Over the past few years, DTC brands have increasingly found Amazon to be a powerful channel for additional sales. Despite this, many are still hesitant to join the world’s largest online shopping platform due to a misunderstanding about how Amazon can benefit businesses that sell direct-to-consumer.
Today, Amazon is much more than an e-commerce marketplace. It has become the most popular platform for customers to discover new brands. According to reports, 66% of consumers begin their online shopping search on Amazon. With COVID-19 boosting e-commerce to record levels, Amazon has become an effective way for DTC brands to reach new customers. For example, the retail giant now offers an entire suite of tools designed specifically to help brand owners grow their audience base, including:
- New to Brand Metrics
New-to-brand metrics determine whether an ad-attributed purchase was made by an existing customer or one buying a brand’s product on Amazon for the first time over the prior year. - Brand Stores
Stores allow you to showcase your brand and products in a multipage, immersive shopping experience on Amazon. - A+ Content
A+ Content enables brand owners to describe their product features in a different way by including a unique brand story, enhanced images, and text placements. - Sponsored Brand Ads
Sponsored Brands are cost-per-click (CPC) ads that feature your brand logo, a custom headline, and multiple products.
- Amazon Posts (beta)
Amazon Posts help drive brand and product discovery with curated posts that mimic the social media experience.
As a proven channel management agency that has helped generate more than $250 million in e-commerce sales, Channel Key works every day with DTC brands that want to increase sales. While most understand the popularity of the Amazon platform, many want to know the specific ways that Amazon can benefit their brand without cannibalizing sales from their own website. This is a perfectly fair question. After all, the goal is to grow your business. For this reason, Channel Key has compiled the top three advantages to selling on Amazon for DTC brands.
1. Your Customers Are Shopping on Amazon Right Now
More than one out of three Americans are Amazon Prime members. These 126 million shoppers each pay $119/year for their membership. To get their money’s worth, they shop – a lot. Prime members spend on average over $1,000 each year. Not only that, but Prime members are also loyal. According to Forbes, 89% of consumers are more likely to buy from Amazon than anywhere else, including the most popular DTC brand websites in the world. At this very moment, Prime members are searching for products like yours who will purchase an item by the time you’re done reading this email. Put simply, selling on Amazon will help your DTC brand reach more customers.
2. An Amazon Brand Store Can Boost Sales on Your Website
As noted above, more than half of all product searches begin on Amazon. Even more important, about 95% of customers read reviews before making a purchase. This means shoppers are using Amazon to learn more about products they are interested in purchasing both on and off the platform. Building an Amazon presence for your DTC brand that includes positive reviews can influence customers who are in the research stage of their shopping journey. In short, positive reviews on your Amazon product pages can boost sales on your other channels, including your website.
3. Selling on Amazon Can Lower Your Customer Acquisition Cost
DTC website traffic often comes from paid marketing efforts on Google and social media channels. These campaigns target customers at each stage of the shopping journey. Amazon customers, on the other hand, are much closer to the bottom of the sales funnel. Therefore, your paid campaigns on Amazon will reach customers who are ready to make a purchase. In addition, since Amazon is essentially a massive search engine for shoppers, your brand store will benefit from organic traffic as well, which doesn’t cost you anything. All of this contributes to lower customer acquisition costs.
CHANNEL KEY TAKEAWAY
The number one reason why DTC brands should consider selling on Amazon is because more than 200 million people shop there each month. Not only that, but many customers prefer Amazon. According to the 2020 report from digital commerce platform Scalefast and research firm YouGov, 43% of shoppers would choose Amazon over a DTC website because of the cheaper and/or free shipping options, while 33% would choose Amazon because of Prime membership perks. Instead of viewing Amazon as competition, DTC brands should consider the retail giant as a partner who can help them reach a vastly greater audience. This doesn’t just apply to start-up or small- and medium-sized companies. Powerhouse brands like Apple and Adidas have shifted their focus to DTC sales and currently operate thriving stores on Amazon. Even with an established and loyal base of customers, they understand that the largest e-commerce marketplace in the world can help them reach an even wider audience of shoppers.
ABOUT CHANNEL KEY
Channel Key is a full-service channel management marketplace consulting agency that has helped generate $250M in Amazon sales for retail brands around the world. Complete 360-degree services include marketplace strategies, content development, marketing and advertising, catalog management, marketplace and fulfillment setup, ongoing consulting, and much more. To learn about how Channel Key can help increase sales for your business, contact us today for a free consultation.
