We often talk about the importance of D2C eCommerce here at EmberTribe, but on this episode of TribeTalk we dig into selling on Amazon. We’ve had many clients who were able to generate big wins using Amazon as their primary or secondary store, so even though we’re big on using D2C platforms like Shopify, we’d never turn our nose up at a different channel for sales!
Okay, first things first. If you’re not already selling on Amazon but you’re considering it, you probably want to know the benefits and the drawbacks of selling on a marketplace.
Pros for Selling on Amazon
It can be much easier to get started on Amazon than to hire a team for your new eCommerce store, especially if you’re brand spankin’ new.
A marketplace can be a great space for businesses that have an exclusive and/or unique product that will stand out.
Amazon has tremendous reach (we’re talking more than 66,000 orders placed per hour), something most small businesses can only dream of.
Cons for Selling on Amazon
Thousands of vendors might be selling the same product as you, and cheaper.
You can't easily retarget your own customers because the data isn’t your own.
You don't get to build a relationship with customers.
If you're not constantly monitoring for perfect management and zero infringement of policies, Amazon will have no trouble pulling the plug on your account.
Amazon Advertising Costs Can Be Wasteful (But They Don’t Have To Be)
So say you’ve decided that the pros outweigh the cons. We don’t blame you—there’s huge opportunity selling on a marketplace—but now you’re not sure how to keep ad spend at a reasonable level. We’ve been there, done that, and have collected some insights that might help you out.
If the average cost of a sale for your product on Amazon is a little bit too high (or perhaps way too high), you’re probably using wasteful targeting tactics.
You should be intentional with your keyword bidding. Are the keywords you’re spending money on worth the cost? Are you overlooking keywords that are primed for purchases? Keep close watch of how your keyword bidding is impacting your ROAS.
You should consider separating your branded campaigns from your unbranded campaigns to help increase overall ROAS.
Branded campaigns usually perform better than unbranded, and over time having these separated can help level off your costs. If you have everything bundled into the same campaign, it can mean it’s a little harder for you to determine which keywords are actually performing.
You can catch cheap, profitable sales by having low bid automatic campaigns.
For instance, when you're setting up your automatic campaign, Amazon usually suggests a bid of, let's say, 80 cents, a dollar, maybe $2, depending on the category. Our growth specialists will usually bid around 10% of that Amazon bid suggestion (so very, very low) on campaigns with no negative keyword, which can help you catch a few sales that are extremely cheap and profitable, and decrease your overall costs.
Recommended Tools for Amazon Sellers
As mentioned earlier, selling on Amazon can make you feel like you have less control because the data you get just isn't as comprehensive as when you use a D2C platform. However, if Amazon Marketplace is a big conversion-driver for you brand, you definitely don't want to drop it like it's hot.
For US Amazon Marketplace sellers looking to optimize their Amazon sales, we recommend utilizing 3rd party tools like Sellerly by Semrush, that give you more powerful insights for scaling.