How Sellers Can Make the Most of Amazon Marketplace’s Data-Driven Environment

What makes an Amazon.com seller stand out on such a mammoth platform? What turns some sellers into Amazon Marketplace success stories and leaves others practically invisible?

A leading brand on Amazon is one that manages to be a top seller in its category. However, volume alone doesn't determine a leading brand; many large retailers dominate their categories by sheer size. But unless they know how to contextualize their brands to the Amazon platform, they’ll never achieve the same kind of boost to their sales.

For example, brands that join the platform’s Subscribe & Save program open up their sales to new and repeat customers. By subscribing to the program, customers receive ongoing product deliveries while also enjoying exclusive discounts offered by Amazon as a reward for signing up. This allows consumers to save money on their purchases while receiving the convenience of regularly scheduled deliveries.

Brands with subscription-ready products — from supplements to personal care to household cleaning products — are going to be the most successful here. That’s likely why Health & Household is the second largest category on Amazon, with 218.9 million unit sales. The platform’s first-party brands (Amazon Basics, Solimo, and Amazon Basic Care) account for nearly half of those unit sales.

It’s no surprise that Amazon’s own brands often come out as the top sellers across categories because they naturally leverage the platform with Amazon Marketplace marketing strategies.

How Do Brands Win With Data-Driven Marketing Strategies?

Amazon’s advertising capabilities can connect brands to a network of data. Data-savvy brands can use this data to build brand awareness and carve out greater niches within their categories.

Data is Amazon’s biggest asset. The company’s whole purpose is to learn as much as possible about consumer behavior on the site in order to effectively predict what people will want and need. Amazon uses price data on other online retailers' websites to adjust pricing and capture potential margins. It also uses consumer data to power its incredibly robust advertising machine. Brands looking to get more traction on Amazon Marketplace can make playbooks from these strategies.

When it comes to data-driven marketing, the best place for brands to start is to use the data they have direct access to on Amazon. To leverage that data even more or tap into additional insights, investing in data tools or partnering with an agency can help brands take their strategizing one step further. That way, brands are using the resources available to them.

This approach can be especially transformative for smaller companies that are concerned about their margins amid recession fears. The benefits of data-driven marketing are that brands can get the very most out of their marketing budgets, choose the most valuable long-term strategies, and zero in on the most valuable types of sales rather than just going by sheer volume.

Using a Data-Driven Marketing Strategy on Amazon

Any brand can utilize the tactics of leading Amazon Marketplace sellers. The key is to tap into the benefits of data-driven marketing. Start with these steps:

1. Understand the flywheel effect.

The flywheel effect is a popular growth strategy, and one that Jeff Bezos himself espouses. It works by front-loading effort — i.e., an investment at the outset that leads to a snowball effect of profit. An Amazon sale initiates a flywheel because a sale is never just a sale; it's data feeding the algorithm. That’s why it’s important to use data analysis and look at the total return on ad spend instead of just advertising return so that you’re making decisions based on all of the value coming from your marketing efforts.

2. Select your goals and KPIs.

Making good use of the Amazon platform means tracking, measuring and adjusting your strategies as you sell in real time. To make this work, you’ll need a set of goals and marketing campaign success metrics to follow. As a Marketplace seller, your goals might involve impressions or new subscriptions. You might prioritize certain kinds of sales — e.g., sales of higher margin items or those that help you rank better on the platform. Amazon’s MWS helps you monitor the key performance indicators that matter to your brand and make tailored experiments that could help you nudge the needle in the right direction.

3. Prepare your data.

In order to start using data-driven marketing strategies, it’s a good idea to spend some time preparing your data. Clean up your data stores and remove siloes so you can connect insights and make better decisions. Connected data can help you avoid spending marketing dollars on products that have no stock or optimizing content for products that never sell. Remember: Data-driven decisions are only as good as the data they’re based on.

Amazon is no longer just a destination for shoppers; it’s the whole shopping experience. More than 60 percent of shoppers begin their product searches on Amazon. The platform acts as a holistic shopping environment, informing, educating, inspiring and selling to consumers at the very same moment. Brands that can develop comprehensive data-driven strategies to match will be the ones climbing the platform to the top rather than getting trapped under it.

Lukas Helmers is a performance marketing manager at Finc3 Commerce, an Amazon and marketplace e-commerce agency. Claas Hartmann is an advertising team lead at Finc3 Commerce.