When it comes to selling on Amazon, there are a lot of different roads to success. For example, some brands do really well in brick & mortar and also do well on Amazon simply because they are a well-known brand. Other brands do very well with their digital marketing and have embraced Amazon as part of their online sales channel mix. And then there are others who are born on Amazon and have emerged quickly by designing their entire business around Amazon.
It’s safe to say there is no single “right way” to success on Amazon, but there are some cornerstones that all successful brands on Amazon seem to have in common. This blog will walk you through the 7 fundamental principles you can follow to help you rise in the rankings on Amazon and compete (and win) against some of the bigger brands in your category.
Identify your disadvantages
Let’s face it, no brand is perfect - including your own. That means you may have some disadvantages that you will need to address. The first step to selling on Amazon is identifying how you can compete. Take stock of the biggest competitors in your space. Establish where your larger competitors possess advantages. What attributes or resources do they have that support their success and how does that compare to you? What value propositions do your competitors have and how do they compare to yours? Becoming clear about your disadvantages will help you determine how you can develop your strengths.
Develop your strengths
Once you know where you are disadvantaged, you can establish where your strengths are and develop them to the point of mastery. Although you may not have deep pockets, global distribution, or a large staff of employees, you may be able to move faster than your competition, or build your brand in a disruptive way.
Take the example of Liquid Death Mountain Water, a small, seed-funded startup. One of their big competitors is Smartwater, owned by Coca-Cola. Liquid Death recognized that they could never go head-to-head with a company like Smartwater given the budget, clout and resources that Smartwater had. So instead, they focused on where they could win.
Don’t try to win at their game
Liquid Death used different tactics to level the playing field and shift the odds in their favor. In the all-famous story, David and Goliath, we learned the tale of an underdog winning against the odds. David (the underdog) used smooth rocks and a sling against his opponent (Goliath) who was dressed in armor, spears, and a shield.
David’s quick thinking, agility and scrappiness helped him defeat his enemy. Liquid Death used a similar strategy in their quest to win market share on Amazon:
- They priced themselves competitively, even though margins weren’t as strong initially
- They manufactured their water in “tall boy cans” rather than the plastic bottles that Smartwater used. They even ran a #DeathtoPlastic campaign to get press around this
- They used competitor research to run conquesting ads (including Sponsored Products and Sponsored Brand ads) to introduce their product to in-market customers
Liquid Death has a unique value proposition - their hardcore positioning as a means of getting young adults and teens interested in drinking water. By doing so, their brand could be irreverent instead of being “smart” which is a game they knew they would win at. They also knew they could win at being “cool” by putting water in a tallboy can instead of a plastic bottle.
While you may assert that this example bears no resemblance to your brand, remember that it’s important to identify your strengths and develop them to the point of mastery, which didn’t happen overnight for Liquid Death. When you develop mastery there are actually many ways to win, but you will need to determine what that looks like for your brand.
Choose your pond wisely
Rather than positioning yourself as a small fish in a big point, find a small pond to swim in. Seth Godin has an adjacent strategy called finding your “smallest viable audience”. This strategy looks at the overlap between a specific type of customer you could serve very well with the absolute minimum amount of revenue that could support your business. In this approach, the viable circle is huge because there are many things you could sell. The minimum circle is small because there are a lot of little niche customers you could serve. Where the two overlap is the small amount of customers you can serve really, really well while still supporting your business.
What is the audience you want to hone into? If you are in the pet industry, maybe you want to focus on just toys for hyper-active dogs, or only on USDA Organic paleo-approved dog food. Once you find your smallest viable audience, you can serve them better than anyone else.
Utilize Amazon tools and service providers
In addition to the right strategy, there are a large and growing number of tools and service providers available to aid Amazon sellers in their mission to compete against big brands. One of the more cost-effective tools in particular, AMZ Scout PRO, helps you quickly analyze opportunity and saturation. You can simply search for a keyword on Amazon and instantly capture data for all of the products that appear on the page, including product title, brand name, price, estimated unit sales, and more. While you can gather data manually, it’s easier and more efficient to do it with tools - agencies and in-house teams rely on tools to manage and grow their Amazon sales channel everyday.
Focus on what consumers want
Studies find that your product price impacts 68% of the purchase decision. While product availability, product assortment, product information, and free shipping also are important, product price has the largest impact. While it’s hopeful to think that good branding and a compelling story are enough to win customers, when it comes to Amazon, consumer purchase decisions are heavily driven by price. If you aren’t priced competitively, you will not succeed on Amazon.
Pull information from successful competitors
Research is crucial for your selling strategy. Tools like ReviewBox help you quickly pull information from your competitors - including their reviews. Their tools are designed to scrape Amazon multiple times a day looking for changes in price, new reviews, change in images or copy, and other information on competitor’s product detail pages. Not only can you avoid “reinventing the wheel” by getting information from competitors, but by staying on top of your competitors’ prices and reviews you can also identify opportunities to run conquesting ad campaigns.
Even without great tools, don’t underestimate “good ole fashioned” research! Spend time browsing Amazon - your competitors’ information is publicly available on Amazon if you look for it. Conduct test buys of your competitor’s products on Amazon to analyze the customer experience to unlock new insights. When we do this with our clients, we often find at least 1-2 areas where we can create a better customer experience than the competition.
Has your brand nailed these 7 foundational strategies for success? If you are looking for help pulling together a comprehensive plan to win against large competitors on Amazon, contact Amplio today.