You’re A Brand: Why Should You Care About Amazon?

At this point, it may seem that I’m being coy when posing the question of why people should care about Amazon, but the reality is a lot of brands don’t know why and so they’ve ignored it.

The question deserves an answer: a thoughtful one at that.

As it stands, Amazon controls 37.3% of the US ecommerce market and it shows no signs of slowing down, with Amazon expected to reach 38.7% in 2020. Ecommerce sales in general made a large jump from 11.8% to 16.1% of total retail sales, happening from Q1 to Q2 in 2020, while steadily increasing half a percentage or so each year normally.

The pandemic this year has only accelerated what some of us have known to be true.

Total Retail Sales in Q2 rang in at $1.31 Trillion, ecommerce sales at $211 Billion, meaning ecommerce sales are up 31.8% from Q1, and up 44.5% YOY from Q2 2019. That’s a significant shift, given how brick & mortar stores were affected in the opposite direction.

This brings us to a simple conclusion; as Amazon becomes a greater share of the ecommerce market, which itself is becoming a greater component of all retail in the US, Amazon is not going anywhere. In fact, it’s steadily becoming one of the major contenders in the retail game.

Watch out Walmart.

Beyond simple market share, Amazon has changed the landscape of retail. In an on-demand economy, Amazon delivers: on time and often early. In fact, I’d argue that the largest ecommerce retailer has driven an increased demand for items to be delivered quicker, and with incredible reliability.

Product Visibility in Retail

54%.

That’s the percentage of people that go directly to Amazon to search for products, over Google, which is hands down the largest search engine on the planet.

Why is that important?

Getting on Amazon is not just about generating revenue anymore. It provides brands credibility, credibility that is super important in a reviewer’s world. Consumers are going to Amazon to get information on products they are looking at, to valid their thoughts and opinions on the products, and help them make purchasing decisions.

If your products aren’t on Amazon, or they are misrepresented on Amazon, be prepared to lose revenue that could have easily been yours.

Brands that aren’t controlling their presence on Amazon are doing themselves a bigger disservice than those who aren’t even on the marketplace. Someone who doesn’t find your product can’t make an informed decision on your brand.

If a third party seller is selling your product, or selling a knockoff, and your product has lost credibility, consumers will get the wrong impression of your brand and you’ll lose trust with your target audience. Misinformation beats lack of information.

Reputation is important. 88% of consumers use 10 reviews to form their opinion on products. Now imagine those reviews suck. Think you’re going to win over the consumer?

Opportunity for Revenue Abounds

Large corporations have ignored ecommerce, namely Amazon, because they’ve not seen it represent enough revenue to be worth their time. For instance, a company with $10 billion in sales won’t bat an eye at an additional $100MM in sales, since it’s only 1% of their overall revenue.

But imagine if you grew that 1% to 5% over several years with a concerted effort, putting you at the forefront of the growing market share Amazon and ecommerce are gaining...

Ignoring a growing issue, because it seems insignificant, is the perfect way to have problems metastasize and turn more dangerous than they originally were.

1% of sales may not make a big difference in the market, but when 10% is now on the table and you’re 5-10 years behind the rest of the industry, best of luck playing catch up.

Some brands still believe Amazon is not necessary, despite instantly rebutting themselves in their next statement. An article I’ve scrutinized previously was one Yahoo Finance put out back in 2018, where Bombas and Warby Parker explain why they don’t sell on Amazon. (Sigh)

The co-founder Randy Goldberg explains how they want to build “our brand through our own channels, controlling our story, and importantly, our data,” which doesn’t make much sense, when you know what Amazon is all about.

Does Amazon Give Brands Enough Data?

Does Amazon provide you with all the data you could possibly want? No.

Do they provide you with plenty of data to help grow your business and make intelligent decisions around strategy and performance? Absolutely.

Anyone worried about getting on Amazon.com because they want to control “their” data is forgetting something. Social media.

Brands want to be able to gather as much customer data as possible in order to analyze who is purchasing what, how much they’re spending, what url the traffic is coming from, what part of the country they’re in, at what times they’re buying, and what color they paint their toenails at 3pm on a mild sunny afternoon.

Why?

Because they want to know how to better sell to their customer base. And that all makes sense.

However, when your brand is active on Amazon, consumers are going to look you up on social media. 79% of the US population has access to social media. Still worried about not getting enough customer data?

Brands hesitant to get onto Amazon because of supposed lack of data also don’t understand the Amazon ecosystem. Or they’re working with an Amazon consultant that doesn’t understand it either. The marketplace giant is constantly releasing better analytics, updating the platform, and providing greater insights on what drove consumers to purchase.

Conclusion

If you aren’t sold on the concept yet, what will it take?

Are you waiting for another pandemic?

The doubting Thomases of the retail world are going to be in for a rude awakening as they coast into 2021 on fumes, eventually realizing they’ve missed the boat. At that point, the boat is packed and space is at a premium. Competition is greater.

Still think Amazon isn’t a great idea because insert reason here?

Hmm… okay.

About the Author

Article written by Michael Maher

Michael is the Chief Idea Officer of Cartology, a custom done-for-you services agency helping brands grow revenue and become profitable on the largest marketplace in North America. He loves hanging with his wife and daughter close to the beach, great bourbon, R&B music, good coffee, and hanging around a fire. 🔥