What does the Amazon Rainforest have in common with Amazon.com.au. Well, other than sharing the same name, they’re both huge: the largest of their kind. Amazon accounts for 43% of all online sales… Fourty. Three. Percent.
- Amazon and Ron Burgundy, have a lot in common.
Their market share is colossal. There are between 2-3 million online stores worldwide (excluding China), and Amazon make up for 43% of all online sales.
The good news? Amazon has landed in Australia, and it’s here to stay! If there’s any one piece of advice we can offer eCommerce businesses, is that digital marketing is all about embracing change.
In the case of accepting or battling Amazon, we’d suggest the former and to swim instead of sink.
Welcome to your introductory guide on selling with Amazon! In this blog, we’ll be looking at what this eCommerce giant is all about and how to make it work for your business. Throughout the guide, we include a number of key questions, frequently asked by our clients.
We’ll be looking at things like:
By the end of this document, you should have a much clearer understanding on the fundamentals of working with Amazon and what it means for your business. This will ultimately help you to decide if selling with Amazon is right for you!
Amazon is important because it is the #1 search engine for eCommerce shopping and has 3 times as many product search queries as Google.
Amazon’s aim is to make money, so they want to promote products that have a high sales volume. This means that the conversion rate on your products will be a huge indicator of your product quality.
Essentially, more sales means higher rankings, and higher rankings will result in more sales for your business!
Where Google aims to serve users by showing content that is relevant to their search, Amazon aims to serve users by showing products that the user is likely to buy based on their search.
Because Amazon makes money on each sale, one of their #1 considerations when deciding to rank your product will be “Are people likely to buy it?”. As such, sales volume of a product is vital to ranking, and if you’re an early-adopter of Amazon.com.au your products will have a higher sales volume than those of your competitors.
This will help your products rank better, and thereby continue to sell more! It’s a flywheel kind of cycle. Just like businesses who thought about SEO and online revenue early are now winning the game as early-adopters, eCommerce businesses need to be early-adopters of Amazon to win there.
This depends on the product type and price, however at a the Global Retail conference in Australia earlier this year, the business development manager for Amazon.com.au said anywhere between 8-15% of the product price should be expected as a fee. This is broken down as:
We know what you’re thinking:
“8-15% sounds like a lot of money! Do I really want to pay that when I can sell on my own website for free?”
That’s a good question! We would recommend you think of it as a marketing cost. Typically, eCommerce websites are already spending at least 10% of the cost of goods on marketing. For example: spending $10 to make a $100 sale.
Whether it is through AdWords, Facebook, a coupon code or an online sale. If you’re already spending at least 10% on your marketing, then Amazon won’t be all that different. You’re essentially just paying a fee to gain great exposure for your products and increase their sales - think of it a marketing fee.
“Still sounds like a lot of money to me... Am I supposed to pay those kinds of fees forever?”
It is a fair whack of margin, especially if you’re not used to paying 10% on marketing already. However, your long-term strategy should be based around acquiring customers through Amazon, but then converting them to loyal customers with you.
Once they’ve shopped with you once and you’ve given them an incredible experience, gone above and beyond, and then nurtured that customer (via email, social, offering value etc.) you will hopefully start to see that customer begin to shop directly with you.
Paying a 10% marketing/Amazon fee is the “easy” part... Converting that customer into a long-term loyal customer is what will take work and a bigger picture strategy.
Once you have your account set up, there are two ways to sell on Amazon:
Amazon will hold your products in their warehouse and manage all customer orders from placement to packaging as well as shipping. There is a premium attached to this option as storing your products with Amazon comes with a fee.
As a seller, you create a product detail page/list a product, stock, manage, package and ship your product. This document outlines the requirements of being your own seller on Amazon.
“Okay, I’m ready to sell on Amazon. What do I do to list a product?”
There are two options when it comes to listing your products:
If your product is unique to your business (i.e. you’re the distributor, importer, manufacturer) or no one else has listed your product yet, you can “Add a Detail Page”. This will allow you to import all of the information for your product (in an Amazon-friendly way of course, but we’ll cover those details soon!) onto a product page to create your listing.
If you are a re-seller of products and someone has already created a “Detail Page” you can add your product listing (essentially just the price and your details) to that Detail Page.
“So I don’t get my own product page/listing if the product isn’t unique?
Correct. To make shopping easier for users, Amazon only lists each product once and sellers can add their details such as price, shipping, etc to the product page.
Whoever set up the product page initially will have the master access to editing all details on that page, and you’ll just “piggy-back” on their listing.
Similarly, if you are first to be on Amazon with an item you may win the editing rights to that product details page. That’s another benefit to being the first on Amazon, however it is a trade-off because the more work you put into that product page the more you could be also helping your competitors to sell the product if there are multiple sellers!
It’s a fine line, but in general you are better off being first-to-market with the product, and increasing your own sales, before any of your competitors do it.
“How does Amazon tell if my product is unique or the same as someone else’s?”
Amazon requires standard product identifiers for most stores. A UPC or EAN (Global Trade Identifier GTIN numbers) is required to identify your products.
“If the product listing is shared with multiple re-sellers, how does the consumer choose who to order from?”
This is a huge part of the Amazon strategy - winning “the buy box” on a product details page.
If you win the buy box because you have great stock levels, great price, fast shipping, great reviews, a fantastic perfect order percentage rate, you answer everyones questions etc etc... Then people will almost automatically buy the product from your store rather than someone else’s! We want to ensure we’re on Amazon early so that we can do all of these things well, and win the buy box.
“Okay, I understand why I should be on Amazon ... But what details do my products require and how do I improve my rankings?”
Just like an SEO strategy, there are some things you will need to be aware of to rank well and increase your conversions on Amazon including:
Include keywords in the title where possible. It’s important that titles contain relevant keywords. Acceptable titles are limited to 50 characters and ultimately, conversion is the most important ranking factor for Amazon. As such, a more concise but keyword rich/relevant title will result in higher conversions than unnecessarily long titles.
For example, compared the difference in product name between the two products below. The dive watch's concise but relevant title is ideal. The dive knife's title is unnecessarily long, of which is unfavourable.
Numbers and Symbols:
Images must be at least 1000x1000 pixels for zoom capabilities. Multiple images are important, but the ability to zoom on a high-res image will likely result in higher conversions. 85% of the image should be of the product itself.
Product images submitted to Amazon must meet the following technical specifications:
Bullet point are an essential part of ranking well on Amazon. It helps to quickly identify unique features of a product which ultimately contributes to an good user experience. Bullet points should also be concise but still contain relevant keywords.
In addition to bullet points, full product descriptions are required for all Amazon products. This is where users are engaged and learning more about the product. It’s therefore important to have it look presentable and almost blog-like when listing top products. Time on page is a ranking factor for Amazon, so having people scroll through engaging content and learning more about a product will be an important factor.
Additionally, product detail pages cannot include an email address or link to an external websites. This will automatically prevent your product from being listed. For full details on the rules of building a product detail page, click here.
An example of a strong product description, see the listing below:
A table containing technical specifications like colour, shipping weight, shipping height, etc is required as part of an Amazon ‘Product Detail Page’.
Research shows that Amazon prioritises products with more options over those without; Putting all size & colour options into one listing will help increase consolidated reviews for a single product, rather than having multiple reviews for the same product spread out over multiple size & colour variations. This is important as reviews are one of the top-ranking factors for Amazon.
Questions asked and answered on the products are also ranking factors. As such, the seller will need to consider this for existing customer service teams and provide them with some basic training on answer formats and using relevant keywords in their replies.
Search terms must be specific to each product. It’s not like normal Google/PPX principles where you enter a single keyword - instead, you fill each of the 5 search terms boxes with unique words that include variations (e.g. sunblock and sun block) and are likely to be searched.
This is important for a few reasons. Amazon’s objective is to sell more products. Therefore if the seller has low stock or is constantly going out of stock then this will adversely affect your ranking. It’s therefore important to keep a close eye on your stock levels for products listed on Amazon.
Perfect Order Percentage (POP) and Defect Order Percentage (DOR). The aim is to maintain a DOR of <1%. These are things such as negative feedback, shipping issues, and other claims. It’s also important to note that if the buyer removes their negative comment, it doesn’t count towards DOR so it is highly beneficial to address negative feedback and resolve customer concerns.
Reviews are one of the most important ranking factors on Amazon. It’s therefore extremely important to encourage and incentivise customers to leave positive reviews on your product pages.
“That’s alot of stuff! If I’m late to the Amazon game and I’m not ranking well I’ll need to somehow sell more products in order to improve my reviews and my store rating before I can rank higher... So how can I do that?”
At this stage, if you’re late to the game and you need to increase your sales, ratings etc.
Amazon becomes a pay-to-play platform! So instead of the 8-15% fees you will pay per product, you may also find that you need to either lower your pricing to be more competitive, and therefore lose profit margin, or pay to promote your products with sponsored ads (which would also likely cost another 10-15% in advertising costs).
So it’s best to be there early and try to rank well - but if you miss the bus, you can “pay-to-play”.
Like anything in the digital world, it pays in the long-run to put in the work and be an early adopter. With eCommerce getting more and more competitive, have to risk it to get the biscuit and try new things to make an impact. Hopefully the experience you give them post-purchase is amazing enough that they become a long-term customer of your business after finding you on Amazon!
No one wants to be the late-adopter who sinks. You've got to swim, and we supportively suggest diving in now.