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Before Requesting To Work with an Agency, Consider This

November 2017

At Amplio, we’re fortunate to have a background of intense data-driven marketing and an innate desire to provide gratuitous value to our clients. We are passionate about helping companies grow their sales on Amazon regardless of their starting point, company size or exit strategy. Our experience and expertise in a rapidly growing channel like Amazon brings both opportunities and challenges. Amazon is a convoluted, menacing, beast that can completely change the way your business runs… and we are 100% confident that Amazon can change your business for the better.

All signs point to the likely conclusion that Amazon can not only can help sales and marketing channel owners make their quarter or year, but also help them make their next decade. For Amplio, this presents both immense opportunity as well as challenges. We are inundated with requests every week to take sales calls for brands across the maturity spectrum ranging from brands that are looking to launch on Amazon to brands that are looking to dominate major categories on Amazon. Many of these requests are not yet ready to begin working with established marketing agencies. Not to say these brands “aren’t good enough,” just that agencies, like any business, have an expertise level that grows overtime and an accompanying overhead level to maintain.

So what is your pulse check in determining whether you’re ready to start a real conversation with an agency like Amplio?

  1. Budget – Advertising on Amazon will cost money, and if you’ve chosen to work with an agency, they will cost money as well. The end goal here is to accelerate your brand’s effectiveness in the channel. For example, we generally we see a 4:1 return on ad sales. This means that for every $1 spent on Amazon advertising, $4 are returned. This ratio is not inclusive of the “halo effect,” which are sales correlated to ad sales but not directly attributed (conversion rate). This is not universal, and will take a period of testing and experimenting to achieve this. You’ll need a budget of (minimum) a few thousand dollars to achieve this.

  2. Internal Resources – We require a primary point of contact to own the Amazon channel and work directly with Amplio. If your team is small, usually less than 5-8 people, this may be difficult to accomplish unless an executive team member can dedicate time to support the partnership. Amazon requires integrated efforts across sales, marketing and operations. A point of contact with the authority to make decisions across departments combined with the skills to deal with ambiguity and dive deep will experience the best results.

  3. Product Development – Amazon’s “flywheel” generally dictates that the more ASIN’s you sell, the better your sales (ASIN’s are an individual sku number, i.e. single product). Do you have a portfolio of products today? Do you have an imminent plan to expand your catalog?

  4. Category Competition & Brand Reputation – For example, if you’re selling Bluetooth speakers (a hyper-competitive category on Amazon), all of your competitors in this category will be bidding on the same keywords. Many of them will have a head-start with review quantity/quality and SEO ranking. What have you done to accelerate your brand recognition outside of Amazon? Are people searching for your brand name on Google, Amazon and other search engines? Is your product differentiated enough to win? Is your price point competitive for the mass market?

If your answers to these questions are “no,” working with an agency may not guarantee success on Amazon. So, what to do when you haven’t met these criteria yet in terms of your brand journey? Consider the following:

Work with a Broker

Many brands we work with started off working with brokers, and this may be a great place to start on your Amazon journey.

Pros: Amazon brokers typically charge a short-term setup fee followed by an ongoing percentage of sales. Their revenue model is fairly simple. It plays to brands who appreciate the low-risk, “you win when we win” mindset, and is consistent with broker models found across other retail channels. Reps generate revenue from their client by applying this percentage to invoice amounts that the retailer pays to the brand manufacturer. Many rep groups will front or outright pay for the costs of common promotions tactics, knowing that they will recoup the investment when they earn a percentage of sales that is bolstered by the promotion.

Cons: With long-standing relationships, their businesses are built on referral. If those relationships dry up for any reason, their effectiveness also dries up with it, at least momentarily. Typically brokers are “door-openers.” Since they’re typically compensated exclusively based on a percentage of sales, their incentive to fix any past transgressions or strategic mistakes is often limited. They’re ideally looking for brands that are poised to instantly grow sales once the relationship is established within their Amazon network, and their time and dedication will follow accordingly.

DIY Through Self-Education

The fact that you’re reading this article serves that you’re a person that is hungry to learn. Amazon is a beast, but it is manageable. YouTube and Google are your friends here—keep track of your questions and thoughts, and find resources online that can get them answered. You’ll find a few searches yield the same thought leaders in the space, so find the ones that resonate with you and your brand in your journey, and soak up as much content as possible.

Pros: This is possibly the cheapest alternative in the mix (depending on how you value your time). Your learnings stick with you, are largely scalable/repeatable, and will at minimum help you ask better questions if you decide to work with an agency down the road.

Cons: Time is valuable, and depending on the size of your company and your scope of responsibilities, you may not have “extra” time to dedicate to learning. The growth or quota goals you’re being held to may be time sensitive and the learning curve too long to realistically achieve them.

Contact Amplio

If you’ve read to this point and none of the above options work, call us. Yes, this goes counter-intuitive to this entire article, however we’d be happy to hear from you, setup an initial call to determine whether we would be able to help you achieve your goals, and, at minimum, provide some directional guidance to help you grow your brand.

Pros: We’re awesome, tons of fun, and most importantly we take our Core Value of “Give Before You Get” very seriously. There’s nothing immediately monetarily in it for us, but our hope is that we may be able to work together down the road, or you refer your friends to us that are also looking to grow on Amazon.

Cons: We may not be able to help. Perhaps you’re already doing everything right, or our cost to help may exceed your resources. You may also make some good friends during the process, which can be counter to your personality.

Contact us here.

 

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Amplio Digital
Written by Amplio Digital

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