Amazon Marketplace is an essential tool for today’s brands and online sellers in an increasingly complex ecommerce environment. What’s known as the world’s leading marketplace, is also one of the most powerful advertising channels and product search engines. But to make the most of it, where do you start? Here’s everything you need to know in order to leverage Amazon to its full potential.
It’s hard to remember a time when Amazon wasn’t the go-to place for online shopping. Now, as one of the most trafficked websites in the world and with an active user base of over 310 million, Amazon is much more than just “that big online marketplace.” While there was a time when people would just use Amazon to purchase products, it certainly isn’t the case today. According to a late 2017 consumer survey conducted by Survata, Amazon now accounts for nearly 50% of initial product searches. What does this mean? For brands and online retailers, this shift in consumer behavior means that just listing products on Amazon marketplace is no longer enough to stay afloat in its competitive environment. Rather, a strategic mixture of both product listings and advertising is needed to leverage Amazon to its full potential. Due to the broad nature of Amazon, as both an online marketplace and an advertising channel, we have quite a bit to cover. Here’s a handy list of everything we’ll discuss:
Selling on Amazon is not black and white – meaning, it’s not as simple as just listing your products and gaining sales. In order to understand how to sell on Amazon, let’s examine each piece of the “selling on Amazon” puzzle.
While the option “Fulfilment by Amazon” is already set in stone in Amazon Vendor Central, Sellers have a bit more freedom to select the option best fit for their business. Here are the three options, along with what you need to consider with each:
1.Fulfillment by Amazon (FBA): This is one of the preferred methods by Amazon for retailers and brands, and will actually work in your favor when it comes to Amazon SEO. This method automatically ships with Amazon Prime.
You ship your items in bulk to Amazon —> Amazon stores your products in one of their many Amazon Fulfilment Centers —> Once a shopper orders your product, Amazon takes care of the packing, shipping, tracking, and shipping-related customer service on your behalf.
2.Seller Fulfilled Prime (SFP): Another preferred method is when the seller handles the shipping themselves but does so according to the standards of Amazon Prime. To qualify for this method, you must have a cancellation rate of less than 1% as well as have shipped 99% of your orders on-time. To see which sellers meet the requirements, Amazon sellers must complete a trial period held by Amazon themselves.
Seller successfully completes SFP trial period —> Once a shopper orders your product, you take care of packing, shipping, and tracking according to the standards of Amazon Prime.
3.Self-shipment: Essentially, this method allows you to ship at your own pace. For large brands and online retailers, this fulfillment option is not recommended. It may also negatively affect your ability to rank in search and win the Amazon Buy Box.
Shopper orders your product —> You handle the packing and shipping at your own pace (must be within the time frame you advertise).
Now that we’ve covered the basics in terms of order fulfillment, let’s dive into the anatomy of an Amazon Product Detail Page.
Although many factors go into whether or not your product sells well on Amazon, among the most important is the way in which it’s presented. This is where the Product Detail Page comes in. Once a shopper clicks on your listing either on Amazon’s search engine results page (SERP) or through category search, they land on the details page. A Product Detail Page is essentially your chance to inform and convince shoppers that they need to buy your product now. In it, you have plenty of opportunities to share compelling, informative, complete, and rich product information. The details page is fuelled by your Amazon product feed, so your Amazon product data needs to be top-quality in order for it convince shoppers to buy. Here are the key elements of an Amazon Product Detail Page:
Each attribute can be optimized within your Amazon product feed to increase conversion and your overall revenue potential.
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Product visibility Product buyability
Search rank (1st page) Buy Box ownership
Product relevance Seller ranking
Advertising on Amazon used to come with many different acronyms like AMS, AMG, and AAP. However, after realizing how complex it was for advertisers, Amazon unified all three systems into the simply 'Amazon Advertising.' Amazon's ad portfolio includes everything from product display ads to programmatic ad buying functionality. However, before anything else, it's recommended to start with it's self-serve PPC search ads, which are similar to Google Search Ads.
Amazon Sponsored Product Ads work on keyword-based targeting. That is, you define the relevant search terms in which the ad should target. The more granular the keywords, the higher relevancy each click is likely to have. While using broad keywords will target a larger audience, the ad won’t be as relevant to as many shoppers.
The auction-style model of Amazon Sponsored Products means that the higher your bid, the better chance the ad has of appearing on the results page of a shopper’s search. Of course, the product relevance also plays a major role in the discoverability of the ad (e.g. a hat will never rank under a search for kitchen appliances). Amazon Marketing Service recommends starting with a daily budget of no less than $1 / day.
Similar to Amazon Sponsored Products, Sponsored Brands use keyword-based targeting.
The minimum bid for a single click is $0.10 (which varies slightly by country), while the minimum budget for an entire campaign is $100 and $1 for daily budgets.
Product Display Ads are quite different from both Sponsored Product and Headline Search Ads. Here, you have two targeting options. You can choose to either target specific products or target related categories. Essentially, it lets you target by consumer interest or product, rather than keyword.
Product Display Ads operate on the same pricing format as the previous two formats, an auction-based, cost-per-click model. The minimum bid for a single click is $0.02 (varies slightly based on country), while the minimum budget for the entire campaign is $100 and $1.00 daily.
Get an in-depth understanding, practical steps and expert tips about Amazon Marketplace in our guide.
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