The right Amazon strategy is critical to scaling your business on the world’s fastest growing ecommerce channel where millions of active shoppers search and browse products — daily.
However, the Everything Store has also become fiercely competitive: there are now over five million sellers on Amazon.
The good news is that while it has become more competitive, there is more opportunity than ever to grow your business on Amazon.
Here’s a look at Amazon strategy that accounts for the three essential factors to drive your business growth on the Marketplace.
“Successful Amazon strategy means tightening your operations, building your brand equity with creative content, and leveraging Amazon’s advertising tools to reach your customers on and off the Marketplace.”
– Nancy McLaughlin, Senior Manager, Marketplace Channels at Tinuiti
Step 1: Tighten Your Amazon Operations
You can spend all the time and resources on your product listings, content, and advertising — and still fall short if your operations aren’t in order.
What do we mean by operations? The logistics of your Amazon business:
- Inventory management to meet your demand (and Amazon’s if you’re a 1P Vendor)
- Ensuring that your products are always in stock (never stockout)
- Shipping & order fulfillment
- Reducing returns & chargebacks
- Maintaining a high fast-track rate (Prime Eligibility)
Your approach to operations will differ if you are a first-party vendor that sells products wholesale to Amazon, a third-party seller using Fulfillment by Amazon (FBA), or a third-party seller using an alternative fulfillment service.
Regardless of your model, the objective remains the same: identify and minimize operational gaps that slow performance and cost money.
This becomes more important when you consider that all operational factors impact one another.
Your inventory and order fulfillment impacts your in-stock rate, which influences control of the Buy Box, which impacts your Sponsored Products advertising, which in turn affects sales and your organic product rankings — you get the idea.
To wrap up Amazon operational strategy:
- Stay on top of your demand forecasting to maintain in-stock status for all products
- Review your fulfillment process to meet shipping & delivery expectations for all transactions
- Understand the root cause of chargebacks and reduce these to 1% or less on all orders
- Maintain a high fast track rate (at or above 85%)
“Sound management of forecasting, purchase order management [for Vendors], and ASIN-level performance will allow for maximum ROI for advertising. Also, understanding the root causes of chargebacks will enhance overall profitability,” says McLaughlin.
Step 2: Build Branding with Amazon Creative Content
You can drive all the traffic in the world to your listings, but if your creative content is lacking or not congruent with the rest of your brand’s assets across the web, you will lose out on visibility and sales.
The good news is that Amazon is making a concentrated effort to empower brands with the creative tools and features they need to establish their brand equity and promote shopper loyalty.
Amazon currently offers a multitude of branding features including:
Not only do these creative features help to improve the aesthetics of brands on the Marketplace – but they also provide new opportunities to drive traffic to a brand’s entire catalog and increase detail page conversion rates.
Building out your product pages and storefront can contribute to a seamless customer experience that resonates with shoppers across your website, social channels, and Amazon — take every advantage to build up that experience and raise your brand equity.
To wrap up Amazon content strategy:
- Leverage Amazon Premium Content to build your brand, tell your story, and differentiate yourself from competitors
- Regularly refresh and optimize your creative content based on testing and what resonates with your audience
- Update your storefront every time you update your website
- Ensure all content is mobile friendly
Want to learn more about Amazon content? Check out The Brand’s Guide to Amazon Creative Services.
Case Study: Advil’s Amazon Store Grows Its Marketplace Brand Presence
Step 3: Leverage Amazon Advertising to Reach Customers (Even Off of Amazon)
Your operations are dialed in, your product pages and stores feature visually compelling creative, now it’s time to power up the advertising machine to get more eyeballs on your product listings and store pages.
“Paid advertising continues to grow in prevalence, importance, and complexity for brands on Amazon. Look at the evolution of Amazon’s search results pages to see how paid placements have assumed the dominant positions in front of shoppers.”
– Pat Petriello, Head of Marketplace Strategy at Tinuiti
“The failure to leverage a comprehensive advertising strategy on Amazon significantly limits the ability of brands to reach customers.”
Because over 70% of Amazon shoppers do not click past the first page results.
That means that if your products aren’t displaying on page one, you have little chance of shoppers landing on your page.
Even brands that have a strong organic ranking need a paid media strategy because without it, they will fall behind in traffic, sales velocity, and eventually — ranking.
When it comes to generating paid traffic that powers your Amazon flywheel, you have several options:
- Amazon Sponsored Products Ads
- Sponsored Brands
- Amazon DSP
“Amazon has loads of first-hand consumer data that can be used across the entire purchase funnel,” explains McLaughlin.
Amazon Sponsored Products
Amazon Sponsored Products are pay-per-click ads based on keywords (and product targeting) that drive traffic to a desired product detail page within the Amazon platform.
Yes, that means you can use Sponsored Products to target your competitors’ listings for offense and that of your own for defense.
Sponsored Products particularly important because you can create auto campaigns for keyword harvesting and manual campaigns for more granular targeting.
These ads are great for driving traffic and showing up for important keywords that you otherwise wouldn’t display for on the first page organically.
Want to learn more about Sponsored Products? Check out The Simple Guide to Amazon Sponsored Products .
Amazon Sponsored Brands
Sponsored Brands (formerly known as Headline Search Ads) are keyword-driven ads that can appear across the top of the SERP.
In 2018, Amazon opened up Sponsored Brands to 3 new ad placements including the middle of the SERP and at the very bottom of the SERP.
Sponsored Brands are great for driving awareness or branding around a particular keyword.
Formerly known as Amazon Advertising Platform (AAP), the Amazon Demand Side Platform (DSP) is Amazon’s display offering that can be used to target Amazon audiences across webpages and apps that are connected to Amazon’s display network.
From home page banner placements to HTML offerings, Amazon DSP is a premium advertising (unlike the other ad programs, DSP has a high spend threshold) offer available within Amazon Vendor Services.
One of the major perks of DSP advertising is the ability to leverage Amazon customer data to serve ads to past purchases and other shoppers likely to purchase your product(s) on Amazon-owned network sites.
For example, Peloton.
Peloton, a home workout bike company that has seen wild success in the last few years, uses Amazon DSP to reach their customers while they’re visiting Amazon’s display network (anywhere from fitness websites, to fitness apps and more).
These display ads have tailored media that is highly relevant to the consumer based on Amazon’s audience insights — allowing Peloton to laser in on people interested in fitness and exercise.
Amazon DSP targeting spans the entire marketing funnel: lifestyle segments, in-market segments, and retargeting segments — all based on Amazon’s first-party shopper data
Case Study: Seventh Generation Scales Amazon Revenue +440% With New Branding & Advertising Strategy
To wrap up Amazon advertising strategy:
- Leverage Advertising to drive traffic to your listings to jumpstart sales velocity and ranking
- Sponsored Products are great for targeting keywords and competitor listings
- Sponsored Brands are effective for building awareness around your brand or product launch
- Create auto campaigns for keyword harvesting and manual campaigns for granular targeting
- Use Amazon DSP to scale your brand’s initiatives across the entire funnel
The Final Takeaway
Amazon is only going to grow more competitive, which is why it’s important to leverage an Amazon strategy that accounts for the main factors that drive success on the Marketplace.
These factors call for mastering your operational efficiency, creative content to build brand equity and tell your story, and Amazon advertising to drive visibility and traffic to your optimized listings.