The Top 3 Ways to Win on Amazon During the Holiday Season

Are you currently selling your brand on Amazon? You might already know that in the 4th Quarter of last year, 51% of the total e-commerce growth in Q4 2015 was attributed to Amazon. Amazon has been ranked as the most reputable company in 15 countries for multiple years.

These days, people are obviously more comfortable with buying stuff online generally, but the level of implicit trust that Amazon has with its shoppers is pretty incredible. Customers know that if there is EVER an issue with a purchase, Amazon will solve it for them.

Why Amazon is the place to be this holiday season:

1. Shoppers LOVE Amazon Prime

• Shoppers love the free 2-day shipping.
• Shoppers love the easy returns and award-winning customer service.
• Shoppers are willing to pay a premium - studies show a 20% premium -  for a prime-eligible item. Prime shoppers are not hunting for the lowest price. They are looking for convenience and a place to shop that they can trust.
• Prime is estimated to have about 63 million U.S. members now, each spending about $1,200 a year on average, vs. an average annual spend of $500 for non-members.
  
  

2. And Brands Love the Fulfilled By Amazon program.

• FBA allows brands to use Amazon’s fulfillment network to fulfill their customer orders, which makes their products prime-eligible.
• Imagine being able to basically rent the space in  over 100 fulfillment centers run by Amazon and have them fulfill customer orders for you?
  
  

3. Amazon is "The Everything Store".

• Amazon used to be for books.
• Amazon used to be for the lowest price.
• The founder of Amazon Jeff Bezos wanted it to be the everything store and these days it is. Amazon is becoming the go-to place for categories which may surprise you:
• Amazon is predicted to be the world’s largest fashion retailer in 2017, overtaking Macy’s.
• Auto parts, groceries, custom items, handmade - people are shopping on Amazon for anything that can be put into a box.  

And this year, 47% of people have planned to do their holiday shopping on Amazon. With that said, and with us already into the first week of October, here are 3 ways you can maximize your success on Amazon over the Holiday selling period. 

The top 3 Ways to Win on Amazon in Q4

September 29th I was invited at a Shopify Meetup in NY to talk about how to prepare your channel and inventory for the most profitable time of the year on Amazon: Q4 aka The Magic Holiday Season. I talked about the key aspects we address when working with Bobsled Marketing clients. We have partnered with brands to help grow their sales on Amazon in various aspects, from handling our clients’ entire Amazon sales channel (things like product launches, inventory projections, customer service & operations) to Amazon SEO & PPC management and Q4 is the best time of the year to start taking a really good look at your business. With that said, I’m going to address our top 3 ways to win on Amazon in Q4.

You can also watch the video version of this article instead!

1. Listing Optimization

During our Shopify meet-up last week, our host, Richard from Eastside Co talked a lot about store optimization for Shopify, and for better or worse there are less levers for brands to pull on Amazon. Still, optimizing your product listings is a very good use of your time in October.

• To start with, you’ll want to do a Product audit. Check how your product listings display in mobile search results. 70% of people browsing on Amazon.com are doing so from a mobile device.
• Update product titles. Leverage keyword research and also use the brand terms and other words people are searching with.
• And be sure to put the most important information in the first 25 characters of your titles. While keywords in titles is important for discovery and SEO on Amazon, it should not create a WTF moment for browsers. “WTF?” is never something you want customers thinking when they see your product listing show up in their feed.
  
  

The next step of Listing Optimization involves auditing and update product images.

• Are your product images good quality? Are all images high resolution  so that users can zoom in and see the detail?
• Use only high-resolution images and experiment with dynamic or alternative angles to stand out from competitors.
• You can also consider holiday-themed product listings which show your product being given as a gift or in use for holiday events.
  
  

2. Pay Per Click Advertising (PPC)

Amazon’s ad platform is called Sponsored Products and it helps with “top of the funnel” discovery of products, as well as to intercept buyers when they’re about to purchase from a competitor.

Instead of hoping that consumers will discover your brand and products in organic search results, use PPC ("Pay Per Click" advertising) to get prime airtime in relevant search results as well as once they’re already browsing through search results.

This is a product search page for a product I was looking for: refrigerator storage. This is the Awareness phase in the purchasing funnel, I’m just looking for potential solutions at this stage. You can see highlighted in red, all the Paid placements on this first search results page.

Brands using PPC effectively can basically buy their way to the first page, for this search term. But, if the shopper clicks onto a competitor’s product page instead, you could still win the customer back through a placement on your competitor’s product page.

Your PPC to-do list for the Holidays should look like this:

October

• Ad display audit. Check how your Sponsored Product ads display in mobile search results. Do they make sense?
• PPC needs to be running for 2-3 weeks BEFORE an event/holiday. For example, Black Friday PPC campaigns should be set up in early November. Another tactic is that you can set up your campaigns super early, and upload them in a Paused status until you’re ready to run them.
• Start increasing bids for holiday keywords slowly and track progress. Think about these potential keyword ideas:  unusual gifts for dad, gift ideas for sister, holiday ideas for mom, best gifts for male friend, unique gifts for grandma, new gadget ideas for gifts, gifts for him (or her or kids), fun gifts for grandpa.

November

• If selling in Canada and the UK, start ramping up PPC in those marketplaces in mid-November, to prepare for the peak December shopping period.

3. Inventory Management

You need to be relentless and intensive with your inventory forecasting and management ahead of the holiday season. It’s totally NOT sexy, I know, but this will have perhaps the single biggest impact on your sales this year. We’re talking mostly here about running out of inventory when you’re using FBA. Here’s why:

Let’s say your average sales on Amazon are $1,000/day, and increase to $4,000/day over Q4 - October, November and December. To see a 4X volume increase over that period in many industries is fairly conservative. You could expect total annual sales of $638K .

If you were out of stock of inventory 1 day of each month - just 1 day! Your annual revenues would be down $24k or almost 4%.

Now this scenario is the scariest! If you’re out of stock for just 2 weeks during the critical Q4 period. Your annual revenue would be down $56,000 or almost 9%.And this is a situation which many brands get into especially if they are not keeping a very close eye on inventory levels in ALL of their channels.

Your inventory to-do list for the holidays should look like this:

• If in doubt, go deep on inventory. Better to be over-stocked in December than miss out on sales. There is an extended holiday period in January when consumers begin to start spending all those Amazon gift cards they got as presents. Wait until the end of January to pull out your excess inventory.
• If doing FBA, be prepared to switch to FBM immediately if inventory runs out (only if you have the capability to fulfill orders on time!)
• Amazon offers some tools for forecasting inventory needs, but fair warning that they are fairly rudimentary and time consuming to interpret. There are some pretty good 3rd party tools out there which do a better job and often worth the investment.

For those of you interested in getting to know the ins-and-outs of selling on Amazon, I have a book coming out in November about how brands can leverage Amazon to grow a global customer base.

The Amazon Expansion Plan is set to launch November 10th and you can get it on Amazon and Kindle.

Learn More Here