EP40. Selling Beauty Products on Amazon

Hello and welcome to the Green Beauty Conversations podcast. My name is Gemma. I'm the relationship manager at Formula Botanica and also the host of this podcast. If you want to find out a little bit more about what we do and who we are, then head over to formulabotanica.com and check out our free sample class in this week, I am interviewing Mark Bond from Expert Edge, all about selling your beauty brand on Amazon on Enjoy. Hello and welcome to the podcast.

Mark. Hi. Nice to meet you and it's great to be on the podcast, actually. I'm very excited.

Good, I'm glad. This has been one of my most eagerly anticipated episodes from From My Point of View. So Mark is here today to talk to us all about Amazon and what it's like to sell beauty products on Amazon. And I was recently invited to come and see Week at the imf, which was a forum that was part of the professional beauty show in London here in February. And Mark gave a fascinating talk on Amazon and what he how. How he works. And his talk was backed up by someone who is actually selling their beauty products on Amazon. And it was just such a fascinating topic and one that I feel is probably not discussed enough. So, without further ado, Mark, if you could introduce yourself to all of our listeners.

Yeah, absolutely. So my name is Mark Bonn. I work for an agency called Expert Edge. We're technically a marketing agency, but we're very specialized in terms of Amazon, so we only deal with Amazon, but in that sense we help brands on the whole spectrum. So brand new brands that want to get on Amazon and need to get set up, anyone who's been on Amazon, been selling for a while, but kind of wants to take it to the next level. It really covers anything from the account management side, optimization on content work up to logist and warehouse setup. So really, basically, if it's got to do with Amazon, someone at Expert Edge should be able to help you. And it was actually quite nice to be at the AMF as a speaker as well. It would have been lovely to get a bit more time because I was told to keep it at 15 to 20 minutes. So I had to kind of cut quite a few of my topics short. So it's quite good to hopefully get a bit extra time here to go into enough detail to make sure the important points come across.

Yes, I hope so. So we don't have a time limit so we can explore this topic. So it's a big question from everyone we work with, whether they're in the uk, whether they're in the US wherever they're based in the world. And the question is, should I be selling my beauty products on Amazon?

Yeah, that is, that is a question I get a lot. It's basically the short answer is yes, you should definitely be on Amazon. Some brands like to engage with Amazon a lot more actually actively sell, drive it as a, as a sales channel and make sure that it is up there. Because you can't really ignore Amazon as a player or as a channel anymore. A lot of brands really just bunch it into general E Commerce or E Tail as well, which in our experience isn't enough. It really needs to be treated as a separate sales channel. But just to elaborate on that short yes answer, even if you don't want to engage with Amazon, and I get this a lot as well, just questions about what about the pricing and Amazon's always cheap. Isn't it bad for brand image? That might be true, but you have to keep in mind that if you don't put your products on Amazon then a third party seller quite likely will. If you keep growing, if you get into any of the bigger supermarkets and you really kind of get, get a good amount of brand awareness and get the ball rolling, someone at some point will notice your brand will buy your products from potentially a distributor and upload them on Amazon. And then there's this big risk that I see quite a lot as well that a third party seller will have uploaded the product, awful pixelated images, no or short bullet points, incorrect titles. And that can really hurt a brand much, much more than engaging with Amazon themselves. So I would always say at least get onto Amazon via a, for example a seller account. You can even do it for free, get your products on there and with, with the so called brand registry, at least you've got control over your content. So if third party sellers are selling your product, at the very least get onto Amazon, register a seller account and make sure you've got good titles and on there because especially when you think about it nowadays if someone's standing in a shop and they've got two or three products they're looking at, it's just so easy to get out your phone, look at the Amazon app, look at Amazon, kind of compare the reviews, have a look at the images, titles, bullet points. So that kind of the connection between Amazon and offline channels is something people forget a lot and it will really have a good impact on your, on your sales if you've got a good decent Amazon product page as well.

That's really interesting because just after your Talk. Stephan, from which is a skincare brand in France, talked about his experiences with selling on Amazon. And like you said, the reason why he, he actually started engaging with Amazon was because some of his customers in spas had said, hey, you're trying to, you know, undercut us because we see that you're selling products on Amazon for cheaper. And he was like, oh, no, that's not me. And then. And then obviously had to develop a business strategy with Amazon because of that, because someone else was already doing it. So what is your advice for someone taking into context? Obviously we just talked about that experience. What is your advice for someone who is starting out, who is, you know, thinking about potential retailers and stuff like that? I know you said, you said that they should treat it as a separate sales channel. Do you think they should be engaging with Amazon from the start? What is the best way to go about that?

Yeah, I would definitely say getting onto Amazon early is definitely quite helpful. And there's this lovely example that we actually got from Amazon themselves, which is a bit of a case study. Amazon has done this case study related to coffee, but it's basically, you can just apply it to almost any brand. What they did is they went into. This happened in Canada, so they went to one of the Canadian big supermarkets, went into the coffee section and just had a look at which brands are in the supermarket. And in the end you end up with maybe 12 to 15 brands and it's, it's generally the big ones. So it's really like. To get onto the shelf in the supermarket is quite tricky in a way. You've made it when you get into a supermarket, when you think about it traditionally, and then kind of applying that to Amazon, if you think about, think about it, Amazon has digital shelf space in that regard and it's completely unlimited. So everyone can really get onto Amazon. But the magic, in a way, if you want to call it that, happens on the search result page one and page two, because rarely anyone. I know I don't do it myself, rarely anyone ever goes onto page three or further. So if we, if Amazon then took page one and two search results and compared the brands that were on those in those search results with the supermarket, and you could see that obviously some of those big brands were on the, on the top search results as well. But in general there were a lot more brands and also the top five to ten spots were very, very much smaller challenger brands. So you do have, you do have in a way. Obviously, big brands have a big budget and they can drive more Marketing and so on. However, it is a bit of a more level playing field if you think about traditional channels because you do, you have the same options the big brands have. So you can really, with very little investment, you can get your products onto Amazon. You can make you, you can make sure you've got good keywords in there so you can be discovered by your potential customer. Nice images, good content in of bullet points and the so called a content or enhanced brand content as well, which really allows you to tell a good brand story and go into detail about the product. It can be done very easily and quite cheap to get on there. So I would say absolutely get on there. Even if you don't want to develop Amazon as one of your major major sales channels, you should definitely make sure to get on there, get on there early so you've got full control over your content and build it from there. If you want to engage with Amazon and invest a little bit, because an invest is definitely required. If you want to drive it as a channel, it is very easy to get on there. You've got a level playing field, you can really work on the same things. You've got the same tools as the big, big players. So yes, absolutely, I would say get on there early.

I mean that's an interesting point because you know, talking about it from a level playing field like, I guess you don't have to pitch to someone to be on Amazon. You can just kind of start the process yourself and I think probably, and we'll explore this a little bit later is I guess one of the benefits is that the same rules apply to everyone really with Amazon, don't they, in a way, whether you've got. So if we could just detail a little bit the kind of options that there are with selling with Amazon. Because I think several questions are going to come off this kind of thing because obviously there's challenges with each of them. So I know that you can be like a vendor or you can let Amazon sort out your logistics, but if you could take us through the kind of more formal terms for those things and how they work and what the benefits benefits of each model of selling is really.

Yeah, absolutely, absolutely. So basically the two big relationships you can have, or the two main relationships you can have with Amazon is on the one hand the vendor that you manage that you mentioned, which means that Amazon will buy stock from you and sell it on in their own name. You can see that on Amazon. If a product says sold and dispatched by Amazon, you can tell that is a vendor. Amazon has bought the stock straight from the vendor and sells it on in their own name. The second option is a seller and as a seller you have several sub options. You can basically call it as a seller you're technically always still the owner of your stock, but you can use what is called fulfilled by Amazon, which is that logistics side of things, which means that you can prepare a shipment, you send your stock into an Amazon warehouse and Amazon will then send out the orders individually. This enables the prime badge and 24 hour delivery as well. Technically you are still the owner of the stock. Amazon just takes over the logistics side of things. And on Amazon you can spot this. If it says for example sold by Alabache, dispatched by Amazon, then that means that it is actually the brand themselves who's selling it. But Amazon is just doing the logistics side. The second option for a seller is the so called merchant fulfilled logistics option, which means you are basically sending your stock or the product straight to the customer. So you get an order, you have to spot your order in seller central, accept it and send it out yourself. That obviously does not have the prime badge in that case. So you don't get that 24 hour delivery. However, at some point down the line, if you've got good delivery metrics and a good seller rating, you can use what is called seller fulfilled prime, which means if you're able to deliver stock within 24 hours, then you can get that prime badge with your self fulfilled orders as well. So those are kind of the options you've got vendor and then seller and seller. You need to decide between FBA so fulfilled by Amazon or merchant fulfilled. And if I'm talking for example to a brand that is just kind of new thinking about getting on Amazon, they don't have a presence on Amazon, they don't have a sales history. In that case I always suggest go seller first. And the main point for that is you've got control, most importantly, you've got control over your pricing. As a seller you simply set your price and that is what it is displayed at Amazon. And if you are going with the FBA option, you can send your stock into Amazon and you're in stock straight away. And just as a bit of background as a vendor, if you start out early on as a vendor and you're not one of the major big brands that Amazon knows, there will be demand, then it can take some time to actually get going. Because you have to imagine Amazon as this big automated machine which is, which is kind of, which works with a very sophisticated algorithm. And this Algorithm actually has to notice a certain amount of demand on a product. So you need to have a lot of clicks and a lot of page views on your product before the system decides that they need to actually place an order. And only after this first order is placed and you're in stock. That's when you can really start using marketing and you can start getting your sales rate. But that's a little bit of a catch 22 because you need marketing to get traffic and you need traffic to get the order, but you can't do marketing without that order. So it can be a bit of a struggle to start out as a vendor straight away. So that's why I usually suggest go as a seller. You can set your price, you can send in a shipment, you can pretty much start more or less straight away. There is a little bit of a caveat here I have to give, because Amazon has two categories which are a bit guarded. One is anything you either ingest or secondly, anything that you put on your skin. And obviously beauty brands are very much put on your skin in the majority of cases. So be prepared to have your ingredients and your safety data sheets ready because you will have to actually submit all of that documentation. And if that's not ready straight away, it can actually take some time to get past all of those safeguards on Amazon, get past quality check. And if you need to get your safety sheets done after the fact that you're trying to upload the products, it can really delay things quite a bit.

Okay, so the first option that you mentioned, where you sell your stock to Amazon.

Yes.

That's where you get all of the prime badges and you get access essentially to Amazon's prime database, I'm guessing.

Yes. Well, you definitely, you do get your prime, your prime access straight away. So you have a product that is prime eligible and gets the prime badge, meaning it can be sent out within 24 hours. That is basically almost always automated and included. When you are a vendor, you can get this prime access as a seller as well, but it does need to be unfulfilled by Amazon or seller fulfilled prime. But yeah, generally, yes.

So you sell your stock to Amazon, they obviously they, you know, they're kings in terms of logistics. I mean, you know, when you think about Amazon, you know, logistics, they've got it down with that option. Is that where the difficulty comes in terms of pricing?

Yeah, the pricing issue is related to how Amazon's algorithm is set up because Amazon is always trying to have the lowest price. So basically, if you are a vendor, what Amazon does is they will scan the Internet. They've got a very large list of online retailers that they are scanning. That list isn't disclosed, but you can kind of make a good guess depending on the category you are in. What Amazon does, Amazon is never ever a price leader. They are always a price follower. So they will scan these other online retailers and they will always match the lowest price they can find online. And that also includes for example, any short term deals or offers. So if you've got for example a Marks and Spencer's deal planned and they on their online store discount your product, there is a high chance that Amazon will match that price as well. So that's kind of the price struggle because Amazon is always matching the lowest price they can find. And you can't really have a discussion about this either. Amazon just automatically matches it. So the only way to really have any control over pricing is to make sure that internally your price structure is very well thought out. And you always have to kind of treat Amazon the same you would treat one of your best wholesalers or one of your best distributors in terms of the pricing you offer. And then you shouldn't have any major issues. But always also make sure you don't offer too many big bulk buys where someone gets a very, very cheap price. I've seen a lot of issues. Someone was discounting a large order and these found their way very cheaply onto Amazon after a while. Or for example, if there's another online seller who's able to offer a very, very favorable price, Amazon will match this. And if there's, if the profitability and the margin for Amazon isn't there. So let's say you sell your product at pound five to Amazon and another online retailer sells their product at £5.50 and that's only a 50p difference. Amazon will just simply stop ordering your products. And you need to really think about your pricing structure if you're a vendor because you don't have any control over the sales out price and there is a risk of Amazon matching a very low price.

And like you said, if they suddenly stop ordering your product, that means that your sales will suddenly stop, I'm guessing.

Absolutely. Unless there is, let's say, let's say there is a vendor offer as well as a seller offer on a certain product. If Amazon doesn't order, obviously they're out of stock and that offer wouldn't be visible on the product page anymore. But then if there's, let's say a third party or yourself as a seller, then that order would take, take over and you. And it would still sell. However, it would not be your sale in a way, it would be a third party where there's like a middleman taking a bit of margin as well. So. Yeah, that's exactly right.

Yeah. So that's, that's the difficulty. I mean, I'm supposing if you are, if you're either going to be a vendor or a seller, where it's fulfilled by Amazon, you're making use of Amazon's logistics. So you're taking advantage of the fact that they have an extremely polished and professional logistics set up. So you know, or they know as well that the products are always going to get delivered, that there's not going to be any issues with that, hopefully. But they, but they control everything. So what are the pros and cons of that situation?

Well, first of all, a major pro that I want to, to mention on the seller side for FBA offers and especially for small and medium brands, it is very, very helpful to be on FBA as a seller because you've basically got the option, if you're an fba, to deliver your products to send your shipment to a UK warehouse and then Amazon from there has the option. Or you have the option to use Amazon's network to sell in other marketplaces in Europe as well. So you can deliver to the. Amazon will then transfer stock to Germany, France, Italy, Spain and you can therefore enable your sales in those countries as well. And that's kind of really, really helpful. And we see a major plus for smaller brands because they just don't have the distribution network on mainland Europe or they don't have the option to send stock over to, let's say France, southern France for example, or Spain. So utilizing Amazon's FBA network to sell in those countries is a big, big, definitely. Another plus that's actually very recent is that Amazon is now changing their referral fees. So the payment that you have to pay to Amazon for each sale is most likely going to be reduced for several categories. So that will make it more profitable for sellers as well. So that's definitely a big plus. On the vendor side, you've got the plus that it is nicely automated. You've got this Amazon sold by Amazon offer, which looks very, very good for a customer and has a good effect conversion. But there is no, you really can't say this is the ideal model and this or this is the ideal model for you. There's no one shoe fits all sizes at Amazon. It's definitely important to say that early on it's much easier to start out as a seller because you've got much more control. You can get the ball rolling much easier. But I see a lot of brands starting out as a seller and later on switching over to the vendor side because it's more convenient. Sometimes you will get your PO dropped in every Monday, sometimes some additional ones on Wednesday, but always Monday morning. You've got your pos, you work on your pos, you send it to Amazon. Amazon takes care of the vast majority of the rest. You just have to look at your advertising and promotional side of things and Amazon takes care of the rest. So there is definitely pros and cons on both sides and it really depends a lot on the business. How the business is set up and wants to work early on seller, later on vendor or just keeping it at seller are both definitely, definitely options.

The other option obviously, like you mentioned, is that you control your own store stock, that it would be fulfilled by you, the seller. Yes, but obviously Amazon set conditions on that, don't they? And I, I remember the Stefan from Ella Boucher talking a little bit about things like refund rates and delivery rates and things. So like if you're not, you've got X amount of refunds, they seem to see that as a problem. Or you've got X amount of missed deliveries or people aren't receiving the products correctly. Is that something that you see working with Amazon exclusively? Do they set quite rigid rules for sellers that kind of match their own logistical aims and objectives?

I guess generally you're quite open there. So when Stefan was talking about his delivery issues and the extremely strict guidelines, he was talking about the Seller Fulfilled prime side of things because that is very, very strict and completely right. You need to have a seller rating of at least 4.7 is quite high. You need to be able to deliver within 24 hours and you've got, for example, if you apply for Seller Fulfilled prime, you have a three month testing period where you will be tested on all of your logistical metrics on your delivery times and rates. And if you don't hit Amazon's targets, you're not allowed to continue. And if you want to, if you have too many complaints or refunds on the Seller Fulfilled prime, then it definitely, they can definitely kick you out. If you do just generally fulfill your orders by yourself, then it's not quite as strict. You've got, for example, you've got a box you can fill in on your products which includes the lead time. So you can basically just make it dependent on your own logistics, make sure that you've got good pricing and you don't lose out too much on fulfilling these orders. But also keep in mind that a customer decision quite often depends a bit on how quickly you can deliver. And additionally the lead time is one of the metrics that determine the search result rankings as well. So it is good to deliver quickly. But also Amazon is quite a bit more lenient if you fulfill it yourself. You just have to keep in mind if you say I'll deliver in two days and it arrives in five days, there might be some negative reviews coming out of it. So kind of sticking with your lead times is important as well and making sure that the customer isn't unhappy. But generally merchant fulfilled orders are not quite as strict, but seller fulfilled. Absolutely. You need to be very, very much on, on, on top of your game to, to be able to keep yourself in that program.

Amazon has an algorithm, right? So everyone is working within the algorithm. Like you mentioned. How have you seen brands have success when working with this algorithm? Because in your talk it seemed to me and, and the questions after Stefan presented his, his side with Ella Boucher, there seemed to be a certain amount of frustration with how this algorithm works. Just like we algorithm and the Instagram algorithm. I mean how easy is it to be successful with within this algorithm? And what are your tips for brands really?

Definitely, absolutely. So basically the algorithm, Amazon's algorithm is managed by a company called A9. So A9 is there basically a daughter company that works on the algorithm and updates and manages it. You will see. First of all, I want to mention you will see quite a lot of scams online talking about the new Update and the A10 algorithm. It doesn't exist. It's A9. It's a company name. The company is called A9 and they won't change their company name if they have a new update on the algorithm. They change it all the time, they never disclose any changes or patch notes. So basically everything we know about this algorithm is by testing and just kind of using, using general knowledge in a way because you have to, you have to just keep one thing in mind, Amazon and us as well, in a way we want to sell, right? So if the more you sell, this is the number one point, the more you sell, the higher you will show up in the search results. This is, this is basically the most important metric. The 30 day sales rate will determine who comes out on top of the search results. There is a lot of hidden other metrics as well. You've got for example Your time spent on page, your bounce rate, your lead time goes into this a little bit as well. So there is a very, very long set of metrics and everything in one way or another is included in the, in the algorithm. But most importantly, if you just keep in mind the more I sell, the better chance I have to rank highly for a certain search term. That's usually the best way to go about it and you will then usually see success. So what we usually do is we like to look at Amazon as a bit of a holistic model. So you can't just kind of pull one lever and then suddenly start selling and growing like crazy. It's really a mix of everything. So you need to make sure that you include good keywords in your content. Make sure you've got very good looking titles that include your brand, product, maybe another buzzword or unique selling point about the product and the size of the product. You need to have nice bullet points, Imagery, very important, five or more images, thousand pixels or more. So you've got the zoom function and they look good. Use lifestyle images, you can use videos up to 500 megabytes. Those have a great effect on conversion. And that a or enhanced brand content that I mentioned earlier, which is kind of like about halfway down the page, just above the reviews and in the there you can use some additional banners, you can get some more information about the brand, some extra information about your product in there. And then obviously if you have all of these in place and you've got a very good looking best practice product page, then from there you can look into getting your advertising going because you need to, you need to keep in mind as I mentioned, ranking on page one or two of the search results is super important on Amazon. However, if you don't have a 30 day sales rate, you obviously won't be ranking very highly on those search results. And the way around this is Amazon's PPC marketing. So their advertising for which you can target specific keywords and you can then display your product on top of the search results. So the very top two, between top two and four search results for keywords are most likely a sponsored product advertising. And that's how you get around this issue. Early on when you're just starting out selling, you can then pay to get your product to the top of the search results. Get those clicks. With a good product page you get a good conversion. If you got a good conversion you can start building your sales rate. So that's basically the process you have to look into. You can complement this with A few promotions and really it's the whole set of levers that we've got. We have to find the right dials, pull the right levers and make sure that we get a good mix of all of the tools together to make a brand successful on Amazon.

I mean, I'm guessing, guessing that, that, that is probably a slightly oversimplified version of what happened.

Yes, absolutely.

Because you guys exist to help people. I mean, you know, your main aim is obviously to help people sell on Amazon and you're obviously there because people need help with it. And I could be through being in your talk and listening to some of the difficulties that people were having with it. I think what came across to me the most was that unlike other retailers or et cetera, retailers, it's very difficult to build a relationship with Amazon in terms of, yeah, if this is going wrong or somehow, I don't know, someone else has popped up with identical product and has tweaked a few things and now it's, it's doing better. And there was that one gentleman that said, you know, Amazon just delisted him because of some problem and you know, suddenly all his sales were gone. So I wanted to talk a little bit about that side of it. Like it's probably going to be very different for people, I would imagine, than other relationships that they've built with retailers or E tailors because it just seems like, like you said, like a vast machine. So I'm just wondering how that works for people. Like how do you engage with them?

Yeah, that's one of the points. Why we are quite attractive as well to, to, to a lot of our clients or potential clients. It is a big struggle to have a chat with your vendor manager of sort of like if we start on the vendor side. Yeah, you've got a so called vendor manager who in a way is the buyer for your category or subcategory. And these are very, very busy people and they are getting a thousand emails a day from all of their vendors in their category. So they simply don't have the time to engage with everyone, which is understandable as well. So they need to split their time. And it does make sense. I mean it's a bit frustrating but it does make sense that they would give more time to whoever is more profitable, sells more for them. So that's why it's for smaller or medium sized businesses, quite a bit of an issue to get to this vendor manager and talk to them. So the main way to deal with Amazon is via support tickets and they are quite good at responding. You will get quite a few cases that might take a while or some copy and pasted generic answers. But it is definitely the way to work with Amazon in these kind of cases. And why we are so attractive to a lot of clients is that we've got a lot of good contact at Amazon and we can generally find a way around that problem and find a contact at Amazon on the seller side of things. I would say in a way it's worse because there is no vendor manager so you only have the option of support cases and needing to submit support tickets. However, they are improving the process on the seller side lately with a live chat support system. So that actually helps quite a lot and can really take off some of that, some of that pressure. And one thing that's really good advice for new and upcoming brands is Amazon's Launchpad program. It's not easy to get in there, but this is an account management team, an account management program that will help startups and up and coming brands. So if you are kind of a new brand, especially if you're crowdfunded and crowdfunding backed, then you've got a very high chance of getting into the Launchpad program and that can be very helpful in terms of having a contact advantage Amazon.

So just explain a little bit more about what Launchpad is.

Yeah, Launchpad is one of Amazon's programs. They've got several, in several, some marketing programs, some account management programs. So in each kind of category there's some type of program. And Launchpad is basically a account management support program for new brands. It was initially just for crowdfunding backed startups, but they've kind of, they changed the entrance guidelines so you can already apply. Even if you're not backed by crowdfunding, you can apply for this, for this program. They will then have a look at your brand. And if you are kind of, if you are a promising up and coming brand, then Amazon will very likely approve you for the Launchpad program. And what this does is that they will support you to get started on Amazon. So they will help you with your logistics early on. If you've got any issues, any suspension issues or stock not arriving, they will help you sort these out. If you've got a support ticket it lingering for a while, they can then look at these and put some pressure on the support staff. So it's just basically they can help you with any early issues that you, that you are facing on Amazon.

Okay, sounds interesting. Yeah. So I'm guessing that it's actually going to take quite a lot of time and investment. If you're thinking about Amazon as a really serious sales channel, if you are.

Completely serious about it and you do have as a goal you've got Amazon as one of your main sales channels, then you definitely do need to either put in the time and with that, I mean at least a half, sort of like half employee or even a full employee to have, have on Amazon full time to completely understand it all or for example, work with an agency like us in order to kind of navigate that, that jungle. Because there is a lot of, a lot of pitfalls, major opportunities, but also a lot of risks. So you need to either have someone dedicated to Amazon or you need to try and find a partner who helps you with this.

Let's talk a little bit about Amazon's luxury beauty platform. So they launched that a couple of years ago, I think.

Yeah, yeah, it was, yeah, two or three years ago. Yes.

Yeah. So can you explain to us what that is?

Yeah, it's basically obviously the beauty category is very mixed in a sense. You really generally you've got so many categories and usually you can create a subcategory and it's fine, you can let that category run in the beauty segment, you've got just so many international sellers and vendors and between exceptionally cheap products and absolutely high end luxury segment products, there's just a huge, huge gap. And the issue quite a lot was that because of, because Amazon has this. As mentioned earlier, Amazon has their automated algorithm matching pricing that was very often a bit of an issue, especially with luxury or high end products. So the luxury beauty category kind of allows you to a certain extent at least control your pricing. So Amazon's website price won't be matched with the lowest online retailer they can find. But also what they promised when launching the category was that they are having a much higher level of engagement and that you get a lot of additional tools and kind of like a different style product page compared to the regular Amazon categories. You do definitely have a different product page. For example, you don't have those five bullet points that we all know and love so much.

No, no, it's different.

Yeah, exactly. You've got these three categories. You've got your benefits, your suggested use and your and your description in there. So you've got three text boxes in a way instead of your bullet points. And one thing I actually do like quite, quite a lot about the luxury beauty category is that instead of just the name of the product under your title, it always says buy a certain brand and Instead of that, you can actually use your logo. So you can have a logo implemented on Amazon that is clickable and leads you to the Amazon store if you've got it set up. So that's actually quite nice. The only negative thing really in the luxury beauty category that I feel is that engagement that Amazon promised is kind of dying down a little bit. I've heard from a lot of brands that early on it was absolutely lovely. They heard back from their vendor manager or any kind of account management support very quickly. They were helping setting it all up very, very quickly and nicely. But that has kind of changed a bit and the engagement just isn't there yet. It's still there for larger brands. So if you're at a stage where you make a couple hundred thousands to a million a year, then Amazon is absolutely happy to support you still. But if you are a smaller brand that is in the luxury beau category, the engagement will be fairly similar to, to a regular, to a regular vendor.

I mean, let's just have a little chat about the Amazon landscape at, at the moment, anyway. So I feel, and this is obviously just a personal opinion, that in the us, how people shop on Amazon in terms of beauty is quite different to how they're doing it in the UK and Europe and other parts of the world. And actually I was speaking to a brand recently, it had a lot of success on Amazon in the US and implemented similar processes in the uk, selling in Amazon uk and haven't had anywhere close to the success they had in the us. And I think that's because here in the uk, and I think in Europe as well, we still associate Amazon mainly with electronics. Perhaps we're not seeking out beauty in, in the way and in the same way that it is in the us, But I see that here in the uk, Amazon is sponsoring a lot of beauty events and they are definitely kind of pushing themselves, you know, trying to change hearts and minds, I guess, in terms of how we shop, which is obviously, you know, they're probably their larger agenda anyway because that's, that's what they do. But I think that from what I've seen at the shows and how they come across, they've, they've, they've kind of shown themselves as almost like a marketing research company. So they've tried to sell this idea that you should have your products on Amazon because it will tell you a lot about your customers and it will also give you a chance to build reviews about your product and you'll be able to use those reviews to get other Sorts of retailers and e tailors interested in you. So you can use Amazon as a base, but because they've got, you know, they're in contact with such a wide variety of people. I mean, what do you think about that? Do you think that they are doing something like that, that they are trying to change things slightly in the UK and the eu? And is there a benefit to using Amazon almost like a market research tool?

Well, first of all, yes, definitely you can get some very good data out of Amazon. It does need a little bit of investment in the sense of that you need to run advertising and target specific products and keywords to get that type of data. But it definitely, definitely is possible. And I would absolutely agree with that. When it comes to brands that are doing very well in one market but not so well in another, a lot of the times that's a little bit of a brand awareness issue. I see that quite often that brands that are very big either in the EU and they want to kind of get into the North American market or vice versa. A North American brand that would like to get into the European market for those, it's a bit of a, it can be a little bit of a struggle to just kick off and get the ball rolling because the brand awareness just isn't there. And that makes it a bit harder because your brand terms obviously won't be searched a lot. So you need to really make sure that you have a best practice product page and that you really target well in advertising. And I think that's where an agency like us comes in as well, because that's one of our main benefits is that we are really, really strong on the advertising front. We always go in and we do very in depth keyword research. We do a very broad testing month where we really look at the category, look at the keywords, see what works, what doesn't and then we really get a good idea of what the category looks like. First of all, we get the data you've mentioned in sense of a little bit of customer base, customer data, keyword targeting data which can give you some great insight for other channels as well. When it comes to Google Ads, Facebook ads, even just metadata for your, for your homepage. So that can give you some great data. And that advertising side of things is really crucial on Amazon as well. You need to have a well set up advertising strategy and run ads if you want to be successful on Amazon. I don't want to say it, but I'm almost telling you, tempted to say you almost can't be successful if you do not run advertising on Amazon, especially for brands that are, let's say you're an up and coming brand, you're doing well on Amazon, with a little bit of marketing, you're growing. Well, at some point you will get on the radar of the bigger brands and the big players. And those guys have a lot of advertising campaigns set up and they will be starting to target you at some point. And at the very least you need to have some branded campaigns and branded ads set up to protect yourself. Otherwise your search results will be swarmed with competitor products, but then vice versa as well. You definitely should have some ads go and try and get some share from the competition, get into these niche keywords and adjacent keywords where you think this could work. Well, let's try and target that and do some testing on advertising, get some data on what works. And there's some lovely anecdotes. In one of my early campaigns, we were just thinking, how can we target some competitors? Where can we get that little bit extra? And what we did in the end, this was for office products, right? So stationary, those, those type of products. And what we, what we figured out in the end was that the person who is buying coffee and toilet paper is actually also buying stationery. It's the same decision maker, the same person in a big business. So we started targeting our, our shredders and our notebooks. We start, we started to put them up against coffee and toilet paper and tea and sugar and, and all of these types of products, products. Some of those campaigns failed and they were just turned off straight away. But there were like three or four amazing campaigns in there that were giving us great profitability and really getting it, getting the sales up, which was an absolute gem. So those types of things we always look at and do as well. I kind of like to think of Amazon sometimes as a little bit as a comparison to a professional sport because if you run your 50 meters in a certain time, you might be really good, but you really need to shave off those two more seconds, which might just be 3%, 5%, but every half percent you can get at somewhere or another, whether it's your advertising, good new title, better bullet points, better images. If you just add these things up in the end you'll end up with 10% growth just with a few adjustments here and there. And that makes us attractive as well, I suppose, because we know what to look at, we know where to get those 0.5 or 1% increase and we can really make sure that we efficiently target resources correctly. And that's what's really interesting. That's why advertising is crucial. But yeah, also the data you can get is quite valuable.

Interesting. I find this incredibly interesting because my mind is like ticking now and I'm thinking there could be ways that you could make this so incredibly successful and like use it as a launch pad, I guess. Well, that's why Amazon called it Launchpad to go other things, because they have case studies themselves of how people had managed to use the ratings in rating reviews that they had on Amazon to pitch themselves to other retailers and have had a lot of success with that. So there seems to be that the Amazon reviews and the Amazon engagement does carry weight with other retailers and E tailors.

Absolutely, absolutely. And this kind of ties a little bit into that mobile phone that you can just grab in a store and look at it as a customer. The same goes for the decision maker at Sainsbury's and Tesco's and I don't know where, like Super Drug for beauty products, for example. If they see that you've got a great Amazon presence, good reviews, a good amount of reviews and a good looking page, then it definitely will have some weight when they are making a decision of who to give that little bit of shelf space to that they've got left or that they are freeing up for a new brand. So I would absolutely agree with that. Amazon can have a good effect on those offline channels, but also vice versa, being in those offline channels can have a good effect on Amazon as well. So it's really a lot of people are thinking about like, oh, traditional bricks and mortar channels against Amazon. But really I kind of want people to think of it as a bit of a complimentary thing. Like if you do well in one channel you will, you will have a positive effect on the other channel and if you work on both, then you will have the maximum effect and grow the best. So you can't just say I don't want to do Amazon. Then you're gonna have third party sellers and a bad product page and negative brand image. But also you can't say I will just be on Amazon, Amazon and forgot the bricks and mortars because then you're missing out on a bit of brand awareness and potentially getting that bit of extra image creation, brand creation that you need on Amazon to really kick off and get the ball rolling. I mean it does work. We've seen brands as well that are just using Amazon in a certain market and nothing else and it took off and they're doing amazingly. But if you want to be safe and you want to really have a good, efficient strategy. I always like, like to say think of Amazon as a complementary channel, not a cannibalizing channel for your, for your bricks and mortar traditional sales.

Let's just have a little discussion about Amazon themselves. So they have beauty ranges, they've just launched, they've got their makeup one and they've got the skincare one. And I know that there's been quite a lot of chatter about this, you know, so what are their aims with these products? Are they, are they trying to, to gain a market share for themselves? And you know, I heard some, one of someone that I work with, a marketer said that they had a client that was incredibly successful on Amazon with candles and they had, you know, runaway success and Amazon actually made their own version of these candles and sold them and actually pushed them out of market. What do you think they're trying to do with launching their own beauty lines? And I have some thoughts of my own. I'm just going to ask you. You.

Yeah. Oh, absolutely. I mean, absolutely. This can definitely be a bit of a struggle for brands, especially, especially smaller brands, because Amazon, obviously, they've got, they've got endless resources for any kind of marketing. You'd think they know their tools best. But we've seen, we've seen some awful, awful, awful content on Amazon products as well, Bill. So that's, that's not a guarantee. But yeah, I kind of agree that it can be a bit of a stretch struggle. One thing that, I mean, obviously there are, there are some things that are going wrong at Amazon. I don't, I don't want to kind of like make that sound good, but Amazon, and this is a positive about Amazon, Amazon does always have the customer in mind. I mean, obviously they want to be selling and they want to sell profitably, but everything they do, they do have the customer in mind. They want to make it as easier for, as easy for the customer to shop. They want to, want to be able to offer everything if they can. And that's what their logos is about as well. If you just look at Amazon's logo, a lot of people, people don't know this. You've got your Amazon and then you've got that little arrow going from A to pointing to the Z and kind of like shows from A to Z. Amazon wants to have everything and sell everything from A to Z, so it kind of shows in their logo as well. But basically they are trying to always be, always have the customer in mind. And when you Go up against Amazon's own brands. It can be a little bit tricky, but in a way it's just one more competitor and they don't, they don't really, really have any more options than for example, any of the big beauty brands. In a way it just needs a little bit of extra effort. Make sure you've got that extra advertising campaign that is targeting Amazon so you can kind of get that share that they're taken from you back. Make sure that you've got a very, very strong looking page and if you are in a position where you have a good sales rate and you're high up the search result rankings, in that case with good protective campaigns and some good content, you should definitely have a strong chance of stay up there. Obviously Amazon is very strong and there, there's a very, very good chance that they will take the number one spot of the search results and the category, but you can still stick around on, on spot number two and you can definitely make sure that you've got a good share and that you don't lose out and decrease in sales too much.

Yeah, absolutely. I mean, I think they also, it's a good, it's a good strategy for them in terms of market research because by having their own brand brands on there, they can get a lot of information about customers as well and obviously use that.

Oh yeah.

To help other brands. I mean, what do you think about the fact, I know that when you were talking at the imf, people were saying, you know, the problem is, is that you don't get any customer data with Amazon. You don't have a relationship with the customer. So for instance, you know, I was speaking to this brand recently at a show and they were saying that they are doing well on Amazon, they are doing very well, but they're not growing their own kind of email list or their own, you know, marketing campaigns on, on another side because they don't have any access to the customers that Amazon that are buying from them through Amazon. So they don't get any of the customers details, you know, so, so basically they, you know, they, and if there's, if there's sort of a problem, then everything gets sent to them via Amazon, you know, if there's a problem with a product, whatever. So they don't have a relationship with the customer and what they were doing was putting little things in their packages when they sent them out and trying to make a relationship with the customer that way. I mean, do you think that can be a disadvantage for brands in a way?

First of all, that is definitely correct for the vendor side of things. As a vendor you get next to no customer information. It's very hard unless you spend big and you run some of Amazon's so called DSP campaigns, which is big brand awareness creation campaign campaigns. And you can get some information in terms of customer base and your funnel there. But if you are for example, a seller, you do have more control. You can even send out emails to your customers via Seller Central. This can even be automated with some tools. So you could for example, set up a tool that sends out automated emails after every bought product saying thank you very much for buying your product. We're very excited to be part of your journey covering us. Would you please leave a review on our page, that kind of thing. It's definitely possible on the seller side. Additionally, you've got some more programs coming up that will improve engagement, but a lot of those are still in beta so we need to kind of wait a little bit on that. But just as an example, what Amazon is working on at the moment is a program where you can basically say I will give you a 3 pound Amazon gift card if you buy one of our products and leave a review as an example, that kind of thing. So yeah, on the seller side you don't get a lot of information about your customers, but you do at least get the chance to engage with them and send them for example, a follow up email or if there's a complaint or a problem, you can actually talk to the, in a lot of cases you can talk to or send an email to the customer straight away. But yes, on the vendor side of things you don't get any information and you don't get to actually engage or talk to any of the, any of the customers. That is true and it is a little, little bit of a downside in a sense. But unfortunately it's what we have to work with when it comes to Amazon.

Yeah, exactly, exactly. So I guess it's just trying to realize what the, yeah. What the pros, pros and cons are. I think and, and I think through, through looking at this myself there is such a benefit to working with an agency because you know, all the, the little bits and pieces of how this Amazon puzzle kind of fits together. Together, fits together in a way like because I felt like talking to people who do sell on Amazon and the brand I was talking about do it themselves and I think possibly they didn't, weren't aware of all of the different features and things that they actually had available to them in a way if that makes sense.

Yeah, there's definitely, definitely a lot of things to understand. You can really make a lot of, you can get some good data and make a lot of good decisions just based on what you see in your, let's say sales report. You've got for example, lost buy box, which means like the buy box is whoever is the lowest offer, generally it's the lowest offer with some exceptions that if a customer clicks add to cart, the offer that is added to cart is the owner of the buy box. So to say. So you've got a lost buy box report, you've got stock reports, you've got some good data on your clicks and sessions in seller central. So you can definitely get some good data, but you definitely need to know what to look for, what each metric and what each data point actually means to make a good decision. And then in the sense of how to work on Amazon, what's the priority? Where do I get my low hanging fruit first and make sure I set myself up for success, that kind of thing. There is a lot to navigate and I mean obviously you can look at guides and blogs and white papers online, but let me tell you, it takes longer, it takes a lot of time to get through all of these and actually go figure out which ones actually gives you good information, which ones just try and get which ones are just clickbait and actually don't really know much and just trying to get you to read it. So yeah, in that sense we obviously the whole team has been working with Amazon for years. At our end we've got a lot of former Amazon employees that have that internal extra bit of knowledge. So absolutely, in that sense we were incredibly helpful in the sense of, of making sure people understand what's what, telling them this is what we need to do first, this comes second, this comes third, and helping them get past the blockers as well. If you are, for example, especially in the beauty category, let's say you're trying to get into, into Amazon, there's a high chance that they will first of all stick you into their Dangerous Goods or Hazmat program. And then you need to make sure that you, that you get past that, get the right documentation into Amazon. So there's a lot of pitfalls, there's a lot of issues and blockouts that can really, really delay your selling on Amazon. So I think that's one of the main points where we're attractive. We get a lot of these smaller and newer sellers call us up and saying like I've registered on Amazon about Two months ago and I still haven't got my product in the system even what do I need to do that kind of thing? So, yeah, there's a lot of struggles. It takes quite a bit of time to get there and really have understand it all.

I mean, it was interesting, the diversity of the audience at the talk that I heard you guys speak at, because there were some people who were clearly using Amazon as one of their primary sales channels, were doing quite well. And then, you know, I was quite interested in what Stefan was saying about his case study with Ella Boucher, because he kind of made it sound. And I hope I might be right. I hope I'm right at least was that he made it sound like, for him, him anyway, for his brand, there wasn't a major benefit in terms of sales on Amazon. The major benefit for them was presence on Amazon.

Exactly.

Does that make sense what I'm trying to say there?

Oh, yeah, no, no, absolutely. That is. That is exactly right. He's saying. I mean, obviously Stefan's objective wasn't to turn Amazon into a major sales channel. His objective was to take control of his brand image and take control of his brand on Amazon, which I completely. So there's definitely a lot of things I could tell Stefan that he could look into if he wants to grow his channel, especially when it comes to his product pages and when it comes to advertising. However, I also understand that that is not his objective. So he's not looking to grow it into a sales channel. But it is definitely right that I would say even if that is not your objective, you're not looking to have Amazon as one of your main channels. Be on Amazon, definitely get on there, make sure you control your brand because. And that is. That was one my example slides as well. I had an example of. I think it was Elixir brand that had a product on there with no bullet points. Very, very short product titles, which didn't even have a capitalized first word, which was the brand. Awful images, that kind of thing. So let's say you don't want to sell a lot of Amazon, it still makes sense to get on there, to be present. Make sure that, for example, you mentioned this earlier as well. If you've got like another product, a party seller having an identical product on there that suddenly starts selling well, you can get. You can very, very easily and quickly merge duplicates into your listing, which is absolutely no problem at all. So that's sort of like one of these maintenance things that we do on a regular basis as well. For all of our clients just to look over at least, at the very least the best sellers. But, but if possible for the whole catalog just to make sure there isn't a lot of third party listings popping up left and right. And if they are merging them into our, we see third party sellers getting really, really sneaky as well. For example, if you have a product and you sell it in a four pack, for example, right now I'm talking about a brand of ours, it's a tea brand, they've got a four pack of their products which is their main product that they are selling because singles just isn't feasible for them and any larger sizes is a bit too much. No one would buy it. So four pack is what they decided on. That's what they're selling now. Over the last few months there was a lot of third party sellers popping up with other four packs because it's their main product. They keep selling into the distribution as well. But we've just like we're on their case straight away. We see them pop up, we merge them into our product, they've got a worse price that's just dropped down the list of other sellers. So it's not a problem. So what they've started doing now is they buy four packs, they open the four packs, create three packs or six packs, anything that isn't matching our size, which then makes it impossible for us to merge it into our program product and they're trying to get their sales that way around. So you will see people come up with awful tricks, some really gray areas even against Amazon's guidelines and that kind of thing. So you need to not only make sure that your products look good, you also need to be on top of your game and make sure you keep an eye out on third party sellers. You have good variations in your products and if there's any kind of dodgy things happening, make sure you put in a test order or something. For some dodgy looking sellers, is it actually your product or are they selling some fakes? That happens a lot. We've had that where we had to order a few test products of some duplicate listings just to see if it actually is that product and it wasn't. So you can get those suspended via infringement reports quite quickly. But there is a lot to those kind of third party duplicate listings as well.

Yeah, I know that there seems to be a concern, especially amongst people I've spoken to about the idea, idea of fakes being on Amazon and I know that, I mean I don't know if this is how it works. But when we were, when we were talking now, I suddenly thought about it. But if someone is offering a fake product at a very low price somewhere on the Internet, will Amazon's pricing algorithm match that price?

Well, the, the pricing algorithm has, it's basically just established online like a proper online retailer. So if it's kind of, let's say if it's on ebay, they would never match it. Definitely that's, that's not the case. That shouldn't be, that definitely shouldn't be a risk. But if it's, if it's sold anywhere at any genuine online retailer or even if it's on someone's shop, then if, if that shop is big enough and has enough volume at some point it will, it will pop up on Amazon's radar and they will add it to their match list. Yeah.

Right. Okay. I think we covered everything that I wanted to ask you. Do you have any final parties words? Because I reckon this is going to be quite a popular episode.

Oh absolutely, very definitely, very excited. It's, it's this, this is my very first post podcast ever. So I'm actually quite, yeah, quite, quite excited. It's, it's really, really great to get this chance of you. So thank you. First of all, if anyone has any questions I'm happy to refer to our homepage or give, give my information if there's any, any questions and also, also if there's any follow ups from you. If you get a lot of questions and you would like to have like just a quick additional segment to recall quickly, just let me know. Always open to anything Amazon related and I'm sure there will be lots and lots of questions. So yeah, happy to help with that.

So all of Mark's details will be in the show notes that accompany this episode so you'll be able to find expert edge and get in contact with them. If you, you want any help with Amazon and yeah, if you guys want another episode with that covers very specific questions with Mark and Amazon, then let us know and we can organize that for sure. Thanks so much for joining us, Mark.

No problem. Thank you for having me and yeah, it was great. Thank you so much.

Pleasure. I really hope that you guys enjoyed that interview with Mark. I, I hope I asked the questions that you would like me to ask and Mark has suggested if we would want a second episode. He's happy to do that. So if you would like that then please don't hesitate to get in contact with us and you can do that by visiting our website, formulabotanica.com finding us on social media, Facebook, Twitter and Instagram Formula Botanica. Or head over to our free Facebook group, the Skincare Entrepreneur Mastermind, and join in on the global green beauty conversation Once again. Thank you you so much for listening.