Insights

Amazon Programs: What Brands Should Be Considering

Expo_West

 

A growing number of programs are available to brands on the Amazon Marketplace, each with its own set of features, advantages, and risks. These programs tend to follow the following three objectives: adding value to the shopping experience, making products more accessible through lowered costs, and making products more easily visible.
 

A quick overview of Amazon’s various program offerings
 

The Brand’s Broader Ecosystem

When executed properly, each Amazon program has the ability to create a ripple effect, increasing demand and raising awareness on participating products. It’s important to be mindful of the ways in which one program will play into your brand’s overall strategy. For example, promoting a product through a Lighting Deal may decrease the perceived value of a premium product, while potentially boosting the awareness and reach of a new release. Not every brand or product will benefit from any given Amazon program, so consider how it fits into your greater strategy before implementing.
 

Consumer benefit

Your shoppers may find value in certain Amazon programs, but may be deterred by others. If you sell a replenishable product, a program like Subscribe and Save can reduce friction for your loyal customers, as they won’t need to remember to order your product each month. At the same time, nobody needs a new cast iron skillet every two weeks.
 

Cost

Participating in Amazon programs needs to be seen as an investment. It’s worth investigating what kinds of return on investment you can realistically hope for, and determine what long-term goals your strategy promotes. Participating in Vine Voices, for instance, has costs associated with it, but may very well put a new product on the map that otherwise might not see high levels of traffic. If you run a Lightning Deal and your product sells well, you will be sacrificing your standard profit margin for awareness, customer satisfaction, and product reviews. Stay aware of costs, the potential ROI, and make sure your short-term goals feed into your long-term strategy.
 

Risks

Each program offered through Amazon has inherent risk. When running a standard promotion, there’s a chance that a campaign that doesn’t hit the ground running, resulting in a poor or negative return on investment. This is a risk that marketers deal with every day, and while there are financial downsides, the negative impact is relatively isolated. However, choosing to enter a product in Vine Voices may result in negative feedback for a product of yours. This puts your brand in the unfortunate situation where you paid to decrease your product’s perceived value. Understand the potential risks of entering programs, weigh them against the benefits, and use this information to make an informed and calculated decision.
 

Success

Define what success means to your brand, both in the short and long-term, and choose a programs strategy based on your goals. If you have a product that is already relatively successful, but you are shooting for a higher sales goal, a standard Amazon promotion is a safe bet. Subscribe and Save is great for building customer loyalty, particularly with replenishables. Lightning Deals and Vine Voices should be reserved almost exclusively for new and underperforming products with low sales rankings, and will infrequently yield a short-term return on investment. Put simply, do not take shots in the dark when choosing an Amazon program, and avoid implementing strategies that don’t directly support your brand’s goals.
 

Again, focus on the long-term

Having a successful campaign with one Amazon strategy should not be the end-goal for brands who are serious about their e-commerce presence. The majority of Amazon programs function best as part of a longer, greater strategy, and seldom create instant-gratification ROI. Create a plan that focuses on nurturing product or brand awareness, building long-term customer loyalty, and increasing sales volume consistently over time. Learn from the programs you participate in, set realistic goals, and continuously adjust your strategies to feed into your brand’s broader ecosystem. While Amazon programs are not one-size-fits-all, they offer a unique opportunity for brands that are patient, future-oriented, and willing to take calculated risks.