Categories
E-Commerce

July Prime Day Opportunity & Post-Mortem

Amazon finally announced Prime Day on July 11 and 12, 2023. The most exciting part of the announcement – the launch of an invite list, which customers must request access to – to access deals that will likely sell out.  

We still see brands that are hesitant to sell on Amazon. We also see brands more hesitant about Prime Day due to margin squeezing. 

Vendors must understand what Prime Day is and is not. Amazon has created a two-day event to sell branded devices, offer exclusive promotions to Prime members, and sell advertising. Notice what is not mentioned – profitability and margins.

There is no secret sauce or quick road to success on Prime Day. Prime Day planning should start the day after the event for the following year’s event or when Amazon announces an event for October.

The  2023 Innovation – Moving Away From Amazon

Is Amazon using Prime Day as the first opportunity for brands to drive traffic off of Amazon to other domains? 

Or is this another case of Amazon adding additional value to the Buy with Prime program by leveraging Prime Day to promote products not on Amazon’s marketplace?

Prime Day Tactics For Success

Brands and vendors ensure you are marketing products with profit margins. Are these ASINs available for both event days?

Vendors ensure that you have inventory planned to be moved to Amazon warehouses. Vendors likely will see slim margins if they have not negotiated promotions for products with positive margins.

What is the one thing Amazon vendors want but get relatively little coverage? Net income and net revenues. Net revenues have a variety of Amazon acronyms, but do vendors know what this means?

How To Validate Whether Prime Day Was Successful

  • If it’s profitable and with margin – fantastic work done by your team.
  • If it’s remotely profitable with lower margins – your Amazon team has done better than most vendors.
  • If it is not profitable and with no margins – Amazon has won, and your team needs assistance. 

It is about making net margins and profit daily, monthly, and annually.

Post Prime Day Activities To Aid Festive Season Goals

Brands and vendors, what did you learn from Prime Day 2023 from day one data? Did you have ASINs run out of stock, or did your advertising budget get blown into a million pieces? Did your advertising campaigns perform as you expected or not?

Every year, Prime Day is when brands and vendors learn how customers perceive your brand, how your team performed during the event, and what analytics are needed to move the needle.

A debrief/report of what happened that contains data review, learnings, and challenges faced. What worked or did not generate sales or revenues as expected?

Use the data provided by Amazon and from solution partners to create a picture of what happened over the 48 hours of Prime Day. Many brands do not use Prime Day as a dress rehearsal for Q4.

Categories
E-Commerce

The Importance of Product Differentiation

Attention: Amazon Vendors — Embrace Product Differentiation Before You Consider Abandoning the Vendor Central 1P Ship.

If you work, support, or frequently talk with Amazon vendors (those whose products are purchased directly by Amazon) you’ll note that the biggest challenges (in no certain order) are profit margins, annual cost increases during AVN, and the creeping sense of doom. Semi-kidding about the doom.  To be more precise, vendors tend to share the pervasive feeling that – compared to Amazon 1P – there must be more advantageous sales channels and/or a better business model than Amazon 1P. 

While it might seem easy to offer or suggest a range of solutions based on the challenges noted above, the reality is that every brand, product category, and scenario includes nuance and complications. 

“Should a brand sell on every marketplace, and leverage marketplace diversification to prevent or mitigate Amazon dependence?”

While it might sound compelling to sell every item in your catalog everywhere.  Please proceed with caution! Experienced vendors, who’ve been there and done that, will no doubt perk up with the understanding that complete marketplace diversification has the potential to create a problem capable of quickly growing to the size of the Incredible Hulk.

Amazon is no longer the only game in town. Over the last five years or so, numerous other retailers have created dozens of online marketplaces that enable product-buying customers to not only just buy in-store but to buy online and pick up same-day in a preferred parking “fast lane” or just like Amazon, purchase online for home delivery. 

Be careful what you wish for. Since Amazon is no longer the only (or primary) marketplace for vendors to sell via a “platform” – there are hazards many have not fully considered. Products being spread across multiple markets almost always negatively impacts 1P vendors. 

Here’s why: Unless vendors have truly differentiated their products by sales channel, any level of product similarity will immediately trigger Amazon’s price-matching web spiders and algorithms. From a product-purchasing customer’s perspective, you can almost always guarantee that Amazon’s price will be the same if not lower than other online marketplaces.  Here’s how Amazon speaks to that: “We constantly compare Amazon’s prices to our competitors’ prices to make sure that our prices are as low or lower than all relevant competitors. As a result, we don’t offer price matching.”

What they fail to mention is that they are constantly scouring the web to ensure that prices for every ASIN are not being undercut by other retailers for the exact same SKU.

What’s a Vendor To Do?

While we are pragmatists and realists, we know this next suggestion will take time.  But with that said,  we firmly believe that Amazon 1P vendors must ensure that every product sold on every discrete sales channel should include unique and different packaging while at the same time eliminating all duplicated data points.  This means by channel, a product should not share similar descriptors such as barcodes, GTINs, or SKUs

It’s a really big ask.  We get it.

But we’ve seen this pay major dividends, here are the tactical elements to keep in mind:

  • Be sure you understand your best-selling items based on each unique sales channel and do all you can to differentiate those items to ensure there are not comparable and/or used against you, as the vendor, by any platform.
  • If your products are found to be similar, Amazon will match the lowest price which means your margins decrease. 
  • Differentiate your product’s packaging, the item’s name, and even the colors of the products for each sales channel. Not only does this help to make price matching more difficult, but it also provides vendors a quick visual tool for identifying “leaky” sales channels (for example, now you can see when/if a Walmart-only SKU appears on Amazon). 
  • Create bundles to develop an additional layer of differentiation for each channel and then relaunch the most successful products as Amazon exclusives.  

Differentiation of product selection is a powerful tool and the first step to creating (and sustaining) better margins on Amazon. This process takes time, capital, and long-term planning.  But getting it right will help to ensure that your business is running efficiently as possible.

Please reach out to our team today!  We’d love to hear your questions about this latest post.

Categories
E-Commerce

2023 Prime Day Prep

Can you believe it’s already the second week of May? If you are thinking about what exactly, is looming for the next 90 days, we hope you can say Prime Day preparation has been completed. If not, please note that the submission window for Prime Day member deals and lightning deals has likely passed by the time you read this. 

When is Prime Day 2023? Amazon has not officially announced this year’s date for Prime Day, but increasingly, it looks like smart money suggests it will happen during the second week of July. 

So what must a 1P vendor do to prepare for Prime Day 2023?

  1. Evaluate the product detail pages for all of the promotional ASINs. 
  2. Plan for inventory demand before Prime Day.

Product Detail Page (PDP) Evaluations

In preparation for Prime Day – 14 days to go:
  • Are there any incorrect variations listed on this ASIN? Ensure that only the correct variations are linked to the Parent ASIN. 
  • What is the current share of voice for this product, organic versus paid? Are customers currently finding this ASIN through search advertising only, or is it due to high rankings for specific keywords? 
  • Check keywords to ensure that customers can find your products quickly. Video content on the product detail pages drives conversions. 
During the days leading up to Prime Day:
  • What, if any, content for your Prime Day ASIN(s) has changed – including reviews, stars, and customer questions?  Stay on top, and create a baseline.
  • What are the competitive changes related to the share of voice and/or deals offered for similar ASINs by competitors?
  • 3P offers by ASIN – did any of your partners sell below the minimum advertised price?
  • Were there any pricing changes in the preceding days on non-Amazon websites? Ensure that buy box suppression is not accidentally triggered by another promotion. 
  • Total price change per ASIN – was pricing elasticity upwards or downwards?

Inventory demand

  • Look at your forecasts for July – do you have enough stock in FBA warehouses, and have you also planned for a spike in sales? Amazon will enforce chargebacks and reroute customer traffic if your product is out of stock. If needed – plan to drop ship merchandise to FBA warehouses.
  • Reserve a specific amount of stock that you can dropship. 

Let Equity Commerce help you ensure that Prime Day 2023 is a success.  Reach out today.  

Categories
Buy With Prime E-Commerce

How Should Brands Think About Amazon Costs?

Multi-Channel Fulfillment (MCF) costs are increasing – is Fulfillment by Amazon (FBA) next?

What will happen with 1P brands and vendors currently under negotiations with Amazon?

It’s almost the end of April 2023 and time for some reflection and honesty. Let’s face it, 2023 has been challenging so far.  We’ve seen layoffs at most of the large incumbents (Amazon, Microsoft, Meta, Google, and others), inflation, while virtually all businesses are looking for cost savings at every customer touch point. 

So what does this all mean for Amazon 3P sellers and 1P vendors? In the simplest terms, it means higher expenses and difficult negotiations. MCF has already seen a price increase and it’s likely it will be even more expensive as we approach Q4. 

Amazon will no doubt use Prime Day to demand more deals from brands of all shapes and sizes and will likely also use the always-crazy fourth quarter as another inflection point to increase costs associated with shipping, warehouse space, etc. 

Brands and vendors are almost certainly facing a year in which Amazon only gets more (and more) expensive. 

What can you do to manage these costs?

Frequent readers of this blog know how much emphasis we place on brands possessing a thorough understanding of their unit economics.  Use that data (again, at an ASIN level) to negotiate as hard as possible with Amazon to ensure you have some protective measures related to margins and profits. 

Don’t despair! 

Throwing your hands in the air if you just don’t care is simply enough.  We get it. 

Brands are in a tough position, is Amazon nothing more than a necessary evil?  Hmmm, where else (besides Amazon) can you sell as many units, reach as massive of a purchasing audience, and generate as much revenue as you do today, selling via Amazon?

The answer is nowhere. Currently, no other platform as powerful as Amazon exists.

But fear not, we suggest using 2023 as the year in which you remove those non-performing ASINs from your Amazon account and begin to sell via other channels such as your Direct-to-consumer (DTC) website. If you’re smart, and we have faith in you, you should also leverage Buy with Prime (BwP) to reach as many of those 157 million plus Prime members. 

Be strategic about the new products you add to the mix on Amazon.  Does this product generate enough margin and profit for your business? If the answer is no – do not list it. 

For lower-priced products (less than $50 per unit) bundle them together to grow your average order value (AOV).  And in case you missed the memo, selling any item for less than $10/unit on Amazon is akin to throwing money away.  Your order volumes would need to be MASSIVE to generate a profit. 

In addition, our internal research has shown that in many cases sellers are competing against lower pricing from sellers from completely other markets, like those where sellers can survive with either smaller labor needs and/or pay for more staffing at lower costs. 

Getting into an Amazon price war with these brands will not end well. 

Do you have a “leaky” Amazon sales channel?  Are you competing with a roster of unauthorized resellers selling your product on, or to Amazon?  If so, talk to us about creating and implementing an authorized reseller program.  Do it now!

Have a plan! Ensure that you have an ironclad minimum advertised price (MAP) policy for your distributors and resellers. Also, ensure that your manufacturing partners are contractually prevented from reselling your products to, or on, Amazon. Competing against your own partners is a recipe for migraines and diminishing returns!

Bottomline: Brands/sellers should control as much of their brand and product Amazon ecosystem as possible!  Accentuate the positive and do everything in your power to ensure that Amazon’s impending cost increases (winter is coming!) do not effectively kill your best-selling products or business. 

We’d very much like to hear about your marketplace pain points and serve as your guide on this journey. Let’s get started – reach out to us today.  

Categories
E-Commerce

Top 3 Amazon Vendor Negotiation Tips

As of mid-April 2023, most Amazon 1P vendor brands are either attending Amazon Vendor Negotiations (AVN) also known as Joint Business Plans (JBP), or in the initial stages of working with their vendor manager to create a business plan for 1P sales for the next 12 months. 

Here are a few tips designed to help vendors prepare for AVNs.

1. Download your sales and operations data from Vendor Central.

Brands should already have this habit, but in prep for AVNs go to Vendor Central, download the agreement, and prepare notes on the core elements of the latest agreement. Pay special attention to allowances (marketing and freight), terms (base and payment), incentives (volume), and pay-to-play programs.

2. Know your true 1P costs.

Ensure you and your team have a thorough understanding of costs – both on and off of Amazon. Calculate all the costs related to selling via 1P. What are your PPM (Pure Product Margin), Net PPM, and Operating Margin? Same for your off-of-Amazon costs.

PPM (Pure Product Margin) – This is based on the wholesale prices Amazon pays for your items in 1P purchase orders. PPM reveals the ratio of net profits to revenue.

Net PPM – This factors in all the operational costs that it takes to operate on Amazon’s platform such as labor costs of your Amazon team (or agency), logistics, and purchase order processing. 

Operating Margin – Net PPM plus other costs that Amazon charges brands for not ensuring that the relevant products are available to consumers. < Proposed: This is the operating income minus all operating expenses including variable costs for production, wages, and raw materials

3. Ask the right questions.

When you can speak with your vendor manager – ask the right questions. Ask for details on how marketing development funds (MDF) were used at an ASIN level. Which ASINs were used during promotions and marketing events, and how did this impact customer impression numbers and of course, sales?

The Amazon Vendor Negotiation (AVN) process is potentially stressful but if you plan accordingly, and prepare scenarios and questions that are both relevant and attainable, you can help to ensure that the entire AVN process is beneficial to your brand. 

This can be a complicated process full of moving parts, so take the time to prepare to ensure that your team is adequately informed and ready to interact in a meaningful way with your Amazon vendor manager. 

If you agree, disagree, or would like to debate any of this, please reach out to Equity Commerce today.  We look forward to hearing from you. 

 

Categories
Buy With Prime E-Commerce

How Amazon Buy With Prime Helps Shopify Brands Grow Their Business

Brands on Shopify understand the importance of bolstering their revenue by selling through Amazon. One good way to do that is to take advantage of Buy with Prime, a valuable payment solution designed to support Shopify store owners seeking growth opportunities.

Shopify merchants who use Buy with Prime can access a wider audience, streamline transactions, and improve overall customer satisfaction. In this guide, we’ll discuss how Shopify brands can leverage Amazon’s Buy with Prime program, and the tools it offers that can help brands grow their online business.

Amazon Buy With Prime vs Shopify: 5 Things You Should Know

If you’re a Shopify brand that is thinking of leveraging Buy with Prime to boost profits, there are a few things you should know first.

1. Early Adopters Have the Advantage

Brands that have built e-commerce businesses via Fulfillment by Amazon (FBA) have an early adopter advantage over brands with no marketplace DNA.

These businesses know how to leverage data and insights to create “hero” products that generate a large percentage of overall revenues from Amazon. These brands have a prominent structure and business philosophy advantage over Shopify-only brands with little or no marketplace understanding.

For marketplace-native brands to thoroughly leverage the inherent power of Buy with Prime (BwP) they must be willing to partner with an agency to enable Amazon Advertising. This partner agency advertising access requirement combined with the fact that these brands are already familiar with the arsenal of Amazon tools – such as Seller Central, Brand Registry, and programs like Vine – is one more reason to consider integration with Buy with Prime immediately. You’re already there, or at least very close!

2. It’s Easier for Brands With an Existing Shopify Website

Current Amazon marketplace-only brands and sellers should immediately (starting today!) actively maintain or launch a consumer-facing website run via Shopify software to diversify, expand and mitigate risk from their Amazon account(s). If you’ve been in the Amazon game for a while, you know all about the dreaded impacts of arbitrary Amazon ASIN and/or account suspensions.

These can happen overnight and without warning. Amazon-native sellers and brands can now use Buy with Prime to leverage their DTC sites and advertise directly to Amazon Prime members (now more than 200 million worldwide) without using “traditional” digital marketing solutions controlled by Meta and Google.

At launch, it’s safe to say your DTC site will likely deliver smaller or more modest revenue returns when compared to current marketplace businesses. But we think it’s prudent to spread resources across other platforms. This is not just a safety plan or a hedge, a DTC presence also provides brands with a long-term opportunity to grow, and at scale.

3. Shopify Brands Have a Shipping Advantage With Amazon Buy With Prime

We hear this question all the time: “What 3PL do you suggest?” It’s evident that smaller brands (from a logistics perspective) have always struggled to compete with Amazon. Thanks to Buy with Prime, you can offer customers the same two-day shipping and easy returns.

Instead of a perpetual third-party logistics quest, you can centralize and solve this headache with a single solution. This solves multiple challenges, and Buy with Prime also enables brands to hand off one of the hardest parts of e-commerce – logistics – to Amazon. And let’s be clear, Amazon has unparalleled, world-class logistics, returns, and payment systems.

 

New call-to-action

4. Use a Tactical Approach for Amazon Buy With Prime for Shopify

Understanding how products perform by season and by quarter is another indicator that a brand should consider the Buy with Prime program. A tactical BwP approach enables product sales segmentation and a path for how products can be utilized to grow away from the Amazon marketplace.

In addition, an acute understanding of the potential for cannibalization with products sold via Buy with Prime should be an essential consideration for brands. In other words, keep your top sellers in Seller Central, and build out your product catalog and brand portfolio with Buy with Prime.

5. Brands on Shopify Should Use Amazon Buy With Prime to Become More Independent

As noted earlier, one of the primary nightmares that haunt Shopify brands is the real fear that on any given day, Amazon might suspend a listing (also known as a suppressed ASIN) or even an entire account with little or no recourse.

We encourage marketplace-native brands – like those on Shopify – to understand that embracing Buy with Prime is not only a tactic to ingratiate their brand with Amazon but also a massive opportunity to grow businesses away from Amazon’s site using Amazon advertising.

It’s a bit counterintuitive, but again the holy grail here is Amazon’s huge audience of Prime members and access to Amazon’s bona fide full-funnel advertising solution.

Looking to Implement Amazon Buy with Prime for Your Shopify Brand? Get Expert Help

Enrolling and then integrating Amazon Pay and Buy with Prime code (primarily javascript) to your brand’s Shopify website may seem like a chore – but understand that you can leverage a full-service e-commerce agency to manage this integration support and coding. As a result, in less than two weeks on average, we’ll help you to gain access to the online world’s most highly valuable customers (Prime members).

Buy with Prime is not a magic silver bullet intended to “fix” a poorly run marketplace-native brand. First, build your brand’s foundation, and when you’ve reached a threshold of $500,000 to $1 million in annual revenue (these amounts are loose guidelines that can and will vary by category of course) you’re likely in a great position to unleash the power of Buy with Prime to accelerate growth.

We’d very much like to hear about your marketplace pain points and serve as your guide on this journey. We can tell you about Shopify case studies involving Buy with Prime to help guide you on the right path. So let’s get started – reach out to us today.

Categories
Buy With Prime E-Commerce

Who Owns Customer Buy With Prime Data — Amazon or Sellers?

Many Amazon sellers are curious about data ownership, especially with the introduction of the Buy with Prime program.

So here’s the question: does Amazon own the data that is generated by customers from the Buy with Prime orders? The answer is no.

That’s good for Amazon sellers who want access to this data for critical insights into their business. Also, if you’re wondering how Amazon protects customer data, the retailer utilizes their highest security standards to protect the Buy with Prime data that is generated on a brand/seller’s Direct to Consumer websites.

What Data Does Amazon Collect for Sellers?

So what data does Amazon collect that sellers can take advantage of? Here are four examples to give you an idea.

Order Information

Amazon uses the Buy with Prime order information to process payments, facilitate communication with customers about orders, fulfill customer orders, and provide returns and refunds when necessary. This information will also include product name, quantity ordered, and returns-related information.

Account Information

Amazon also stores the Seller Central account information provided by seller brands when setting up Buy with Prime accounts, this includes contact details for your account users, product descriptions, pricing information, product content, and inventory.

Inventory Information

Amazon uses Buy with Prime inventory and order information to plan for and improve fulfillment services for users of the Amazon Fulfillment Network, including Buy with Prime merchants, FBA sellers, and Amazon.

Shopper Information

Amazon provides participating partners of the Buy with Prime program the shopper information including name, email address, phone number, and shipping address. (Note: After the order and onward, brands and sellers can begin to create direct relationships with Prime customers via email marketing.)

Leverage Buy With Prime Data to Boost Long-Term Profits

As you can see, the Amazon customer data generated through Buy with Prime provides critical data for ecommerce sites looking to grow their businesses. By using Amazon’s “Sponsored Brands” advertising for Buy with Prime, brands and sellers have the opportunity to drive customers to discover other products and custom content on their own websites.

 

New call-to-action

 

Buy with Prime enables brands/sellers to develop long-term relationships with Prime customers who can then be marketed to in a personalized manner using the data collected. This provides sellers with an exciting new opportunity to develop revenues and sales.

Want to learn more about how to grow your business using Buy with Prime and leveraging Amazon’s advertising platform? Check out our guide, “How Marketplace-Native Brands Can (and Should) Leverage Buy With Prime.”

 

 

Categories
Buy With Prime E-Commerce

Top 5 Ecommerce Web Design Tips to Drive Conversion & Brand Confidence

Designing an ecommerce website has never been easier. In fact, thanks to the rise of software-as-a-service (SaaS) ecommerce providers – like Shopify, WooCommerce, BigCommerce, and others – the once-laborious process to create an online store now involves just a few clicks of a mouse.

However, it’s after your new site launches that the real challenge of attracting customers and getting your storefront noticed truly begins. According to the US Small Business Administration, more than 627,000 new businesses are started each year, which means that each month, more than 52,000 new potential competitors are out there, ready and willing to take attention away from your new store.

That’s why new and existing customers must trust your brand and have the confidence to make purchases on your site. As an ecommerce business owner, you have a full arsenal of digital marketing tools designed to help you. Here are a few ecommerce homepage best practices you can use to get started.

How to Get Your Ecommerce Site Noticed: 5 Ecommerce Website Design Best Practices

If you’re looking to maximize the effectiveness of your branding and boost conversions on your website, keep in mind five online store best practices for e-commerce website design throughout the site-building process.

1. Showcase Reviews on Your Ecommerce Storefront

An ecommerce site’s lifeblood is its customer reviews, so be sure to collect, curate, and share, share, share those ratings on your website in a prominent place – like your storefront ecommerce home page.

Providing examples of positive reviews and favorable product ratings from previous consumers helps potential customers not only decide between product options but also feel confident about purchasing. This social proof can help to convert a browsing customer into a purchasing customer.   

2. Create High-Quality Content

Build and strengthen customer trust by creating high-quality product page content. Ensure that every page on your website contributes to the cause. This means each page communicates clearly and precisely with fresh images, anticipates questions, and accurately and adequately describes the products for sale.

3. Provide Multiple Payment Options

Provide multiple payment options to ensure a smooth and easy checkout. Once a customer has found that perfect product, are they able to buy from you with their preferred payment method? While some customers will use a debit or credit card, others may prefer a payment service that keeps funds in escrow until the ordered item is received. Options are important!

4. Prioritize Customer Services and Quick Fulfillment

Great customer service and quick fulfillment are must-haves. Ensure that your online business includes a customer service team that can answer questions and queries quickly and clearly. Customers love good service and, in many cases, they’re even willing to pay higher prices to get that top level of service.

Quick shipping matters, too. In fact, more than 70% of shoppers expect to receive their items within two days of purchase. The days of “allow 4-6 weeks for delivery” are long gone – your customers expect near-instant gratification, so it’s critical you can match those expectations.

5. Simplify the Purchasing Process on All Digital Storefronts

Count the number of clicks it takes to complete a purchase. When designing your digital storefront, keep in mind that it should be easy for consumers to complete a purchase with just two clicks of the mouse (or less) to get to checkout. Any additional clicks will negatively impact conversion rates and you risk customers leaving your site or clicking away before making a purchase.

How Amazon’s Buy With Prime Program Can Help With Ecommerce Site Best Practices

The above web design tips for ecommerce storefronts will help, but there’s another tool you should take advantage of: Amazon’s Buy with Prime service. If it’s crystal clear to customers that your online store leverages the Buy with Prime service on your homepage, you’ll provide new consumers with additional trust factors that can lead to conversions.

 

New call-to-action

 

Not only does Buy with Prime provide an additional check-out option (as noted in our list above), but store owners can also leverage Prime’s compelling 1-2-day shipping promise and Amazon customer service!

Buy with Prime also provides merchants access to Amazon Pay, another well-known and highly trusted payment option that your customers can rely on when completing a purchase.

According to Amazon’s data, more than 50% of non-Prime transactions fail because consumers are unwilling to pay high shipping costs. Prime members (now more than 200 million worldwide!) also expect 1-2 day delivery service, so just by offering Buy with Prime on your site, you can differentiate your brand. And best of all, brands that already leverage Fulfillment by Amazon (FBA) can quickly add the power of Buy with Prime to their Amazon businesses.

While competition is heating up and more businesses are launched every month, savvy business owners who focus on continuous improvement in a dynamic marketplace like Amazon now have a powerful opportunity to truly unleash the power of Amazon’s tools to grow their businesses off of Amazon.

Want to learn more about how to use Buy with Prime and leverage Amazon’s advertising platform to grow your business? Check out our guide, “How Marketplace-Native Brands Can (and Should) Leverage Buy With Prime.”

Categories
Buy With Prime E-Commerce

You’ve Launched Buy with Prime, Now What?

Since the invite-only launch of Buy with Prime (BwP) in September of 2022, participating merchants are most likely uncertain about what they can (and should) do next to generate momentum for their enrolled products. Here’s our quick overview covering how Buy with Prime partner brands should leverage Amazon’s advertising tools to drive traffic to product detail pages.

Please take a few minutes to better understand the various Amazon advertising program types that partner brands can use to accelerate sales growth. It’s also worth noting that brands enrolled in the Buy with Prime program do not personally create or manage this advertising, instead, Amazon Display Advertising agency partners (like our team here at Equity Commerce) are responsible for building, manage, and reporting on these campaigns.

Amazon Advertising Tools Available for Buy with Prime Brands

Currently, there are three Amazon advertising options to consider:

Amazon Sponsored Brands

Designed for brands enrolled Amazon Brand Registry, this option is meant for partners that want agency-managed access to Amazon advertising inventory. Sponsored Brand advertising is now available to sellers and brands who are part of the Buy with Prime program and who do not sell via the Amazon marketplace. This program is currently in “closed beta” for non-variant products (products with parent-child relationships). Products with parent-child relationships (sizes, colors, etc.) are excluded from this option but may be added in the future.

Amazon Demand Side Platform (DSP)

An agency-managed Demand Side Platform that enables brands and sellers to programmatically purchase advertising to reach new and existing audiences both on and off of Amazon. 

Amazon Display Ads

Agency support is also required for Amazon Display Ads which is only open to brands and sellers that are leveraging Buy with Prime.

Social Ads for Buy With Prime

Promote your products on Facebook and Instagram. Social Ads for Buy with Prime help you reach engaged shoppers with dynamic social ads that automatically feature the Buy with Prime badge.

In conclusion, both new-to-Amazon and Amazon-native brands have an early adopter advantage to use Buy with Prime and various Amazon advertising programs to build sustainable e-commerce businesses away from Amazon.

Helpful Link – Buy with Prime Knowledge Center

Are you ready to multiply your brand equity?  Contact us today!

Categories
Buy With Prime E-Commerce Uncategorized

The Perfect Storm for Amazon Sellers – Part Two

Welcome to Part 2.  In the previous installment, we attempted to define elements of the current economic “storm” that we’re facing.  In this follow-up section, we’ll put this into better context with an Amazon filter.

The Inventory Challenge

As noted in Part 1, due to a variety of factors, there is a current oversupply of goods in warehouses and stores across the US. This surplus of inventory made it especially challenging in Q4 for sellers to get new products in place on both virtual and physical shelves ahead of the critical holiday consumer spending period including Black Friday, Cyber Monday, and days heading into Christmas and beyond. This oversupply has forced brands to reevaluate and reconsider how to utilize on-hand inventory both now, and in the future. 

Oversupply has created challenges for sellers on Amazon including inventory that has simply not moved.  Storms can reveal readiness or a lack of that same preparedness.  And of course, not all brands and or sellers can be nimble. As noted in Part 1 an awareness of unit economics and the impacts of regular testing of pricing elasticity is a tried and true tactic to influence inventory levels. 

Experienced executives understand the situation and should deploy these strategies to generate sales when additional purchase levers are less apparent. This requires nimble teams on the brand side that understand the need and often the urgency, for aggressive product pricing to move products out of facilities.

Sometimes it might be as simple as recognizing the scope/scale of available products in a warehouse compared to “normal” pricing and in turn how those variables impact the sales cycle.  In other words, moving prices upwards when inventory levels are low and being prepared to adjust pricing downward and back to “normal” when more inventory is available. It may seem counterintuitive but pricing and availability are both levers brands can and should use to accelerate or slow down sales.  

How did we get here?

Is this a case of an inability to plan and forecast pre-pandemic? Will this be a lasting impact on post-pandemic inventory that has not and will not move? It’s not a hedge and we shall see. Brands and sellers were forced to scramble to obtain inventory during the pandemic and in some cases, were dependent on third-party manufacturing that went months behind on purchase orders. This has left brands and entrepreneurs who sell on Amazon with a host of challenges that are essentially unprecedented. This uncertainty has wreaked havoc on every link of the supply chain and inventory process. In many ways, this verdict of ambiguity can result in weekly or even daily storm cycles that brands and businesses did not (or could not) anticipate. 

Understanding how to read the business horizon and navigate these kinds of challenges can either make or break a brand or seller. If you have read this far – it is likely that you too are in stormy waters and may need a life jacket or a life raft.

The FBA problem

A third storm element (and one with even bigger waves) creating challenges for sellers is the status of warehouse space at Amazon fulfillment centers for brands leveraging Fulfillment by Amazon (FBA). Running lean is the answer. In fact, if products are sold via FBA – the goal should be to turn that inventory before 60-90 days. The longer items remain in FBA warehouses, the larger the costs of storage in addition to sunk costs of business capital that cannot be accessed until the items are sold. 

If history is an indicator of future behavior, Amazon will continue to simply increase the costs of FBA. If calmer waters are not reached, these products will remain stuck, stranded, and languishing in FBA. And as you know, only Amazon benefits from that scenario

In Conclusion and Land Ahoy! 

How do brands navigate these challenges?

  1. Have a keen understanding of unit economics.
  2. Understand the options of price elasticity and be prepared to use pricing in combination with available inventory to generate revenues and avoid stock-outs.
  3. Optimize, strategize, and plan for fulfillment.  What items are truly the best fit for FBA? If sales volumes are insufficient – use other strategies such as Fulfilled by Merchant (FBM) and better yet, seller-fulfilled Prime. 

If you are a CFO, brand owner, or an Amazon seller – it is clear that you are experiencing a perfect storm that needs careful attention and thought as it could have long-standing impacts on your business. It’s not all doom and gloom.  And just like in nature, storms pass.  Brands that understand the elements listed above will be much safer and closer to calm waters than their competitors. If you feel the need for an experienced sailor – the team at Equity Commerce is looking forward to hearing from you.