Getting listed on Amazon often requires extraordinary preparation before even reaching out to the online seller. Betsy McGinn will cover how to understand the selling platform, unit economics, content needs, optimal product and pack configurations, and other best practices fundamental to succeeding on Amazon during the SFA Maker Prep webinar this Thursday at 1 pm EST titled “The Amazon Roadmap.”
SFA News Daily spoke to McGinn about various aspects of the process.
At what stage of the specialty food business journey should a company begin considering selling on Amazon?
For some brands, Amazon is their initial path to market for many reasons, including instant national distribution, control of their own destiny as a marketplace seller, no slotting, no traditional distributor needed, and a closer connection to their consumer. But, since Amazon is an entirely different business model than brick-and-mortar retail, it's not right for every brand, so it is important to assess when the right entry point is.
What is one mistake you see specialty food businesses make when preparing to sell on Amazon?
There is often the misconception that Amazon is simply an online version of a brand’s retail stores. Or that the ease with which we buy on Amazon will be reflected in the ease with which we can sell on Amazon. Both assumptions could not be further from the truth; this is when I see brands struggle. There is essential foundational work to be done that is the key to success, like understanding the business model and all the levers for success, before even sticking a toe in the water.
As the world's largest [product] search engine, Amazon is a powerful tool that can be a game changer for a brand, and this is where many natural and specialty brands thrive, but I would never use the word "easy" to describe Amazon.
What are some pros and cons of using Amazon as a platform to sell a specialty food product?
The biggest pro is 148 million Prime Members who are loyal Amazon shoppers and can be a brand's biggest online sales driver. Also, Amazon has developed a Third Party Marketplace like no other, offering ease of fulfillment and robust advertising and marketing opportunities. Did I mention it's the largest ecommerce search engine in the world? Most searches on Amazon don't start with brand names but rather keywords related to product features, so it is an immense discovery opportunity for consumers. Additionally, many brands leverage their success on Amazon into their retail success.
However, it is not a panacea—there are challenges. With historically slender margins, food brands can struggle with profitability when including costs like shipping that are not a factor in brick-and-mortar retail. Also, while Amazon offers an automated seller experience, it is not always easy, and it may make sense to engage additional resources to help.
What would you like attendees to leave your session with a better understanding of?
I would like attendees to get a feel for what it entails to be successful on Amazon, and how much of your success is determined by you, the brand owner. That is why my colleague Phil Segal and I wrote the book The Amazon Roadmap: How Innovative Brands are Reinventing the Path to Market to help brands understand the importance of doing the upfront strategic work to get it right for long-term growth and success on Amazon.
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