CPG Companies Must Use Amazon
Customers’ online shopping habits have drastically changed as a result of the pandemic. This change has made selling on Amazon necessary for CPG companies rather than just a nice-to-have. How your brand is formulated for Amazon or any other marketplace is just as important as what brick-and-mortar locations your product needs to be in, as we frequently tell our clients from the CPG industry.
Many CPG companies view Amazon as an unknowable behemoth that is unworkable. But in actuality, Amazon can be a fantastic opportunity for businesses that know how to control the beast if used properly.
Here are nine suggestions that all CPG companies should include in their Amazon marketplace strategy, ranging from pricing and listing optimization to review generation and analytics.
1. Improving Your CPG Packaging for Amazon and eCommerce, NOT JUST Retail
The majority of CPG companies only consider how their packaging will look in actual retail locations, not how it will look on the Amazon Search Results Page. Customers of Amazon frequently compare shops, and about 75% of purchases are either unbranded or involve comparison shopping in some way, whether it be through shopping apps or price comparison websites.
Because of this, it’s essential to draw attention to your product’s key features on the packaging (i.e., the product’s featured image on Amazon) so that they can be seen in search results and in comparison to listings that haven’t been optimized.
This advice can be used to draw attention to features that are significant to your customer since Amazon does not permit text on its main image. Observe how in the same example, you can see the terms “protein,” “30 g,” and “12 pack” right away from the SERP without having to click on the listing itself. With Evolve, this is less obvious and is probably costing them clicks.
Crop your image to reduce white space and use contrasting colors to make your listing stand out as another optimization tip. Cropping the image makes the product look bigger, which subliminally leads customers to believe they are getting more for their money. Colors that stand out are crucial for differentiating and emphasizing the key elements of your image.
2. A post-purchase review funnel
Acquiring reviews during an early Amazon launch is one of the biggest challenges for new CPG brands. Having said that, it’s essential to develop a solid review strategy early on.
We assist clients in finding and developing “carrot stick” offers that entice customers to opt into a funnel as one of the things we do. In addition to boosting ratings, this also gathers customer data for remarketing during subsequent product launches.
We’ve seen clients use this strategy to generate anywhere between 50 and 100 reviews within the first 30 days of launch with the right offer. It’s a fantastic way to start conversations with Amazon customers directly.
3. Brand Registry for CPG Companies
Access to vital seller tools like headline ads, PPC videos, Storefronts, A+ Content, and Brand Analytics requires the Amazon Brand Registry. The majority of CPG brands are unaware that approvals can take some time, so it is preferable to complete this as soon as possible, especially before the product launch. The Amazon IP Accelerator Program is a frequently underused service. This program aids in accelerating approvals, particularly if a trademark application is pending.
As you wait for Brand Registry approval, make sure your upcoming products adhere to Amazon’s rules. This covers the need for category ungating, proper browse node IDs, and variation standardization. For instance, in order to be approved to sell, those who intend to sell dietary supplements must now submit a Certificate of Analysis (CoA) and Letter of Guarantee. Remember that each product category has different requirements and that if they are not met, a listing may be removed.
4. Using Offers Under $15 to Drive Offers at Entry Points
Many brands are unaware that any item priced at or below $15 on Amazon qualifies for a 7% referral fee discount (the standard rate is 15%). In other words, you qualify for a 7% increase in gross margin for that particular SKU simply by marketing an item priced under $15.
Amazon does this to encourage emerging brands to develop an introductory offer that tempts customers to buy from an unproven brand. Customers are unlikely to spend more than $20 on an unfamiliar brand, so CPG companies should take advantage of this feature to promote purchases of newly-launched products by merchandising a sub-$15 offer.
This might be offered as a variety pack or sampler. We frequently discover that these listings can significantly boost repeat customer lifetime value (LTV) and subscriptions on Amazon.
5. Use of FNSKU Labels Instead of UPC Codes
When replenishing inventory, Amazon mandates the use of FNSKUs over UPC codes for products that have an expiration date. In case there are any issues with expiration, they can segment by lots thanks to this. At the time of writing, Amazon imposes this arbitrarily. It is best to anticipate that they will eventually make this mandatory.
Ensure that everyone in your supply chain or manufacturer is familiar with Amazon’s barcode system. Our team of supply chain specialists at MarketplaceOps can assist you if you’re unsure of what barcode to use or when to use it.
6. Branded vs. Unbranded Searches Keyword Segmentation
Optimizing the Amazon conversion funnel requires a thorough understanding of the customer journey. Customers typically discover your goods through:
When a customer sees your brand in a store or an advertisement, they conduct a branded search on Amazon. There is no shopping around here. They simply want to make a purchase on Amazon or read reviews to guide their purchase; or
Unbranded Search is where users enter keyword phrases related to specific products, like “healthy tomato sauce.” Since it lacks your brand, it causes a number of your rivals to appear in the search results. Active comparisons are being made between your product and competing goods.
CPG companies erroneously believe that there is a one-size-fits-all strategy for marketing to Amazon customers. The truth is that by classifying searches into different categories and developing unique marketing campaigns for each, you can maximize results. By doing this, you can strengthen offers and increase sales.
7. Using virtual bundles to increase average order values
Virtual Product Bundles is a feature that Amazon recently introduced that enables brand owners to virtually kit products. This eliminates the requirement to physically bundle products with distinctive UPCs. From the perspective of the supply chain, it’s a fantastic way to cross-promote various offerings and seamlessly add more SKUs without incurring additional operational costs.
By utilizing this feature, brands can cross-promote newer SKUs against best-sellers while also raising average order value (AOV). The SKU count and AOV are increased immediately, but the long-term advantage is that brands can eventually control the coveted “Frequently Bought Together” (FBT) section of the product page by making enough bundle purchases. Possessing such has resulted in significantly higher sales volume across our entire client base.
8. Using Subscribe N’ Saves as a growth metric and concentrating on LTV
A well-known eCommerce metric called lifetime value (LTV) encourages CPG brands to consider future purchase frequency over time rather than just the initial profitability of the sale.
Recently, Amazon updated the Subscribe n’ Save program, giving brands more knowledge of customers’ recurring purchases.
This level of insight is essential for CPG companies using a subscription model because it enables them to view Amazon as a channel for generating both one-time sales and repeat business. This mentality enables brands to consider long-term profitability rather than just one-time profits.
9. Finding High Converting, Relevant Keywords Using Brand Analytics
While tools like Seller. Tools and Helium10 are excellent for gathering a large number of keywords, nothing beats getting the information directly from Amazon.
Brand-registered Seller Central accounts have access to the Brand Analytics tool, which allows brands to retrieve highly effective keywords straight from Amazon’s database. Amazon will give you a list of keywords from which these ASINs are generating sales after you enter your target keyword or the ASIN of a competitor.
Brand owners should use this information proactively to identify any gaps in their keyword-targeting strategy. It assists you in determining which keywords are the best to invest in for promotions in addition to helping you find new keywords.
Final Reflections
Amazon selling requires a lot of research and initiative. Setting up your offerings and advertising strategies can require a lot of trial and error, even with the Amazon tools made available to sellers.
