. 

Obviously, the decision to use Amazon’s FBA service comes with added costs. In addition to paying standard seller fees on orders, Amazon will also charge a fulfillment fee based on the type and size of the product. Storage fees for the space that inventory takes up in Amazon’s fulfillment centers are yet another cost that results from using an FBA model for sales. However, some of these costs would simply originate elsewhere, such as from in-house employees or a different logistics provider. By partnering with Amazon on fulfillment, sellers enjoy an easier path to Amazon Prime status for their products, reduced customer interactions and more streamlined processes for returns. 

4. Utilize Amazon Web Services

Since 2006 Amazon has provided companies with information technology infrastructure services, known as cloud computing. Designed to reduce the technology costs that startups, large enterprises and government agencies face, Amazon Web Services (AWS) is the most comprehensive and widely-used cloud platform in the world, with more than 200 services available from data centers around the globe. 

AWS focuses on offering functionality, security, innovation and agility to its customers. Their services range from backup storage and purpose-built databases to artificial intelligence, analytics and website hosting. Businesses of all sizes needing technology support are choosing to partner with AWS due to their experience in the industry and advantages for clients.  

Whether they sell on Amazon or not, online retailers can partner with the company through their AWS tools. While doing so would not impact a seller’s performance in the Amazon marketplace, it could be a way to lower their IT costs and strengthen their brand’s web stability or security. 

5. Sign up for the Amazon Delivery Service Partner Program

A recent addition to Amazon’s partnership options is the opportunity to own one of its independent delivery companies. More than just being a delivery driver, it’s similar to the franchise model common in the restaurant and service industries. The Delivery Service Partner (DSP) program is aimed at individuals interested in running their own full-time small business

Applicants chosen to join the Amazon DSP program are responsible for hiring, training, developing and retaining a team of up to 100 employees while managing a fleet of between 20 and 40 delivery vans. The Amazon delivery company will exclusively support the delivery of Amazon packages within a specific town or region. 

The company claims the startup costs for Amazon delivery partners are as little as $10,000 and states that logistics experience is not required. Lease agreements for delivery vehicles that avoid up-front fees are negotiated by Amazon, while training and technology to run the business are provided to selected applicants. However, it is a highly competitive process, and only limited openings as the owner of an Amazon delivery business are available. In addition, Amazondetermines the locations where a Delivery Service Partner is needed. 

Those interested in becoming a DSP owner may complete an initial screening to join a waitlist called the Future DSP program to prepare for a career as a full partner and be notified when an opportunity becomes available. 

Start your Amazon partnership off right

For many businesses, the key to partnering with Amazon is creating a solid foundation to build from. Since 2011, Amazon sellers have trusted Amify to help them do just that. Our team of experts knows how to navigate the platform’s extensive landscape of options to find the techniques and relationships that will lead to growth. It’s time you learned more about Amify’s proven record of managing logistics, optimization and efficiency for brands that are dominating the competition. Start the conversation today.