Hagerstown, MD, USA - June 2, 2014: Image of an Amazon packages. Amazon is an online company and is the largest retailer in the world.

How to Sell on Amazon and Protect Your Brand

By Chuck Penzone

I recently finished reading “The Everything Store” by Brad Stone, an excellent account of the history of Amazon so far. I’d highly recommend reading the book if you’re interested in learning about Amazon’s culture, their approach to business, or selling on Amazon. Is it required reading for a new seller? Not at all, but it will help you understand why Amazon make the decisions they make.

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One of the things that stood out to me was the number of companies and industries caught completely off guard by Amazon and the ensuing fumbles managing their brands on the Amazon platform. Many accuse Amazon of unfairly destroying other online retailers the way Walmart has been accused of destroying Main Street. Yes, there are examples of ruthless negotiation and some unfair price-cutting business tactics but Amazon has been in the relentless pursuit of providing a better online shopping experience for consumers since it’s inception. Consumer’s approach to shopping for anything and everything has changed, not just due to Amazon, but due to the still evolving internet as a whole. Amazon has, in turn, repeatedly adjusted, improved, invested, and reinvented itself. It’s this relentless pursuit and willingness to change that has cemented Amazon as the preferred online shopping destination now and for the foreseeable future.

So, if Amazon is the preferred shopping destination online but their business practices undercut profits and can potentially damage brands, how can you sell on Amazon and protect your brand?  Well, the obvious solution would be not to sell on Amazon. This approach might work for big multi-billion dollar brands like Nike and Lulu Lemon but for smaller brands the customer acquisition cost is likely to be too steep. The Amazon website gives you access to millions of customers who are actively searching for every type of product, every day, all over the world.

So, rather than view Amazon as an enemy trying to steal your margin, maybe piggy back on their dominance and platform is the better bet if you can maintain or even improve your brand queity. You might not ever view Amazon as a friend but could you consider frienemy? With that in mind, here are few tips and tricks to help protect and build your Brand ID when selling on Amazon:

  1. Caveat Venditor (Seller Beware) – Not too long ago in the early 2000s it seemed the consumer landscape was returning to the Pre-Industrial Revolution notion of “Caveat Emptor” or “buyer beware”.  You couldn’t go to the store and buy a gallon of milk without being offered a protection plan in case of spoilage. Amazon has quickly reversed this course.  On Amazon, the buyer holds the cards – almost all the cards.  This means as a seller you need to choose your battles carefully. That’s not to say Amazon will let buyers abuse sellers but if you’re the type of company that typically likes to battle with your customers here and there about a return then selling on Amazon may not be the place for you. If you know this going in and you budget for a higher percentage of returns you’ll be better equipped.Amazon is making Caveat Venditor great again.Did you get the protection plan? On Amazon it doesn’t matter – Amazon is making “Caveat Venditor” great again.
  2. Stay Organized – To be more specific, stay organized with your products.  If you’ve never sold on Amazon before or your current product mix on Amazon is disorganized, incomplete or confusing, fix it. If you’re not sure how, consider hiring a firm (like Core) to help you formulate a plan for listing your products. The seller options and information on Amazon can be a bit overwhelming and if you set up a seller account and just start dumping things in, you’ll likely figure out there was a better way.  Why is this important?  Because organizing your products, creating proper variations, and providing product information clearly and correctly will help protect, establish, and legitimize your brand.

    Organization done right.
    Organization done right.
  3. Exclusive SKUs – Depending on the types of products you sell, consider creating Amazon exclusive SKUs. Let’s say, for example, a popular shoe company sells the PowerZoom running shoe on their website. It sells well on their current site but they’d like to open up the Amazon sales channel without completely cannibalizing their current sales.  They could create the “PowerZoom Z” or an exclusive color variation either on their own site or on Amazon’s. This might help to alleviate the pricing issues some sellers have seen from Amazon’s Web crawlers automatically crawling the web and offering your product at a lower price as well.
  4. Product Photos – So the good news is Amazon requires a very clean aesthetic for all primary catalog images.  They must be shown on a white background, centered, no violators, and the product must be the focus of the shot.  Why is this good news? Because it looks nice and most companies already have them on file this way (thanks Apple). The bad news is that Amazon’s system optimizes the thumbnails and, in our experience, product images tend to look a bit fuzzier than they might on a company’s own website.  In addition to the clean white aesthetic you should do the following:
    1. Take all your photos from the same angle.
    2. Make sure that the color of your products matches. If you have four models of headphones that are made with the same purple. Make sure those purples match exactly across the board.
    3. Pay a professional to shoot your products on a gray or white background and then clip them out (remove the background) properly – you might think it looks fine but the consumer subconsciously notices things like jagged edges or background areas that have accidentally been left in.
      screen-shot-2017-01-11-at-9-21-35-am
      What am I buying here? Why are there two different colors? What’s with those abs? I’m pretty sure these aren’t approved by Michigan State but that’s a whole ‘nother blog post.

      Okay, so yes, most people can probably figure out the gray Michigan State sweatpants above are what you’re buying and the black are just for reference but the point is, it looks amateurish and is damaging to a brand.

  5. Brand Gating – Follow the steps on this blog to try and get your brand “gated”. Amazon Brand Gating requires that anyone selling certain major brands submit three official invoices and/or a letter from the brand owner before they can sell your products. This is arguably the most effective way of protecting your brand on Amazon in regards to pricing and 3rd party selling but if you ignore the above photo and organization points you still won’t be establishing a quality brand presence.
  6. Cross-Sell – So you get to pack what’s in your product right? So how about some good old fashioned cross-selling material that points your new customer to your website for additional accessories and other products?
  7. Communicate – if you’re having a problem there is a good chance another seller has experienced it.  Utilize the forums on seller central to find out what others have done in your situation. Don’t be afraid to reach out to Amazon. Despite their “caveat venditor” approach their seller support team is extremely responsive.  If someone is abusing returns, leaving unfair feedback, or unfairly taking advantage of you they’ll try and help.
  8. Police – If you’re selling your own products on Amazon and your brand isn’t gated (see number 5)  you will almost undoubtedly find some other seller magically starts listing your products at a lower price.  This is referred to as “hijacking”.  There are a couple different ways to combat hijackers. One method is to send an official sounding note with an immediate take down demand. Something like the following is usually effective:

    The following listing and any listing related to {insert your company} is in violation of proprietary design and copyright laws as well as Amazon’s seller policies. To avoid legal action the listing must be taken down within 24 hours.

    {Copy URL of listings in violation}

    You could lower your price but lowering the price might lower the perceived value of your brand. Another suggestion would be to have a friend buy the product and then file a complaint.  I don’t like the this method because it’s likely that the hijacker will shut down their current store and just start another… plus you could end out the price of the item or return shipping. For more information on dealing with seller hijacking there is a great article on this blog mywifequitherjob.com.
    Screen Shot 2017-01-11 at 9.33.45 AM.png

  9. Redefine Success – You may need to redefine what constitutes success on Amazon. Separate out the Amazon SKUs from other product channels and strip out any overhead costs that don’t truly apply. The costs of your marketing flyers, your sales associate, etc shouldn’t be added into the product costs. You may not be able to do this from an accounting standpoint but it’s at least a useful metric for understanding how much profit you’re actually making from the Amazon platform.

Protecting your brand and selling on Amazon aren’t easy but I’m not sure why people ever expected it to be. Brand management and selling have never been easy.  It takes dedication, ingenuity, and a consistent ground game. Is Amazon perfect? No. Does Amazon always do what’s right for brands? No, but I do believe they’re trying to be better. Yes.

Thank you for reading. If you’d like to work with a Brand Identity and Design firm that innovates, creates, and helps you get the word out consider Core. We’d love to have a conversation.

1-866-362-8962
www.discovercore.com

 

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