Why Webstores Simply Are Not Able To Compete Directly With Amazon

We thought we would highlight why it's important for online brands to be on Amazon and what it takes to be successful on Amazon.

First, Let’s take a look at the advantage the Amazon marketplace has over a brand’s webstore.
 

Shipping

•    Amazon can ship to over 72% of the USA population on the same day or in one day to the customer.

•    Over the last 20 years, Amazon has built amazing trust with customers when it comes to shipping

Amazon: Everything to Everybody

•    Amazon’s stated goal is to sell every viable consumer product known to man.  There are over 584 million products on Amazon.com (USA).  But when you take into account variations (sizes, colors, flavors, etc) there are billions of SKUs on the platform.

•    This variety of products is a convenience factor that individual webstores cannot compete with.
 

Amazon Prime

•    There are more than 100 million Amazon Prime members who get free 2-day shipping (well it's kinda free…  Prime members pay $119/yr for membership and that encourages them only to buy more from Amazon. So, Amazon collects $11.9 billion per year just in prime member fees which is basically prepaid shipping.).  

•    46% of Amazon Prime members make at least 1 purchase on Amazon every week.

•    Amazon is now working on free 1-day shipping to its Prime members.

•    Prime members spend, on average, $1,400/yr on Amazon.  What do repeat customers spend on your webstore per year?  Do you know how many repeat customers your webstore has and what their average value is?

The Amazon Marketplace Is A Selling Monster

•    Amazon averages almost 88 million visits EVERY day (USA).  Amazon revenues by time Period 12 Months Ending March 2019

Amazon’s Sales Tax Advantage

•    Amazon customers rarely have to pay sales tax but on your webstore they likely will, making your product more expensive from the perspective of the customer.

Customers Trust Amazon

•    Customers trust Amazon with their personal data more than any other tech giant, and even their telecommunications providers.  That is why conversion rates are so much higher on Amazon than on webstores.
 

•    Because people trust Amazon — and its seamless return policy — consumers are more inclined to try new things. 80% of Amazon customers discover new products on the site at least sometimes, up from 50% last year. Similarly, 53.4% of Amazon customers are more willing to try an unfamiliar brand on Amazon than elsewhere, another advantage for smaller merchants.

•    Convenience is an obvious benefit of online shopping, but it’s only the second-most common reason people shop on Amazon. While a quarter praise convenience, 41.9% of Amazon customers are focused on price, first and foremost.  Another significant stat is a quarter of Amazon customers always compare prices on other sites (for instance your webstore). Half do sometimes and the other quarter never even bother; Amazon customers simply take it at face value that Amazon will offer them the best deals.

•    9 out of 10 USA online consumers price check products on Amazon before purchasing.

Keys To Be Successful On Amazon

Showing up on Amazon’s search results

•    81% of Amazon’s clicks go to brands on the first page of product search results; 64% are in the first three items. 

•    Only 30% of click ever make it to page two of the search results.  

•    After page two of search results clicks basically sink to zero.

Obtaining On-Going Customer Reviews

•    Amazon allows only reviews from verified customers of your product. (We can contact the Amazon customer for you and request a review)

Driving Traffic From Outside Amazon To The Amazon Product Page

•    For small brands and new brands to Amazon, this is a critical step in developing your product ranking which leads to where the brand’s product appear in the Amazon search results. 

Marketing (Both Inside and Outside Of Amazon)

•    This is where most brands fail and thus fail on Amazon.  Brands get listed on Amazon but without a comprehensive and effective brand marketing outside of Amazon, the brand’s products are lost in the crowd of thousands of similar products listed on Amazon.  Without this marketing on part of the brand, there is no much chance of success on Amazon.

Price Point of Product

•    Brands must be price competitive.  There is no way around it.  Most of the time the brand’s Cost-Of-Goods (COGs) are simply too high so therefore the brand cannot reduce their price to be competitive.  To be price competitive your COGs must be as low or lower than your competitors.

Fulfilled By Amazon (FBA)

•    When selling on Amazon for a variety of reasons your product orders must be fulfilled and shipped by Amazon.

Amazon Prime Status and Buy Box Eligibility

•    A brand’s product must achieve “Amazon Prime Status” and be “Buy Box Eligible”.  Products achieving “Prime” status are sought after by Prime members.  87% of all purchases go through the “Buy Box”.

Selling on Amazon is not easy nor simple.  Most brands make a “Hobby” income and nothing more.

 Contact EpochBG to discuss how to either improve your Amazon sales or to start selling on Amazon.

Newsletter Issue #33 - Some Quick Facts And Answers fromEpochBG