
Retail isn't dying, its transforming
These words of wisdom from our friends at LightSpeed have never been more true. Brick & Mortar retail is still the dominant form of shopping. But the reach for small and medium businesses is limited, with shoppers only coming in from a few miles away. Businesses can expand that reach more easily than ever before. It takes just a few days and a little work, and a company can have it's products in front of millions of potential customers on Amazon.com.
While getting there is mostly easy, it is being successful (and profitable) that takes a little more work. For those who have launched hundreds of products on Amazon before, it might be second nature. But for those entering the online space for the first time (or struggled to get through the last time), having a launch plan for Amazon is critical.
The Honeymoon Period
Let us start out by saying that Amazon has not confirmed the "Honeymoon" period as real. While many believe it is, no one outside of Amazon knows for sure. Based on our conversations with Amazon insiders, we have concluded it is just a by-product of Amazon's algorithm, not something they meant to do. If you aren't familiar with the honeymoon period, we can explain. During the first few weeks after a product is made available on Amazon, keyword ranking is magnified based on a number of factors including:
Sales Velocity
PPC
Reviews
To put it simply, let's say a product normally goes up one spot in the rankings for every 10 sales. During the honeymoon period, a product may go up 3 spots for every 10 sales. Since significantly more sales go to the products that appear closest to page 1, capitalizing on the ability to more quickly and easily get to page 1 becomes much incredibly important to a businesses sales.
So to get the most out of the honeymoon period and give a new product the greatest chance of success, the launch strategy must be perfect.
Keywords
The first step in creating an optimized listing is to have the correct keywords in place. Simply knowing your product is a great place to start. Type in keywords in the Seller Central backend based on what the product is.

Here someone has filled in keywords for a fryer basket. They completed this just by knowing what their product is and what it does, and looking at competing products. Not a bad start, but there some mistakes in here, like the use of the word perfectly, which we call qualifying words (other examples include cheap, excellent, etc.) These mistakes are what hurts. Since Amazon only gives so many characters in this field, wasted space is costly.
There are tools out there available to sellers that can give some insight into keywords, but knowing the SEO rules and how to turn data into information is critical. Just as we mentioned above, placing words into the Search Terms that shouldn't be there wastes space, even though those results may appear in the data you have collected.
Images
A picture is worth a 1,000 words, and that stays true on Amazon. Two elements tend to catch shoppers attention right away, price and images. Amazon requires the main image to be the product on a white background, but after that, sellers have freedom to be creative. While exactly what you need depends on the product, we recommend two types of images:

Lifestyle Images - Show the product in use in its natural environment. This seller is offering a hammock, and uses the image of a child enjoying the hammock on a beach to put all the fun times into the mind of the shopper. All they have to do is add the hammock to their cart!

Infographics - This gives the shopper information about a product in an easy to understand way. This storage kit uses images of its products to show dimensions. Imagine trying to explain sizes without the images. "The biggest container is 6 by 6 by 9." Shoppers become overwhelmed trying to figure out which container is biggest. The only thing that could improve this is to put a similar sized product beside it. A bag of sugar beside the bottom left image would tell customers just how much it holds.
Pay Per Click
More sales equals better ranking equals more sales. Wait, didn't we say it takes sales to get to page 1, and it takes being on page 1 to get sales?
Yes, we did.
Isn't this a chicken and egg problem then? Fortunately, it is not.
With Pay Per Click, you can make a brand new product appear at the very top of page 1, where all of those magical sales happen. Pay Per Click means a company pays every time their ad is clicked, even if the shopper doesn't buy anything. Because of this, poorly planned PPC can get very expensive. On the flip side, well planned PPC is incredibly powerful.
The key to success with PPC is monitoring your results. We tell everyone "If you aren't in the ad console everyday, you're doing it wrong." Check the search results from clicks. Look for searches that have nothing to do with the product being offered, then negate that word. You'll stop paying for clicks that will never convert.
Each month, your ad metrics should be improving. There are two metrics Amazon provides for its advertisers:
ROAS (Return on Ad Spend) - This is a measure of how many dollars of revenue are generated for every 1 ad dollar spent. If you see the number 5.67 under ROAS, it means that campaign/ad group has generated $5.67 for every $1.00 spent on ads. A number under 1.00 means you have spent more than $1.00 to generate $1.00 in sales (which isn't good), so the higher the number, the better. Most sellers are doing well if their ROAS is between 5.00 - 9.00.
ACOS (Advertising Cost of Sale) - This is how much you are spending to generate $1.00 of revenue. Expressed as a decimal, you may see a number like 0.17. This means for every 17 cents the ad spends, it generates $1.00 in revenue. A number over 1.00 means you have spent more than $1.00 to generate $1.00 in sales (which still isn't good), so the lower the number, the better. Most sellers are doing well if their ACOS is between .11 - .20.
There is a third metric that you should monitor as well, called TACOS (Total Advertising Cost of Sales). The two metrics above only show performance at the campaign level, whereas TACOS is a product level metric. TACOS is a measure of how much was spent in ads relative to all sales of a product, not just directly attributed to the ad. This is important because organic rank is partially determined by sales velocity. If you spend more on ads to get more sales, you eventually get more organic sales because the product appears closer to the top of page 1.
This means that even if an ad campaign isn't doing as well as you'd like, it may be supporting the product to maintain its high ranking position. If that is the case, a company is wise to allow the ad to continue running. To calculate this metric, use this formula:
Total Ad Dollars Spent / Total Sales
If the number is .15 or less, the campaign strategy is successful. Getting to .10 is the ultimate goal for most businesses. Too much under .10 though, is a sign that ads are being underutilized or the product is on the defensive. Consider a Sponsored Display ad in that case and try to take some business away from a competitor.
So much goes into the transition from Brick & Mortar / webstore to Amazon, but with diligent planning and in-depth research, a successful sales channel can be added to any business. And if it seems overwhelming, consider partnering with an industry expert like ARSN Digital, who can manage the transition from beginning to end and eliminate the learning curve.
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