Working with Retailers to Maximize Your Direct-to-Consumer Sales on Amazon
May 25, 2023
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Victor Elmann 8:03
Sure. And we’ve definitely worked with Amazon to help with that. So we do have the prime services as well. Now the one thing that you should know right away is even though we may or may not have the buy box, we notice that customers will buy from us over whoever owns the buy box. Yep, they will also there’s a lot of prosperity, they will also convert at the Circuit City site or any other retailer site wherever we tell her we’re talking about here. Right, right, well converting those sites and we see the cross parody, and we see the funnel and the flow coming through different channels as well. I think the customers want that traditional retail support, if they have a bad buy, it’s going to be a wasted investment if they don’t get that warranty. Right. I think that’s, I think that’s an important factor that the customers and anybody should just be cognizant of. There are also ways on Amazon to drive traffic to other sites that have a really good DNP program. You can do a lot of sponsored a lot, targeting on Amazon to to get the buy box. There are certainly a lot of ways that even though you may not be the cheapest on Amazon, there are ways to drive traffic to your specific listing by box. And we think that we know because it’s been successful for us, when given the choice customers will spend a little bit more not like dramatically. We’re not saying like Don’t be like, I’m sure but customers want that. I want that. They want that sense of peace of mind that they buy something they know they could return out of a problem. They can they can someone someone’s there to take care of them.
James Thomson 9:52
So let’s shift gears here. I want to talk about one of the other recent trends that has happened with brands where some of them are starting to grow. Exclusive opportunities to certain sellers, be them retailers or online only sellers. But they’re exclusively giving particular resellers the opportunity to represent their brands on a channel like Amazon. What do you think about that approach, when brands choose to go that route?
Victor Elmann 10:17
I think it’s important for the brand, because one has a lot of counterfeit products on Amazon. And I think as a brand owner, if I was a brand owner, I would want to regulate the product. So we make sure that it’s authentic products to it from an authorized seller that can actually give the customer good support. So actually, that’s a very good trend. And I think Amazon is doing the right steps by building the new transparency program by allowing gating on certain products to really help, really helping this, this counterfeit problem that Amazon has. I’ve heard horror stories from brands, really tier one brands, that customers get a product that’s just not authentic. Yeah. And that’s a problem for everybody that occurs.
James Thomson 11:07
So, you’ve told me that you’re a big believer that brands should be working with retailers on ecommerce channels like Amazon. Tell me about your perspective here. At a time when more and more brands are deciding to go direct to consumers, using FBA, to simplify their shipping in the returns? What kind of conversation Are you having directly with brands to try to talk them off that path?
Victor Elmann 11:32
We don’t want to talk about that path. I think it’s important for the brands to have a presence, a direct to consumer. But I think we can help them in that path by offering more data, more analytics, that explains who their customer is across every single touch point. And we can tell them, you know, hey, we think that this red widget is going to be a hot seller and you focus more on red red widgets, or, you know, one product may work in a certain channel that will work in another channel, right? The brand owners don’t necessarily always understand every single touch point, they might understand one touch point specifically, well, we want to help them grow across all those touch points and this partner is working on helping share data with them.
James Thomson 12:18
My experience firsthand working with brands that are new to Amazon is that they just see higher margins going direct to consumers, but they don’t necessarily see the additional complexity and the work they’re going to need to do to be able to earn that extra margin. Talk to me about when you’re representing brands today, in traditional retail channels, for brands understand what that relationship looks like. Now a brand goes and decides to go direct consumer on Amazon. While they may appreciate your insight, are there other things that you can do to basically get them to say, let us represent you in this e commerce channel rather than you trying out as a brand to figure out how to make e commerce work directly to consumers?
Victor Elmann 13:02
Absolutely. I mean, our feedback is great on all the marketplaces that we’re on. We have multiple distribution centers across the country. So it’s not just Amazon when you think about e-commerce, now you have to think about every single marketplace, including direct to consumer. And we can help that we have distribution centers across the country we can deliver within two days anywhere in the country. Yes, I’m not just sending stuff to FBA, which is important. But even seller fulfilled prime is another option for bulky items that may not necessarily make sense to send to FBA. And a lot of these brands are starting out to be honest with you, they don’t have that logistical support, they don’t have that customer support yet. So we like to incubate those brands, share with them, give them a piece of our marketing or piece of our, our, our customer base, so they can learn more, as our customers learn more about their products, I think that’s a one way to look at it. Yes, they give up a little bit on margin, but what they give up, they’re getting a lot more in return. And that’s not to say that they shouldn’t go direct to consumers, I think brands should definitely continue to sell direct to consumers. But we offer an additional enhancement on top of that.
James Thomson 14:22
What one of the pieces of feedback I’ve received for brands is that they’re going direct to consumers, in part because they don’t really know the end consumer very well. They’ve traditionally had a retailer between them and the end consumer. And so by now going direct to consumers, there’s a better opportunity for them to engage directly with consumers and collect consumer data that they can use to make better products. What do you think about that, that philosophy?
Victor Elmann 14:48
Absolutely. And that’s, that’s, again, another reason why brands should work with retailers because it would just give them additional data. We would partner with them. Not just in that specific widget, but we have experienced with almost every single brand in every single category, yes, that we can discuss what works, what doesn’t work, why it doesn’t work, what the pricing should be, if a new a new widgets coming out, we have a lot of insight as to what the appropriate price might be supply demand. There’s a whole host of things that we have dedicated teams to help in this endeavor to help those brands grow and succeed, which they may not necessarily have those resources when they’re starting out.
James Thomson 15:35
One of the new trends with all these private label products now showing up on Amazon, many of these products, especially in electronics, you know, I will gag if one more person says, Hey, I have my own Bluetooth speaker brand. I mean, there are definitely categories within electronics where everybody can go build their own private label brand. As a large, sophisticated retailer, how do you think about the tearing of which types of products make sense for you to aim to participate in in the e-commerce marketplace versus letting these private label sellers go and sell? You know, headsets and speakers and so on and so forth?
Victor Elmann 16:18
It’s a tricky question because this specifically on Amazon, I think Amazon needs to do a better job in regulating the number of vendors. I mean, it became the Wild Wild West. Everybody from China has a website now. Now, what happens is that the customer doesn’t really find what they’re looking for. This is too many products, and too many pages, which is another. Again, I don’t want to sound redundant here. The reason why the omni channel works is because the vendor says, hey, look at this retailer, yes, this particular product, let’s go on their website. And they’ll see a more curated assortment, we have a customer hotline that can guess, cuz they know customer support that can guide the customer to a purchase decision. And Amazon has become a little bit more self service with all their products. So it’s important to have that sales support customer support option. And to also have that curated report, we find that the actual Circuit City brand page on the marketplace or on our website is very, very, isn’t very traffic, a lot of traffic goes to that section, we build the pages, and we see what customers are clicking on what they’re buying on there. So people are going on the brand page, and they’re going on specific categories to find a more curated product assortment, as opposed to using the search, the search to find no Bluetooth speakers, which you’ll find a million pages. Right. Right, right.
James Thomson 17:52
I want to talk about a category that’s not electronics, on Amazon in the watches category. Amazon actually offers resellers the opportunity to use basically a third party manufacturer warranty service. So this warranty isn’t actually coming directly from the manufacturer. It’s coming from a third party organization. Do you see that kind of model eventually becoming more relevant in electronics? Or do you see brands continuing to be the sole provider of the warranty? Post sale?
Victor Elmann 18:25
and consumer electronics specifically? I can’t speak to Yes, yeah. So watch this. I don’t know if it is consumer electronics. In general, the trend has been over the last 10 years that I’ve been doing this was just to have an extended warranty. So you have the manufacturer warranty that comes with one year two year generally. And then we usually sell an extended warranty for a year or two. And people buy it for laptops and computers and TVs and things like that. on Amazon, they usually in the consumer electronics section, they usually sell an extended warranty. I wasn’t aware that they think all the products already have a warranty in it. So it’s not like there. It just naturally comes with it. So I don’t know how they could exclude the manufacturer warranty from a specific product. Yeah, I mean watches are different.
James Thomson 19:22
But watches have a manufacturer warranty except that many of these manufacturers, if it’s being sold by an authorized seller, they will void the warranty. But consumers don’t necessarily know that. So Amazon steps in to try to fill the gap, which is confusing for consumers until they actually need the warranty and discover they’re not dealing directly with the manufacturer. They’re dealing with some unknown warranty company, which you know, certainly creates a different purchase dynamic or in this case a post purchase dynamic. So let me ask you this. You spent nearly 15 years building partnerships with brands. What advice do you have to brands on how they can build successful sourcing partnerships on Amazon, and other ecommerce marketplaces, given that Amazon is welcoming everybody, the brand, the retailer, the unauthorized seller, they all can get equal footing on Amazon when it comes to the algorithms, what would be your advice to brand that’s thinking about potentially becoming more ecommerce centric?
Victor Elmann 20:27
Well, I would say, the first thing that I would do, if I were you is understand what your long term goals are. A lot of brands start out on Amazon. And they don’t think about how they want to grow once they have whatever market share they have on Amazon. So we see as people go on Amazon, they sell really, really well to have something that’s ranked top 50, top 20 in a category, and then they want to branch out into retail and start selling in retail. Yeah, the problem with that approach is that if you don’t think about it the right way, and you’re not leaving enough margin, or whatever the situation might be, once you’re in the next step in your in your journey, and you want to have retail relationships, brands are going to look for margin, they’re going to look for a bunch of different things to support the product. So what we found a lot of time is that the brands go in directly on Amazon, they have a low margin. And then once they hit retail, they can’t they can’t afford the retail margin as well. Right, that’s when the conversation ends. So it’s important for brands when they’re thinking and strategizing about pricing, and about how they want to grow, to not just think about direct to consumer, but to leave a little bit of room for growth later on once they had outgrown just Amazon and just e commerce and they want to expand across different partners to think in advance about what that looks like strategically.
James Thomson 21:51
So as a retailer, you’re used to owning the customer relationship in the store, merchandising, the messaging, the customer service, and so on. With e commerce marketplaces like Amazon, that dynamic is flipped upside down. And you’re often putting your product on a listing that may not be properly optimized, or one that you don’t have the ability to alter. So you can’t create that same consistent branding that you’d like to have with what you have in your store. What do you think about engaging with Amazon customers when you can’t ultimately manage the content that’s going to be there on an Amazon listing.
Victor Elmann 22:27
So our partnerships with our partners are very good one, we explained to them why it’s important to have a Brand Registry as well, their sub brand registries that you can have. And the trend, the trend within our industry. And I don’t know that others but in our industries, is to give a little bit of ownership on Amazon to the retail authorized retailers. So they can build a plus listing, they can build the images, they can do sponsored ads, and things like that. So it’s very important as you work with these brands to talk about a true partnership, not just let’s list your stuff on Amazon. Another other method that we’ve used that has been super helpful in our industry is a bundling method. So for example, if the brand, I’m just talking in general, right, let’s say the brand is a widget for smart home, buy smart home has a bunch of different product categories and product wise. And they can only sell that one product to a manufacturer, or working with a partner, a retailer that sells multiple categories and multiple products, we could offer accessories to go with it, we could offer a complete package complete solution to the end user, kind of like a smart home and a box, if you will. And putting those listings on Amazon gives them another option that the brand can do by themselves. But it’s something the retailer can do for them as we sell all those all those options.
James Thomson 24:02
I want to finish our conversation today by asking you about how do you create a consistent customer experience for your customer, whether they buy in store, whether they buy on your website, whether they see you on an e commerce channel that you don’t ultimately control that consistency of what does it mean to buy from this particular retailer? How do you create that consistency?
Victor Elmann 24:25
Well, we want to make it easy for the customer. We want to give them value. And we want to give them post post purchase support. We want to do that over and over again. And even if you’re not decided to purchase from someone else, we still want to offer those options to the end user because they know that we’re there and we can help guide them through that journey from top of the funnel to the bottom of the funnel. Yeah, and the important thing to understand here is all these channels are where the customers are right now customers are. They want to buy whatever makes it convenient for them. Right where as a retailer, we need to make it as easy as possible for the shopper to shop, whatever way they want. And I think the customer will appreciate that ease of use and the support from those retail, traditional retailers.
James Thomson 25:18
So one last question. I’m a brand, I want to start engaging with retailers to figure out which retailers actually know what they’re doing from an e-commerce perspective. What advice would you give to a brand on how to vet a retailer to figure out if that retailer knows how to do things on e-commerce channels?
Victor Elmann 25:37
Well definitely look at who the retailer is, what their history is, what their what their reputation is in the industry. If the focus is on omni channel, look at what they’re doing well and direct to consumer look at what their feedback score is on Amazon, looking at what the eight plus pages look like, looking at what the customer support looks like, are they adhering to map map violations could be a problem because if one person lowest price and other person matches, then the whole channel, right? You’re gonna be spending weeks trying to bring the price back up to the MSRP or math price. That’s why it’s super critical. When you work with a retailer I work with a legitimate retailer that can help you and guide you that has resources. And then if there’s any issues you have someone to call that can take care of the problem for you. So getting a retailer is one of the most important things if a brand does choose a retailer to work with, just make sure they’re reputable and they’re gonna adhere to the policies that you want.
James Thomson 26:43
Very good Victor, I want to thank you for joining us today on the Buy Box Experts Podcast. For those of you interested in learning more about Circuit City, please visit circuitcity.com. We look forward to having you join us again on a future Buy Box Experts Podcast. Now to finish today’s podcast, I’d like to share some final thoughts. For third party sellers to be successful on Amazon, a critical level will be soliciting feedback from customers. We at Buy Box Experts are really big fans of the team at eComEngine and it’s tools that help Amazon sellers to simplify the process of messaging customers of Amazon orders. To learn more, go to ecomengine.com. And with that, I want to thank you for listening today and I look forward to joining you next time on the Buy Box Experts Podcast.
Outro 27:27
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