Amazon: a business owner’s friend or foe?
Part 5 of The HurryCane Story; From Napkin to the No. 1 Selling Cane in America
Does Amazon scare you a little? If you’re considering scaling your business on Amazon, it makes sense. With more than 240 million active users and $88 billion in net sales in 2014, Amazon is one of the largest online marketplaces in the world today. And with such a big presence comes big opportunities for success—and failure.
Luckily, the important question you’ve been hemming and hawing over—“Is it time to consider selling on Amazon?”—has likely already been answered for you. Just look at the state of your business right now. Are you driving traffic to your website? Are you selling on a consistent basis? It really comes down to this:
If You’re Successful, AMAZON WILL FIND YOU
That’s what our team at Marketing Architects learned with HurryCane—the No. 1 selling cane on Amazon. When we first launched this DME category-shattering product all we heard were negatives about selling on Amazon—that is was a bad proposition, it’ll control everything, etc. We were hesitant, so we pushed on finding ways to scale the business, keeping Amazon on the backburner.
However, we quickly found out that when we started to sell products offline and began to drive a considerable amount of traffic to the HurryCane site, Amazon forced its way into the forefront.
If Amazon deems that you’re driving a lot of traffic to your product site using specific keywords, it will study what you’re doing and then try to drive people to Amazon by showing similar, relevant items on the SERPs. For example, even consumers who were Googling the exact term “HurryCane” were offered up clever Amazon ads for canes using keyword terms that were just one step shy of breaking trademark laws (hurry-cane, Hurry Cane, etc.).
That’s when we knew we had to make a big decision: were we going to try to compete with Amazon or—gulp—join it? And this is exactly the question you have to ask yourself. Which brings us to this:
How Do You Work With Amazon?
There is more than one way to work with Amazon, but the best option for your business truly depends on your strategy. It comes down to determining what your overarching goal is: are you building a brand or trying to move a product?
For Marketing Architects, we were trying to build HurryCane’s brand, but selling the cane was also important. We knew we wanted to maintain control of the product pricing and the messaging. Initially, we listed HurryCane on Amazon but handled the billing and shipping.
We then tried the Fulfillment by Amazon (FBA) platform. We created a product listing and when a customer purchased the cane, Amazon shipped and billed the customer directly (and handled any customer service questions). Amazon would charge us a referral fee and a per transaction fee. We saw a sales increase of 15-20 percent when we moved to FBA, so we decided to stick to this arrangement.
Using the FBA platform allowed us to treat Amazon like a second direct-to-consumer site—we were able to track sales and witness sales trends correlations from both our own product site and Amazon.
Drawing from our own experience, we realized that that if a company is selling product regularly, they’re better off on the FBA platform from a sales standpoint. However, it’s crucial to ensure that your retail partners aren’t also selling on Amazon, otherwise you’ll begin to see price erosion—don’t let them compete with you!
If your No. 1 priority is to sell product units, then Amazon has another option for you. Amazon will purchase products from manufacturers. The upside is you can sell a large amount of units quickly. The tradeoff? Amazon can sell the product for any price it desires, which creates issues if a manufacturer wants to maintain a set price across all channels and retail partners. No matter what you do:
Don’t Go Into Backorder!
Running out of product while you’re selling on Amazon is much more painful than when it happens on your own site. When your product sells on Amazon, it builds momentum—meaning more sales and more visibility. When you’re product goes into backorder, this indicates to Amazon that it’s unavailable and affects the product’s visibility on the site. At one point, one of the HurryCane color options sold out so Amazon stopped showing all the canes in results pages.
Amazon’s Coming For You (Hopefully)—What Are You Going to do About It?
Don’t be afraid of Amazon. Instead, harness its power with a firm and educated grip. Marketing Architects did. Since HurryCane’s entrance to the marketplace in 2011, Amazon sales has made up as much as 25 percent of HurryCane’s online sales. Give us a call today and we’ll help you find just the right way reach your target audience as you scale your business.
Read more in our series about how Marketing Architects created the No. 1 selling walking cane in America:
Part 1 – How to Name a No. 1 Brand
Part 2 – How to Test Your Way to the Top