Should you be on Amazon as a D2C brand?

Hi there 👋,

Today I’m going to break the rules and talk about *He Who Must Not Be Named*...

No, not Voldermort.

Amazon.

When it comes to Amazon, it’s a love/hate relationship for me.

I’ve had the most inane arguments with their Customer Care team, and I strive to support brands directly or shop locally as much as possible.

But I have to hand it to them, when it comes to buying in a rush, requiring quick delivery, or ensuring reliability for my purchase, they’ve got it sorted.

You’ll notice that my book recommendations are usually listed on Amazon. These are not affiliate links.

I do this to guarantee that the book is available no matter where you’re located geographically.

But I do aim to support local bookstores as much as possible with my crazy reading habits (I can’t walk past one without going in). So you’re welcome to take the recommendation elsewhere.

For example, in the UK, you could utilise bookshop.org, which supports local bookstores.

And I’m not the only one using Amazon.

So how can you make this enormous platform work for your D2C brand?

How can you play their game and come out on top?

Love them, hate them, Amazon is running this game

Despite recent resistance to Amazon and a renewed focus on shopping locally, Amazon is still dominating in both the UK and the US.

They performed worse in 2022 than 2021, but this still accounted for $30,074,000,000 in sales in the UK 😅.

Research demonstrates that 93% of individuals have recently shopped on Amazon, and 63% go there to check prices when shopping.

Amazon is the benchmark for not only pricing, but also possibility. It’s where we go to see what’s available and existing in the market.

But the statistic that surprised me the most, and hurt the most, was that only 19% of customers expect to make a purchase on a D2C brand 😔.

The rest expect to find what they need on online marketplaces, like Amazon, or in-store.

This makes it very difficult to ignore Amazon, and presents quite the challenge for D2C brands.

So what can we do about it?

D2C brands need to sink or swim 🏊

It may seem simple enough. If D2C brands use Amazon, then they shouldn’t have an issue taking advantage of this immense traffic.

Well… no.

There are a lot of issues in using Amazon as D2C brand, particularly high-end ones.

You’ll dedicate so much time on building your brand and website, only to have the following problems if you start using Amazon:

• Minimal insight into who the customers are and ability to interact with them (you can no longer respond to reviews)

• Reduced control over the customer journey and setup

• Splitting your effort across two storefronts (though you do get additional exposure with that effort)

• High effort required to grow and rank against competitors

• Potentially cannibalising sales on other channels (including your own website) with Amazon Prime offering free next day delivery or the shopper preferences/habits to buy on Amazon

“Daphne! This sounds terrible! Why would we ever bother with Amazon then?” You demand angrily.

I’m not saying you have to work with them, as it is pretty rough, I’m just saying you should consider both options.

“Okay, okay,” You grumble, “Keep telling us about Amazon then.”

Does the Amazon-bought shoe fit?

Okay, let’s consider when Amazon is the right fit for your D2C brand.

1. First things first: do you have Product-Market Fit?

And thinking you do is not the same as knowing you do. You must have tested your Product-Market Fit and worked out your messaging extensively to get Amazon working.

If you need a hand, check out my Message-Market Fit Programme! It helps you to determine your place in the market, with input from myself and other leaders in the industry.

Alternatively, you can check out my article on conducting Product-Market Fit research.

2. Once that’s sorted, check the search volumes for your product on Amazon. 

This can be done with an Amazon Specialist who will look at a range of data.

Or alternatively using tools like Helium 10, Jungle Scout, ahrefs or keywordtool.io.

How are the search results, both organic and paid, for your own website?

You can also look at the bestseller lists to assess where competing or comparable products are popular.

Remember that your website can impact conversions, so look at the quality of traffic around keywords rather than just the cost of acquisition.

Some brands are naturally more search-led than others (products were few customers are solution-aware).

3. Calculate whether it would sustainable for your brand.

Take into account your pricing, distribution costs and ad spend.

You’re likely need to invest in Amazon ads at the beginning to get the ball rolling.

4. Find an Amazon specialist to weigh in on the matter.

Ideally, I’d recommend having someone with Amazon experience on your team. But alternatively, find an Amazon specialist with experience in your niche.

This will save you a lot of painful mistakes (and time, and money, and tears, and tantrums) along the way.

Recommendation

In every edition of Growth Waves, I also share a related resource to check out related to the week's topic. No links are affiliates.

While I may do some shopping on Amazon, I’m not an expert in the matter. So I’d like to thank Michael McPherson for providing input on this newsletter and reviewing it.

Michael is the co-founder of ThePurposeLed and helps sustainable brands become more visible on Amazon. I recommend following him on LinkedIn for insight into succeeding on Amazon and great tips to apply to your own brand.

If you are considering Amazon I’d recommend doing their free category audit to get an idea of the demand of your products as well as insights on your competitors.

You don’t have to like Amazon, but every D2C brand should at least consider whether they could benefit from this platform. Make a conscious decision for your brand’s best interests.

There are many reasons not to use Amazon in today’s climate. One is that they’ve been criticised for their lack of sustainability. Their response is to commit to being run on 100% renewable energy by 2025, but only time will tell whether they fulfil this goal.

Utilising Amazon for your brand also shouldn’t be something you quickly do, an add-on to your business model. Amazon is not just a marketing channel, it’s a full distribution solution.

If you choose to list on Amazon, take the time to do your research and invest in building a setup primed for success.

Now that I’ve opened bookshop.org, I might just take a peak for some new books to add to my never-ending to-read pile…

Daphne

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