In the last few months, Hanapin released a report for ecommerce marketers revealing that over half of marketers still aren’t advertising on Amazon. Considering Amazon is a giant in this industry, it’s surprising at first to understand why so many are not taking advantage of the platform. I mean, it’s Amazon, why not right?
56% of Ecommerce Marketers are NOT advertising on Amazon
Hanapin’s 2019/2020 State of PPC Report
However, it’s not always that simple. If it makes sense for you, then you should definitely be advertising on Amazon. This behemoth of a platform is certainly not going anywhere soon and has only continued to grow every year. It would be wise to at least consider it, no matter how big or small your budget may be.
Here are reasons why some marketers aren’t advertising on Amazon:
Competition product copying on the platform at a cheaper price reduces the adoption rate of Amazon as a whole.
We’ve seen Google PPC revenue decrease (~20-30%) after launching campaigns for a brand’s top-performing website products on Amazon. Paid Amazon ads usually add around 10% of new revenue, leading to a loss in overall PPC revenue.
Amazon takes a huge cut of revenue despite the fact that brands already pay to advertise on the platform.
Because Amazon uses Dynamic Search Ads, once you add product to the platform, Amazon will start showing up for more branded product searches. Ultimately, this will impact your website revenue because more ads are showing for your product on Amazon than they are for your own website.
Amazon Prime is a big deal to customers. If you don’t have it, customers may be less likely to buy from your brand, depending on the cost with shipping included. So, you’re then faced with the challenge of buying completely into Amazon and going after that Prime tag, or going the other direction and fighting a different uphill battle.
Logistics can also be an issue. Smaller brands especially may be finding it challenging to meet Amazon’s requirements around feed set up, fulfillment, inventory management, etc. Amazon has you send your products to warehouses all over the US to spread out product inventory. This means several boxes going to different places – some across the nation, which isn’t cheap. Also, the larger your product, the higher the fees.
You get better margins selling on your own website due to Amazon’s product fees. Also, Amazon’s agreement states that you can’t sell the same products on your website at a cheaper price – it must be the same or higher.
You don’t get customer emails to use for marketing efforts.
You lose control of customer input – anyone can post a negative review even if it isn’t accurate. Some sellers will even go as far as to do this intentionally to competitors. Negative reviews hurt your ranking.
As we’ve seen recently, even major brands are starting to break-up with Amazon. So knowing that there are really good reasons why you wouldn’t advertise on Amazon, who is actually winning on Amazon?
New Amazon Report with Innovell
Hanapin partnered up with Innovell, who builds digital marketing insights from the best teams and top influencers, to help answer that question in a new report coming soon.
The Amazon report will be a 50 page printable PDF report. The experts we interviewed (including our own Amazon expert, Tanner Schroeder!) come from diverse backgrounds and provided a very broad insight into where Amazon advertising is headed.
Stay Tuned, the report will be released soon!