Nike decided they no longer need Amazon in their life. Those days are gone. But what does this mean for other brands on Amazon? Is it the beginning of an avalanche of departures?
The $19 billion dollar sneakers icon, Nike, said "Goodbye" to Amazon.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. 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 is by far the best way to launch a brand and get it 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 advantage for selling on your own ecommerce website
Profits. 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.
Customer experience. You can build a consumer experience all-around your brand and up-sell more easily on your own site.
Brand loyalty. You can collect customer data which otherwise would have gone to Amazon. This gives you a large database of consumers you can reach out to them at any time.
The huge advantage for starting your brand on Amazon
However, if you are a new brand in town, meaning 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.
Slower sales. 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, we get a flood of immediate sales.
This is because when shoppers browse Amazon, they are already looking for a product to buy. But if you just launched a website, even if you spend 10's of thousands on Google and Facebook ads to promote it, you won't have a thousandth as many shoppers visiting your ecommerce website and additionally, since you are new, the conversion will be far lower than if they found your product on Amazon because they don't know who you are yet and therefore have no reason to trust you.
Higher upfront costs. Amazon carries insanely high ranking. If someone googles a product, very often Amazon listings show up at the top page of search results. But for you to get your ecommerce website ranking you will need to write consistently content for at least 6 months and additionally run highly relevant ads before you can expect a strong traffic flow to your own online store.
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 credibility as a person or business.
To earn credibility takes time and money. Yes, Amazon takes a 12-15% chunk of your revenue, but that is because you don't have to pay for content creation, blogging, SEO and ads to get your online store ranking.
Far less exposure. The exposure Amazon's online platform can give your product is unprecedented since the founding of the internet in 1983. It would take you decades and a ridiculous amount of money to give your products the same level of exposure for 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 to collect your customer's information. The incentive to get them to go to a landing page and enter their name and email could be "register your warranty," "get a 20% coupon code with 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 ecommerce site where they get "exclusive products" that you are not selling anywhere else.
Some day your brand is so big that you don't need Amazon anymore.
4 Facebook Ad
Build Facebook ads that bring you customers!
We sent it! Please check your email to download the examples.
Oops! Something went wrong while submitting the form
Married a pearl. Fathered 4 miracles. Fired his boss. Turned a single dime into $104,857. Today, a self-made millionaire, Seth and his team of 8 badass coaches teach entrepreneurs how to build passive income on Amazon.
Dead serious about building income on Amazon with eight successful coaches in a community of badass Amazon sellers? Join the Amazon FBA Mastery membership.