by Seneca Hampton, founder of Hampton Adams

Amazon is one of the world’s largest online selling platforms, with 6.3 million registered sellers. Third-party sales began in 2000 and now make up 44% of the sales on Amazon. While Amazon makes itself one of the most accessible places to sell your product, the competition to be the top seller is fierce. With changing algorithms and copycat products popping up daily, sellers must know the game to succeed in selling on that platform. 

I’ve seen companies make many mistakes when approaching Amazon, which can be avoided if you want to crack the code and succeed. 

Here are the top 3 mistakes I see companies make selling on Amazon:

1. Taking the Wrong Approach to Marketing.

One thing I continue to see time and time again, is that sellers take the wrong approach to marketing on Amazon. There are many marketing approaches. You have direct response marketing on one end; on the opposite end of the spectrum, you have brand marketing. But when it comes to Amazon, the only thing you need to keep in mind is how to appeal to your customer. After that, it’s all about closing the sale. 

When selling on Amazon, you are at the bottom of the funnel. With direct response marketing, you speak to the customer in a way that gets them to buy. Put yourself in the buyer’s shoes. Customers on Amazon don’t care that you’ve got a shop on Amazon. They will buy a brand they have never heard of if it has a reasonable price and good reviews.  

It’s this buyer mentality on Amazon that companies sometimes forget. I’ve seen companies who market on Amazon, trying to get customers to fall in love with their brand. But the customers don’t care. This isn’t your website, where people peruse through your pictures, look at reviews, read the measurements, and decide. On Amazon, our eyes go to reviews, price, images, and title, and we click to buy. That’s it. 

2. Valuing Profit Over Ranking.

The second mistake companies make is focusing on making a profit on Amazon. A profit is always the main goal in other types of marketing. When purchasing ads, for example, you want a certain monetary return on your investment. But with Amazon, it’s a foot race to make the sale. 

Every sale you get is a step forward in the race. But here’s the thing. It’s not about the price. It’s about the quantity sold per order. Say you are selling glassware. If you sell two pieces instead of one, it’s a higher value to Amazon and their algorithm than selling one glass that costs more than two. It’s a velocity game. It’s not a profitability game. 

Ranking is real estate on Amazon, and it’s the most valuable thing. Companies come on the platform and say to themselves; I want to be profitable. If their product doesn’t sell, they might think it’s their listing or advertising. It’s not. You’ve priced yourself out of your market in terms of value. In order for you to be profitable, you’ll need to strike that balance between what you’re selling and what your customers are getting. 

3. Forgetting To Meet Customer Needs First.

The third major mistake I see people making on Amazon is creating an offer based on what is best for them, not what is best for their customers in relation to the competition. When you type an item you are searching for into the Amazon search bar; your results will show no-name brands above the major brands selling the item. The top results sell a similar product to the name brands but without a name brand price tag. 

It’s not necessarily about undercutting the name brand on price but rather providing higher value. For example, if you search for a name brand sneaker on Amazon, several non-branded results will show up first. The price will likely be a fraction of the price on the name brand with similar reviews. If the customer is most interested in finding high quality sneakers and doesn’t care about the name brand, they will buy the cheaper option if it has great reviews every single time.

The big companies may not care what they sell on Amazon. They’ve got other outlets to sell their products. But the scrappy startup selling exclusively on Amazon must pay attention to creating the best value for its customers. It’s the only way to succeed. 

 

Seneca Hampton is an entrepreneur with multiple 7-8 figure businesses, from eCommerce to Logistics, Consulting, and Speaking. Seneca’s recent appearance on ABC’s Shark Tank demonstrates how he built Hampton Adams, an online eCommerce-based business that serves a rapidly growing customer base. 

 

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