Amazon marketplace optimization unpacking the strategic levers that drive marketplace performance

Amazon Marketplace Optimization

Unpacking the Strategic Levers that Drive Marketplace Performance

Rick Backus

We Turn Browsers Into Buyers

Founded in 2007

Over +250 active retail clients

Top 50 fastest growing companies in

San Diego

Recognized as an Official Google

Shopping Partner

Exclusive focus on retail

Visit the New CPCStrategy.com

Services Include

Retail-focused Paid Search (PPC)

Google Shopping Management

Shopping Channel Management

Amazon Sales Acceleration

Rick Backus

@CPC_Rick

Born & Raised in San Diego

Went to UCLA (Gonzaga is going down)

Worked at PriceGrabber.com

New Father of Emmett!

Presentation Overview

The Amazon Plateau

Our Approach to Amazon

Discoverability Breakdown

Buyability Breakdown

Winning The Buy Box

Resources

The Amazon Plateau

The Amazon Plateau: a long-term period

of stagnant sales growth

Without a strategy focused on ongoing

optimization, a seller will hit the proverbial

wall

The increased sophistication of the

Amazon Marketplace warrants a new

approach

Approach to Success on the Marketplace

Discoverability Lever: Product Content

Product Titles

Features / Bullets

Search Keywords

Category-specific Product Attributes

When should you invest resources

in optimizing product content?

Discoverability Lever: Catalog Structure

Parent & Child SKU Relationships

Discoverability Lever: Sponsored Products

Acceleration program for newer or low-

exposure ASINs

Discoverability lever for your top Buy Box

offers

Unveiling of Amazon’s search query data

http://www.cpcstrategy.com/amazon-

sponsored-products-guide/

Discoverability Lever: Sales Performance History

Along with offer relevancy, sales

performance is the most important

discoverability factor

Amazon has the incentive to give top-

selling products the most visibility

Drives the virtuous cycle between

product discoverability & buyability

What Is The Buy Box?

The Amazon Buy Box is an algorithm

that tries to give the customer the best

possible value for their money.

How Is The Buy Box Winner Determined?

It does this by determining which product offerings promise the best balance of high seller performance and low cost price.

Buy Box Rotations

If there are several merchants offering similar value for money, the Buy Box winner changes during the day, these changes are called “rotations”

For Example:

10 equal sellers will each get 10% of the Buy BoxA relatively high performing seller could have 70% of the Buy Box against a lower performing seller, who could have 30%

Buyability Lever: Fulfillment Method

Strong Buy Box factor

The process for FBA assortment selection

Buyability Lever: Fulfillment Latency

Strong Buy Box factor

Latency is entered at the

product-level in the catalog

feed

Buyability Lever: Landed Price

Strong Buy Box factor – highly immediate and controllable

Should be leveraged based on your competitive landscape

Enable strike-through prices

How about raising prices?

Buyability Lever: Product Reviews

Strong influencer of conversions

on the detail page

Significant lever for brands

When should you invest

resources in generating

product reviews?

Buyability Lever: Seller Feedback

Buy Box factor

Almost always a strong reflection of

the quality of a seller’s fulfillment

processes

When should you invest in

generating seller reviews?

Buyability Factor: Seller Rating

Strong Buy Box factor

Mostly comprised of multiple

components found within Seller

Central (ex. On-Time Delivery Rate

(ODR), Late Shipment Rate, etc.)

Respect The Brackets

The higher your bracket, the higher your

Buy Box share

Jumping from one bracket to another

will have a stronger effect than moving

within the brackets themselves

Seller Rating

Seller Rating is divided in to 6 brackets:

• 100-98%• 97-95%• 94-90%• 89-80%• 79-70%• Less than 70%

Shipping Time

Like seller rating, these are divided into brackets:

• 0-2 days• 3-7 days• 8-13 days• 14 or more days

Again, jumping between brackets is more effective than moving between them.

Create a No-Go-Zone

Understand the points below which you should never allow your metrics to go. These are:

– Seller Rating - Below 70%

– On-Time Delivery - Below 97%

– Tracked Orders - Below 98%

– Late Shipment Rate - Above 4%

– Cancellation Rate - Above 2.5%

– Shipping Time - More than 14 days

– Customer Response Time - More than 10% of messages over 24 hours

Mobile = 100% of Sales Go To Buy Box

Over Christmas 2014, 50% of

Amazon customer shopped via

mobile

On mobile devices, the “More

buying choices” button is

practically invisible

Nearly 100% of mobile sales go

through the Buy Box

Super URLs

Resources

Resources

Resources

www.facebook.com/groups/ecommercegroup

Resources

Resources

www.theamazingseller.com

www.cpcstrategy.com/miva

Amazon Marketplace Optimization

Unpacking the Strategic Levers that Drive Marketplace Performance

Rick Backus