Ask L2 is a series where we answer questions from our clients and readers.
Question: Third-party sellers have turned Amazon into a crowded marketplace. How do we stand out?
Amazon can often feel like a free-for-all with multiple third-party distributors trying to sell the same type of product. There are three core ways brands can boost their visibility on Amazon:
Optimize for organic search. Sellers can optimize their assortment and product pages to organically boost visibility on the platform.
Pay to play. Similar to Google, brands can artificially boost their visibility by allocating a marketing budget for Amazon’s paid media offerings.
Partner with Amazon. Brands can increase their visibility among Prime shoppers by selling wholesale to Amazon as a first-party sellers.
The first two strategies are an iterative science that require constant fine-tuning and performance-based improvements. (Contact us at AmazonIQ@L2.com to inquire.)The third strategy is less tactical and more decision-based. Being a first-party seller on Amazon isn’t right for every brand, but it’s important to at least understand how doing so could give an immediate boost to visibility.
For example, in the Household category—which includes kitchen and home supplies—only 14% of total product assortment is sold by first-party sellers, but they account for almost half of all Prime-eligible products. For some products this effect is even more exaggerated. Sixty-five percent of cleaning tools, 74% of food storage bags, and a whopping 98% of Prime-eligible toilet sprays are sold and shipped by Amazon. Compared to the general assortment (Prime and non-Prime) in these categories, brand can double their visibility by selling products wholesale to Amazon.
In another category, Health Care—which includes over-the-counter medications—first-party sellers account for just 10% of total product assortment but 55% of Prime-eligible assortment. There’s a similar degree of uplift for first-party sellers that sell first aid kits and bandages. Brands that sell such products have the most to gain by selling their merchandise wholesale to Amazon.
For more insights into which categories have the most to gain by becoming a first-party, Prime-eligible seller, see L2’s latest Amazon report.