February 28, 2024
Most brands with an established customer base will consider launching on Amazon at some point. And why not?! With over 310 million active users, it’s the most popular e-commerce marketplace in the U.S. AND chances are a lot of your customers frequent Amazon already for online shopping and may even be wondering if your brand has a presence there. For brands that don’t have an Amazon storefront, two things can happen if a customer searches for your products on their search engine: Customers who can’t find your brand on Amazon will return to your website and purchase. Worst case scenario: They end up buying a competing product from Amazon instead. To battle these issues, the Pilothouse Amazon team sees a lot of brands take these two approaches when selling on Amazon: 1. Focusing on branded keywords Build it, brand it, and forget it. A lot of DTC brands will create an Amazon storefront, target only branded keywords in their ad campaigns, and then leave it at that. To do this, you’ll need to build an optimized Amazon listing, send in some inventory, and add some advertising dollars on branded keywords so you show up first in search results. Branded campaigns are a great way for your existing customers to find you with ease — Just make sure your competitors aren’t stealing away your customers! This can be a viable option for brands at a decent scale who don’t have the bandwidth to take a more comprehensive approach to Amazon selling. While this can add some profit to your bottom line, with this approach your Amazon revenue will only ever be as large as your branded presence. This means you're: ✅ Only targeting customers who are aware of your brand and products ❌ Not acquiring brand new customers 2. Focusing on generic keywords Now let’s talk about generic keyword advertising. A generic term is a non-branded term. For example, if you are selling a Nike Pegasus Trail Runner, “trail runner” would be a generic term and “Nike trail runner” would be a branded term.. Ranking well for generic keywords is a major win since these shoppers are net new customers for your brand with a strong intent to purchase. This approach is an investment at first but has the potential to result in huge gains. Here are two ways to achieve growth: Slow Profitable Growth In addition to branded campaigns that generate a high return, generic campaigns are built slowly and consistently on long tail low volume keywords that generate a profitable ACOS (Advertising Cost of Sale). Minimal budget is invested into ranking (high volume generic terms) in order to maintain a target-ACOS that is profitable to the brand. Fast Unprofitable Growth Allocate the bulk of your budget to campaigns that are designed to generate rank and combine this with an aggressive discounting and pricing strategy to boost CVR. Purposely running the account below a profitable Total Advertising Cost of Sale is the fastest way to achieve sales volume. Once volume and rank is achieved, the account is shifted to a profitable position. This is a cash investment approach and can generate great results, (provided the business is in a position to invest). Ultimately how and when you approach Amazon depends on the current goals of the business, the current cash scenario, and the long term goals for the Amazon channel.