How to succeed on Amazon in 2024

About this Episode

Robyn Johnson, CEO and founder of Marketplace Blueprint, is with us on this episode of Confessions of a Marketer.

She has been heralded as one of the country's foremost leaders on the topic of selling and marketing products on Amazon.com.

And she has the distinction of being on the episode that kept this podcast going even while we were on hiatus, with hundreds of downloads and listens every month since we went on ice about three years ago.

TRANSCRIPT

Mark Reed-Edwards: Thanks for joining me today.

Robyn Johnson: It's my pleasure, and I think it's awesome that I can help you be here as we reopen things. And Amazon has changed so much. Dog years are, you know, one year is every seven years. I feel like Amazon every one year is 10 years.

Mark Reed-Edwards: That's for sure. I mean, think back three years ago, we were in the middle of the pandemic still. And the world was kind of getting used to using more and more technology. So Amazon had a huge boom as a result of that, along with the other tools that we all use every day.

So the world is definitely different from when you and I talked three years ago. I'm sure things have happened in your life that are make you different. Can you share a bit of your background and what you do at Marketplace Blueprint?

Robyn Johnson: Yeah, so I've been eating, sleeping, breathing Amazon for about 13 years now. We started as sellers, took a hundred dollars, grew our business to a million dollars in just a couple of years and primarily on Amazon. And after that, we coached a lot of other high volume Amazon sellers. This was when it was the wild wild west. You could do anything. People were taking apart food and repackaging it in very unsafe ways. We didn't do that, but there were a lot of people who were. And then about seven years ago, eight years ago, we started the agency called Marketplace Blueprint.

And in that agency, we specialize only on Amazon. So we don't do Facebook, no Meta, no Google. We only do Amazon. And the reason for that is because everything in Amazon is integrated. So to work on your SEO for Amazon, you have to coordinate with ads, compliance, inventory management, and negative customer experiences.

All of those need to be integrated to make sure that you get the best mileage out of your ad dollar on Amazon. And also that you don't get stuck with a bunch of fees or being unable to sell at all.

Mark Reed-Edwards: So every company that makes a product, pretty much, thinks they need to be on Amazon. How do you decide on whether Amazon is in fact the right forum for your products?

Robyn Johnson: So I will say that there are some products that Amazon is not a good fit for. Amazon works best on repeatable products, products that are going to be consistent. There is a space for custom products. We have a custom dog tag company that we've been working with for a long time that was on Shark Tank.

They do very, very well. You can do custom items, but one of a kind things that are not repeatable, those don't do as well because Amazon's algorithm is really designed for is you have to really be able to repeat that sale over and over again. Now, the things that have changed is it used to be, you know, field of dreams.

If you build it, they will come, you know, you just put a garlic press. press on there and you stick a label on it and it would sell. Those days are dying if they're not already dead. You really need something that will bring some unique value, so it fixes a problem or it solves a need in some way that's unique to others.

Or you need to have very, very deep pockets. You can still launch a garlic press, but to get it to where you're going to get those significant organic sales, you're going to need to invest a ton of money in ads and be willing to go into the negative for a period of time if it's a really competitive or commoditized product.

And then the other thing is we need to balance how much search volume is there for your product. So if Lego launches. anything, Lego will immediately get sales because Lego has such a loyal brand following.

Now, if I launch a new product with a new brand, I will not get those immediate sales because people aren't already looking.

So there's several tools that can help you look at that. And then the other thing we want to look at is-- especially with D to C. Sometimes D to C companies will come to us and want to take their product on Amazon. They've been very successful with D to C. One thing I want you to think about, if that's you, is when you're driving traffic from Meta to your website people are only seeing your product.

So if you have a higher than average price for your industry, the difference is when you come to Amazon, your competitors are going to be centimeters away from your product. And so that means if you have poor reviews, if you have a much higher price and you can't really isolate and crystallize why your product is so much more expensive,
it can be difficult for you to be successful on Amazon because the lower cost, higher reviewed items are going to be right side by side with you. I don't know if that helps.

Mark Reed-Edwards: Yeah, it's kind of interesting. All this direct consumer stuff, like Flex Tape or something that you see the ads for, they kind of existed in their own universe. And often when you see an ad like that you might Google it or go on to Amazon and search for that type of product.

And then, if that direct to consumer is playing in Amazon, you're going to see the alternatives. So maybe you know, a box of FlexTape is $12.99, but the competitor, or the Amazon Basics version is $9.50. You know, you go for the cheaper version. That's pretty much what you're saying, right?

Robyn Johnson: Yeah. And on the converse of that, so, it can be good to have your product on Amazon, even if you don't plan to focus on that channel and just do some branded search, make sure your product comes up for your brand. I have this little ADHD timer that I use and I saw an ad on Twitter or X and I went to go to Amazon to buy it. But it wasn't on Amazon so I bought a competitor. Sometimes you can lose that, but if I had gone and the one that they were trying to sell me was 27 and the other one was 999 and I could see they were the same, they still would have lost that conversion. So if you're close, it can be good to have a presence.

If you are going to be sold in retail stores , it can be even more important to make sure you're the one that creates the listing on Amazon so that you have control, that your brand registered. So that if you do decide you want to make Amazon a primary channel going forward, you don't have a lot of cleanup from resellers creating listings with any
false information that could also potentially get you into compliance or legal issues.

Mark Reed-Edwards: I think one of the big evolutions in the three years since you and I chatted last is how big Amazon has gotten as an advertising medium. Can you speak to that? How big are they? They obviously have a massive reach. And how do they determine where those ads show up?
Is it contextual? Are they driven by keywords? How does it work?

Robyn Johnson: Well, and you know, ads on Amazon used to be very simple, with keyword targeting, there really was only one placement, there really was no creative. But now Amazon has been adding more and more advertising product types. So this means there is more room for creative, there is a lot more granularity. And before, you know, I'll be honest, six, seven years ago, you could have been very successful just with an automatic campaign. And there are some select instances where you still can, but you're not going to get the same lift as if you have a really strategic thought out ad strategy.

You know, and the biggest mistake that people make on Amazon when it comes to ads is, let's say you have a clothing line and you're trying to get some more traction on your Amazon sales. If you have a finite amount, let's say you only have. 3, 000, 2, 000, you know, you can be successful with a small amount but you, let's say you have 5, 000 a month for, you know, 20 SKUs, a lot of times people will spread that budget out equally, and really what we want to do is we want to target that ad spend on a small number of SKUs, a small number of targets, whether that be keyword, demographic, category, competitor targeting, and really focus on trying to get those ads to cause conversions for that specific product. And the reason we want to do that is we want to try to cause enough conversions where the product starts to rank organically in the first five to ten positions because the best place to hide a dead body is still page two of Amazon search.

Mark Reed-Edwards: Ha, ha, ha.

Robyn Johnson: Before I would usually say like 25 results could fit on a page. Now on a competitive search term, you know, above the fold, you you might only see two or three organic ones. So there might be only 10 organic spots on the entire front page. That means that you really do need to cause those conversions. And when you're looking at your ads, Amazon provides an advertising cost of sale, which is kind of like the inverse of ROAS. But what we want to do is we want to really look at the equivalent of TROAS, which is TACoS.
And you know you've been doing Amazon too much when you see an ad for tacos and you immediately think ads and you have to recorrect yourself for the delicious snack. But TACoS will really tell you how your ads are impacting organic because that's really more than incremental sales. To maximize your profitability on Amazon we need to, of course, be looking at return on investment for each of those ads, but we want to see how that return on investment is increasing organic ranking because that was where you can start to bring back in some of that cost and increase profitability overall. So when it comes to Amazon, it's kind of like disciplining children, pick your battles, but win your battles at all costs.

Mark Reed-Edwards: So for the uninitiated, can you tell me what TACoS is? Because I'm uninitiated on that.

Robyn Johnson: So it's Total Advertising Cost of Sale. ACOS looks at, you know kind of what percentage of your ad revenue. TACoS looks at all of the revenue and the reason it's helpful is it tells us, you know, not just, you know, because sometimes what was we had a company where a specific campaign had like a 43 percent top ACoS, which is not good.
You know, we really want to keep that 20 to 30. But when we looked at the TACoS, because even though that conversion rate was a little bit more expensive, the conversions that were happening took them on a very important primary keyword from page three or four to being the second organic result.

So those ads were helping kind of feed the engine that kept them at the top of the page, if that made sense.

Mark Reed-Edwards: One of the other pieces of news is that Amazon is now selling ads on Prime Video, and I'm wondering is there a connection between those ads and advertising on Amazon itself?

Robyn Johnson: Yes, Amazon's offering a lot of sponsored TV, sponsored display, and they're beginning to test these. And a lot of times they even have no minimum budget. So, there's a lot of availability to kind of test and play. The negative is if you have a stakeholder or you as a stakeholder are very focused on direct ROI, we really have to remember that ad campaigns are going to be more brand awareness and you're not going to get the same numbers and direct ROI.

Our agency is really focused on profitability for our clients. So if somebody has got a very tight ROI or they're in a tight cash position, we usually will not recommend these because we're still trying to figure out --Amazon is still trying to figure out --how to get the best conversion off of these.

But Amazon has really been expanding the advertising capabilities for brands, and even services that don't sell on Amazon. And the really cool thing is while a lot of first party signals have been taken away from Meta and Google -- that's been a shifting ground for a long time.

Amazon has a pretty robust set of first party signals that you can target just the right shopper. And they've been growing and developing this thing called Amazon Marketing Cloud where they can measure impact of year over year campaigns. And so there are a lot of really cool, fun, new to market things to be testing.

There's a lot of new ad types, ad placements that are available for brands of all different sizes of budgets. It's just, you know, really understanding where those ads are, going to be surfacing. So like some of the Amazon DSP, which is kind of the, the managed used to be called kind of the managed services part, but now there's some self managed stuff in there as well.

Some of those videos will show on Twitch, which if you're selling a video game accessory is awesome. If you're selling, you know, Bengay ointment cream to 60 year olds, probably not going to convert well. So, you know, it is about making sure whoever you partner with really kind of understands where those will show and understands how to limit and adjust and kind of guide you in a way that those ads are going to get the best possible engagement.

Mark Reed-Edwards: So big question to close out. And maybe this is the theme for today's discussion. And , I think it's a rather big question, but if anyone's going to answer it, it's going to be you. What does it take to succeed on Amazon in 2024?

Robyn Johnson: So, you know, this answer is very different than what I would have given you even a year ago. Amazon right now is very focused on compliance. Courts have found that they're liable for unsafe products that are sold on their marketplace. So before it really was just a question of marketing.

Amazon has always been very concerned about the customer experience. This makes it a really complicated marketplace. And it makes it so that if you don't have experience with Amazon, let's say you are a guru when it comes to Google or Meta, Amazon can be different and difficult because a lot of things are labeled the same as they are in other
ecosystems but they work differently. The other thing is that you're really going to have to have your compliance documentation in order, especially in the area of food supplements, anything child and baby, you're going to need to make sure you have to have a CPSC, you're going to have to have any safety testing that's required.

You also need to be partnered with somebody to know the right words to say or you need to do that research on your own. So one of the things that Amazon a long time ago I'm guessing they got in trouble with the EPA or something along those lines. That's usually what causes this.

But Amazon got really, really committed to verifying that pesticides were safe, which is great. But now, you know, all of a sudden, overnight, your anti bacterial sock is now considered a pesticide. So there are a lot of trigger words. So if you say let's say, let's say, for example, if you put the word doll in your bobblehead, that might now trigger you to to provide all of the CPSC documentation as a toy, even though your bobblehead was really not a toy.

And then you have to really be watching your voice of the customer in Account Health, there's a tab called Under Performance, there's one that says Voice of the Customer.

You should be checking that twice weekly. Anything with more than two of the same negative experiences-- So let's say two people, three people all say the shirt was too small or three people say they got the wrong item. If we see it more than three times in a row, even if it's a slow velocity item, then we want to make sure: What do we need to change in the listing?

What do we need to change in the way that the pictures are located? So, you might say, well, I can't help it if people buy the wrong size. Yes, you can. You can put a size chart in there. You can put measurements. You can put that item on different sized bodies, so people can see it's tighter in the waist.

And the reason that is important is if Amazon sees that your product is causing a negative experience, they will remove your product from the platform. Even if you're Lego. So don't think, well, my product is selling a lot. They won't do that. There are rare cases, but for the most part, if something's a negative experience, they will remove it from the platform.
So you have to have all of that.

Mark Reed-Edwards: Sorry to interrupt you, but is that done through sentiment analysis? Is it AI that drives that or are there people looking at these listings and looking at these ratings and investigating why they're low for a certain item?

Robyn Johnson: You know, I think anybody that could tell you the answer for sure probably wouldn't be able to say because

Mark Reed-Edwards: Mm hmm.

Robyn Johnson: Amazon has really great NDAs. But my guess is that it's primarily driven by AI and then reviewed by people under certain circumstances. Because there are times where we have a product that has a 20 percent negative customer experience rate, but it's because one person out of five said something and those don't flag, which makes it more difficult because there's not like a hard and fast rule. I can't say, well, as long as you're getting this many and your, your NCX is below this, but basically, you know, keep everything out of those bottom two, the, the poor and very poor, and you should be hypothetically okay.

But we want to keep everything good as much as possible.

Mark Reed-Edwards: So the upshot with Amazon is that it's really, it's not a simple marketplace to do business with.

Robyn Johnson: No, but it can be really, really powerful. You know, we have brands that were, you know, really struggling D to C. They weren't getting the brick and mortar spots, or they did get the brick and mortar spots that they wanted, and it caused more problems. They were dealing with returns and all sorts of different things.

Now, Amazon has its own sets of problems. It has not sunshine and rainbows. We do have some good TACoS. We have some brands that have been able to completely turn around negative things. We have some really large brands that are in every Walmart, Lowe's, Home Depot, and for the last several years, Amazon has been able to sustain growth for them even though every other channel has been significantly down.

So it has allowed them to have avoid layoffs. So it is definitely something that you want to consider. It can be a very powerful channel and you can use it to feed your other channels in some ways as well, because Amazon is so bottom of funnel. When you look at your ad conversions and you see what's converting there, that can really be sent back to your SEO, to your SEM agencies or if you're doing that yourself and really making sure that your product pages are using those keywords because those keywords that work on Amazon are all going to be very much the buyer intent. So it can be helpful there as well. It can also be really great for customer acquisition.

Now, if you don't get any customer information, but especially if you have a consumable product, Amazon Subscribe and Save Now offers this ability to add a coupon on the initial purchase. I'm a marketer. I know all the tricks, but I will tell you the number of times that I have signed up for a subscribe and save, even though I wasn't even sure if I really was gonna like this product, and I ended up on the auto ship because I was like, "Ooh, I'm cheap and I can get 25% off my first purchase and then, you know, 5% off everywhere after--
Yeah, of course I'll sign up for a subscribe and save. I'll just cancel it later."

And so usually two or three times later, then I, you know, go back.

Yeah. You know, so. If you have a consumable, make sure that you are really utilizing Subscribe and Save. Amazon is now providing a lot more data. Their brand analytics that they've been providing has been really amazing to help determine whether or not: is the category down or is my listing down?

We have two full time people that just handle Amazon compliance and then three people that just do Amazon seller support tickets.

We call it being professionally persistent.

There can be really good opportunities there. You do need to make sure that you have the margin in order to sustain on Amazon and really make sure you're looking at apples to apples. So the Amazon FBA fee, make sure when you're comparing that to your self fulfillment, you're including the cost, the tape, the labor to pack up everything.

Cause all of that is included in FBA, but then you also want to make sure you're thinking about Amazon's return fee. Return policies are probably a little bit more generous. So that margin is really your access to being successful on Amazon because you do need enough margin in order to at least launch with advertising and some deals, maybe a coupon or Prime exclusive deal.

And to be able to have that ability to discount on the big tent full days, like Prime Day and I think they're calling it T11 now, which is kind of ridiculous. It went from Black Friday to 11 days. I don't know when that happened.

Mark Reed-Edwards: That's great. What a crazy world. Well, Robyn, I, I hope we catch up sooner than three years next time. I really appreciate your insight and thanks for joining me.

Robyn Johnson: I hope it was helpful. And you know, if you're struggling with Amazon, no, it's not you. Amazon is, can be kind of a bear, but it can definitely be worth it.
And keep listening to this podcast. You can hear more amazing, different confessions from different marketers. And thank you very much for having me back on the show.