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Amazon And You: How to Maximize the Partnership
The document discusses strategies for maximizing partnerships with Amazon, highlighting its dominance in e-commerce and specific shopper demographics. It includes best practices for selling on Amazon, such as pricing strategies, product listing optimization, and the importance of customer reviews. Additionally, it outlines potential pitfalls sellers may face on the platform and emphasizes the need for an effective Amazon strategy in the evolving retail landscape.
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Amazon And You: How to Maximize the Partnership
- 1. AMAZON ANDYOUHowtoMaximizethePartnership MIKE DUNCAN -CEO - SAGE ISLAND
- 2. MIKE DUNCANCEO /CREATIVE DIRECTOR MDUNCAN@SAGEISLAND.COM slideshare.net / sageisland
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- 6. » Retail stores’revenue is flat; Amazon continues to grow » 6% of US retail sales come from e-commerce » Amazon accounts for 60% of all US online sales growth last year The Facts Facts about Amazon.com
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- 10. Amazon accounted for60% of all U.S. online sales growth last year. Facts about Amazon.com
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- 14. The record formost items moved from the shelves to the loading docks in one week is 2,086,548. Last year, when Amazon's site went down for 49 minutes the company missed sales of nearly $5.7 million.
- 15. » Younger andwealthier shoppers » Buying diverse range of products, notably apparel » The average prime members makes $69K and is 36.5 years old » Millennials make up 37% of Amazon shoppers—largest group » Prime households spend $1500 per year; non-Prime households spend $650 Who Is Shopping On Amazon?
- 16. » Competitive pricing »Robust reviews from customers » Fast delivery – especially from Prime Amazon Strengths
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- 18. Amazon Apparel Brands Franklin & Freeman- Men's dress shoes Franklin Tailored - Men's suits and accessories James & Erin - Women's clothing Lark & Ro - Women's clothing (Also available in Canada) Society New York - Women's clothing North Eleven - Women's accessories for cold weather Scout + Ro - Children's clothing
- 19. » Amazon hasquietly launched 7 fashion brands » Only sold on Amazon Since 2005 Amazon has added almost as much yearly apparel revenue ($27.8 billion) as the $29.6 billion in sales that the department stores have lost.” – Morgan Stanley Amazon Apparel Brands
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- 21. “We're promised instantcatalog shopping—just point and click for great deals. We'll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet—which there isn't—the network is missing a most essential ingredient of capitalism: salespeople.” -Clifford Stoll, Newsweek 1995 “
- 22. » Limited productselection » Security concerns » Logistics cost and timing » Price vs. retail » Salespeople vs. convenience Obstacles of eCommerce
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- 27. Overcoming Price vs.Retail
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- 29. » Apparel (30million clothing items available) » Media (top category for Prime users) » Electronics » Groceries (thanks to quick delivery) Basically, Everything Millennials on Amazon
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- 33. Sell to Amazon 1P/ Vendor Central Sell first-party, wholesale, directly to Amazon Retail, using the Vendor Central interface. Sell yourself 3P / Seller Central Sell third-party to consumers through the Amazon marketplace, using the Seller Central interface. Sell Thru Seller(s)
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- 36. » Amazon buysyour products, sells them at “appropriate” prices, and pays you back » Invite-only, generally for larger manufacturers and well-known brands » Cons: inflexible pricing, no access to customer data » No control over customer service » Slower payments from Amazon to you Amazon Vendor Central
- 37. » Allows third-partysellers to list products on Amazon » Option to use Fulfilled by Amazon (FBA) to access Prime shipping » Can be used by anyone » Sellers retain full control of product listings and pricing » Better choice for most retailers Amazon Seller Central
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- 39. Best practices forproduct titles
- 40. Titles should include4 elements » Variant / Color » Size / Quantity » Keywords (what the product actually is) » Titles are limited to 200 characters • Capitalize first letter of each word • Spell out measurements (“feet” is better than “ft”) • Numbers should be numerals (“5” is better than “five”) • Don’t use ampersands—spell out “and” instead Product Titles Amazon Best Practices
- 41. Best practices forproduct images
- 43. » Image mustmatch product in size, color, etc » Product must be recognizable » Image must be a photo, not a drawing » Image must be taken at a flattering angle, focused, and well-lit » Product must occupy at least 80% of image area » Entire product should be in image » Background should be simple and clean to keep focus on product Product Images Amazon Best Practices
- 44. Best Practices forProduct Descriptions
- 47. » Buyers compareproduct listings to choose what to buy » Information you offer helps them make their decision » Find Amazon ASIN (Amazon’s Standard Identification Number) » Write a full, rich description that includes both basic and detailed info » Include title, image, brand, condition, key features, size, materials, etc » Ensure you meet Amazon’s category-specific requirements » Add product image—this is a must Product Descriptions Amazon Best Practices
- 48. Best practices forbullet points
- 49. » Testing showswell-crafted bullet points increase sales » Relay key product features & important info » Great for people who are scanning quickly » Maintain consistent order for all products » Begin each sentence with capital letter » Write bullets in fragments and don’t punctuate » Do not include promotional or pricing info Bullet Points Amazon Best Practices
- 50. Best practices forpricing WINNERS LOSERS
- 52. » Research competitionas you develop compelling price point » Take shipping costs into account—this is the main reason shoppers abandon carts » Offer free shipping to increase sales » Clearly communicate shipping policy and delivery times Pricing Amazon Best Practices
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- 57. » Good reviewscan push on-the-fence buyer into a purchase » 79% of consumers trust reviews as much as personal recommendations » 73% of consumers say positive reviews make them trust a business more » Ask friends, family & loyal customers for Amazon reviews » Send follow up emails after a purchase asking for feedback » Request reviews via newsletters and social media » Offer discounts or giveaways for honest reviews » It’s against the rules to request 5 star reviews Good reviews are key Amazon Product Reviews
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- 59. PITFALL 1 PRICE PARITY Yourselling agreement with Amazon includes a price parity clause, which states that the price you set for items on your Amazon store – including shipping and any discounts – is required to meet or be lower than your price on other online sales channels. Because Amazon is diligent about monitoring and enforcing price parity, you need to be mindful of pricing, especially when selling on multiple marketplaces.
- 60. PITFALL 2 LURING CUSTOMERS Ifyour item description contains website URLs or your business/seller name – in text, on graphics or even on photo watermarks – Amazon is apt to take action. Other marketplaces may not be as strict about these names or links, so pay close attention to your listing to ensure you aren’t giving shoppers a reason to click away from Amazon.
- 61. PITFALL 3 PRODUCT DETAILS Sellinga popular item? Don’t save steps by copying another seller’s listing information; Amazon is on the lookout for this kind of activity. Feel free to compare your data with that of other sellers of the particular item, but don’t duplicate their pages.
- 62. PITFALL 4 CUSTOMER FEEDBACK Productreviews are important selling tools, but you need to ensure the info shoppers leave on Amazon about your items is truthful and appropriate. It’s fine to solicit feedback and include links to your review page, but end your involvement there. Don’t ask customers to delete negative reviews, offer compensation for reviews, or review your own store or products.
- 63. PITFALL 5 NO STICKERS Ifyou’ve chosen to take advantage of the benefits of FBA – which can include eligibility for Amazon Prime shipping and Amazon’s customer service guarantee – don’t risk that partnership by stocking anything but correctly identified and stickered products. You must accurately label each item so Amazon’s fulfillment system can correctly identify the product within its system. In other words, don’t spam FBA with commingled inventory.
- 64. PITFALL 6 CUSTOMER COMMUNICATION Amazon statesthat sellers must communicate with customers by email only, even if your personal store and other marketplaces are amenable to other methods. Make sure you respond to emails promptly and accurately convey Amazon’s shipping timeframes to your customers.
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- 67. » Fulfillment Method- (FBA, Prime Self Fulfilled, etc) » Landed Price » Seller Rating » Shipping Time » Feedback Score » Order Defect Rate » Late Shipment Rate » On-Time Delivery » Customer Response Time » Tracked Delivery Rate » Feedback Count » Refund Rate » Inventory Dept » Cancellation Rate Amazon Buy Box Recipe (Algorithm) 3 cups 2 cups 2 cups 2 cups 2 cups 1/2 cups 1/2 cups 1/2 cups 1/2 cups 1/2 cups 1 tbs 1 tbs 1 tbs 1 tbs
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- 72. » People lookon Google - People buy on Amazon » More Sales = More Momentum = More Sales » Highest average ROI we have ever seen
- 73. » Use Google/SocialAds to direct people to your Amazon store » Use Amazon ads to advertise products directly on Amazon » Only pay when someone clicks your ad » Optimized ad performance with keywords, budgets, etc. » Use metrics to monitor success and ROI Advertising
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- 75. » Company XYZproducts are selling well on Amazon through 3P » Amazon reaches out to Company XYZ to sell direct » Amazon matches low price or beats low price to sell more units » Amazon blames low prices on leaks in distribution at the brand level » Prices stay low until brand controls distribution (tough to do) » Retailers become showrooms for Amazon What is happening?
- 76. » Target brandswith Amazon strategies in place » Look at prices on Amazon when considering a new brand » Exclusivity to SKUs? » Create your own brand » Put pressure on brands to figure Amazon out Can’t beat ‘em? Join ‘em. If the brand has no Amazon strategy, and you can compete on Amazon after all the fees. Just start selling yourself MF/FBA. Retail Strategy
- 77. » Determine yourAmazon strategy (brand or retail) NOW » Disruption can unearth new opportunities » Keep your friends close. Keep your frenemies closer. » Keep your eyes peeled - Amazon wants to sell everything » Go with the flow - Start swimming or you’ll sink like a stone Key Takeaways
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