Grow Your Brand Beyond Amazon With a Strong DTC Strategy How can brands leverage Amazon to grow DTC sales? Let's dive right into it.
By Tomer Hen •
Opinions expressed by Entrepreneur contributors are their own.
In the past two years, brands like Supply, Beardbrand, and Ranch Road Boots joined the likes of Nike and Ikea to exit Amazon. While this shift in strategy does pique the interest of DTC brands, it is one that removes its presence from the biggest shopping site in the world. This begs the question: How can brands leverage Amazon to grow DTC sales? Let's dive right into it.
As the largest product search engine in the world, Amazon offers key benefits that work to the seller's advantage and also appeal to consumers. Specifically, consumers trust the platform. Further, added incentives, such as Amazon's single-day delivery, an accessible catalog of diverse products and the brand's buying power, add to the platform's assets.
The downside? High fees, huge competition over price and keywords, non-unique product pages, prioritization of sponsored listings and, of course, the uncertainty of having your listings pulled at any time.
While this does make the benefits of switching to a single DTC sales channel shimmer a little brighter, it comes with its own fair share of drawbacks. The complete control over the content, absence of market fees and building long-term customers are offset by the heavy lifting to attract customers, investment in site maintenance and building trust with customers.
Sellers who also sell on DTC channels are afraid that having both sales channels will make Amazon cannibalize their DTC sales and undermine their high-cost DTC marketing efforts. All this, while also paying Amazon with high selling fees.
Here's how brands can leverage Amazon to grow direct customer relationships:
Strategically perceive Amazon as a doorway for relationships
When a customer discovers and buys your product on Amazon, they are still an Amazon customer. They made the choice to search for a solution to their problem on Amazon. Despite choosing your product, they trusted Amazon first to display the products and brands.
Think of an exhibition or a multi-artist gallery. Brands who wish to grow direct relationships with customers through Amazon perceive it as the "gallery" that provides them with the opportunity to make a great first impression on the consumer. Although, this might not make the desired profits right off the first interaction.
This is just like how an artist would use a gallery to showcase their talent and provide visitors with an experience that would leave them wanting more. This could be deployed in several practical ways we will discuss further. But this mindset is crucial to succeeding in using Amazon to grow direct customer relationships.
Related: 3 Ways to Get Your Amazon Customers to Buy Directly From You
Use (and A/B test) product inserts to start direct relationships with Amazon customers
Think of Amazon as a sales driver, not a customer acquisition channel. With no data or opportunity to re-engage with the customer, you mostly make sales on Amazon but do not acquire customers.
Despite strict restrictions on the content of your product inserts, there are several ways you can engage with your customers outside of Amazon without breaking the rules.
The most effective ways to interact with customers are through email and text messaging. Think of an added value you can provide the customer that would prove incentive enough to give you consent to interact with them after their Amazon purchase. For example, register their lifetime warranty, sign up to an exclusive content club or even free products. Direct them to sign up via a special link (QR code or a very short URL works best) to your list.
A/B test the offer to see which one resonates best with your audience and gets you the most engaged customers. From this point on, it's up to you to deliver great value for their consent and engagement with your brand through this channel.
Pro Tip: This is not just a lead list — these are customers who have received your product, paid money and attention to your brand and now expect to get more value from your brand. The more value you provide, the higher your chances are to convert them into paying customers directly with your brand. It's all about the "trust meter" that will make them buy directly from you the next time around.
Use Amazon as a review showcase
Being the largest product search engine in the world, consumers may search for your product or brand on Amazon even if they've seen your ads outside of Amazon. Consumers trust the Amazon review system. While many sellers are angry about them removing reviews, some are taking advantage of that consumer-trusted system to increase credibility and sales outside of Amazon.
One of the strategies we use for brands we work with is to push their product on Amazon to make as many sales as possible. We push to get as many positive reviews and showcase these reviews outside of Amazon — in ads, email marketing and social media.
We then provide a coupon for consumers to incentivize them to purchase the product directly from the brand's website. This way, the brand enjoys the credibility of the Amazon platform and acquires customers directly on their site.
Related: 6 Reasons Why Amazon Product Reviews Matter to Merchants
Be ready to break even or even lose money on Amazon sales to win long-term on DTC
To drive sales and beat the high competition on the Amazon marketplace, brands must think of Amazon as a marketing channel rather than a profit center.
When done right, brands can acquire high-quality customers from Amazon who will buy and engage directly with the brand. This spares the high marketplace fees and constant need to adapt to new Amazon regulations and rising competition.
Further, this allows the brand the freedom to showcase its products and brand the way they desire. It also provides brands the chance to learn more about their customers' preferences and innovate new ways in which they can serve them better.
Given the tremendous value brands get from acquiring direct customers and the high cost of acquiring them outside of Amazon, it's sometimes worth looking into spending more advertising on Amazon. Alternatively, brands can lower prices on specific products inside Amazon and gain traction on initial sales for the chance to convert more of these sales into long-term customers.
This is similar to the strategy employed by accessory manufacturers when selling in Apple stores. Though sometimes they break even or lose money on the front-end products sold within Apple stores, they gain long-term customers. When done right, this also helps increase brand recognition and word-of-mouth marketing.
If the strategies I presented to you today were beneficial to you, or if you plan to employ them in your sales activities, I'd be excited to hear from you! Or, if you would like to talk more about how brands can use the changing landscape as an opportunity to grow, please feel free to drop me a note!
Related: 3 Reasons Brands Should Shift to a Direct-to-Consumer Model
