The Current Landscape
The competitive landscape on Amazon is greater than it ever has been. If you are an authorized re-seller or an online retailer of various brands and products, you are dealing with an ever-increasing amount of legacy and traditional brands going direct to consumer.
These omnichannel moves by legacy brands was once prevalent only on their own D2C website, but over the last 5 years has rapidly increased on marketplaces such as Amazon and eBay.
Amazon private label sellers, some who pretend to be untouchable, are now faced with a formidable foe with the largest wave of Asian direct manufacturers, launching private label products on Amazon.com. Marketplace Pulse reported, in January of this year, that 49% of the top Amazon sellers are Chinese, while the U.S. has dropped to 47%.
Along with increased competition, these Asian sellers often employ “black hat” tactics to gain advantage in product rank and reviews, leaving U.S. merchants with few choices left except to increase ad spend and merchandising techniques.
Security Through Diversity
As much as I love Elon Musk dancing or his podcast interview with Joe Rogan, I would never put my entire IRA 100% allocated in Tesla. As much as no other marketplace or shopping engine can seem to match the might of Amazon, sellers and merchants must secure their future through diversity, just as you would with your investment portfolio.
Engage and expand on marketplaces such as:
- Google Shopping Actions
- Back Market
Check out Channel Advisor’s List of Channels as inspiration:
Being involved in the ownership, management, and operations of over a dozen multi-channel e-commerce retailers over the last decade, I have found that almost 100% of the time secondary marketplaces were more profitable than the #1 sales channel. Analytical data points on financial statements such as return %, marketplace fees, and advertising as a % of sales were almost always higher on Amazon.com, sometimes even double, that of secondary channels.
Building a business through these secondary channels can be done, but it requires a different strategy than Amazon and employing the usual strategies or pretending like it’s a mini-Amazon is never successful.
What To Really Do
Before the world of selling goods revolved around 5-star ratings and info graphics, business was done by merchandising and relationships.
While analytical strategies such as page rank, reviews, images, video are still extremely vital on any channel outside of Amazon, these secondary marketplaces require daily attention by someone in your company that cannot be replicated by some automated software or cheap virtual assistant.
In my experience, relationships, in person meetings, dinners, etc. are also extremely vital to representatives from companies mentioned above. A lot of the decision makers and representatives from these companies are open to having monthly or weekly calls with you and your team members to create a roadmap to success.
Unique marketing opportunities often present themselves as well, such as, but not limited to:
- Daily deals
- Front page or category page placement for your business and/or select merchandise
- In app marketing
- E-mail marketing
- Ability to advertise products through affiliate channels
After that, it requires a well-trained team that understands each marketplace in depth, deploying and testing multiple strategies and then continuing to work on improving sales performance across each site.
If you have questions about selling on Amazon, optimizing your listings and advertising campaigns to peak performance, please contact Prime Guidance for a free account consultation at firstname.lastname@example.org.
Author | Matt Kubancik, Direct of Partnerships and Senior Consultant
Prime Guidance enjoyed visiting with friends and colleagues at the Capitalism.com CapCon 2019 Conference January 17 th-23 rd. For those that have not attended, this conference is all about fueling the entrepreneur in you and motiving you to grow faster. A few of the big takeaways for me, where the importance of focusing on family first and prioritizing your own health as well in order to be a better leader and make a bigger impact within our companies and our lives. I also heard the importance of having a vision for your company, and the need to openly communicate the vision across the entire organization. We got a lot out of it, and hope you did too. Hope to see you there next year.