A conversation with Natural Factors’ Shawn Fenton and Netrush’s Rob Principe
When it comes to selling natural vitamins and supplements on Amazon, there may be nobody more knowledgeable than these two people. Meet Shawn Fenton, Global E-Commerce Strategist for Natural Factors, one of the largest manufacturers of nutritional products in North America, and Rob Principe. He’s currently Director of Business Development at Netrush, but spent several years before that with Megafood, a premium vitamin and supplements brand, spearheading their Amazon strategy.
Shawn and Robert have known each other since 2014 and recently joined forces as co-presenters on a webinar for the American Herbal Products Association. But we got a little time with both of them to talk about the current Amazon landscape, and how a natural supplements brand like Natural Factors successfully navigates on the platform.
Rob: So let’s just start with some of the basics around what’s happening with online marketplaces like Amazon right now. In 2020 we saw a massive acceleration of ecommerce sales: 32.4% according to some recent data from Edgewater Research. Rolling into 2021 post-COVID, we still see growth, although it’s at a much slower pace. It’s clear that consumers are more comfortable with purchasing online, which is slowing the return to brick and mortar. They like the speed and convenience of shopping online. And Amazon is approaching 70% of all ecommerce sales.So, huge opportunity. When I talk with brands, I always emphasize that when you’re a third party seller on Amazon, you can’t make the mistake of thinking of Amazon as the retailer. They are a platform or a marketplace. But it’s your product; you’re the seller. How does Natural Factors think about Amazon?
Shawn: It’s interesting, a lot of companies have invested in and prioritized building and maintaining their own direct-to-consumer websites. We’re currently building our own DTC site, but it wasn’t the first priority for us. Back in 2014 or so, we were faced with the choice to invest in our own DTC site or Amazon. Compared to Amazon, we knew we would never be able to drive that much traffic, or convert that many shoppers, so it made sense for us to optimize for Amazon first. From our perspective, we see Amazon as a direct-to-consumer platform. It’s a place where we can have direct interactions with the customer.
Rob: It always blows me away that Amazon has 150 million Prime members. That kind of access to shoppers is just incredible.
Shawn: Amazon is probably the biggest collection of consumer sentiment we have as a brand. The reviews are incredibly valuable. We’re always trying to listen and learn: Why do people buy our products? For example, we might lead with a specific product benefit but we find consumers leaving reviews about something completely different that they liked about the product. Amazon gives us the opportunity to listen and learn from those consumers and improve our marketing copy.
Rob: And along with all that opportunity, there’s also a lot to be cautious about, right? Unauthorized sellers can undermine your pricing strategy or misrepresent your brand or your products. The great thing about Amazon is that anyone can sell on Amazon, but it’s also the worst thing about it.
Shawn: Right. Brand protection is always on. You never stop thinking about who is selling and representing your brand out there. It’s a really important aspect of doing business on Amazon.When we were first exploring how we’d sell on Amazon, we knew we didn’t want to go 1P, because we wanted to control our pricing. It’s really important to figure out who you are working with today — distributors and retailers — and will they be able to support you tomorrow in controlling your brand on the Amazon platform?
Rob: Brand protection is maybe the biggest hurdle for companies selling on Amazon. Not everyone understands it, and in many companies there are multiple parts of the organization that are involved or have a stake and they don’t always agree on what should be done. How do you overcome those hurdles?
Shawn: We go to great lengths to ensure the quality of what we put in our bottles, so if others cheapen the brand or the product by discounting it at will, that’s something we’re not willing to do. So it’s really helpful to have executive buy-in — our President, our founder, everyone — is aligned with what we’re doing. Sometimes you have to make some really tough decisions and you need that executive support. The other part of this is buy-in from the sales team. Some of the things we do from a brand control perspective might make their lives harder. So it’s important they understand the reasons we have these policies. At Natural Factors, we took the extra time to meet with our sales team and make sure they not only know what we’re doing, but why.
Rob: So this is something that brands don’t often think about as they jump into Amazon: SKU and catalog curation. I speak to a lot of brands who want to put all of their 250 SKUs up on Amazon. Fine, but that’s going to make your catalog hard for shoppers to navigate and spread your advertising dollars thin. So it’s important to think about what’s going to work best on Amazon for your business. What’s Natural Factors’ approach?
Shawn: We don’t offer all of our almost 500 SKUs on Amazon. For example, some of our products have a short shelf life because they come directly from produce grown on our farm in Canada. Those products are very fresh and can’t sit for very long on a shelf. So it doesn’t make sense to sell those on Amazon. Here’s another example, some of our products are under $15, and on Amazon it can be hard at those price points to make sure we’re making our margins. So we really have to take a look at those SKUs and ensure they make sense before listing them.
Rob: So you do all these things. You optimize your catalog, you protect your brand with a MAP policy and get your distribution strategy locked in. Then what? That’s the really fun part because that’s where growth takes off.It’s hard to quantify this, but people who regularly search for you on Amazon, you know that has a bearing on your overall retail strategy. What’s that old saying? It takes six touchpoints to convert a new customer? Maybe it’s not six anymore. But if they see you on-shelf at the store and they see you on Amazon, and they see you on Instagram, there is definitely a halo effect for increasing your brand profile. How does Natural Factors make decisions about where to invest from a marketing perspective?
Shawn: It’s complicated. At first we weren’t sure how much to invest in marketing on Amazon. But we looked at all our marketing channels and asked, how many of those could convert customers and lead to sales? And how many of those channels could we measure? When we looked at where we’re getting the best return, Amazon rose to the top. Plus with Amazon you can measure everything. This person clicked, this person bought. And so now, Amazon represents a large percentage of our digital marketing spend. And it’s all measurable.