If you are experiencing trouble listening to the podcast: listen directly from Food Finance Institute’s website.
In Edible-Alpha™ podcast #38, Tera interviews Jeff Walcoff, Vice President of Sales & Marketing with Marketplace Strategy, a digital marketing agency headquartered in Cleveland, Ohio focused exclusively on Amazon.com sales acceleration and optimization. Marketplace Strategy helps large brands (ex. Nestlé) and small brands navigate the various possible tools and avenues to sell through Amazon, everything from developing an Amazon strategy to optimizing search and product pages and implementing paid promotions using Amazon Marketing Services’ keyword-based advertising. Jeff commented that most difficult thing to determine when they engage with a brand is the potential sales on Amazon depending on the various tools that make sense for the brand’s goals.
The Amazon platform provides a means for small and emerging brands to find an audience and generate sales if they dedicate time and resources to ensure discoverability on the platform. For example, brands need to constantly optimize product pages to take advantage of things like long-tail keyword searches for their niche product to bring up their product page prominently in search results. Since the majority of product pages are found via search on Amazon itself, optimizing product pages with the right keywords and features once the user is on the page is key to getting sell-through on the platform.
Jeff has found that while Amazon is becoming more competitive, many organizations aren’t giving it the level of attention they could to optimize their sales. He says the challenges of fully leveraging the platform are the same for large and small brands. For example, many food and beverage brands have found that they need to sell variety packs or other bundles to get their products to the $10 – $20 price point that is optimal for both what consumers are looking to pay while balancing achieving profitability on each unit that is not possible with selling individual products for less than $10. However, some premium products (ex. more than $20) can get sell-through on Amazon if properly differentiated.
Similar to physical retail, packaging (in this case, through an optimized product page) and paying for optimal space (in this case, having an easily discoverable product page in search) are all key to getting trial of food products on Amazon. While there are some perishable products available through Amazon Fresh or Amazon Prime Now, the food brands that have the most traction today in selling through Amazon tend to have shelf-stable products.
There are two basic ways to set up a relationship with Amazon. With Seller Central, food brands operate as a 3rd party selling directly to consumers on the platform. Seller Central gives brands more control (and more responsibility) for all of the customer experience operational needs (like shipping/fulfillment), but also more potential profitability and ability to launch/test new products easily. Vendor Central is an invitation-only way of selling wholesale to Amazon with them handling the fulfillment, pricing and other factors of selling products. Each method has its advantages and disadvantages in terms of the consumer experience, vendor operational needs and what charges have to be monitored closely with the Amazon relationship, but the optimal path (or mixture of both) depends on the goals of the brand.
Show notes by: Zacary Smucker Bryan