Have you started selling on Amazon but still don’t see the results you expected?
Building the success of your brand on the most popular e-commerce platform in the world may be less simple than expected, but knowing and using all the options made available by Amazon, it is possible to maximize sales on the marketplace. In this article from Witailer we explain the positive experience from one of our clients, an international beauty and cosmetic brand, live on Amazon since 2018. They entrusted Witailer to achieve their sales objective and since mid-2020, we have helped them exceed one million euros in annual sales. For this, we have interviewed the Strategic Account Manager that follows the brand and has coordinated the project to tell us about the chosen strategy that led to these results.
Once the seller account is created, what are the next steps?
The first step is to register the company’s brand on Amazon, using the Brand Registry program. By registering the brand upon the Amazon Brand Registry, all property rights are claimed and, consequently, all benefits arising from all online branded content, obtaining greater opportunities in terms of traffic and visibility. Brand Registry is also essential for the creation of a personalized Store on Amazon, where you can present the brand and highlight its products.
Catalogue creation and optimization
The next step was to upload 50 products from the brand’s catalog onto Amazon’s marketplace. The selection was made taking into account the brand’s performance, both in the offline and online world (online we followed search trends for the beauty category on Amazon). This analysis was possible thanks to Witailer’s Marketing Intelligence platform (WMI) designed to offer brands an overview of their own performance in this channel compared to competitors, while identifying improvement opportunities and factors that influence conversion rate.
The contents of each product (title, bullet points, descriptions, and backend keywords) have been subsequently optimized and indexed, by adding the most relevant keywords for their category, improving organic visibility.
The offers of products available in more than one variant (of color, dimension, etc.) were correctly grouped through the Amazon parent/child functionality, allowing users to compare different options within the same product page.
Amazon Store and advanced content
As explained above, registering the brand in the Amazon Brand Registry gives you the right to create your own store: a free site with various subpages within the Amazon platform that promotes the brand and its products. The focus in this case was to design a store that represented the brand’s catalog in an organized way, classifying the products into subsections according to their specifics.
For a selection of articles, the pages dedicated to the products were further enriched with A+ contents, an Amazon functionality that allows the creation of original and captivating content, through the use of both images and texts.
Regarding the pricing strategy, the client’s economic module was built with the objective of guaranteeing the desired marginality on the channel, taking into account commissions, advertising impact, operating costs, and profits. An important matter in the definition of Amazon prices for the individual products of the brand has been to guarantee that these were not competitive with those of the brand’s e-commerce.
The adopted strategy quickly turned out to be the winner one and the initial catalog was gradually enriched until it had more than 500 products in 2 years. Likewise, the offer was expanded thanks to a limited selection of products from which the client was an exclusive reseller and for these, a dynamic pricing strategy was set in place.
Logistics were managed through FBA (Fulfilled By Amazon) and this service played a fundamental role in the success of the project. Subscribing to this program provides a series of advantages for sellers, such as improving the visibility of the products thanks to the insertion of the Prime icon, the insertion of the Fulfilled By Amazon logo, and consequently increasing the chances of winning the Buy Box.
After the first period of testing and evaluation, it was decided to adopt a supply strategy to Amazon warehouses that covered a stock of at least 60 days, in order to minimize the possible risk of shortages (out of stock). Out of stock items not only clearly mean loss of sales, but they negatively influence organic positioning over time.
Taking into account the purchasing habits of users in the beauty and skincare category, in January 2020 the customer joined the “Subscribe and Save” program, a service that allows Amazon users to receive periodic deliveries of one or more products, often customizable, without shipping costs and benefit from an additional discount. To date, the products that are part of this program represent 7% of total orders, with an increase of 3 percentage points since its implementation.
Reviews submitted by Amazon users after purchasing a product have a significant impact on both visibility and product conversions. That is why it was possible to act on this aspect through the adoption of a proprietary tool from Witailer – Engage – that deals with managing user feedback, evaluations, and opinions. This program sends the buyer a reminder 7 days after the purchase is made, inviting them to evaluate the purchased product. Thanks to this functionality, the evaluations for the brand increased 4 times for each sale, positively influencing the organic positioning and the credibility of the products.
What marketing and advertising activities were developed?
Planning and managing the advertising on Amazon were critical to the project. The first step was to define the budget throughout the year for advertising activities. The ACOS (Advertising Cost of Sales) objective and the percentage of direct sales, generated by the sponsored ad campaigns, was initially set at 40% to intercept the most relevant keywords in the category, subsequently proceeding to a progressive reduction as sales increased. The continuous optimization of the campaigns was developed using deep keyword crawl logic, together with the use of negative keywords, which allowed identifying and concentrating on the most profitable terms, progressively increasing the effectiveness of paid activities and taking ACOS below 30%.
At this stage, it was decided to redefine the advertising budget, balancing it to a constant reinvestment of 15% of the turnover generated by sales. This more aggressive strategy made the products obtain an optimal inorganic positioning, both in the medium and long term. Then, this was also reflected in an improvement of the results as well as in terms of organic results and tangible sales.
Usually, after the first few months, sales stabilize: what is it that allowed the growth of this brand?
After a few months since the initial catalog was uploaded, sales stabilized at € 27,000 per week.
To ensure that growth didn’t stop, it was essential to invest in advertising activity on the platform, particularly taking advantage of the potential of the Amazon DSP (Demand-Side Platform) service for the management of programmatic ads, which allowed us to identify a reference target (and that actually can be reached outside of the Amazon platform itself).
The breadth and diversification of the catalog have strongly contributed to the results obtained. Products that were added in a second phase contributed to an additional turnover of approximately 45%.
Finally, it should be noted that a few months after the opening of the Italian account, it was decided to join the Pan-European Amazon Fulfillment Program, which allows you to sell your products on all European marketplaces. The profit obtained from this action led to a total sales growth of + 10%.
To date, the client generates more than € 100,000 per month and has acquired the first million in turnover after only two years of activity on the platform.
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