The Five Pillars of Maximizing Your Brand on Amazon

A nuts-and-bolts conversation with Netrush’s maestro of online marketing Rob Principe.

Findaway Adventures recently sponsored a live Zoom event featuring a conversation between Rob Principe and Wilson Lau. I moderated. Rob is the director of new business development at online retailer Netrush, and Wilson is CEO and founder of NuTraditions. Rob and Wilson proved to be the perfect pairing of what can happen when cutting-edge online retail expertise meets an exciting young brand looking to establish its presence online.

The conversation went incredibly deep on the nuances of online retailing, boiling down to what Rob called the “five pillars of maximizing your brand on Amazon.” Here they are.

  1. Pricing: The first thing you’re going to need to do is protect your margins on the Amazon platform. Amazon still equates price with customer satisfaction, which means the lower the price, the happier the customer, right? In many cases, this is true. Certainly if you’re buying commodity brands like paper towels or soda, people just want to find the lowest prices of Bounty or Pepsi. But those of you who are creating brands around premium CPG products are targeting customers who care far more about quality than price, so you must protect your margins.

  2. Distribution Strategy: Next, you need to decide to whom you are going to sell your products. If wholesale, how will you control how your product reaches the end consumer? Selling direct to consumer (DTC) is more straightforward, but you may still want to set some limits to prevent arbitrage. Steer away from any kind of volume discounts, e.g., “If you buy 25 units, you get an extra 20% off.” If you plan on going wholesale or are already going wholesale from a distribution strategy, you have to deal with a rule called “right of first purchase,” which basically gives the distributor or retailer the right to sell your product at whatever price it chooses. Pick your distribution partner with great care and create clear contractual language about what you want to do, where your products are allowed to go, and what retail partners they can go to.

Findaway Club Conversation
Featuring Rob Principe & Wilson Laudrive.google.com

  1. Seller Platform: 1P or 3P — are you going to go first party or third party? What is important to you? Revenue, control, profitability, cash flow? Is Amazon going to be the retailer, and you’re going to sell your product to Amazon? Or are you — or a partner — going to be the retailer and sell to the end consumer? Know this: whether you want to be on Amazon or not, if there is any significant demand for your product you will be on Amazon.

  2. Retail Readiness: Is your brand ready to be sold to Amazon? Have you created listings? Have you registered your brands? Do you have enough inventory? You need to have at least eight weeks of inventory to be on Amazon. Going out of stock on Amazon is the kiss of death for a brand. The good news is Amazon has gotten very good at allowing brands to become an extension of their overall brand. What works digitally off of Amazon will likely work on Amazon, so build your value proposition off of Amazon and carry it over to that platform.

  3. Advertising: Approximately 65 percent of all product searches begin on Amazon, and Amazon is the third most-used tool for online advertising behind Google and Facebook. Amazon is an advertising platform as much as it is a retail platform. It is an expensive place to play, but its conversion rates are unparalleled (as high as 60 percent). If you are primarily interested in selling DTC, which is very profitable, use advertising to direct consumers toward your website. If you’re investing lots of time or money into getting your Amazon presence set up, then send them there.

Of course, it really depends on what your goals are and which initial KPIs you are targeting. If your ultimate goal is to run your business for a long time and make good money, the DTC only approach might be very good. If you want to grow your business to sell, omni channel approaches, focusing on Amazon, are the way to go.

If you do go with Amazon, the usual principles of managing brand relationships continue to matter, including automatically following up on purchases, staying in touch with customers, engaging positive and negative reviews, alike, and building a strong lifestyle and brand narrative through images and videos as well as words. In the end, the pillars are only as strong as your brand strategy or narrative.

There’s a lot to learn, and I hope you’ll watch the full video because Rob and Wilson really unpack the big questions.

In the meantime, let me know how your change-the-world brand is maximizing its presence on Amazon!

Sincerely,

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All credit to my ghostwriting partner, Dave Moore, who is instrumental in getting my thoughts out in a coherent manner & into these blogs. Thanks Dave!

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