Despite Amazon gaining more of a foothold within the retail sector with each passing year, many brands have yet to enter the marketplace. We had a chat with Bobsled CEO and Makely founder Kiri Masters about her personal journey as a brand owner selling on Amazon, launch strategies, and the downsides of scaling on Amazon.
Kiri Masters launched her craft supplies brand Makely on Amazon in 2013. At the time, Amazon was still very much a mystery to both brands and marketers alike. Kiri’s experience managing her own Amazon account led to the formation of Bobsled Marketing less than two years later.
In 2013 I was working in New York as a commercial banker and in my spare time I would do craft projects. I realized there was a big gap in the market for some DIY lighting kits. After a lot of trial and error, I developed my first few products, and a side-hustle business was born.
Fast forward to the present, Makely has grown remarkably into a 7-figure business. My role is more of a backseat one - I have a small team that manages all the day-to day. Originally we focused primarily on lighting products, but now we’ve expanded to a variety of categories within the crafting space.
Amazon was not on my radar initially. All sales came through the Makely website. But I started hearing more from other business owners that it was a viable sales channel, so I thought I’d give it a try.
In the beginning I ran into difficulties. There was so much to figure out! Product barcoding, keywords, promotions, PPC… it was all a mystery and there wasn’t much support from Amazon or other sources. But once I got through all the initial obstacles, I started building momentum and very quickly Amazon became my biggest sales channel. The Amazon account launch revolutionized my entire business as I could get my products into the hands of more people than I could manage to get to my ecommerce store.
When I first launched on Amazon and I was running into all those problems, I had a real lightbulb moment. I realized there were likely so many other brands in the exact same position, and this was the inspiration to start Bobsled, an Amazon-first digital agency that catered to the changing retail environment.
I fell in love with my new role as CEO of Bobsled, but I didn’t want to just abandon Makely. So I hired Ashley Wilson who became Operations Manager.
Ashley has done an amazing job growing the brand’s presence, and she’s supported by the Bobsled project team who now oversee the daily operations, marketing, and PPC advertising for Makely’s Amazon account.
On the left: Ashley Wilson, Makely’s Operations Manager
Back when I first launched Makely on Amazon, it was like the Wild West. Not too many people were talking about best practices that would be suitable for larger brands.
There was so much opportunity for newcomers to win market share on the platform. But the downside was that savvy sellers back then could use gray-hat tactics like giving away products in exchange for reviews and other ways of gaming the product rank system.
Amazon’s Terms of Service (TOS) are now far more stringent when it comes to product launches. The marketplace is also far more crowded - it’s harder for new products to rank well. On the plus side, nowadays there are a lot of educational resources and support services available for brands.
Seasonal trends inform which new products we launch on Amazon. Ashley keeps a close eye on which products are generating buzz on sites like Pinterest, and develops a shortlist of potential products we could potentially bring to market.
Ashley then works with the Bobsled team to do Amazon pre-launch market research. This involves looking for any existing competitor products, calculating anticipated profit margins after Amazon selling fees, and developing a promotional strategy. After going through this process we look at cash flow, select the winners and lock in a date for the launch program.
For the launch, timing is everything. For example, if we have a new product suited for the wedding season, to truly capitalize the product should be available on Amazon and primed to perform well before the season kicks off. Likewise with holiday-themed supplies. This takes a lot of planning from a logistical point of view, including detailed inventory projections from the Bobsled team, and finding the right strategies to promote the product once it goes live. We’ve had some good success recently with Amazon Live, Posts, and Vine Reviews to launch new products, as well as implementing a really robust PPC strategy.
Copycats
Unfortunately, there are a lot of bad actors selling on Amazon. If you develop and launch a best-selling product, it’s only a matter of time before other parties will create rip-off versions which will eat into your market share.
This is something I’ve seen many times with Makely and the hundreds of brands Bobsled has partnered with. On some occasions Amazon will protect the brand owner and punish the bad actors, but this isn’t guaranteed. It requires persistence and a real insider’s experience of the platform to know how to push cases like this along. Having a team of Amazon Specialists that can diligently monitor and protect your Amazon catalog around the clock is really important.
Cash Flow
With Makely, we’ve observed constant Amazon revenue growth since launch, and all of the profits have been reinvested into developing and launching new products.
Every business owner understands that there’s no such thing as “too big to fail”. It’s really imperative from a cash flow perspective that a high percentage of new products achieve success on Amazon.
The best way to avoid running into a cash flow pickle is to do your due diligence on each product prior to launch. Finding a trusted partner to complete Amazon pre-launch market research is a necessity.
One other tip here is to ensure you’re not being nickel-and-dimed on fees. Bobsled saves Makely tens of thousands of dollars a year in FBA, storage, and referral fees by closely monitoring product categories and our inventory situation.
Reliance On Amazon
If a large proportion of your revenue comes from Amazon, many of your eggs are in one basket.
Amazon can increase their seller fees at any moment. They could choose to suspend one of your best-selling listings. Or they could decide to permanently shut down your account. Their platform; their rules.
This reliance creates a certain type of risk, and so it’s critical that brands always abide by Amazon’s TOS. Utilizing gray-hat or black-hat growth tactics on Amazon could undermine the health of your entire business.
Understand The New Retail World
In terms of locking down the right retail strategy, there’s a lot for brands to consider. Many businesses have strong relationships with traditional retail distributors and a huge brick-and-mortar presence. Or you might be doing solid numbers through your own ecommerce site.
The fact remains; more and more shoppers want the convenience and simplicity that Amazon provides. Ultimately, you need to figure out the right way for Amazon to work for your brand. You should control the channel, rather than the channel controlling you.
Getting clear on which products should be available on Amazon vs other channels is a major decision. By ignoring Amazon you’re potentially missing out on some huge growth opportunities. You can’t sit around waiting for a buyer from Amazon to contact you - that’s not the Amazon reality. I recently published an interesting interview with a Bobsled client on this topic that you can listen to here.
Find A Way To Differentiate
When I founded Makely, I didn’t have any advertising budget. So I filmed and released some YouTube tutorials which gained traction and helped generate sales. This gave me insight to the product discovery process for shoppers in my niche, and we’ve since worked with many talented bloggers and influencers who’ve helped promote new products.
With our Amazon channel we use PPC and Promotions to drive discoverability on the Amazon channel, but this is only part of the awareness strategy. A lot of people who buy our products on Amazon have found us through an affiliate influencer or blogger. This gives us more credibility to buyers and an edge over the competition.
As the Amazon platform becomes more crowded, finding ways to differentiate will become increasingly important.
Develop (And Refine) Your New Product Launch Program
What worked then won’t necessarily work today. Amazon is constantly evolving, and therefore your launch strategies should adapt too.
It’s also important to remember that due to the product-focused nature of the Amazon marketplace, no account ever completely graduates out of the launch phase. Whether an account is five years old, or five minutes old, it doesn’t matter. With each new product you’re starting from scratch, which is both exciting and daunting. If I haven’t said it enough already, resourcing your Amazon team with best-of-breed professionals is critical!