HOW MUCH SHOULD I INVEST IN AMAZON?
A question we get asked a lot when brand owners are considering listing their products on Amazon to supplement or indeed become the foundation of their sales strategy is: how much money should I spend putting my products on Amazon?
Minimum investment when selling your products on Amazon.
Given how saturated Amazon Marketplace currently is and the need for brands to utilise a number of strategies in order to stand out from the competition, we recommend that a minimum budget of around £1,000 is required.
If anyone invests less than this amount, they will be going up and competing against products that do have the budget behind them. While this doesn’t necessarily guarantee that they will fail, what it does mean is that their growth is likely to be inhibited and the time it takes to reach better search rank positioning will increase too.
The £1,000 budget is slightly arbitrary, however, because you would also need to take into consideration your product, its category, your competition, the ideal price point, and the daily sales you want to achieve.
How far does your investment go with Amazon?
When you invest in Amazon, it attributes all of your investment in its platform to a sale/no-sale outcome. This can easily outperform Facebook advertising or Google pay-per-click ads and we are already seeing a decline in overall spend on these platforms.
How is investment linked to growth on Amazon?
The acceleration of a product’s growth on Amazon is directly linked to the investment made on the platform.
At certain times of the year, such as at the beginning of the 3rd quarter, many brands are looking to jump start their busiest sales periods, like their Christmas sales, and invest more heavily into the platform than at other times.
This also means that many brands have money available to invest in boosting their sales or brand identity at this time of year, so it is the perfect time to invest in product listing on Amazon to provide an edge in the lead up to the Christmas sales period.
Regardless of the time of year, a significant investment in getting your products listed and up and running on Amazon, as well as protecting your products on the platform, will allow your brand to grow faster on Amazon, which will translate well on other platforms as brand trust is built, too.
Will my product fail on Amazon without significant investment?
Does that mean that your product is doomed to failure on Amazon if it is not backed up by a large investment?
Not at all.
Matt Peck, CEO of Market Rocket, says:
“Fundamentally, the only thing that we ever ask of our prospective clients is that they have a good product. If they have a good product and we believe that there is a demand for it, which we’re very good at identifying, then minimum or maximum spends go out the window.
If a product can cultivate demand on the platform and investment is linked directly to sales, then the initial outlays are negligible and ongoing investment is directly attributed to price tolerance and competition.”
If you’d like to discuss selling your products or launching your brand on Amazon, please do not hesitate to get in touch.