To succeed in e-commerce, one must be willing to embrace change. Amazon is no exception to shifting currents. Challenges to Amazon’s growing platform demand that they make practical changes to attract customers and contend with competitors.
For sellers, it means that we may have to make radical changes quickly, and with very little warning upfront.
We have to evaluate challenges and risks, and make decisions accordingly. We have to find ways to make Amazon’s algorithms and systems work for us.
We have to protect our businesses from scammers and invisible threats from any direction!
Check out these highlights from the latest in the world of Amazon and how they might affect you.
1) Is Amazon organic search depressed?
Marketplace Pulse just wrote an article claiming that Amazon is now demoting organic search results, instead favoring sponsored products, Amazon brands, and "recommended".
For example, if you navigate to Amazon and search "table lamp" you will see Sponsored brands across the top, then three Sponsored Products followed by only two organic results on the second row, then Best Rated in category on the third row, then Editorial Recommendations on the fourth row, then Amazon brands on the fifth row, and then finally, organic search results on the last part of the page.
Marketplace Pulse implies this as a threat to third party Amazon sellers. They conclude, "Since relying on being featured as one of the best sellers...is unreliable, brands are increasingly forced to spend on advertising."
That's one way to look at it. Unless you understand that using and investing in Amazon advertising is the fastest way to get your product ranking organically.
Look at it this way—by promoting your product using Amazon advertising now you will be less dependent on Amazon advertising later. The result? You make more money! 💰
If you are selling on Amazon right now, there are three things you must know about PPC Amazon advertising:
- Investing in Amazon advertising PPC can get you on the top page of search results fast.
- Investing in Amazon advertising PPC will give you data that shows you what customers of your listing. This means you can optimize that listing and increase not only traffic but sales on your listing's page.
- Investing in Amazon advertising PPC will eventually get your product ranking organically. If you are struggling to get a grasp on Amazon PPC, reach out and our team can help you.
2) Amazon Fresh $0.00/month
Amazon's grocery delivery service, just dropped from $14.99 to $0.00 per month for all Prime members.
This means that if you live in one of 2,000 cities in the US as well as in London, Tokyo, Berlin, Hamburg, or Munich, and you order food on Amazon.com, you can expect it delivered to your house, sometimes—Within. One. Hour.
Imagine trying to explain this to your grandparents in the 1950s. "Type words into a screen and in one hour those words make food show up on your doorstep!"
My grandfather had to wait for the chicken to lay the egg before his family could scramble it. 🐣My father had to drive to the grocery store to buy food. 🚗
Maybe the next generation will have the food teleported to their plate. "Hey mommy, I want pancakes!" Zooop! Bon appétit!
But I do have one complaint: Have you strolled into a Whole Foods market lately? It's not the same, is it?
Those hand drawn chalkboard calendars with upcoming events in the store? Gone. The in-store events like storytellers for children? Gone.
Would you have believed that the loss of these personalized, local, wholesome experiences in Whole Foods was a result of Amazon firing a whole bunch of the Whole Foods marketing staff?
Yeah! It was marketing staff who created those wholesome experiences.
Since when were marketers in charge of storytelling and decorative chalkboard calendars?
It's what made Whole Foods, well, wholesome!
But with Amazon's prioritization of automation we should expect this. In just two years Amazon has made three huge changes at Whole Foods. If you are an entrepreneur, don't miss these:
- Convenience has gone up. Go to Amazon.com. Buy the food you want. In many cities, see it at your doorstep in 1-2 hours.
- Prices have gone down. Amazon has lowered the price on many select foods which previously alienated people from "Whole Check", and they offer discounts to Prime Members.
- Food options have grown. There are more food choices at Whole Foods than we have ever tasted before.
I just did it the other day. I walked in, grabbed a product, and pulled up my Amazon buyer app. I clicked "Whole Foods" and—boom—I was out in seconds, with a discount.
Amazon improved the top three most important factors to customer satisfaction: Convenient shipping, lower prices, and more options to pick from. This is the Amazon model in spades.
And the result? Customer reviews indicate satisfaction with Whole Foods is on the rise.
3) Facebook Pay
Mark Zuckerberg just announced Facebook Pay. It will work on Facebook and messenger and will soon be available on Instagram and WhatsApp.
E-commerce seller, where will you be when Facebook Pay is ready to go? What about all those fans of your brand line? They don't even have to leave the platform to buy your product. The convenience of receiving and sending money online has scaled at unprecedented speed and those raking in cash will be the ones taking advantage of it.
I will say it today and you can hold me to it five years from now, the cash flow from these and other online platforms is going to rival that of Amazon. Just watch—no, don't just watch, take advantage of it!
4) Nike leaves Amazon
Nike just did it! What does this mean for other brands on Amazon?
Other brands are taking notice. Is it the beginning of an avalanche of departures? Maybe. What Nike is doing makes sense. They don't need Amazon. But you do.
Nike is a $19 billion dollar shoe juggernaut because they built brand credibility. Not selling on Amazon allows them to control the brand experience. Customers will flock to them wherever they sell. Not to mention they don't have to share a costumer with Amazon. Under the legal agreement, when selling on Amazon, Amazon owns the customer.
Retail analyst Randy Konik says, “Amazon is just a traffic aggregator that reduces friction in consumption...it doesn’t build communities.”
I agree. Even with the "follow" button now on Amazon storefronts for registered brands, it's just not the same as buying direct. You never know for sure if you are buying from the brand itself or from a third-party reseller.
This could be the first rock of an avalanche of big-name brands departing from the West's most popular online retail platform.
Although Amazon is not the best platform for growing a personalized, customer-centric brand, I am convinced it's by far the best way to launch a brand and get early exposure in a way no other platform on the planet can do.
Let me break down the pros and cons on both sides:
The huge advantages in selling on your own e-commerce website
You immediately see an extra 12-15% in profit 💵 because you are not paying Amazon referral fees which are like a commission for the sale occurring via Amazon's platform.
You can build a consumer experience all-around your brand and up-sell more easily on your own site. From day one when they buy on your store, you can send them an e-mail, invite them to a Facebook group, notify them when you post a new blog, and create a relationship that the customer loves.
You can collect customer data which otherwise would have gone to Amazon. This gives you a large database of consumers you can reach out at any time.
However, if you are a new brand in town—if the mass public does not recognize your brand and you don't have over 100,000 followers, many of whom would buy anything you sell—then you put yourself at a serious disadvantage by not selling on Amazon.
The disadvantages of starting a brand on your own e-commerce website
This is because when shoppers browse Amazon, they are already looking for a product to buy. Additionally, since you are new, the conversion will be far lower than if they found your product on Amazon because they don't know you yet and therefore have no reason to trust you. If you were searching for a product through Google, and a website came up for a brand you never heard of, would you dive right in and buy it? Probably not. You'd look at reviews and search around to make sure you it's legit before you enter your credit card info. They trust Amazon because they have already built credibility.
I have 3,000 plus Amazon seller students and help 500,000 more on various platforms. Almost every single time—with rare exceptions—when we apply the step-by-step methods we teach of finding a huge potential product, differentiating it in a way no competitor is doing, and launching it using our three-prong strategy, they get a flood of immediate sales.
Higher upfront costs
Amazon carries insanely high ranking. If someone Googles a product, often Amazon listings show up at the top page of search results. But to get your e-commerce website ranking you will need to write content consistently for at least six months and run relevant ads according to Neil Patel, one of the best marketers on the planet. That's not only work for you but also money going into hiring a blogger.
This is because Amazon's years of credibility have done most of the hard work for you. Just having your product on Amazon gives it a certain amount of credibility, even if you had zero validity as a person or business.
To earn credibility takes time and money. Yes, Amazon takes a 12-15% chunk of your revenue (around 33% if you pay them to fulfill your orders), but that is because you don't have to pay for content creation, blogging, SEO, and ads to get your online store ranking. 💸 Even when you spend money on Amazon PPC, if done correctly, you end up earning that money back and making a whole lot more if done correctly.
The exposure Amazon's platform can give your product is unprecedented. Millions of people can see your listing if it's on the first page. But if you just launched a website, even if you spend tens of thousands on Google and Facebook ads to promote it, you won't have a thousandth as many shoppers visiting your e-commerce website. It would take you decades and a ridiculous amount of money to give your products a similar level of exposure on your own online store.
So what's the ideal strategy?
- Launch your brand on Amazon. If done correctly (and we teach exactly how to do that), you can get an immediate flood of sales, which means money is already coming back into your business.
- Include card inserts with your product's package to collect your customer's information. Give incentive to get them to go to a landing page and enter their name and email such as "register your warranty", "get a 20% coupon code for your next purchase", or "receive a free gift."
- Use the insert card respondents to build an email list of customers whom you can invite into a Facebook group featuring your brand where you add additional value. This now uses Amazon as a funnel.
- Eventually, you will have a large army of customers whom you can drive to your personal e-commerce site where they get "exclusive products" that you are not selling anywhere else.
- Some day your brand may get so big that you won't need Amazon anymore.
If you are serious about a cash-flow business that builds freedom for you and those you love, stay keen on the latest changes in the world of e-commerce. Those changes come fast—faster even than you can run in Nike shoes. 👟 Some changes come with challenges and all of them with opportunity.
When an online company makes a big change, they don’t have to alter construction or get inspection approvals. They just do it—often without warning.
Like a pirate navigating uncharted waters, keep your eye peeled for upcoming changes. More are coming soon!