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For the past two years, brands like Supply, Beardbrand and Ranch Road Boots have teamed up with Nike and Ikea to leave Amazon. While this change in strategy is attracting interest from DTC brands, it is one that eliminates their presence from the world’s largest shopping site. This begs the question: how can brands leverage Amazon to increase DTC sales? Let’s dive in directly.
As the world’s largest product search engine, Amazon offers key benefits that work for the benefit of the seller and also attract consumers. Specifically, consumers trust the platform. In addition, added incentives, such as Amazon’s one-day delivery, an accessible catalog of various products, and the brand’s purchasing power, are added to the platform’s assets.
The downside? High commissions, great price and keyword competition, non-unique product pages, prioritization of sponsored listings, and of course, the uncertainty of having your listings removed at any time.
While this makes switching to a single DTC sales channel a little brighter, it comes with its fair share of drawbacks. Full control over content, no market rates, and long-term customer creation is offset by heavy work to attract customers, investing in site maintenance, and building customer trust.
Sellers who also sell DTC channels fear that having both sales channels will cause Amazon to cannibalize their DTC sales and undermine their high-cost DTC marketing efforts. All this while paying Amazon with high sales commissions.
Here’s how brands can leverage Amazon to increase direct customer relationships:
Strategically perceive Amazon as a gateway to relationships
When a customer discovers and buys your product on Amazon, they are still an Amazon customer. They made the decision to find a solution to their problem on Amazon. Although they chose your product, they first relied on Amazon to show off their products and brands.
Think of a multi-artist exhibition or gallery. Brands that want to grow direct customer relationships through Amazon perceive it as the “gallery” that offers them the opportunity to make a great first impression on the consumer. However, this may not work as well as you would like from the first interaction.
This is how an artist would use a gallery to showcase their talent and offer visitors an experience that would leave them wanting more. This could be implemented in a number of practical ways that we will discuss later. But that mindset is crucial to succeeding in using Amazon to grow direct customer relationships.
Related: 3 Ways to Get Your Amazon Customers to Buy Directly From You
Use (and A / B testing) product inserts to initiate direct relationships with Amazon customers
Think of Amazon as a sales engine, not a customer acquisition channel. With no data or opportunity to reconnect with the customer, you mostly make sales on Amazon but do not acquire customers.
Despite strict restrictions on the content of your product listings, there are several ways to interact with your customers outside of Amazon without violating the rules.
The most effective ways to interact with customers are email and text messaging. Think of the added value you can offer the customer that would show enough incentive to give you consent to interact with them after their purchase on Amazon. For example, sign up for a lifetime warranty, sign up for an exclusive content club, or even free products. Direct them to register using a special link (QR code or a very short URL works best) to your list.
Try the A / B offer to see which resonates best with your audience and get the most engaged customers. From now on, it is up to you to offer great value for your consent and commitment to your brand through this channel.
Professional advice: This is not just a list of potential customers: they are customers who have received your product, lent money, and paid attention to your brand, and are now hoping to gain more value from your brand. The more value you provide, the more chances you have of turning them into customers who pay directly with your brand. This is the “trust meter” that will get them to buy directly from you next time.
Use Amazon as a showcase
As the world’s largest product search engine, consumers can search for your product or brand on Amazon even if they’ve seen your ads outside of Amazon. Consumers rely on Amazon’s review system. While many sellers are angry that they are removing reviews, some are taking advantage of this system of consumer confidence to increase credibility and sales outside of Amazon.
One of the strategies we use for the brands we work with is to drive your product to Amazon to make as many sales as possible. We click to get so many positive reviews and show these reviews outside of Amazon, in ads, email marketing, and social media.
We then offer a coupon to consumers to encourage them to purchase the product directly from the brand’s website. In this way, the brand enjoys the credibility of the Amazon platform and acquires customers directly on its site.
Related: 6 reasons why Amazon product reviews are important to marketers
Get ready to balance or even lose money with Amazon sales to earn long-term with DTC
To drive sales and beat the high competition in the Amazon marketplace, brands need to think of Amazon as a marketing channel rather than a profit center.
When done right, brands can acquire high-quality Amazon customers who will buy and interact directly with the brand. This saves high market rates and the constant need to adapt to Amazon’s new regulations and growing competition.
In addition, this allows the brand the freedom to display their products and brand in the way they want. It also gives brands the opportunity to learn more about their customers’ preferences and innovate new ways to better serve them.
Given the sheer value that brands get from direct customer acquisition and the high cost of acquiring them outside of Amazon, it’s sometimes worth spending more advertising on Amazon. Alternatively, brands can lower the prices of specific products within Amazon and gain traction in initial sales to have the opportunity to turn more of those sales into long-term customers.
This is similar to the strategy used by accessory manufacturers when selling in Apple stores. Although they sometimes make or lose money with front-end products that are sold in Apple stores, they get long-term customers. When done right, this also helps to increase brand recognition and word of mouth marketing.
If the strategies I have presented to you today are beneficial to you, or if you plan to use them in your sales activities, I would love to hear from you! Or, if you want to talk more about how brands can use the changing landscape as an opportunity to grow, feel free to leave me a note!
Related: 3 reasons why brands should switch to a direct consumer model