October 15, 2022
The Amazon marketplace is a hostile battleground.
Yet, some Amazon brands continue to thrive & make tons of dollars.
How? They know stuff you don’t.
Here are 21 truth bombs about selling on Amazon that’ll turn the tides in your favor (against Amazon & your brutal competitors).
Product Reality Check
- The Pareto principle remains true when selling on Amazon; 80% of your revenue comes from 20% of your ASINs. If you invest in 10 products, there’s a high chance only one product will be a home run.
- Invest in hard products. They are harder to copy. The longevity of your success depends on it. Most successful sellers didn’t take a course or watch webinars to succeed. They learned by doing.
Brutal Competitive Landscape
- Doing it wrong trumps doing it right when it comes to succeeding on Amazon. Fail more, learn more, excel. Trained armies of US sellers are the least of your concerns – going direct from Factory (China) to Amazon is.
- China is exempt from sales & US income tax with cheaper shipping rates. It’s not a level playing field. You’re at a disadvantage. If your business model can be replicated by Chinese sellers, you should pivot now.
Brand Strategy Revelations
- Going direct-to-consumer on Amazon is no longer sufficient. Your products sell better when there’s a high differentiation & scarcity of supply. More sellers mean more copycats, counterfeits, and commoditization.
- Brand equity matters less now than it ever did. Oversaturation in the SERP makes it near-impossible for customers to differentiate between household brands & generic brands.
- Give your customers what they want & need. Your images, positioning, pricing, & reviews are all the customer sees. Appeal to their senses.
Supply Chain Tactics
- You can’t beat China but you can cooperate. Get your manufacturers to design SKU-specific exclusivity for you. Make an agreement. Own the tooling.
- Most brands are wasting TONS of money advertising on Amazon. They ignore the importance of optimizing their pricing and improving overall ACOS performance.
Marketing Reality Shift
- Ecommerce founders have become too keyword-centric, spending all their time trying to figure out keyword strategies – which should be the least of their worries.
- Contrary to popular belief; supply chain > PPC, strategy & marketing. Shift your focus. Early adoption of software is how smart Amazon brands will win.
Pricing & Business Relationship
- There is a lot of misinformation about pricing in e-commerce today. You’ll kill your growth if you handle pricing carelessly. Stay sharp. Building a pricing function is a lot like building muscle. It’s form and repetition. Make sure to align it with data.
- The agency wants to minimize time per account and maximize number of accounts. The brand wants to maximize profit and minimize spend on the agency. The result is a natural polarization.
Existential Threats
- Amazon’s private label isn’t your biggest threat – it’s the thousands of Chinese sellers with direct-factory connections and lower overhead costs.
- Your product listing is digital real estate. Every element matters: title, bullets, description, images, and backend keywords. Optimize them all or lose visibility.
Customer-Focused Strategies
- Customer feedback might be hard to hear, but it’s gold. Use negative reviews to improve your product instead of fighting them.
- Cash flow is king on Amazon. Without proper inventory management, you’ll face stockouts or capital tied up in slow-moving inventory.
Long-Term Success
- The best Amazon sellers aren’t just selling products – they’re building brands that can eventually expand beyond Amazon.
- PPC is no longer optional – it’s mandatory. But throwing money at ads without strategy is like burning cash.
- Amazon changes its algorithms and policies constantly. The sellers who adapt quickly win; those who complain lose.
- Success on Amazon is a marathon, not a sprint. Those looking for quick wins usually end up as casualties on this hostile battleground.
Conclusion
The Amazon marketplace isn’t getting any friendlier.
The winners in this brutal ecosystem aren’t the biggest or strongest – they’re the most adaptable.
They recognize these harsh realities and pivot accordingly. They build defensible moats around their products through exclusivity agreements, superior supply chains, and relentless optimization.
Remember: what worked yesterday won’t work tomorrow.
In this hostile battleground, knowledge truly is power.
Now you’re armed with the same insights that successful Amazon brands use to make tons of dollars despite the odds.