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Creating an Efficient Marketplace Strategy on Amazon

On today's episode, Steve Weiss interviews David Yu, an expert on growing brands on Amazon. As brands are transitioning from D2C to online marketing places such as Amazon, Weiss and Yu discuss how to build an efficient marketplace strategy.

Episode Transcript — Creating an Efficient Marketplace Strategy on Amazon

Narrator: You're listening to the Spend $10K a Day podcast brought to you by the performance marketing experts at MuteSix. This is your source for cutting edge insight into the world of online advertising from the team with more Facebook case studies than any other agency on the planet. Here is your host Steve Weiss.

Steve Weiss: Hello, everyone. Welcome back to another episode of the Spend $10k a Day podcast. Everything eCommerce all day every day. Hopefully everyone is geared toward an amazing Thanksgiving and Black Friday. We're going to give you some great content, specifically today on Amazon to consume before you consume your Thanksgiving meal. We have an awesome guest today, David Yu, our residential Amazon everything Amazon expert in the house. David's focus for the last how many years seven years has been specifically on growing brands an Amazon, so he's seen the evolution of the Amazon platform. Welcome aboard, David.

David Yu: Hey, Steve. Thanks for having me. Great to be here.

Steve Weiss: So obviously the big question everyone asks is a lot of brands are selling products D-to-C right now, they're selling products through Shopify, through Magento, through in store, and how do you transition a brand that's historically sold through traditional D-to-C eCommerce metrics to being a successful Amazon brand? I guess the old adage is you grow brands on Shopify, you grow brands on Magento, some of these other platforms, but you sell lots of products on Amazon. Is it possible to grow a brand that already has a name for itself on Amazon?

David Yu: Yeah, definitely. A lot of brands right now are using Amazon as a growth channel, not just a separate channel in itself. So in terms of growing your brand off of your Shopify platform, there's definitely opportunities out there. Not just Amazon, but a lot of the growth does happen on Amazon these days.

Steve Weiss: So we talk a lot about the word marketplaces. The word workplaces is now synonymous with you have your paid social strategy, you have your obviously your Google strategy, which encompasses all of Google's network and properties, you have your offline strategy, you have your podcast strategy. Now you have what you call your marketplace strategy. Underneath marketplaces, you have the Amazons, you have the Targets, the Walmarts. Tell us about this word marketplaces. What does it mean? When you say, "What is your marketplace strategy," go into how do you build a marketplace strategy.

David Yu: Yeah. In terms of marketplaces, it could entail any of the third party marketplaces out here. So it could be Amazon, Ebay, Those are just to name a few. But in terms of just having a holistic marketplace strategy, essentially what you'll want to do is one, make sure that you're in control of all of your products and your branding. So you want to make sure that all of the content goes with what your brand persona is, but also what you're trying to display. But also at the same time, you want to make sure all your pricing is consistent, all of your promotions, you have your promotional strategy all set across all channels and that you're in full control.

Steve Weiss: Why is that? That's a really good point. Obviously somehow brands get their brand ripped off and sold at discounted prices on some of these marketplaces. Number one, why is it so important to really control your brand on marketplaces, and number two, what are some of the steps that you've done over the years to really make sure that the brands are protected that you've worked with on these marketplaces?

David Yu: Yep. It's really important for you to control your distributor relationships, especially offline, that you do have agreements. A lot of options that you do have available for you would be separate offline agreements with your distributors. You can agree about net pricing. So in terms of going below a certain price, you can agree not to go below a certain price with them. The reason a lot of brands have this effect is just because a lot of brands have resellers that sell their products that don't really care about the actual brand themselves. They're more interested in making profits. And the more profits that they can make on each of these marketplaces, they're definitely going to sell a lot more. But they don't really emphasize the brand equity. They don't really emphasize the pricing structure, all of these standards that are put in place to protect your actual brand itself.

Steve Weiss: Cool. Obviously we're building on a marketplace strategy. The number one thing we're thinking about is protecting our brand and having consistent content across all these platforms. What's the next step as far as building out this master strategy of going from D-to-C to marketplaces?

David Yu: Yeah, definitely. Definitely making sure that all of your brand content is consistent, like you've said. The next step would be to make sure that you have full visibility on these marketplaces. There's so many brands on these marketplaces that you have to compete with that you may actually lose visibility on these marketplaces because your ranking might not be high enough. So in terms of that, making sure that you're advertising to compliment your brand strategy to increase your visibility on these marketplaces actually increases your overall holistic brand presence on these marketplaces.

Steve Weiss: Cool. So number one, consistency. Make sure content's consistent. Number two, we call visibility. We upload our product skews into Amazon, we sign the Amazon seller relationship. Next step is optimizing our title tags and our body tags to rank for specific Amazon searches. And we also want to do Amazon paper click. This all increases visibility. Dig a little deeper into visibility of when you start laying down a road map for visibility. What are the steps?

David Yu: Sure. Definitely. There's different steps included in that. The first would be the organic piece. The organic piece entails, like you said, making sure all of your titles, all of your key features, all of that are optimized and SCL ready. In terms of the marketplaces, you may not just rank on top of the marketplaces, but you can also rank on top of the Google search engine ranking pages per se. So you want to make sure that your SCO is in line, that you have your valuable keywords in your content, but also at the same time that your PPC is in play, as well. You want to make sure that you're advertising for your priority keywords, but also at the same time that you're growing your account with keyword expansion.

Steve Weiss: Talk a little more about keyword expansion. Obviously a lot of the people who listen to this podcast are seasoned search marketers. They've been doing SCO for a long time. They've been doing Google PPC for a while. Talk about search expansion. How is Google and Amazon different and similar?

David Yu: Sure. Google is more of a consumer oriented platform. They do more research on Google. Google actually places more emphasis on related searches. On Amazon it's more of a eCommerce platform, so they place more emphasis on pretty much conversions. So the more of the conversion metrics that you're effecting with your PPC ads, so let's say click through rates, conversion rates, that'll rank you a lot higher. The number one factor that you rank on Amazon is sales velocity. It's not just site load to sales velocity, but that's the number one ranking factor on Amazon.

Steve Weiss: Okay. That makes a lot of sense. If you really want to game the Amazon algorithm, build product pages that convert. So probably the main variable is looking at your product conversion rate, I guess, inside of Amazon analytics. It's really making sure that you're continuously making iterative changes to your product page where there's images or title tags that are increasing the velocity of convergery sales for each user. Correct?

David Yu: Definitely. You want to make sure that all of your conversion, all of your product content is ready, what they call retail ready, but also at the same time that you're driving traffic to this page, that these people are converting and making sure that your sales velocity is increasing on the marketplace.

Steve Weiss: David, you've been doing this a long, man. I'm sure for us novice Amazon marketers like myself, what are some of the tricks of the trade to really start getting up a really highly converting product page? Any best practices? Anything that you've learned over the years? That'd be gratefully helpful.

David Yu: Definitely. Making sure that you include all of your keywords, all of your relevant keywords in your product content, but also at the same time making sure that your images are fully optimized. What I mean by fully optimized is that you're highlighting the key benefits of the actual product itself. But also at the same time since this is an online marketplace, a lot of people can't really visualize, or can't really understand what the product actually is, or how big it is, or even just any aspect of the product itself. Your job is to really help consumers grasp that idea, making sure they understand what they're actually getting.

David Yu: In terms of the product, you want to make sure that they're fully aware of what they're getting, you're not misleading in anything, any of your statements, while also at the same time you want to make sure that you utilize the customer feedback to the fullest. If you're getting any questions asked, if you're actually getting any reviews, you want to make sure that you're reviewing those questions, you're reviewing the feedback and making sure that you're addressing those in all of your product content.

Steve Weiss: I'm sure reviews play a big role in that sales conversion rate.

David Yu: Definitely.

Steve Weiss: Kind of like one big ecosystem. If you get the best reviews, your conversion rate on visit to sale goes up and then you get more visibility. I guess at the end of the day if you're a marketer, your goal is to keep your customers happy and manage the expectation of these customers. You could do everything humanly possible, be great at PBC, be great at organic, putting the right keywords in the right places, but if your product doesn't fit the expectation of the customer, you're going to be in trouble. Correct?

David Yu: Definitely. And the reason why I say product content is so great, or so important is because that it really affects how people perceive the product. And ultimately if they perceive the product as such a great product, but when they actually receive it it's different from their perceptions, they may actually have a negative affect on their actual perception of the product, but also their reviews that they leave. So making sure that you have good product content and that it really resonates with the customers, but also at the same time that it's really truthful and straightforward and really allows the customer to visualize your product is so important.

Steve Weiss: Cool. So you're launching a new brand on Amazon. Number one, obviously consistent messaging. Number two, visibility. What's the next element? Those are the two main elements. Where is the next element of the strategy?

David Yu: Definitely.

Steve Weiss: The launch strategy per se.

David Yu: Definitely. Just making sure that address all the product content, all of your advertising, but also at the same time your ongoing brand management. You want to make sure that, especially on Amazon, that your brand registered so that way you can participate in all of these programs. You can participate in the enhanced brand marketing. You could protect yourself on the marketplace from counterfeiters or hijackers. This next step is definitely an important piece in the Amazon marketplace.

Steve Weiss: That's interesting. So you want to register your brand.

David Yu: Yes.

Steve Weiss: And I guess what Amazon does once you register your brand that it protects you. They give you extra layers of protection on the marketplace against people counterfeiting your brand. Obviously once you have great traction and success, people want to emulate that. Lots of people don't like doing work so they like ripping the exact product. That's really interesting. Number one, consistent content across everything, making sure that everything, your deals across all the platforms are consistent. Number two, obviously visibility. Number three, registering your brand for extra brand protection.

Steve Weiss: And number four, let's talk a little about supply chain. I know we talk about that a lot of how much product do you send to fulfill by Amazon, how much product do you keep in house, which products do you put on Amazon. Maybe you want to use Amazon as a teaser to get people to come to your eCommerce store. Talk a little more about supply chain because I think that's very interesting.

David Yu: Sure. Definitely. You want to make sure that you focus on your actual inventory because your actual inventory at Amazon determines your actual fees that you'll be paying. In terms of if your product inventory is there for too long, you may incur what's called long term storage fees. So you want to make sure that you send an accurate amount of inventory to the Amazon warehouses, but also at the same time you want to make sure that you're not out of inventory because that's one of the factors that actually hurts your rankings on the Amazon marketplace. Just having the right amount of inventory at Amazon is key.

David Yu: In terms of how you figure that out, one, you want to make sales forecast based on your product history, but also at the same time Amazon is a major volume driver of traffic and conversions. So you want to make sure if you're selling on your website maybe let's say like ten units a day, on Amazon you may actually increase volume to even 30 units a day. So you want to make sure that you factor in that Amazon does have more volume than your website and you want to make sure that you send in inventory to Amazon at the amount of volume that you perceive would be selling on Amazon.

Steve Weiss: That's incredible. There is actually a storage fee that you pay just if your inventory is there for a while. That's really important to understand and factor into your supply chain cost is that if you send too much product to Amazon ... I think a lot of companies try and send all their skews that don't sell on eCommerce, and they don't realize that there is a fee for this if you sell it through Amazon. Really interesting of just really understanding your sales forecast. The next, before we wrap things up, Black Friday strategy and holiday strategy on Amazon. Talk a little more about some of the Black Friday and holiday strategy that you've set forth over in your career, David, because I know you've always been very creative.

David Yu: Definitely. In terms of Black Friday and Cyber Monday strategy, you want to make sure that you optimize your products, making sure that you're fully conversion ready because all of that traffic is coming to your product pages. So you want to make sure that you're converting on that, but also at the same time that you are driving traffic. So making sure that your PBC campaigns are fully in line, but also noticing that your campaigns ... Basically, if you're targeting more broader keywords, you want to make sure that bid down on your broader keywords, but bid up on your priority keywords that way all of the broader keywords are not sucking up your ad budget. And you may run into daily ad budget issues, if you're spending too much on those broad keywords. Again, just making sure that you budgeted enough for these key important dates for your ad campaigns, but also at the same time that you're cutting out a lot of the fat in terms of your keywords.

Steve Weiss: Great. Okay. That's really interesting. Obviously price testing is very important as well during that process. Always, always optimize. I talk about this a lot with David. Always optimize toward sale conversion at all cost. If you're getting wasted traffic on Amazon, it's going to hurt your ranking, so always make sure that you're 100% focused on getting that good conversion rate. Well, David, before we wrap things up, anything else you want to add?

David Yu: Yeah. In terms of just getting forward with the holidays, just make sure that you're fully optimized with your products, again that you're fully optimized and making sure that you don't run out of stock, that your products are fully visible on the marketplace, that you're having ongoing brand protection and just making sure that you're keeping a holistic strategy for all of your marketplaces.

Steve Weiss: Great. It's been a great episode. I've actually learned a lot. I always ... Whenever we chat I always learn a little bit more about Amazon. Coming from personally a very media paved, social paved search background, the marketplaces have always been fascinating to me because I know that they're big sales drivers and they actually are a big piece of the business, for most companies who are in leveraging marketplaces. We're going to be coming up with some more content specifically on marketplaces. We're going to be diving deeper into brand coming up on a couple podcasts in the future, so stay tuned. Hope everyone has a great Thanksgiving. And this is another great episode. I'll talk to you guys soon.

David Yu: Thanks, Steve.

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