Essential Steps for Building a Brand on Amazon
What may have been easy three or four years ago—throwing generic, faceless products up on Amazon for a nice markup—is almost impossible with increased competition and more popular brands on the Amazon marketplace.
In 2020, the Amazon game has changed. The game now favors real brands. If you want to succeed on Amazon, and potentially sell your business for a nice multiple in the future, the best path is to build a unique, differentiated brand.
At LandingCube, we work closely with a number of sellers who all say the same thing: brands last, whereas selling generic products is not a sustainable model.
Here, we’ll explain why brands perform better on Amazon and outline the key elements of a brand that will bring in good revenue and enable a profitable exit.
Why You Should Build a Brand
There are two ways most businesses choose to operate on Amazon. You can sell others’ products (which is known as “reselling”) or create a brand and sell your own products (often called “private labeling”).
Each method has its merits, but brand building is almost always the better long-term strategy.
The Advantages of Reselling
The reselling model is popular for its simplicity. It’s the easiest to exploit for a quick buck, though it was even more so several years ago.
It’s simple because you can follow a standard formula to make money: research which products are popular on Amazon, source the product from a supplier, wholesaler, or retailer, and then list it on Amazon with a markup.
An example of multiple sellers competing on the same listing.
The issue with this model is; what’s stopping someone else from doing the exact same thing?
This is where reselling falls apart. Your store has no differentiating quality. What often happens is that other sellers jump on the same product, and you end up having to price your products lower and lower to make sales. This results in a race to the bottom, and eventually, no one makes any profit at all.
Resellers tend to closely guard what product(s) they sell out of fear that other sellers will copy them and cut into their profit. This is a prime example of how fragile the reselling business model is.
The Advantages of Branding/Private Labeling
Creating and nurturing a brand takes much more creativity and effort, which is why reselling is more popular. But the payoff of building a brand is a more secure and valuable business in the long run.
What you get in return for the extra sweat equity put into your business is longevity, better performing products, higher profit margins, and a higher valuation.
Branded products give you the chance to build an audience and get your customers invested in your brand’s identity. When you do this, you have a better chance of drawing in repeat customers and developing loyal brand advocates.
This lets you sell at a higher price, with higher margins. You’ll also have an easier time getting reviews, which will make your products perform better still by facilitating more conversions and higher search rankings.
A strong brand not only leads to better performing products, it also makes your business more attractive to buyers for the same reasons. In contrast, stores that rely on reselling always need to be looking for the next product to sell, as well as competing for a share of sales.
Buyers don’t want to own a business that needs constant upkeep. They want to invest in an asset, which your brand is.
Brand Building on Amazon—a Blueprint for Success
Now, it’s time to examine how you can set up a brand to be successful.
This is not so much a step-by-step process of building an Amazon brand as it is a collection of things that can distinguish your brand from others.
Anyone can build a brand. Building a brand that resonates with your customers is another thing, however. So, with that in mind, let’s get into it.
The Product Comes First—Make Sure You Sell a Great Product
Your brand is ultimately going to be judged on the products you sell. The most interesting and engaging brand won’t mean anything if your products are poor-quality. So, before you think about any kind of advanced branding tactics, put your time and energy into producing interesting, high-quality products.
These two elements are what make a great product. First, find something to make your product stand out. For example, an additional feature that competitors don’t have, or a free add-on.
If it’s the same as 100 other products already on Amazon, there’s little reason for an Amazon shopper to buy your product. Examine existing products, read the reviews for these products, and try to find a unique value proposition for your product.
Second, work with manufacturers and suppliers to ensure you only provide the highest quality products. You don’t want to be known as the brand whose products fall apart half a day after they ship. You’ll begin to develop a negative brand image, as well as collecting negative reviews that will hurt your sales.
Quality assurance checks with your supplier are essential. If you’re having consistent problems with one supplier, shop around until you find a reliable one. Take responsibility for product quality—blaming quality issues on the supplier won’t fix the fact that you’re the one losing out when your customers are unhappy.
Invest in the Unboxing Experience
One of the most neglected aspects of selling products online is the experience you give customers when they first receive and open your product.
As a brand, you want to evoke an emotional response from your customers. The best opportunity for this is during the unboxing. How great does it feel when something you bought online turns up? The feeling of finally receiving and opening a product is intoxicating. So much so that there is a booming market for unboxing content online. The YouTube channel Unbox Therapy, for example, boasts more than 17 million subscribers because of how its videos conjure the emotional response of opening a new product.
If your product turns up in a boring plain box or plastic bag with nothing but the product inside, you’re missing a golden opportunity to give people a positive emotional association with your brand.
Compare that with a product with carefully designed packaging and a high-quality product insert, providing an unboxing experience that sticks with the customer. The second product is going to stick in your mind longer and has a much better chance of creating a loyal customer and brand advocate.
Growing Your Brand on Amazon
Amazon increasingly wants to be known for carrying the best, most popular brands. To encourage the growth of unique brands on their platform, they’ve introduced a number of powerful branding tools in recent years.
Some of the first things to do when build your Amazon FBA brand are to get a trademark, apply for Brand Registry, and take advantage of these tools:
- Sponsored Brands Ads (or just Sponsored Brands)
- Amazon Storefronts
- A+ Content
- Amazon Attribution
These features help in a variety of ways, such as attracting more conversions, improving profit margins, introducing Amazon customers to your brand’s story and identity, and generating more visibility on Amazon.
Sponsored Brands Ad placement in the Amazon search results.
Sponsored Brands give you valuable real estate in the Amazon search results and are a fantastic way to grow brand recognition within your niche. You can use these ads to parlay single product searches into purchases of additional products within your range—the Amazon Storefronts feature also offers a similar advantage.
Example of an Amazon Storefront.
Amazon A+ Content lets you beef up single product listings with additional information that leads to more conversions, as well as introducing other products in your range and giving you a valuable opportunity to introduce shoppers to the unique image and voice of your brand.
Amazon A+ Content on a product listing.
Finally, Amazon Attribution shouldn’t be forgotten among Amazon’s branding tools. It is a powerful feature to help you track, optimize, and improve the way you run marketing campaigns from outside of Amazon. Efficient marketing campaigns result in more sales, higher margins, and more money to reinvest in your brand.
Utilizing all the above tools is a must if you want your brand to grow. The difference that comes when your brand is visible all over Amazon is immense.
While your primary sales channel is likely on Amazon, to build a brand that lasts, as well as one that fetches the best sale price, you’ll want to establish a presence outside Amazon.
For all Amazon FBA’s advantages, it’s incredibly risky to have all your eggs in this one basket. Additionally, while you have the available branding features discussed above, you still can’t connect with your customer base as well as you can on your own channels.
Buyers want to see a diversified business. Even if you don’t plan on selling, you should still want a brand with diversified sales channels. Should you ever suffer from a ranking decrease, targeted negative ranking campaigns, or any other problems on Amazon, it’s a godsend to exist outside of Amazon, where you can pivot to if necessary.
Build an Audience
One of the most valuable possibilities when you branch out to off-Amazon channels is the ability to build an audience.
Amazon doesn’t let you contact customers directly, outside of updates and communications necessary for the fulfillment of orders. This severely limits your ability to connect with your customers and build relationships.
Your audience could be in the form of an email list, a Facebook group, or any other community where people interested in your niche hang out. However, an email list is the best “one size fits all” option.
A simple way to start building your audience is to set up a sales funnel from Facebook or Google Ads. Run ads with a moderate discount for your product (~25%) linking to a landing page. The landing page features an email optin for the discount code, which the customer can use on Amazon.
An example of the email capture landing page mentioned above.
The cost of ads and discounted products can be off-putting to some, but it’s a worthwhile investment to build a brand asset (i.e., your email list) that helps you grow your business and increase its valuation.
Nurture Your Audience, Don’t Neglect It
Neglecting your audience is a cardinal sin for brands.
It’s all too easy to build a large email list and then sit on it, thinking it will retain its value as long as the subscriber numbers are there. However, the truth is that an inactive email list is not worth much at all.
If you don’t nurture your audience by providing value and keeping in regular contact, your list will rot. When it’s time to finally contact your audience, you’ll end up getting sent to spam. Those who see your emails will likely unsubscribe.
One of the best brand-building tactics is to build an audience and provide consistent value, such as helpful content or news and updates related to your niche. Many are hesitant to do this because it doesn’t provide an immediate return on investment, like a promotional email or a Black Friday deal might. But in the long run, it’s a way for people to remember your brand.
As a result of higher brand recognition, you’ll get more clickthroughs from the SERP, more recommendations for your products, more reviews, and people will be more likely to click and buy when it’s time to send an email about your next big promotion or new product.
Summing Up—Invest in Your Brand
Branding is an important piece of building a profitable business, and one with a prospect of attracting a high selling price. Buyers want a business with a “moat”—that is, a competitive advantage that separates them from the field.
Note that we use the word “invest” a lot. Invest in your unboxing experience, in building an audience. When building a brand, there are some costs involved, both in terms of time and money.
These costs often don’t have an immediate return. However, brands that invest wisely in brand-building assets, such as an email list or nice packaging, see the returns in better long-term performance and a higher valuation.
Those that don’t end up being the “me-too” businesses. Too many Amazon stores are like this. These stores are not attractive to buyers and are thus at risk of falling off the face of the planet at any time.
If you want more than just a quick dollar, invest in your brand. This is the best way to build a business that lasts and set yourself up for a life-changing exit.