It has become a universal truth that Amazon has turned the world of Retail on its head. Having spent the past decade working for and with Amazon, I have had a front row seat to the disruption. And despite its importance as both a retail and advertising channel, it is still often misunderstood.
It is easy to be distracted by the constant stream of policy changes, the launch of new ad units, or shiny ‘Beta’ launches, but it is the fundamentals of Amazon that determine whether or not your brand succeeds or fails… both on the platform and off. And as true as that statement was in the early days, it has only become more so as Amazon has grown in importance.
So, to get us back to the basics, let’s start with a simple question, “What exactly is Amazon?”
What you need to know about Amazon
- If you can not win the Buy Box, it all falls apart
- Optimize your detail pages so customers can find you in Amazon’s Search Results
- Use your detail page content to educate and motivate customers to convert
- Amazon affects sales in other channels, and other channels affect sales on Amazon
Amazon is a Marketplace
Generally speaking, anyone with access to your product can list it for sale on Amazon. Amazon allows these sellers, authorized or not, to compete for the ‘Buy Box’, the mechanism through which the vast majority of sales are routed (as opposed to ‘More Buying Choices’.)
The primary determinations for the Buy Box winner are price and inventory availability. This is great for customers, who value selection, price, and convenience, and serves as the foundation of the famous Amazon Flywheel. For Brands however, it can mean price degradation, inconsistent signals for Forecasting and Inventory planning, and an inability to promote your products through advertising.
In short, if you cannot consistently win the Buy Box, you will not succeed on the platform.
Amazon is a Search Engine
With millions of products available for sale, Amazon serves as a Search Engine to deliver customers with the most relevant products based on the query they have entered. In order to do this successfully, Amazon uses the meta-data and detail page content to ‘understand’ what the product is and how best to surface it in search results.
You may have heard the term ‘Detail Page Optimization’, the purpose of which is to ‘optimize’ your pages for Amazon’s Search algorithms. The trick here is to balance content written for algorithms, with content written for customers… my next point.
Amazon is an Unassisted Sales Floor
Once a customer lands on your detail page, it comes down to the quality of the content to determine whether or not you achieve a sale. I like to think of this in old-school retail terms, namely the challenge of the ‘Unassisted Sales Floor’. But instead of retail displays, ‘Point-of-Purchase’ (POP) materials, and informative packaging, it is images, videos, infographics, titles, bullets, ‘Enhanced Brand Content’, and reviews that do the selling.
There are plenty of best practices to find out there, but my best recommendation is to shop your pages like a customer. Do you give them all the information they need to make a purchase decision? And just as importantly, if they determine that this product is not for them, are you empowering them to shop across your line to keep them within your Brand?
Amazon is a Brand Builder and Breaker
This final point speaks to the importance of Amazon as more than just a sales channel. Amazon acts as a multiplier of all the good and bad of your business. Have strong reviews of your product on Amazon? It will help your Brick & Mortar conversions, and may even help you win floor spots in the first place.
But the inverse is also true. Gone are the days of dumping overstock in some far-away region, or leaving it to unchecked distributors to get your products out in the market. Any missteps your business makes has the potential to disrupt, if not destroy, your brand.
Amazon has a famous saying: “Start with the customer and work backward”, which is a great mental exercise regardless of your business. But for Brands today, I would also consider: “Start with Amazon and work backwards.” You will be happy you did. The health of your Brand depends on it.
Why Should You Care About the Amazon Fundamentals?
Customers are on Amazon, and whether you like it or not, your products likely are as well. Rather than cede control to some third-party without your same standards, best to tackle the channel head on and establish control over how Amazon represents you to the world. And if it becomes a great sales channel for your Brand as well, bonus!