If you think that every company is taking branding seriously on Amazon.com, search for earbuds on the platform. For every great brand you’ve definitely heard of, like Sony or Bose, you’ll find just as many that you can’t even pronounce, like Rinsmola, HWCONA, and Hspro.
That’s because it’s not easy to build a brand on Amazon, but quite easy to launch and sell a product. As a result, many players in the ecosystem actively encourage a short-term focus on product and leave everything else as an afterthought. Amazon product launch guides often focus extensively on keyword targeting and other tactics, but never mention building brands. In addition, a range of aggregators, often led by investment groups with little marketing experience, are currently snapping up portfolios of small but disparate product companies. Their focus seems to be on revenue, with little regard for creating a self-reinforcing portfolio of products that could be leveraged into a memorable or iconic name.
Of course, we’ve all known for a long time that customers are the priority for Amazon, not brands. As far back as 1997, Jeff Bezos wrote that the company’s mission “requires sustained investment in systems and infrastructure to support outstanding customer convenience, selection, and service.” In other words, Amazon.com looks after its customers first — and last.
In some ways, however, this has had the opposite effect intended. A recent analysis by Marketplace Pulse looked at the top 100 headphone sellers on Amazon over the past 2 years and found that only 5 brands — Apple, Samsung, Sony, Soundcore, and Tozo — had a product on that list for the entire time. Only 20 brands had been on it 70% of the time. The reason is likely that each of these companies likely has to win customers again and again through promotions, and when their campaigns go dark, their sales crater.
In this scenario, Amazon benefits, not the customer. Not only does Amazon get money off the sale, it also rakes in increased advertising dollars. But it leaves customers faced with a bewildering array of choices, and when they settle on a brand and end up liking it, it can disappear soon afterward.
As a result, consumers are increasingly paying attention to brands they know on the platform. A recent study by Accenture recently found that 81% of consumers who purchased a product from an established brand on Amazon remembered the product page three months later. This compares to the only 28% who remembered a similar brand’s television advertisement.
So, it’s worth reviewing why companies build brands in the first place and how this applies not just in traditional retail channels but on Amazon.com as well:
Lower customer acquisition costs. If you fail to build a brand on Amazon, you continually leave yourself at the starting line for sales. This creates an inherent inefficiency that will slow your growth curve and be a drag on your business. By building a trusted name that people recognize, you will find it much easier to retain existing customers, while acquiring new ones using the same tools as the product-only companies. That can lead to long-term growth and a durable business.
Algorithmic advantage. Companies on Amazon compete heavily to have their products appear first in search results. Generic keywords like “headphones” or “phone charger” are generally much more expensive than ones like “Bose” or “Panasonic.” A well-recognized brand can lead to exponential savings on advertising costs and shorten the customer’s route to a purchase. Of course, this may require you to expand your horizons beyond Amazon and start building your brand in other channels as well.
Long-term product development. Success for a startup only requires a good launch of a one-off product. Growth, on the other hand, requires continuous innovation. Building a brand on Amazon can help unlock great data that can help you understand customer needs better, uncover adjacencies to your existing products, anticipate future purchases, and evolve your offerings accordingly. By knowing what your customers want and where you have gaps in the product lineup, you can move from being a provider of functionality to a partner in an ongoing relationship.
There’s no doubt that Amazon today offers easy ways to build a niche product and use advertising to harvest demand. But companies can also create enduring customer lifetime value (CLV) using both on- and off-Amazon brand building tactics. Instead of launching products into likely categories or buying individual businesses for their balance sheets, why not create a good company with a great purpose and values – and a solid product roadmap? Why not go the distance and create a world-class brand on Amazon?