The Amazon marketplace has changed a lot over the past years and the predictions are it’s going to evolve even faster into the future. One thing is clear, the good old days when it was enough “just to launch products” to be successful are gone. Competition is ferocious, and it's harder than ever to stand out.
If you want to get noticed in the crowded Amazon marketplace in 2021 and be highly profitable, you have to play according to the new rules.
This article intends to show you how.
Level up your game
At the beginning of the FBA boom, almost anyone could make money selling products on Amazon - basically, if you got the fundamentals right, you were profitable. That’s no longer the case today. The bar is higher.
It doesn’t mean that fundamentals don’t matter anymore, they do. Those critical business needs that every Amazon FBA business has like product development, supply management and forecasting, etc., are still cornerstones of success on Amazon. If you are bad at those, it’s almost guaranteed that your business won’t succeed in the long term.
The problem is that it doesn’t work the other way around anymore - nowadays, being great at those fundamentals doesn’t mean you’ll automatically be successful.
If you want to maximize your chances to thrive on Amazon in 2021, you have to do more. You have to level up your game.
Increase your traffic, conversions, and sales by adding branding to the matrix.
Discover the power of Branding
Currently, the majority of niches on the Amazon marketplace are so saturated, that it’s really hard to find a product that is not already sold by others. As a result, most sellers are selling similar or even the same products competing on price, thereby destroying their margins and predisposing themselves for failure (who can compete with Chinese factories on price?).
Believe me, you don’t want to be one of them.
But what should you do?
- Do the product research right
It’s more important than ever before. If you manage to find a product/niche that is not yet (that) saturated, you have an immense advantage over those who don’t.
- Differentiate by branding
If you are left with the option to sell something similar to what others sell too and don’t want to compete on price, there’s still one option left - differentiation by branding.
And what if you manage to do both? What if you find the right product and add impactful branding on top of it?
Yes, that’s where you ultimately want to be. That’s where the most sales are. That’s the way to grow exponentially.
Branding can help you to fulfill the full potential of your outstanding product or save you if your product is mediocre.
Keep in mind that you sell on Amazon
Branding on Amazon is very different from branding in general. The reason is Amazon standing between you and your customers. They make it much harder for you to create genuine, long-lasting relationships with your customers which are the core element of general branding.
Even successful 7-8-figure FBA brands tend to have only around 5% of repetitive customers. That means that the long-term value (LTV) of acquired customers is limited to one sale in 95% of cases.
On any other platform, e.g., Shopify, the main goal of branding is clear; to get the % of repetitive customers as high as possible, in other words, to maximize the LTV of a customer.
Unfortunately, this is hardly applicable to Amazon. Because it’s hard to create a relationship with your customers there, it’s generally more efficient to focus on:
- Listing optimization → attain a higher click-through rate (CTR) and conversion rate (CVR)
- Driving traffic → getting impressions
*In the buying process, the traffic comes first, only then the customer may click on the listing and potentially buy the product. The reason why I put listing optimization before driving traffic is that you should always optimize the listing first because by driving traffic to an unoptimized listing you would be throwing money out of a window - see example at the end of this article.
In other words, focusing on traffic, click-through rates and conversions has generally a more significant impact on the bottom line - bring you more dollars - than focusing on building relationships with customers.
This means that building a brand on Amazon requires a different approach than building a brand almost anywhere else. On one hand, not all the general branding principles apply, on the other hand, some principles and elements are specific just for Amazon.
During my career as a brand manager of an 8-figure FBA business, I studied dozens of successful Amazon brands, put the findings together, and created the Amazon Branding System.
Apply the Amazon branding system
Amazon Branding System narrows down the usual approach to branding to what matters the most for Amazon businesses.
There are 3 parts and 13 elements of the system:
- Customer Avatar
- Brand Positioning
- Brand Message
- Product Listing
- A+ Content
- Amazon Store
- Brand Website (for legitimacy purposes)
- Product Packaging
- Packaging Inserts
Now, these parts and elements are in order on purpose. You may imagine it like a pyramid. The Brand Identity part is a prerequisite for both the Brand Assets and Brand Touchpoints part. At the same time, the Brand Assets part is a prerequisite for the Brand Touchpoints part.
This may sound complicated but imagine this practical example:
You decided to sell premium yoga mats. You want to create secondary images for the listing (Brand Touchpoint). You can hardly do that if you don’t have, among other things, photos and graphics (Brand Assets). And if you want to maximize the conversion rate of your listing, the photos and graphics have to resonate with the target customer (Brand Identity) - you probably wouldn’t have much success using a photo of a body-builder pumping iron…
Don't get me wrong; it’s possible to sell with, e.g., excellent graphics and photos even if you don't know who your target customer is. But the probability that you’ll make a sale is dropping down.
So, ideally, create/optimize your Amazon brand elements from the bottom of the pyramid to the top, not chaotically, nor the other way around.
Optimized, Optimize, Optimize
Do you know who your target customer is?
Do you use consistent patterns in your main images and secondary images?
Do you use icons and infographics to communicate your brand message? Do you know what that message is in the first place?
Do you have lifestyle photos and videos showing how people benefit from your product?
Do you use A+ Content, Amazon Store, Amazon Posts, and all the other features Amazon is constantly adding?
Do you do all these things?
Most sellers don’t. I understand that there are more important, pressing business needs you have to take care of. In the end, if you are constantly out of stock, no amount of optimization will save you.
But keep in mind, that by not having those elements optimized, you’re literally throwing money out of a window, respectively leaving them on the table.
Two examples of situations so common for Amazon sellers:
You are spending a lot of money on PPC campaigns, but your main image sucks. What’s going to happen? Many potential customers who saw your ad won’t go to your listing or because of the image, although you paid for them to see the ad in the first place. In other words, you’re throwing money out of a window.
Traffic to your best-selling product is damn high, and your conversion rate is around 25%. Although you have the Brand Registry, you don’t use the A+ Content feature on your listing. Suppose that the A+ Content feature generally tends to increase conversions by 5% percent on average. How much money are you leaving on the table by wasting that 5%? You do the math.
- Besides a great product, branding is the key to stand out in the crowded Amazon marketplace in 2021.
- You can't focus on branding instead of, e.g., supply management and forecasting, which are undoubtedly more pressing business needs - you have to add branding on top of it.
- Branding on Amazon is very different from branding in general - it's more about traffic, click-throughs, and conversions than about genuine relationships with customers and their long-term value.
- By not leveraging branding you are throwing money out of a window, respectively leaving them on the table.