Because many of you start thinking and planning for 2024, we want to share 3 part series for Food and Beverages category under the theme of how to win on Amazon in 2024. A lot has changed in the last 12-18 months, both in macroeconomic environment, and also on Amazon. And since Amazon dominance in ecommerce, and relevance for food and beverage brands only continues to grow, we want to help you prepare do well in 2024 on the Amazon marketplace.

In this part I want to share a set of contrarian truths when it comes to Amazon. Why contrarian? Because 5 statements below is what we hear often from brands coming as truths, but in fact are not supported as truths by the reality of what we see on Amazon.

So before you make decisions about Amazon 2024 budgets, resourcing, growth plan, check if you hold 5 statements below as truths. Perhaps our contrarian perspective will give you another angle to help you make better and smarter decisions.

Statement #1: Our broker manages our Amazon just fine

Contrarian truth #1: your broker will not help your Amazon channel grow

We hear it often from F&B brands, where their retail broker also runs their Amazon business. Sometimes it works, more often it kind of works. And I am yet to hear that a brand say their broker is absolutely amazing at growing their Amazon channel.

It makes sense: a retail broker often has Amazon as a secondary, or tertiary expertise that kind of fell into their lap. Which does not do it for Amazon, that is a fairly specialized channel. So while a brand can get lucky where a broker does a decent job presenting the brand’s products and ensures great customer experience through fulfillment and reviews, it is simply not equipped from its own core expertise to drive brand’s growth on Amazon.

Statement 2:  Our brand is brand new, and we will launch it on Amazon as the first and exclusive channel to start with

Contrarian truth #2: Launching a completely new brand with Amazon as the main channel is a bad idea in 2024

Amazon is a platform that amplifies everything: if a brand does something well, they can get multiple leverage on that on Amazon. But any gaps that a brand does not address, will amplify in damage to the brand’s equity or bottom line. That is simply due to a sheer size of the platform, and also high requirements for excellence. Anybody can sell, but only few truly win.

In a case of a completely brand new brand, with no market feedback, unproven product line, a lot of unknown numbers, Amazon can become a land mine. Any issues in product formulation will spill over to bad reviews. Recovering from bad reviews as your first reviews is extremely hard and expensive on Amazon. Unproven market feedback on products means not knowing how to focus on marketing, how to position yourself, who to benchmark as competition on Amazon. PPC marketing which is a must to get customers visit your produt pages on Amazon in the beginning, with no brand equity, will be an expensive investment. Lastly, operational complexity will just add more for a founder who is already wearing too many hats.

Of course, if you are flushed with investors or VC funds that expect 7 figure sales velocity within 1st year, Amazon is the right choice. But reality is, most of CPG nowdays are watching their budgets and experiencing challenges raising funds.

My advice to a bootstrapped, or family and friends only backed CPG startup is to get to $500,000/year run rate outside of Amazon. And then add Amazon. It will help you grow more sustainably.


Statement #3: You need a full blown Amazon agency from the start

Contrarian truth #3: You do not always need a full management Amazon agency

Considering we are an Amazon agency, I am being self-contrarian. But I don’t worry of working myself out of business, I simply want you to come to us when your business is healthy, has already achieved some traction on Amazon, so we can deploy our expertise to really take your brand further on the platform, without hurting your bottomline.

If you are under $10,000/month in sales on Amazon, and do not plan to invest significant advertising, a freelancer specializing in Amazon is a good alternative at this stage. You will always need to be involved as a decision maker (we have seen attempts of full delegation of results and decisions go very wrong), but can rely on a freelancer, or an Amazon consultant to get you to $10,000/mo and beyond.

In the next edition we will talk about hybrid support models that we see become more prevalent in 2024. Internally we are working on a different support level that we are excited to bring to brands that do not need full hands-on Amazon management, but still need an expert by their side (stay tuned for that!)

Statement #4: We will add more products to Amazon give us more sales

Contrarian truth #4: Focusing on less products will give you more sales

I have seen this happen enough to become an ardent proponent of evaluating seriously the less is more as a path to growth.

A brand has few products on Amazon, most of them have sales, 2-3 are consistent bestsellers, and the rest bring tiny sales or 0. The brand does not quite know how to propel their current catalog further, so they decide that adding more products to Amazon will bring more sales. With the thinking that more options for customers will get more sales across more products. In the end they end up with same or only incremental increase in sales, more catalog complexity to manage, more products tied up in FBA (f using FBA), and advertising that is even more dispersed across more SKUs. More complexity, less focus, less advertising to give a chance of a handful of products to go from good to great.

Amazon is a market for virtually for any niche, no matter how niche-y the niche is. If your sales on Amazon are not moving, then something within the current Amazon business is not working. Address that first, see evidence of that via current catalog growth, then add product launches in a more intentional way.

Of course, there are levels of growth when adding new product, new flavor, variation, or new product line makes sense. But when it comes to Amazon it should be done only if your existing Amazon is operating healthy 

Statement #5: Amazon will cannibalize sales from our website, so we do not want to run (Facebook Google, etc.) ads or email list promotions to it

Contrarian truth #5: Amazon will cannibalize sales from your website anyway, so you might just as well benefit from that

Here is the truth: Amazon is THE choice of product searches online. At least half of North American customers go directly to Amazon to research and buy products (skipping Google and other search engine all together).

And when you run social media or Google ads to your website, some of the customers new to your brand will end up going on Amazon and buying your product there. Yes, in the end you meet customers where they are. But I encourage you to consider driving your off-Amazon advertising to Amazon for certain scenarios.

Ex: Amazon Prime Day – bringing off-Amazon traffic will propel you further in search results on a day where there is a lot more customers, and their intention to buy even higher than usual. It also means your Amazon advertising will bring more ROAS because again, there is a lot more potential customers pool, and Amazon rewards off-Amazon traffic

Few days before Christmas, your products are giftable and are FBA fulfilled – some of our clients switch their off-Amazon ads from driving to their website to drive to Amazon, and have seen excellent return. There are a lot of shoppers, who will rely only on the 2 day Prime delivery for the last minute gifts.

In our next edition we will pull a crystall ball and share our predictions for Food and Beverage brands on Amazon in 2024.