Should Businesses sell on Amazon in 2020?

Amazon is the world’s third-largest search engine and also the number one product orientated search engine.

What makes it so unique is that all searches are carried out by consumers who already have a purchase intention.

The recent explosion of competition on Amazon and the inevitable fact that – according to BigCommerce – online marketplaces have become the most important digital marketing channel poses many questions.

Progressive, modern businesses need to inquire into Amazon’s nature if they wish to establish a strong position the in world of e-commerce.

With 9 out of 10 consumers checking prices on Amazon, can companies afford to disregard an Amazon presence in 2019?

Is the Amazon FBA (Fulfilment by Amazon) dream, which is being marketed to millions of sellers, attainable, and sustainable?

Can companies sell on Amazon without compromising their brand identity and values?

And should Amazon be seen as additional distribution channel or as core business?

Any individual responsible for growing their online presence and revenue should be asking themselves these questions.

How does Amazon increase my reach?

Amazon undoubtedly allows the possibility of building a more significant online presence. The problem is achieving the desired visibility in the seemingly endless sea of competition.

Over 3 billion products sell across the Amazon marketplaces and 50% of all online consumer journeys start on Amazon.

This tells us two things: The good old days of a minimal growth strategy and basic product optimizations that make you an Amazon top-seller and guarantee visibility are behind us.

Nevertheless, the potential reach and impact on businesses if they achieve Amazon top-seller visibility holds more significance than any other marketing channel on earth.

According to a statistic about the biggest Amazon markets, the US is considerably the largest with 160.15 billion dollars generated in 2018, followed by Germany with 20 billion U.S. dollars and then the UK with 14.5 billion.

In short, if you understand how to work across these marketplaces using Amazons A9 algorithm, you can reach more customers than ever before – all around the world.

Can I get rich quick with Amazon FBA?

You may be familiar with the multitude of Amazon FBA courses that have recently flooded various social media channels.

‘How I made millions selling pine nut oil on Amazon’ or ‘5 tips to ensure a successful FBA business’.

The method that is commonly taught within these courses can bring success if you’re able to perform a perfect product research that is second to none.

This must be coupled with the dynamic ability to drop and pick up new products in completely different niches every two months.

However, for brands or businesses that specialize in specific product niches and have a particular mission statement, the approach must be fundamentally different.

The reality is that remaining profitable, while merely selling one brand via FBA on amazon without a visible online presence, is impossible to sustain without the best Amazon strategy for your business.

This is where an online presence outside of Amazon becomes necessary for businesses to be successful on Amazon in the year 2019 and onwards.

Many companies have tried to use Amazon at some point and have been hit by a wall of inability to scale.

Your aim must be to align Amazon with your core business as a distributional channel.

What role does Amazon play within my core business?

Many sellers fear that by listing your products on Amazon, they may redirect their sales away from their own online shop and that Amazon will swoop in and capture sales otherwise generated by their other sales channels.

It’s understandable that sellers have these concerns, but this hardly ever happens.

When consumers search for your brand via external search engines (such as Google, Bing, or Yahoo), your website SEO should be implemented correctly to ensure that you always appear above your Amazon listings.

Most businesses use promotional or marketing campaigns that direct traffic towards their websites.

In turn, they are reinforcing their website as the No. 1 spot to access their brand.

Amazon provides businesses, looking to maintain the majority of their sales through their website, with many advantages.

New York Times reported that about 70 percent of the word searches done on Amazon’s search browser are for generic goods.

That means consumers are typing in “men’s underwear” or “running shoes” rather than asking, specifically, for Hanes or Nike.

Thus, with the correct Amazon strategy, businesses would capture sales for general product search terms that a brand would otherwise not be visible for.

If your brand was ‘Casper’ and the customer search was ‘king-size mattresses’, a Casper mattress would not be found via most external search engines.

However, if your strategy on Amazon is correct, you can own a large share of the market for relevant product searches.

Remember: 50% of all online purchases happen on Amazon.

If a potential customer is searching for a product like yours and but yours can’t be found, you can imagine the amount of sales you are missing out on.

How can Amazon strengthen my core business?

Amazon is your digital business card.

Potential customers who see your products offline or on your online shop are very likely to double-check your product on Amazon.

They read real customer reviews, check if the price might be lower and check for general product information.

Think of your shopping habits – the same works in reverse.

If consumers find a product on Amazon, they may check your website, and may find it more attractive due to warranties, customer support, etc.

In fact, a German study by Arvato Bertelsmann found that 15% of Amazon customers would buy the same product in the official online shop, but only 6% the other way around.

As a result, a business gains visibility and reach that Amazon provides as a distributional channel and can use it to push their core business.

Even when you don’t have the intention to make a lot of sales on Amazon, you should make sure that your digital business card is state of the art.

Let’s take a closer look at that strategy.

According to Amazons own data, 70% of Amazon customers never click past the first page of search results.

Your goal must therefore be to achieve first-page visibility on Amazon.

Merely listing products does not mean that you will appear on the first page for desired search terms.

Keep in mind how Amazon’s algorithm defines ranking: through sales velocity and click-through-rate.

Directing traffic to Amazon products (using existing customers or “fans”) will result in better rankings and better organic visibility on Amazon’s marketplaces.

Directing traffic to products on your online shop is a one-time push that would have to be repeated, over and over, to capture continuous sales.

Using a mix of external traffic, PPC strategy, and SEO optimizations, we at AMZ Controlling have created a system that has allowed dozens of businesses to scale on Amazon.

All while furthering the core business as a result of using these methods.

Should businesses sell on Amazon in 2020?

  • Businesses need to be visible on Amazon
  • Businesses must have an online presence outside of Amazon
  • Presence on Amazon needs to be optimised and reinforce brand identity.
  • There needs to be a strategy behind growth on Amazon
  • Products need to be visible on Amazon in the relevant/intelligent places.
  • Businesses need to make the most of the worldwide leverage Amazon holds.
  • Understanding external traffic, understanding the potential visibility it holds, and understanding its role within a business is paramount.
  • Amazon compliments companies, and enterprises complement Amazon. If utilized correctly in conjunction with one another, they will further each other in sales volume, ranking increases, and visibility.
Johann Kretschmer - AMZ Controlling

Johann Kretschmer - AMZ Controlling

AMZ Controlling was founded in 2015 as an Amazon Full Service Agency and currently has 2 locations in Munich and Glasgow. Through the last years we've helped more than 70 companies scale their Amazon Businesses and has successfully launched 5 own brands with which all new strategies are tested first. Currently we're managing a 9 figure Amazon Portfolio with a team of 18 employees.

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