Navigating E-Commerce on Amazon – Food & Drink Business
Author and business strategist Betsy McGinn is so passionate about business success on Amazon that she wrote a book about it. Ahead of his online Amazon masterclass in October, McGinn explains why the e-commerce platform holds such potential for Australian food and drink companies.
Back in 2007, when e-commerce was new to consumer products companies, I was working as the first e-commerce channel manager of the Seventh Generation eco-store and wondered: would people buy laundry detergent on line ?
It turned out that they would – and did – in large numbers.
In my role, I’ve had the privilege of pioneering this new retail landscape on Amazon (and other e-commerce partners) and witnessing first-hand the explosion of consumable categories. on line. During this process, I have experienced both the vast opportunities and the often daunting challenges of this ever-changing retail channel.
My success with both is what ultimately inspired me to start my own business – McGinneComm – where I help brands unlock their Amazon potential, with a particular focus on food and beverage.
I’m a true evangelist of the opportunities Amazon provides for brands, especially nimble brands that aren’t bound by traditional retail models, and international brands looking to break into the US market. According to research firm Mercatus, online grocery sales in the United States are expected to reach US$250 billion by 2025, a substantial increase from the pre-pandemic forecast of US$196 billion.
And brands are truly reinventing the way to market, with many launching for the very first time on Amazon.com rather than retail stores.
Some of the most successful new brands have built multimillion-dollar businesses on Amazon before even launching into a retail outlet.
It makes sense for so many reasons. Amazon accounts for nearly half of online sales in the United States, with $469 billion in revenue, 148 million loyal Amazon Prime shoppers who spend exponentially more than non-Prime shoppers, and a market of unparalleled third-party detail. The latter allows brands to control their own destiny by selling ON Amazon without selling TO Amazon, bypassing this traditional retail model that often takes control away from a brand on its growth path.
Additionally, by offering Fulfillment by Amazon, brands get the best of all worlds – managing their own brand trajectory while Amazon takes care of the often sticky operational elements of e-commerce, like fulfillment and dispatch.
To date, no other retail platform has been able to replicate this hugely successful model.
I have worked with food and beverage brands from dozens of countries including Australia, New Zealand, Namibia, Finland, Bulgaria and Brazil.
You can see why this business model works extraordinarily well for international brands entering the US market. On Amazon, brands instantly benefit from 24/7 nationwide distribution, without the need for a retail distributor or the challenges of presenting shoppers to stores for shelf space. limited retail.
The Amazon shelf is limitless – there is no gatekeeper to decide the fate of a brand, and each brand has the ability to control its own pricing, marketing, and content.
It’s an environment where brands that know their Amazon ropes can truly thrive. But if you don’t understand the platform, well, ask any longtime Amazon seller and they’ll tell you stories about more Amazon irritants than you can imagine!
This is where education, preparation, and a top-notch e-commerce strategy come in. To lay the groundwork for this important strategic work, my colleague Phil Segal and I authored the book The Amazon Roadmap: How Innovative Brands are Reinventing the Path to Market. We had both seen too many sellers come to Amazon naively believing that the Amazon so easy to love as a consumer would provide the same intuitive experience for sellers.
Unfortunately, that’s not true. In fact, the most important part of your Amazon journey is getting all the initial work done before launch.
First you need to know what that job is, and second, you need to incorporate that knowledge into your business and develop the strategy that ensures both initial success and long-term growth.
This methodology works with brands already on Amazon whose business is growing, as well as brands whose business on Amazon is struggling.
In fact, because the Amazon marketplace is constantly changing, the ability to step back and rethink strategy is a necessary break for anyone looking to succeed on Amazon. Because the bottom line is that selling on Amazon isn’t just an online version of physical retail.
Whether it’s whether you have the right products in the right packaging for Amazon (which for food and beverage brands is rarely the existing unit sold on a retail shelf) or understand how unit economics variables are different for e-commerce – knowing exactly what works for the consumer and profitable for the brand is essential.
The marketing and communications on this platform are also different. Because your consumer is not physically in front of your well-marketed product in a store, able to pick it up, read the label, and see it in the context of its category, top-notch content and marketing is also essential. that a well-developed pricing strategy in your plan.
But Amazon’s strategy and execution are not uniform. Your best strategy is tailored to your brand and your business. It is a constant commitment and cannot be entrusted to a single person within your company. That’s what makes this opportunity so exciting – the chance to seize this premier retail opportunity and drive your brand’s success.
My online Amazon Strategy Masterclass (October 20 and January 24, 2023) provides a deep dive into Amazon and insight into the fundamentals of success on Amazon US. It is suitable for brands that are planning to launch or already have a launch plan in mind or are currently selling on Amazon and are looking for an opportunity to optimize their business.
As a follow-up, there will be a limited number of individual and personalized audits and strategy sessions.
I’m not an Amazon evangelist just because I love Amazon, but because I love seeing brands succeed in ways that weren’t available to them before this brave new evolution in retail.
I can’t wait to bring Amazon US to Australia.