What is Amazon’s Sponsored Products Program?
Currently in beta mode, this program allows the ability for merchants to bid on keywords to have their Amazon products show up alongside search results, similar to Google’s Adwords.
In short, how it works is, say you’re Tom’s Tennis Shop, and if you’re selling tennis rackets on Amazon’s marketplace you’re in for a bit of competition:
As of now you have little ability to leap the rankings in either getting your specific product to the top (where the Wilson Energy product currently is), nor do you have a ton of ability in getting your store to the front–at least in any quick or easy manner.
For anyone that’s never had to deal with the hassles of marketplace selling, essentially it’s a long-winded process in which Amazon will reward you for providing good service and positive feedback as your products get more popular, by increasing your product’s and store’s rankings for search terms.
But ultimately it’s a chicken/egg effect–how will your product ever gain popularity if it’s buried at the bottom to start with?
How It Works
Amazon is trying to help people like Tom’s Tennis Shop (for a fee) escalate the process by allowing them to gain quick exposure through bids. So if tennis enthusiast Tim does a search for “tennis racket”, he can find Tom’s Tennis shop in an ad that’ll take him to Tom’s shop–and in turn Tom pays Amazon a fee for the click.
This is on top of the commission he pays Amazon if Tim does make a purchase of course.
Doesn’t Amazon Already Have a CPC Program?
The difference between Amazon’s Sponsored Results and their Product Ads program is that Product Ads will take a merchant from Amazon to the merchant’s site, e.g. tomstennisshop.com.
What Amazon’s Sponsored Products program does is keep the merchant on Amazon, letting Tim purchase from Tom’s Shop from Amazon–so Amazon gets to keep the click money and the commission fee.
It’s somewhat similar to Google’s Adwords, where if a merchant finds it difficult to rank organically in Google’s results for competitive terms, they can purchase ad space from Google for a fee.
What Does It All Mean?
If Amazon starts to roll this out to more merchants, this could absolutely change how the largest marketplace on the planet operates.
For any merchant that either:
- is new to Amazon’s marketplace
- is currently doing low volume
- has good margins on their products even with Amazon’s commission
- wants to increase Amazon Marketplace volume (hint: nearly everyone)
This program will prove to be a tremendous asset if managed correctly. It should automatically provide a boost to a marketplace campaign, similar to any website that advertises using Google’s Adwords seeing a boost in traffic.
In short, like any marketing campaign, it allows merchants to throw money at Amazon to help their store.
Furthermore, any user that’s already on Amazon and is doing a search for your product (e.g. “tennis racket”) is automatically a very motivated buyer–as opposed to a Googler who may just be looking for information–and their conversion rates should be quite high depending on the specificity of your targeted keywords.
Not only that, the increase in orders–provided the merchant provides a high level of service–should automatically boost the merchant’s credibility in Amazon’s eyes.
This then provides them with a boost in “organic” search results in Amazon–so even if a merchant operates at a loss with this program, it could help them out big time in the long run.
In the end, with more merchants coming on to the program, the free-market (place) will dictate bid prices for keywords.
Similar to how Google’s Adwords have evolved with bids ranging from pennies to $40-$50+ per click for certain terms, a properly managed Amazon Sponsored Results Campaign could absolutely be a game changer.
For full information on what it offers, check out Amazon’s website.
If you qualify Amazon will be contacting you by e-mail.