Every Amazon seller worries about margins. It’s well known among the selling community that Amazon takes a significant cut of the seller’s margins. The question becomes: How is budget allocated from what little margin remains?
Amazon Income vs. Asset
There is a large difference between income and assets on Amazon. Income is typically described as short-term revenue that may or may not be profitable over time. An asset, on the other hand, is a sustainable resource that will continue to grow. It requires investing money into the business to continue to scale.
What is a seller’s greatest asset on Amazon? A product listing. Amazon listings are much more than just a splash page to buy product. Ultimately, the listing is the best way to grow organic ranking, brand awareness, conversion rate, and Best Seller Ranking.
Using income to keep PPC ACoS high for a new listing to generate traction and possibly gain organic traffic may be worth it for a defined period of time… but this will, in turn, only generate short-term income. If a seller sticks with this approach for too long, the Amazon cost burden will quickly cut into margins and dry up cash flow. When taking this approach it is easy to lose track of the ROI result, which could easily result in ongoing losses. This effect could lead to business failure. The opportunity cost for not allocating cash to other marketing or market expansion initiatives in parallel, like creating your own storefront or moving into selling in other countries through Amazon, could be enormous.
Similarly, running an Amazon Sponsored Product Ad or Headline Ad can aid in increasing traffic, engagement, sales, and organic ranking, but PPC isn’t the only strategy. Too many sellers want to focus on Amazon PPC campaigns alone in hopes that sales will start to generate. The problem then becomes: What if your listing isn’t optimized correctly and isn’t converting? All that traffic is wasted! This is like hosting a grand opening for a new restaurant while it’s still under construction with no chef or menu.
Maintaining a balanced portfolio of investment in an Amazon strategy is key. Consistently investing into your Amazon PPC ads will always be an uphill battle if listings are not actively and appropriately optimized. Sellers should view their product listing as a long-term asset and investment that will work in tandem with PPC to methodically grow sales.
The Seller’s Choice team is constantly being asked “What should my target ACoS be?” and the correct answer is “Whatever you want it to be!” Yes, sellers could opt for a very high ACoS, make no money, but maybe move organic ranking faster, or maybe they can aim for an incredibly low ACoS have some slower organic growth but profit more. We like to look at the life of the product and business.
For a new product, maybe aim for an ACoS break-even, to grow organic ranking and after a few months lower ACoS to be more profitable. Or maybe the business has the cash to deploy to keep a higher ACoS, take a loss, and grow organic ranking very fast. It’s all in the details, and it’s all about what the seller wants to achieve within a particular stage or timeframe of the product or business development.
So how should sellers invest in their product listing?
Creating A Product Listing Asset
Sellers can run some of the best PPC campaigns anyone has ever seen, but if their listing isn’t converting, the PPC will not see any return. The listing is the main page to their product. This is where the customer makes their final decision whether or not to buy the product.
Keeping listings optimized is key. This includes the current best practices for developing titles, bullet points, and product descriptions. This also means using up to eight additional images, including product profiles and lifestyle photos. By incorporating rendered images, the product looks crisp and professional. By adding Enhanced Brand Content or A+ Content, the brand is presented more professionally and the consumer feels more confident about the quality and reliability of the source. There are plenty of ways to make sure that a listing is and remains optimized to convert as many prospects as possible.
Listings should also be periodically reviewed at least twice per quarter. They should be tracked monthly for category ranking, tweaked and tested, and optimized to conform to the most updated Amazon standards regularly. The goal is for the listing to attract the target traffic, generate deep in listing content engagement, and convert.
Informed Amazon sellers know that character count is a hot topic this year. Amazon continues to limit the amount of characters indexed in listing titles, backend keywords, and even bullet points. Thus, this is where optimization is even more vital. Sellers need to be laser focused with their research to micro target search terms and keywords that will serve to index a product appropriately, while also maintaining consumer-friendly content so the listing will convert.
Building A Brand
Too many sellers are pushing their products to Amazon without a defined strategy while just hoping for the best. Fewer sellers are properly developing their brand on Amazon. The seller with a brand, especially an Amazon registered brand, should deeply focus on brand as their foundational asset upon which to build the company. With this strong foundation properly in place, the target audience should know the brand at least as well as the product. This is especially relevant when deploying Headline Ads, as traffic is driven to the entire storefront instead of just a single product.
Focusing on the brand image will allow a seller to build a sustainable asset on Amazon. Over the long-term, the brand will be the asset that returns the greatest value multiple, and protect the seller from engaging in growth that serves to only benefit Amazon. When executed properly, the brand should ultimately expand beyond Amazon toward a deeper community building and retention strategy. A seller’s long range goal should be to establish their brand such that they can remarket to their customers and ultimately own their destiny.
Seller’s Choice provides uniquely personalized marketing and managed services for digital marketplace sellers, e-commerce merchants, and brand builders worldwide.
Our services are crafted for online businesses that are seeking to enhance their foundation while deploying proven and cutting-edge conversion methodologies.
Seller’s Choice targets accelerated sell-through, brand and product differentiation, and adherence to the highest compliance standards. Through this strategic focus our sellers realize profitable and sustainable growth while maximizing customer engagement and retention.
Visit our Prosper Show booth to learn more about how we can expand the reach of your digital brand and help you win your category. See our portfolio at www.sellerschoice.agency and reach out to us by email at firstname.lastname@example.org.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *