Scale Smart Checklist: Preparing Your Brand for Growth on Amazon (Download Included)
This is part two in a comprehensive three-part series on Amazon retail strategy. If you haven’t already, see our Retail Readiness Checklist before reading this article.
Sales are Trickling In
You’ve launched on Amazon. Your products are up and running. You’re seeing steady sales, and you’re ready to grow. But before you can grow, your processes need to be scalable.Scalability refers to the way a system handles growth. What works efficiently for a few products should maintain its efficiency for hundreds of products. To accomplish that, each part of your Amazon retail strategy needs to be synchronized and working together.
Engaging the Supply Chain
Amazon’s fulfillment gives brands a host of options, and putting all the pieces in place can be overwhelming. Taking the right approach can reduce fees, boost efficiency, increase customer satisfaction, and give your brand a significant sales lift on Amazon.There are three ways to fulfill on the Amazon: Fulfillment by Amazon (FBA), Seller Fulfilled Prime (SFP), and Merchant Fulfilled Network (MFN). Of these three options, only FBA and SFP meet the eligibility standards to be a part of Amazon Prime, which is critical for any brand that wants to be competitive. Consumers shop on Amazon because of the convenience Amazon Prime offers — two-day shipping, convenient returns, and so on. A Prime badge signals these conveniences to shoppers and positions products competitively on the playing field.Out of all the fulfillment options, FBA will almost always be the best choice. FBA is a robust system that allows inventory to be injected into Amazon fulfillment centers. Amazon handles the rest of the fulfillment process from there, but it isn’t a free service. Amazon charges storage fees for the amount of space being taken up by inventory.In order to get the most out of FBA, the idea is to only store the inventory necessary to fill demand and no extra. That’s where demand planning comes in. You don’t ever want to run out of inventory, but you also don’t want to incur extra Amazon storage fees — that’s the fine line that needs to be maintained.Brands also need to consider whether or not their supply chain is best suited to their products’ needs. Large products or products with special requirements — such as food-grade or cold storage — will need to be catered for specifically. There isn’t a one-size-fits-all solution. Brands will need to find a strategy that works for their own unique needs.Lastly, brands need to have a supply chain team in place that can dedicate an appropriate amount of focus towards Amazon-focused fulfillment. This becomes especially important as sales volume increases. If logistics aren’t worked out ahead of time, it will be very difficult to keep up with any sort of growth.
Rethinking Packaging
Packaged products experience more wear and tear on Amazon than in a brick and mortar supply chain, and that’s because of the touchpoints involved. The standard process for a brick and mortar supply chain only has four to five touchpoints. Products typically go from the manufacturer, to the packing line, and then to a store. That’s fairly straightforward, and not at all similar to what happens on the online marketplace.On Amazon, products can encounter up to 25 touchpoints. That’s a significant increase from a traditional supply chain. For packages that get returned — which happens much more commonly in e-commerce — this is just the first half of the journey.Aside from durability, there’s also efficiency to consider. Amazon storage and fulfillment comes at an expense. Making efforts to reduce packaging size results in big savings down the line. The smaller the package, the fewer number of pallets are needed to ship orders from A to B, which means fewer trucks on the road over time and less warehouse space needed for storage.Take nutritional supplements, for example. While most vitamins and supplements ship in a bottle inside of a box, we worked with a top-selling supplement brand to rethink their packaging specifically for e-commerce. Here are the results: Customer experience is the last (but not least) thing to consider. Packaging is a brand’s first tangible impression with the customer, which is why it’s so important to make it count. Both the aesthetic of the package and the unboxing experience play a part in making that valuable impression. No one wants to spend more than a few seconds trying to open a box, regardless of how nice it looks. And no one wants to receive a hideously unappealing package. A good e-commerce package design should exist in that sweet equilibrium between aesthetic appeal and convenience.
We’re seeing how packaging influences the customer experience. Netrush has gotten feedback from customers saying that — even when the presentation looks great — it’s the process of opening the package and getting to the product that affects their overall experience. A bad experience could cause a customer to not buy from you again. It’s better to invest in minimal, easy-to-open packaging that the customers won’t remember than to brand oversized, difficult-to-open packaging that’ll be negatively remembered. Netrush Packaging Director Colby Grantz
Durability, efficiency, and experience — these are the considerations that go into thoughtful e-commerce packaging design. Taking the time to dial in packaging will save you money and headaches as your sales volume increases.Getting the basics of e-commerce packaging needs to happen before getting fancy. We’ll dig deeper into the creative side of packaging design — included branded boxes and marketing-focused inserts — in part three of this series.
Protecting Your Brand
If you went through the brand protection steps outlined in the Retail Readiness checklist, you’ve already made some steps towards fundamental brand protection. You’ve gained a basic understanding of your distribution channels and identified problematic sellers. Now, it’s time to take it to the next level.Before we go any further into brand protection, let’s recap why it’s important. For most brands, the Amazon marketplace is difficult to control. Third-party sellers are woven into the way the marketplace works. For many reasons, that’s a good thing, but it can become challenging for brands to navigate.Because anyone can sell on Amazon, there’s very little obligation for those sellers to abide by a brand’s MAP policy or marketing guidelines. It’s all too common for products to end up on Amazon at a lower price than what’s being offered on the physical shelf. When that happens, it does two things to a brand: it puts a great deal of strain on a brand’s brick and mortar retail relationships, and it damages brand equity. Retailers that follow MAP guidelines won’t be able to compete, and consumers will begin to associate the lower prices with the actual value of the product. Both of those outcomes can be devastating to a brand.There’s only one way to stop third-party sellers from selling below MAP, and that’s to take control of your distribution channels. While you can leverage Brand Registry (learn more about hoe our team can help with brand registry support) to address counterfeit distributors and other rule-breaking sellers, the most sustainable way forward is to fully map out your distribution channel and identify how policy-violating sellers are obtaining inventory. After that, you can refine your distribution to strategically favor sellers that will best represent your brand.Amazon brand protection is a long-term strategy. Not much will change overnight, but a full understanding of your distribution channels and a solid strategy for moving forward will make a positive impact, especially as your Amazon business grows.
Maintaining Marketplace Health
Marketplace health refers to all the nuances of maintaining an Amazon catalog, from the initial setup of product listings to the maintenance that goes into keeping a catalog updated and organized.During the Retail Readiness phase, you set up listings with high-quality photos, thoroughly explained product details, and inserted the right feature points. Maybe you even added a video or some A+ Content. It would be nice to think that a properly set up listing will stay that way, but that’s almost never the case. There are many ways for a listing to go off the rails.A properly functioning listing is like a well-trimmed front lawn: you’ll need a good lawnmower, and no matter how many times you ask nicely, the kids in the neighborhood keep running over your flowers. Because of how the marketplace functions, your content will deteriorate over time without proper moderation. Duplicate listings, off-brand images, and incorrect content — much like weeds — are issues that need to be routinely addressed. Listings might get suspended, stopping sales in their tracks until the problem is solved. And the most frustrating part is that it’s almost never your fault.These problems will only get worse as your Amazon business grows. Having a scalable way to deal with these issues comes down to having the right team in place. Brands that do a sizable amount of business on Amazon need a team whose dedicated purpose is to identify and remedy marketplace issues as they pop up.
Final Thoughts
Sustainable growth on Amazon requires scalable strategies and processes. If everything works together in a scalable way, then your Amazon strategy should retain its efficiency as your sales volume increases.Increasing sales volume means attracting more shoppers. To do that, you’ll need content and marketing strategies that really make your brand shine. We’ll get into all the ways you can make your listings stand out in the third and final installment of this series, Engage Shoppers.
Position Yourself for Growth
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