Is an Amazon-only Approach Right for Your Business?

Remember in 1999 when everyone thought computers weren’t smart enough to handle the changing century and the world would simply crash at the stroke of midnight? Well, we are now staring down 2020, and man, have we come a long way since the Y2K jitters. Nowadays, digital is where we live. And with that, DNVBs (digitally native vertical brands) are a thing; A huge thing! People are creating brands, strike that, full businesses, completely online.

I recently read an article from ModernRetail about companies that are now building brands to sell and launch only on Amazon. My first thought was, wow, what if Amazon ever had its own personal Y2K? I shook that thought off quickly though as I have a lot of faith that the digital geniuses who are employed at Amazon HQ would not let that happen. There’s too much to lose!

My second thought was, this is the evolution of DNVBs. Traditionally, DNVBs go directly to the consumer via their own websites. They own the full customer experience within the digital space, a place where consumers spend more than 40 hours a week according to Hootsuite and We Are Social. One thing about businesses, though, that has remained a constant since businesses began is that you need traffic to be successful. Feet have turned into mouse clicks, and these DNVBs are in a place where they can be found and patronized.

Now brands are taking that one step further. Instead of competing for visibility in a completely saturated Internet market, they are going directly to the most walked street on the block: Amazon.

Going all-in on the eCommerce behemoth is a big task, however. Although Amazon is the most trafficked street on the block, with one study showing 66% of new product searches starting on Amazon, the platform itself is saturated. So brands that do decide to launch here need to tackle their launch plan strategically. ModernRetail put it best: “The intent is to build an Amazon SEO flywheel.” That means investing in customer acquisition campaigns, directing traffic to Amazon products from third-party sources, and of course, building extremely healthy product detail pages that are optimized and advertised.

An entrepreneur looking to launch on Amazon only must consider product quality. Healthy product detail pages are a must for this strategy, and are not an easy task. A healthy status relies heavily on low return rates and buyers leaving positive reviews. So, if you are going to launch a brand solely on Amazon, the products must be great and so-so won’t cut it. Products cannot just be manufactured, but also readily available. They need to be what they are represented to be, and they need to work well. Otherwise, don’t bother.

The overhead is also something to consider. Yes, Amazon takes its cut from products you sell online, but what would the alternative be? Brands thinking of this strategy need to analyze how Amazon’s fees compare to the conventional costs of doing business.

A huge item to also consider is your end goal. Are you trying to gain sales quickly and at scale, regardless of brand affinity? Or are you trying to build a recognizable brand? If you launch solely on Amazon, you will lose the customer experience. Amazon has gone to great lengths to ensure that it is the face for its customers (read: encrypted email addresses that do not allow for B2C communication off the platform, uniformed product detail pages, and more). Thus, you will never truly be face-to-face with your customers if you launch here; Amazon will always be the middleman. This means that your branding and customer experience standards may get lost in the mix. For some, this isn’t a concern. However, for entrepreneurs who are looking to build a strong brand identity, not just sell a product, a solely Amazon-operated business may not be the best way to meet that goal.

There is a lot to consider when deciding if creating a brand solely for Amazon is beneficial for you. It is risky for sure. It might work. It might not. If a budding brand is thinking of this strategy, one thing is certain: it must be done strategically and it must be done right. For those who do make a run at it, just be ready in case Amazon ever has its own personal Y2K. It’s not probable. But, hey, anything is possible. Backup plans are a must for any business taking the risk!

Looking for help with your company’s Amazon strategy? Contact us today.

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