Insights

The 4 Most Common Questions Beauty Brands Ask about Amazon

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Amazon and premium beauty retail brands haven’t always gotten along. But over the last year, many aspects of that relationship changed as beauty — like many retail categories — pivoted to meet a new wave of online demand brought on by the pandemic.

Amazon dominates the e-commerce space. It’s estimated that the online retailer captured 39.8% of all e-commerce sales in 2020 and will capture 40.4% in 2021. Brands need to be where their customers are, and a majority of every brand’s customers are on Amazon.

With that in mind, here are the four most common questions beauty brands ask our team about Amazon.

 

I have a luxury product. Why should I be on Amazon? I feel like it cheapens my brand.

As of March 2021, Amazon is capturing ⅓ of all online beauty sales. That is a huge piece of the pie to miss out on — and it’s only getting bigger. Amazon is not the misfit of retail anymore, but rather a crucial piece of any brand’s omnichannel strategy. By implementing the right marketplace strategy, a brand can take ownership of their Amazon presence, elevate and optimize their listings, and use that marketplace to grow, rather than avoid it.

 

How do I know how much inventory I need to fill demand on the Amazon marketplace?

Amazon, like any retail channel, requires strategic demand planning and robust forecasting. By aligning your brand’s growth trajectory to your marketing efforts, seasonality, trends, and other factors, brands can reduce out-of-stocks while cutting down on warehousing overhead. That said, demand planning on Amazon is unique, and to do it effectively requires an in-depth understanding of the marketplace, your product category, and, of course, your own brand.

 

How do I handle copycat brands and/or counterfeit products on Amazon?

In the world of premium products, counterfeits and knock-offs are an unfortunate reality. However, a lot can be done to mitigate issues. Amazon offers a suite of tools to brands enrolled in Brand Registry to aid with counterfeits. Other tactics may include product marketing, working directly with Amazon, or, in extreme cases, taking action against illegal activity. Knockoffs are another story. Cheap imitations of your product can be offset by highlighting the value of what makes your brand unique — your story, quality, mission, and values. Your target shoppers want the real deal and will go out of their way to make sure they get it.

 

I already have a 1P relationship with Amazon, why would I want to change to 3P with or without an agency?

The 1P vs 3P debate has had premium brands scratching their heads for years. The right decision for your brand will be unique to your needs. In many circumstances, 3P can provide more control and consistency when it comes to forecasting and demand planning, content, and branding, along with access to robust sales and consumer data. In addition, 3P can be more profitable depending on the size and scale of your brand and allows you to build brand equity with your own account. Working with an Amazon retail partner can provide your brand with experience, teams, technology, and infrastructure to strategically, efficiently grow your brand on Amazon, allowing you and your team to focus on the things that matter most to you.


 

Learn how Netrush has helped prestige beauty brands reach their full potential on the Amazon marketplace

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