Third-party sellers enjoy great success on Amazon. 60% of units sold this year in Q4 belonged to 3P sellers. Moreover, most of these sellers make over $1000 in sales every month on Amazon, with some brands exceeding this range and generating huge portions of their total revenue from Amazon.
This is why, Amazon has become a coveted platform for different sellers, experienced and new, to list their products on and kickstart sales for their business.
However, every successful journey needs a well-planned start. And success on Amazon comes from successful and well-thought-out product launch strategies.
Launching a product on Amazon is easy. But listing a product while ensuring that it takes off and does something good for your brand is not. The latter requires extensive pre-planning and meticulous and experience-backed post-launch strategies. In this blog, we will share tips for both these phases of product launch to help you set off on Amazon (from scratch or with a new product) on the right foot.
Pre-Launch Strategies
If we lived in a simpler world, we would just come up with a nice product idea, get the product made, and list it on Amazon to start selling. However, the world we live in is anything but simple, and launching a product successfully on Amazon is far from straightforward.
As exciting as you may be to list your product and get started as soon as you have a product idea, it might be worth it to take a step back and critically analyze your ideas and have a pre-launch plan in place to minimize your chances for failure.
Here are a few steps you can take to build an effective pre-launch strategy:
Cost/Profit Analysis
Performing a cost/profit analysis is critical to ensure that you can sell and make money on Amazon.
Break down all the costs that are associated with sourcing and manufacturing the product including raw material, labor costs, distribution and logistics expenses, any costs of research and development, and warehousing.
You will also want to market your products. Factor marketing and advertising costs into your cost/profit analysis to make sure you can get the word out once your product is launched.
Once you have determined a break-even point, decide on a product price and figure out how many units you need to sell to cover all the production expenses and potentially generate a profit.
Performing a cost/profit analysis will help you see if your product is worth launching and if purchasing it would make sense for the customers, given the price tag.
Customer Research
Knowing what you are selling is important. Knowing who you are selling to is even more important. Therefore, dedicate some time to customer research to understand your customers better.
First, try to scope out the basic demography of your target audience. Identify their age, gender, where they live, etc. Then move on to the finer details. Try to see from your customers' perspective and understand their pain points.
Find out where your audience hangs out. These forums and social media groups will help you listen to what your target audience is talking about and understand their struggles. Once you know what your target audiences’ challenges are, you will be better able to adapt your products so it solves your customers’ problems, adds value to their life, and makes sure they keep coming back to you for more.
Also, leverage this customer understanding to shape your USP and brand messaging accordingly to ensure it resonates with them and influences them to buy from you.
Competitor Analysis
Knowing who you are up against is critical as well. First, identify who your competitors are and then dive as deep as you can into their business. Understand their products and read the reviews they get to figure out what they do well and if there are any gaps they have left behind that you can potentially fill with your new products.
Try and see what strategies your competitors are leveraging to sell their products. Replicate what they are doing right and rectify what’s wrong with their approach.
Demand Analysis
You might love your product or product idea. But will the customers love it? Answer this question by performing a demand analysis because launching a product will do you no good unless customers love it and return to buy it from you.
You can get started with your demand analysis by performing a simple keyword research. This will help you understand how frequently people search for products that are similar to yours and give you an idea of their demand. Keyword research can also uncover potential seasonality related to the product so you know when is the best time to launch this product into the market.
Sourcing and Logistics
Your suppliers play a crucial role in the success of your new product. Therefore, before your product gets to the market, you have to have a plan in place for how you are going to source your products.
Try and leverage your existing suppliers for future product launches. A pleasant relationship with the supplier will help avoid issues down the line.
If you are going with a new supplier, vet them thoroughly to ensure they supply authentic non-counterfeit products. Amazon is strict against counterfeit products and your business may suffer if you end up selling unauthentic products.
Post-launch Sales Growth Strategies
Once your product is manufactured and in your warehouse, and you have listed it on Amazon, it is time to push the product to kickstart sales.
Below are some post-launch selling strategies that can help take your new product off on Amazon:
Ensure Retail Readiness
After your product listing is live and before you move forward with anything else, make sure your listing is retail-ready.
Retail readiness on Amazon means that all your listing elements align with Amazon’s best practices and your detail page is fit to contribute towards a positive product experience.
We have shared some steps you can take to ensure retail readiness in one of our earlier blogs here. To sum it up, make sure your product title and bullet points are optimized and offer all the information that is critical to the customer’s decision-making process.
Take up all the space Amazon offers for visual content and upload high-quality, engaging images and listing videos to help improve product understanding and drive conversions.
Once your listing is retail-ready, you can move forward with your marketing and advertising plans. But before you run ads for your products,
Bring in Initial Sales and Reviews
Driving paid traffic to a listing with no reviews is a waste of ad spend. Most customers will not buy a product that has no reviews. So, it might be worth it if you could hold back on advertising and get initial reviews first.
One way to get the reviews coming in is to enroll your product in the Amazon Vine program. With Vine, your product gets to customers who use it and then leave reviews on your product page. Enrolling products into Vine comes at a cost, but it might be worth it given that these reviews might trigger sales for your brand.
Sales are vital for organic visibility as well. Consider offering discounts on newly launched products and running promotions on them (after they have at least 15 reviews) to get them in front of the right people.
Invest in Discoverability-focused Ad Campaigns
75% of shoppers come to Amazon to discover new products while 68% of them window shop on Amazon. Therefore, advertising your newly launched product on the platform may help drive awareness of the product among the right audience.
Set up visibility-focused ad campaigns and track the metrics such as impressions and clicks instead of ROAS or ACOS to understand its success.
Funnel of Amazon Traffic to Amazon
Getting Amazon customers to buy your products may be a challenge initially because your new listing may not have enough visibility, especially if you are not running any ads.
If you have an email list, market your new products to the subscribers with messaging that entices them to buy them on Amazon. You can also leverage your social media channels to promote your Amazon product and funnel traffic to your Amazon listings and get started with some initial sales.
Once your product gets to a point where it gets steady sales and has enough reviews, you can start advertising campaigns to drive increased traffic and maximize sales and revenue.
Conclusion
Launching a new product on Amazon may sound exciting, but it is worth it only if it is preceded by a strong pre-launch plan and followed by powerful post-launch growth strategies.
Perform a cost/profit analysis, and understand your customers, competitors, and the demand for your product as a part of the pre-launch phase.
Once the product is out, optimize your listings so they are retail-ready, enroll your products in Amazon Vine to get initial reviews, and try and funnel off-Amazon traffic to your listings to get those initial sales. Then continue with advertising the product to get it in front of the right audience and maximize sales.