Lessons from Scrappy Challenger Brands - Episode 209
DESCRIPTION
In today’s podcast, Kiri gives her take on Jungle Scout’s 2021 State of Amazon Seller report along with her insights into the workings of the small, scrappy brands, and the lessons that can be learned from them.
The scrappy challenger brands are generally at the forefront of the tactics and ideas. Those are worth looking into especially if they are used competitively, if they could be legitimate growth opportunities for larger brands and if they can give some insight into what the future might look like.
Make sure to tune in to find out more!
“Certainly not all of the tactics used in the smaller Amazon seller community are things that I would personally recommend, but we always need to look at the scrappier end of town to understand what those tactics are.”
KEY TAKEAWAYS
There are some interesting stats in Jungle Scout’s report related to profitability for Amazon sellers, especially smaller brands and solo-preneurs.
More than two-thirds of the small merchants see profit margins higher than 10%.
More than a third see profit margins above 20%, which is good news for those creating new brands on Amazon.
Earlier this year, Kiri collaborated with the digital shelf institute on research into larger enterprise brands and their challenges with profitability in ecommerce channels including Amazon.
Profitability is a major concern for large companies, because ecommerce is now a larger part of their business mostly due to covid.
In contrast, the small sellers focused on amazon have seen decent profit margins, so there is a lot to learn from them.
The top categories small sellers focus on are: Home & Kitchen, Sports & Outdoors, Toys & Games, Beauty & Personal Care, Health, Household & Baby Care.
The category that is notably absent is Grocery, which aligns with Kiri’s investigation that concluded that CPG is a lot harder to get profitable in when compared with other categories.
More than half of the smaller sellers spend fewer than 20 hours per week managing their Amazon business and the majority said they were profitable within the first year selling.
This contrasts significantly with the larger brands Kiri interviewed for The Primary Drivers of Ecommerce Profitability Across the Digital Shelf.
Scrappy Amazon sellers mostly use FBA, consider just the pricing model that will work on Amazon and optimize content for Amazon and not other locations with different content requirements.
They have exclusives or relationships with competitors to manage.
They are voracious learners and testers, using Facebook groups, obsessing with algorithms, tracking keyword rankings, etc.
Most are planning to grow their Amazon businesses with new products.
There is a risk of concentrating your business solely on Amazon, as well as getting penalized for product compliance, etc.
Another danger are the Amazon FBA aggregators eating your lunch with their scale.
To get more information about how big companies are dealing with profitability challenges, thought experiments, etc., read Kiri’s The Primary Drivers of Ecommerce Profitability Across the Digital Shelf report (in partnership with Digital Shelf Institute).
Read the Jungle Scout report and think, how could we be scrappy?
Read our Bobsled blog posts on how to optimize content on Amazon.
MENTIONED IN THIS EPISODE
Connect with Kiri Masters
Learn more about Bobsled Marketing
Read the Jungle Scout 2021 State of Amazon Seller report
Read the Executive Insights: The Primary Drivers of Ecommerce Profitability Across the Digital Shelf
Bobsled Blog Posts
On October 19th at 11 am EST, Bobsled Founder & CEO Kiri Masters will be hosting a very insightful webinar about 7 of the most important challenges ecommerce & digital leaders of omnichannel brands will face in the coming year.
