If you’re a retailer or product manufacturer, you’ve no doubt had thoughts, or perhaps nightmares, about Amazon. Now officially the third-largest global retailer, Amazon has disrupted the retail marketplace and revolutionized how goods are bought and sold online.
For consumer packaged goods (CPG) brands, or goods consumed daily by average consumers, especially food and beverages, it isn’t enough to just have an Amazon strategy. CPG brands must begin with an overarching digital shelf strategy.
Google defines digital shelf as the places “where today’s shoppers learn about, compare, and select products for purchase.” Brands would be wise to take note of changes in consumer behavior and in online retailers offering digitized options for grocery shopping and delivery—changes that will continue to trend upward in 2017 and beyond.
So let’s address some of these growing trends and answer some frequently asked questions about the digital shelf and selling on Amazon.
Should I be selling on Amazon?
A better first question is, “Should I be selling my products online?” If you’re a CPG or food brand, the answer is a resounding yes. If you’ve determined that you should be selling online at all, it’s important to consider what selling on Amazon could mean for your business and if it’s the right place to sell your products. With little barrier to entry, plus unprecedented access to a built-in buyer base, Amazon is an obvious choice for sellers.
If you are a regional or local brand and would like to extend the market reach of your products, you’re in luck. Amazon offers you access to an audience that brick-and-mortar retailer locations struggle to provide. And with more than 50% of shoppers turning first to Amazon for product searches online, they may look to find you there before looking anywhere else (even Google!). If you are a challenger or startup brand, it’s much easier to get your products listed on Amazon than it is to navigate the complexities of getting your product on store shelves in the likes of Walmart, Target or Whole Foods.
What if someone is already selling my product on Amazon?
When considering whether or not to sell on Amazon, you may be shocked to discover that someone else is already selling your products on the platform. If you have a retail product and are the manufacturer, Amazon gives you some controls and safeguards against counterfeit or illegally sold products. As a manufacturer, Amazon grants the ability to register your brand to gain some control over your original products. To qualify for a brand registration, you must conform to a set of requirements and prove your claim by providing ample documentation showing your rights to any trademarked products. But be forewarned: Registering your brand on Amazon does not guarantee that others will be unable to sell your product, but it will allow you to shut down counterfeits and control product descriptions.
Should I sell on Amazon if I already have an e-commerce store? Can I take advantage of both?
In most cases, there are some distinct advantages to selling on both Amazon and your controlled e-commerce platform. While Amazon is fantastic for gaining access to a growing market of users, the platform still ultimately belongs to Amazon. That means limitations on what you can do to market directly to consumers. Other than Amazon’s own marketing platform, you are not able to re-engage people who have previously purchased your product through email or other channels like direct mail to encourage them to purchase again. You may also want to consider which products you sell on Amazon and which you retain more exclusive rights to on your online store. You can leverage Amazon to drive brand interest, but you may consider making certain unique products available exclusively in your brick-and-mortar or e-commerce store.
Should I position my products differently on Amazon than on my other digital shelves?
Yes. Amazon is a unique marketplace, and some of the rules that work well on their site don’t necessarily translate or work well in-store or on your own online store. Many times, the quantity and size of your product could affect how well it sells on Amazon. Amazon users tend to prefer to buy CPG items or shelf-stable items in bulk or multi-packs whereas they might only buy one pack in a physical store. Creating variety packs or samplers might work well on your own site, but may prove too costly for operations to fulfill in-store or on Amazon. Amazon does provide an easy way to tweak product offerings in an easy test environment to judge a product’s demand before rolling out to a wider distribution.
Should I price products differently between my Amazon store and e-commerce store?
Products should be priced appropriately based on the platform where they are being sold. Many brands will charge more on Amazon to make up for smaller profit margins (due to Amazon fees) or to compensate for things like free shipping. When dealing with Amazon, there are important decisions to make when it comes to pricing. This can be the deciding factor for whether or not you are selected as the spotlight vendor for the coveted Buy Box spot. For more on getting in the “Buy Box,” make sure to check out our Digital Marketing Strategist Cory LaGrange’s recent blog about Amazon’s Buy Box Strategy.
Are there any other places I should be selling my products?
Depending on the nature of your products, there are other online retailers that you should be considering as well. While Amazon is quickly growing in online retail market share, outlets like Walmart likewise offer a marketplace. If your product has international appeal, you may want to explore sites like Alibaba.
In April, Jack Ma, executive chairman of Alibaba, announced an initiative to increase access to small businesses in the United States, extending the ability to sell to the company’s 443 million customers in China. If your product is a specialty product, there may be other niche online retailers with a loyal customer base that can help extend the reach of your products.
Finally, don’t rule out online auction sites like eBay. While we may think they are all for used electronics or hard-to-find items, many retailers use eBay as another sales channel to push product.
Whatever your digital shelf strategy, make sure that you consider all your options before cutting out something like Amazon due to complexities or issues with entry. If you see Amazon, Walmart and your own store as just different shelves on an endless aisle, you stand a better chance to be considered by the new digital customer.
If you need help navigating Amazon or other platforms, download our Amazon Guide for Beginners: Product Creation and Optimization! Feel free to ask a question by sending an email to dkedinge[email protected].