Succeeding on Amazon in 2024: Strategies for Ecommerce Brands from an Amazon Expert

If you missed yesterday's livestream of our latest Commerce Today episode where I spoke with ecommerce and Amazon marketplace expert Nick D. N. , you missed out on one of our best episodes yet! Luckily for you, the episode will be released in our audio podcast feed and on YouTube as a video podcast next week, and in the meantime, I'm highlighting some of the top insights Nick shared in this article.

The Power of Data-Driven Decision Making

Amazon's success is built on its data-driven approach, and sellers who adopt this mindset are more likely to succeed. In 2024, leveraging data will be more critical than ever. As Nick emphasized, "Amazon is a data-driven platform, and in order to be successful on that platform, you have to be data-driven."

Key areas to focus on in your data include:

• Sales trends and seasonality
• Customer search habits and behavior
• Competitor performance and pricing
• Advertising metrics and ROI

By closely monitoring these data points, sellers can make informed decisions that drive growth and profitability. Nichols advises, "You have to have the subject matter expert behind the scenes that can interpret that data and say, what do we do next, where do we go next? How do we actually grow?"

Navigating 1P vs 3P Strategies

The debate between selling as a first-party (1P) vendor or a third-party (3P) seller continues to be relevant in 2024. Each approach has its pros and cons:

1P (Vendor Central):

Pros: Potential for higher volume sales, Amazon handles fulfillment

Cons: Less flexibility on pricing

3P (Seller Central):

Pros: More control over pricing and inventory, direct customer relationships

Cons: Responsible for fulfillment (unless using FBA), potentially lower volume

Nichols notes, "Some brands take advantage of the hybrid approach where you can sell on 1P and sell on 3P simultaneously and really see success on both marketplaces." This strategy allows for greater flexibility and risk mitigation.

Optimizing Your Amazon Presence

Leveraging AI for Listing Optimization

In 2024, Amazon's integration of generative AI into various aspects of the platform presents new opportunities for sellers. Nichols highlights this development: "Amazon has already started inserting generative AI into different points of the product detail page."

One key area is product listing optimization. Amazon's AI-powered tools can now suggest optimized product titles, bullet points, and descriptions based on vast amounts of data and the platform's proprietary algorithms.

Sellers should:

• Utilize AI-generated suggestions for product titles and descriptions
• Continuously test and refine listings based on performance data
• Stay informed about new AI features and tools as they become available

One thing I hadn't realized until I interviewed Nick was - Amazon has trained their generative AI in part on Amazon's algorithm and their proprietary data. So Amazon's generative AI system knows the best approach to use in your listing content to ensure that your products appear at the right time to the right customers. It's a shortcut right into the data you need to be successful, so if you're not using the generative AI features that Amazon has launched, you're missing out on traffic and sales.

Mastering Amazon Advertising

As competition on Amazon intensifies, effective advertising strategies become increasingly important. In 2024, sellers should focus on:

• Sponsored Products: Optimize campaigns by targeting relevant keywords and using negative keywords to reduce wasted ad spend.
• Sponsored Brands: Create compelling brand stories and use video ads to stand out in search results.
• Sponsored Display: Retarget interested shoppers both on and off Amazon to increase conversions.
• Amazon DSP (Demand-Side Platform): For larger brands, utilize Amazon's extensive data to reach customers across the web.

Nichols emphasizes the importance of a holistic approach: "On Amazon, it all works together to really drive the type of revenue that you want to drive."

Expanding Your Amazon Business

International Expansion Strategies

For brands looking to grow their market share, expanding to international Amazon marketplaces can be a lucrative opportunity. Nichols provides a compelling reason for international expansion: "If you don't sell internationally with your particular brand, someone will. So why leave revenue on the table?"

However, it's crucial to approach this expansion strategically:

• Start with research: Analyze market demand, competition, and regulations in target countries.
• Prioritize products: Nichols advises, "Instead of going over there with your entire catalog, which can be very expensive and require a lot of legwork to do, go over there a little bit more strategically."
• Localize your listings: Invest in professional translation and localization of product listings and A+ content.
• Understand fulfillment options: Explore Amazon's various fulfillment programs in different countries to optimize your supply chain.
• Adapt your pricing strategy: Consider exchange rates, taxes, and local market conditions when setting prices.

Diversifying Your Product Offering

To succeed on Amazon in 2024, consider diversifying your product range:

• Analyze market trends: Use Amazon's data and third-party tools to identify emerging product categories or gaps in the market.
• Develop complementary products: Create products that naturally pair with your existing offerings to increase average order value.
• Private label opportunities: Consider developing your own private label products in high-demand, low-competition niches.
• Collaborate with other brands: Explore co-branding opportunities to tap into new customer bases.

Maintaining Profitability

Managing Costs and Fees

As Amazon continues to adjust its fee structure, maintaining profitability requires careful management of costs. Nichols highlights a concerning trend: "We start to see FBA fees really increase on that marketplace. They're continuously growing year over year."

To combat this, Nichols suggests:

• Regularly review FBA fees and consider alternatives for low-margin products.
• Optimize your packaging to reduce dimensional weight charges.
• Stay informed about fee changes and adjust your pricing strategy accordingly.
• Consider using FBA Small and Light for eligible products to reduce fulfillment costs.
• Challenge incorrect fees: "What I have to do is really kind of get into the details. And if you want to call it arguing with Amazon, argue with Amazon. In a systematic way and really claw back a lot of those what I call wrongful price increases."

Streamlining Operations

Efficiency is key to profitability on Amazon. In 2024, focus on:

• Inventory management: Use forecasting tools to optimize stock levels and avoid stockouts or excess inventory.
• Automation: Implement tools for repricing, order processing, and customer service to reduce manual work.
• Quality control: Maintain high product quality to reduce returns and negative reviews, which can impact your account health.

Nichols emphasizes the importance of persistence: "I never give up on it. I keep going. I keep finding ways on how to get better, how to be better, how to optimize and how to take a brand to a new level in terms of increased revenue growth, increased profitability and increased market share."

Staying Ahead of the Curve

Embracing New Amazon Features

Amazon regularly introduces new features and programs. If you're not already using Amazon Live, explore live streaming to showcase your products and engage with customers in real-time.

Building Brand Loyalty

While Amazon owns the customer relationship, there are ways to build brand loyalty:

• Leverage Amazon Posts to share branded content in a social media-like format.
• Use Amazon Stores to create a branded shopping experience within Amazon.
• Provide exceptional customer service to encourage repeat purchases and positive reviews.

Adapting to Changing Customer Behavior

Nichols emphasizes the importance of staying attuned to customer behavior: "Customer search habits change. Why do customer search habits change? Because customers change."

To stay ahead, sellers should:

• Regularly analyze customer search data and adjust product listings accordingly.
• Monitor reviews and Q&A sections for insights into customer needs and pain points.
• Stay informed about broader consumer trends that might impact your product category.

Conclusion

Succeeding on Amazon in 2024 requires a multifaceted approach that combines data-driven decision-making, strategic use of AI and advertising tools, careful expansion planning, and constant adaptation to new features and market conditions.

As Nichols aptly puts it, "Dealing with Amazon, it's like walking into a dark room with a blindfold on your face, and you're trying to get to the other side of the room without bumping into anything."

By staying informed, agile, and customer-focused, ecommerce professionals can navigate the complexities of the Amazon ecosystem and drive sustainable growth for their brands. Success on Amazon is not a one-time achievement but an ongoing process of learning, optimization, and innovation.

Nichols encourages persistence in the face of challenges: "A lot of people see barriers and roadblocks. And I see that too, but I see if we can get to the other side of that, there lies opportunity, there lies revenue growth."