Nicolas Martinez, Vice President of Marketing WendVice President of Growth, CanDo.
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First, there was the Brand Referral Bonus program that Amazon launched in 2021. It gives back an average of 10% of qualifying sales as a referral fee when brands generate sales from non-Amazon traffic. Then, most recently, we confirmed the launch of a now invite-only Prime with Prime integration that allows brands to direct his DTC traffic directly to Amazon checkout. There was a lot of discussion about both of Amazon’s official services about why they wanted or didn’t want to direct their DTC traffic to Amazon. This article details the various pros, cons, and methods I’ve identified for each. For example, should traffic be driven to Amazon product pages with attribution links, or should they be driven directly to Amazon checkouts? A Prime-like fulfillment experience for DTC? Should I set it up or rely on Amazon? How does capturing customer data count? There are many considerations involved in this decision. So join me as I dig in so I can leave with a clearer understanding of how to make the right choice for your business.
First, let’s discuss the benefits of driving traffic to Amazon, regardless of the method you use. First, many (e.g. EComCrew) have found high conversion rates on Amazon. Driving traffic to Amazon had a positive effect on conversion rates. Second, customers know Amazon for its lightning-fast shipping speeds and smooth, hassle-free return process for many items. When customers just starting out with a brand aren’t sure if they want to try a product, having the option to buy from a retailer they already know, such as Amazon, gives them the confidence to push the envelope. So are your advertising dollars becoming less and less effective? You can try increasing your traffic to Amazon and see if that affects your customer acquisition rate. Additionally, Amazon Prime offers brands a way to offer their customers 1- to 2-day shipping that they may not otherwise be able to offer.
Now let’s consider the disadvantages. For one thing, if it’s a method that allows customers to checkout on his Amazon, you’re almost certain to see a drop in sales on your DTC site because you’re driving traffic elsewhere. Depending on your margins, your marketing costs, and what portion of your site traffic is checking out on Amazon, this could be a deal breaker. Recently, one of his brand partners started driving traffic to Amazon and overall sales increased by 10%-20% for him. This reflects a 20% to 30% increase in directly attributed Amazon sales, while DTC sales decreased by 10%. Driving traffic to Amazon may have additional drawbacks, such as loss of customer data and opening those consumers as targets for advertisers on Amazon. These factors are detailed below.
Let’s compare the Buy with Prime (BWP) integration to a simple button with an Amazon Attribution link behind it on how to drive traffic to Amazon. With BWP, shoppers skip product pages entirely and go directly to checkout. Given this less frictional experience, it’s reasonable to assume that more shoppers are likely to convert this way, but we’ve run A/B tests between the two methods. Then you have to figure out which one is winning net net.
Another important aspect is customer data. With BWP, Amazon provides customer data such as email addresses, but in normal Amazon sales, ModernRetail explains, Amazon does not provide customer email addresses. For the latter, however, there are various pre-purchase and post-purchase tactics you can implement to offset this and improve your customer’s email acquisition rate. It’s about collecting customer email addresses and phone numbers on your site before you direct them to checkout. For example, you can include a popup on your site that offers a discount code to share information that also works on Amazon. A product card can be included in the shipment with a callout encouraging customers to scan a QR code to sign up for your email or SMS list after purchase.
When it comes to competitive targeting with BWP, shoppers don’t see ads for other products the way they do when navigating Amazon product pages. We also saw growing inventory concerns among brands on Amazon. If your current inventory situation is tight, BWP may be a better fit because your order’s inventory is in a separate bucket (Amazon Multi-Channel Fulfillment (MCF)). Compare MCF with your current fulfillment method to see if MCF has more or less of an advantage in terms of inventory limits, inbound processing time, fulfillment time, etc.
Last but not least is the cost of each method. Be sure to evaluate how the weight and dimensions of your items, average order size, and service costs for each method affect the fulfillment costs for each method. This will help determine which is the lowest cost option. Also consider Amazon referral fees in your calculations.However, this big Consideration — Using an attribution link allows you to take advantage of the brand referral bonus program. However, all of these factors can vary significantly by product type, so be sure to do your own margin breakdown.
Now you have a detailed breakdown of the current state of DTC traffic to Amazon. There is no one-size-fits-all solution, so if you’re still skeptical, that’s perfectly understandable, especially when considering individual factors such as the effect of methods on conversion rates (CVR) and customer acquisition costs (CAC). can. , organic rankings and sales, and getting customer contact information. However, we hope this information leaves you feeling better prepared to perform your own cost-benefit analysis and run some A/B tests to find out what works best for your brand and your customers.
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