Tackling the Amazon Challenge | Brandon Hendrix of Thras.io
Amazon is a behemoth. So much so, that sales on Amazon accounted for a staggering 49% of all ecommerce sales in 2018.
With access to an audience that large, it’s no wonder that so many brands are selling their products through Amazon, despite the ever-changing rules and risks. And a large portion of Amazon’s massive sales go through third-party sellers that are Fulfilled by Amazon, or FBA sellers.
This is exactly the market that Brandon Hendrix focuses on. He’s the VP of Marketing at Thras.io, a fast-growing acquirer of Amazon FBA businesses.
Brandon has worked in ecommerce for nearly a decade, including at Autotegrity, which sold to ADP, and as the head of acquisition at LopPop, the popular maker of pop up cards. While he previously specialized in paid acquisition, he switched his focus to the wild world of Amazon marketing.
In this exclusive interview with The Empowered Marketer, Brandon shares:
- The growing potential of Amazon PPC
- Why Amazon is cracking down on customer reviews
- How to NOT get your store shut down by Amazon
- …and much more
Listen to the Full Conversation
Read the Top 4 Takeaways
1. Why did you single out Amazon third-party sellers as an opportunity for growth?
In the Amazon space right now, 50% or so is Amazon third-party sellers. I think that’s going to keep increasing, especially since Amazon makes a lot of money on the third party sellers. It’s hard to avoid. Most people just go to Amazon to start searching. You really have to know that space well — know how to take advantage of it and know what not to do. I think it’s going to be the future of ecommerce.
2. Why is selling on Amazon so challenging? It seems like there’s lots of ins and outs and different regulations and rules to follow. What do you think is the number one mistake a lot of people make when trying to sell on Amazon?
Three to five years ago, you could have started with almost anything on Amazon really killed it. Now it’s really tough. Just like you said, there are Amazon terms and conditions that you don’t know. They’re always changing.
There’s also a lot of competition. If you’re not offering great products, you’re going to get hit with customer complaints and reviews. If you’re not getting enough reviews, you’re never going to get served up because of the pure competition. If people have thousands of reviews, you’re never going to be able to catch up to someone like that. It’s not going to be worth it for you.
But at the same time, the conversion rates are great on Amazon. They take care of shipping if you do Amazon FBA. It’s just you do need to know what you’re doing and how to get that initial jumpstart when it comes to Amazon. Otherwise, you’re just going to kind of do one to two sales a day, and it’s not going to be worth it for you in the long run.
3. You alluded to the fact that it’s hard to get found on Amazon. How do you market products within Amazon? And how do you optimize for visibility so people see your products?
Amazon’s very different than a traditional Shopify web store, for example, where you can place Facebook pixels. There, you can track everything from click to conversion and really optimize and scale it up.
Your visibility into Amazon is pretty limited. You can’t place pixels. If you send Facebook traffic, you’re not going to be able to see if someone purchased something. It does make it pretty challenging. But there are a couple things you can do.
Amazon has Amazon PPC. That’s really probably the number one source of traffic for most people on Amazon, and it’s very similar to Google paid search. It’s nearly identical in many different ways. You’re bidding on keywords that people would search in the Amazon ecosystem. You’re setting up your brand terms and your research terms, and you’re harvesting different keywords.
If you get a lot of traction on PPC, it’s a good way to get a boost. The performance is actually pretty good most of the time. If you have healthy margins, you can normally break even or be profitable on PPC.
Then there’s a lot of other companies that specialize in product launches on Amazon. You can go to them. They have email databases and they can help you launch your product, which is pretty cool. You might have to give it away from 90 or 100% off, but you can get a good boost and good reviews. It’s all about getting traction. The more reviews you get, the more you can spend on PPC, the more you can invest to start rising in the ranks, the better.
Right now I’m trying to experiment a lot with Facebook ads and other different types of marketing like SMS and messenger to try to communicate with customers. I’m working on different ways to track traffic when it goes from off Amazon to on Amazon. It’s certainly challenging.
4. When the gap between being the number one and number two result in Amazon can mean a difference of thousands of dollars, do people get a bit creative with their marketing tactics? For example, it seems that Amazon is cracking down on fake reviews a lot right now.
There are tons of black hat, gray hat, and white hat type initiatives that people do on Amazon. Amazon does do something called review scraping. They’ll periodically go through and they can tell if reviews are happening within certain IPs, in certain time frames, with certain credit cards, or related to certain business owners. If you launch your product and you ask your wife and kids and aunt and uncle and have them do reviews, chances are that’s going to get found out and those reviews will get taken away. You may amass a couple of thousand reviews, but if Amazon finds out that half of those are fake, those will be gone.
A data leak that just happened was in the news. A couple of the Amazon insiders were selling people information on how to get around loopholes and the algorithm. For example, you could try to change people’s categories so you’re in a lower competition category. All of a sudden, you become a best seller there. There’s always different loopholes.
There are also all the different giveaways you could do to try to garnish fake reviews. There are a lot of little things that people try to get away with. It’s just little things that you don’t even think about that can get your account shut down for a week. If it’s shut down for a week, there might be enough time for a competitor to all of a sudden re-take your number one spot.
To learn more about Amazon FBA sellers, visit www.thras.io.