Getting listed and finding success on Amazon often requires extraordinary preparation. Betsy McGinn, ecommerce leader and author, covered how to navigate the selling platform, unit economics, content needs, optimal product, pack configurations, and other fundamental best practices when working with Amazon during last week’s SFA Maker Prep webinar “The Amazon Roadmap.”
“Amazon is a place where so many brands can get discovered, and so many people go to discover new brands,” said McGinn when explaining Amazon’s potential to uplift specialty food businesses. “Seventy-eight percent of product searches on Amazon don’t start with a brand name. They start with the characteristics and features of a product that consumers are looking for. So, what that signals to you is that they are open to finding new brands, discovering new categories, and they’re not tied to one particular product.”
McGinn discussed the three platforms Amazon offers to brands, along with the pros and cons of each type: Vendor Central, Fulfillment by Amazon (also known as Seller Central), and Fulfillment by Merchant. As part of Vendor Central, Amazon purchases product from a brand and is responsible for the selling and shipping of it to the consumer, like that of a typical retailer. Seller Central is where the seller owns the product shipped to and stored in Amazon fulfillment centers, and the ecommerce giant ships the product to the consumer. Fulfillment by Merchant is when a product is listed on the platform, but the shipment is managed by a brand or via third-party logistics.
For specialty brands that are just starting out, Seller Central and Fulfillment by Merchant are the two options, as Amazon only wishes to partner with big brands through Vendor Central. Although the Fulfillment by Merchant brands will not get Prime delivery designation, and cannot participate in some Amazon promotions like “subscribe and save,” it allows the shipment of products that Amazon often doesn’t handle, like many frozen goods types. Seller Central, on the other hand, follows a consignment model which may put more pressure on a business’ finances, said McGinn.
McGill also discussed pricing strategies.
“I love to tell people how Amazon consumers go to the site and shop for different reasons than just prices,” explained McGinn. They also go for free shipping, being more likely to have the desired product and "better" prices. “Notice they don’t say best prices or lowest prices,” she continued.
Amazon does not contend to be a low-price leader but follows the market. Brands should feel empowered to price a product right, rather than going lower. She also warned that low prices can be dangerous when selling through multiple channels as retailers have access to Amazon pages and undercutting retailers can diminish a relationship with another company. Additionally, requesting price increases on the platform is often a painstaking, tricky process, she said.
The product page is also a powerful tool to convert product interest into sales.
“Sixty-nine percent of consumers will abandon a product page for lack of information or details,” she warned. So, it’s of the utmost importance to ensure that the product page is filled with useful information and makes the best use of its tools before driving traffic to the page via marketing dollars or other related promotions.
To learn more about how to best leverage Amazon, watch the webinar on demand in the Learning Center.
Related: Launching With Amazon: Q&A With Author, Ecommerce Leader; Trade Spending 101: Q&A With Sales Strategist