opinion expressed by entrepreneur Contributors are yours.
In the past two years, brands like Supply, Beardbrand and Ranch Road Boots joined the likes of Nike and Ikea to pull out of Amazon. While this change in strategy piques the interest of DTC brands, it is one that removes its presence from the world’s largest shopping site. This begs the question: How can brands leverage Amazon to increase DTC sales? Let’s dive right into it.
As the largest product search engine in the world, Amazon offers major advantages that work to the advantage of the seller and also attract the consumers. In particular, consumers trust the platform. In addition, additional incentives, such as Amazon’s single-day delivery, an accessible catalog of diverse products, and the brand’s purchasing power, add to the platform’s wealth.
Down side? High fees, heavy competition on price and keywords, non-unique product pages, priority of sponsored listings and of course, the uncertainty of your listing being pulled at any time.
While this makes the benefits of switching to a single DTC sales channel a little brighter, it comes with its fair share of drawbacks. Complete control over materials, absence of market fees and building long-term clients is offset by the heavy lifting of attracting customers, investing in site maintenance and building trust with customers.
Sellers who also sell on DTC channels fear that having both sales channels would cause Amazon to cancel their DTC sales and undermine their high-cost DTC marketing efforts. All this, even when paying Amazon with a high sales fee.
Here’s how brands can directly leverage Amazon to enhance customer relationships:
Strategically View Amazon as a Gateway to Relationships
When a customer searches for and buys your product on Amazon, they are still an Amazon customer. He opted to find a solution to his problem on Amazon. Regardless of choosing your product, they relied on Amazon first to showcase the products and brands.
Think of an exhibition or a multi-artist gallery. Brands wishing to develop direct relationships with customers through Amazon see this as a “gallery” that provides them with the opportunity to make a great first impression on the consumer. However, it may not make the desired profit from the first interaction.
This is exactly how an artist uses a gallery to showcase their talents and provide visitors with an experience that makes them want more. This can be implemented in a number of practical ways which we will discuss further. But this mindset is key to being successful in using Amazon to develop direct customer relationships.
RELATED: 3 Ways to Get Your Amazon Customers to Buy Directly from You
Use product inserts (and A/B testing) to start a direct relationship with Amazon customers
Think of Amazon as a sales driver, not a customer acquisition channel. With no data or opportunities to re-engage with the customer, you mostly sell on Amazon but don’t acquire customers.
Despite the strict restrictions on the content of your product insert, there are many ways you can engage with your customers outside of Amazon without breaking the rules.
Email and text messaging are the most effective ways to interact with customers. Think about an added value you can provide to the customer that will prove to be a sufficient incentive for you to agree to interact with them after an Amazon purchase. For example, register their lifetime warranty, sign up for an exclusive content club or even free products. Instruct them to sign up via a special link on your list (QR code or a very short URL works best).
A/B test offers to see which offer best suits your audience and gets you the most engaged customers. From now on, it is up to you to provide great value for their consent and engagement with your brand through this channel.
Pro Tip: It’s not just a prime list – these are customers who have received your product, paid money and attention to your brand and now expect to get more value out of your brand. The more value you provide, the more likely you are to convert them directly into paying customers with your brand. It’s all about the “trust meter” that will buy them directly from you next time.
Use Amazon as a Review Showcase
Being the largest product search engine in the world, consumers can search for your product or brand on Amazon even if they have seen your ads outside of Amazon. Consumers trust the Amazon review system. While many sellers are annoyed by the removal of reviews, some are taking advantage of that consumer-trusted system to increase credibility and sales outside of Amazon.
One of the strategies we use for brands we work with is to push our product to Amazon to drive as many sales as possible. We insist on getting as many positive reviews as possible and display these reviews outside of Amazon – in ads, email marketing and social media.
We then provide a coupon to encourage consumers to purchase the product directly from the brand’s website. This way, the brand enjoys the credibility of the Amazon platform and gets customers straight to their site.
RELATED: 6 Reasons Why Amazon Product Reviews Matter to Merchants
Be prepared to break even or lose money on Amazon sales to win over DTC for the long haul
To increase sales and beat high competition on the Amazon Marketplace, brands should think of Amazon as a marketing channel rather than a profit center.
When done right, brands can gain high-quality customers from Amazon who will buy and engage with the brand directly. This spares the high market fees and the constant need to adapt to new Amazon regulations and increasing competition.
Moreover, it gives the brand the freedom to showcase their products and create the brand as per their wish. It also provides brands an opportunity to learn more about their customers’ preferences and innovate in new ways to better serve them.
Given the tremendous value that comes from acquiring direct customers and the high cost of getting them outside of Amazon, it’s sometimes worth considering spending more advertising on Amazon. Alternatively, brands can lower prices on specific products inside Amazon and gain traction on initial sales to convert more of these sales into long-term customers.
This is similar to a strategy employed by accessory manufacturers when selling them in Apple stores. Although sometimes they break or lose money on front-end products sold within Apple Stores, they find long-term customers. When done properly, it also helps in increasing brand recognition and word-of-mouth marketing.
If the strategies I presented to you today were beneficial to you, or if you plan to employ them in your sales activities, I’d love to hear from you! Or, if you’d like to talk more about how brands can use the changing landscape as an opportunity to grow, please feel free to drop me a note!
RELATED: 3 Reasons Brands Should Shift to Direct-to-Consumer Models