The Challenge
This pet bed and car seat brand approached us to help them transition from Amazon 1P to selling directly on Amazon using a 3P selling model. They wanted to make this transition because of the logistical and operational challenges that erratic Amazon ordering was causing for their business. Not to mention, Amazon 1P was demanding a large discount on wholesale which meant that selling directly via 3P would increase their profit margins significantly.
Consulting, Evaluation, and Planning
After a full scoping conversation to understand their goals, challenges, and limitations, we put a plan in place to slow, then phase out completely, the fulfillment of Amazon 1P orders. A three phase approach was deployed to comfortably transition out of 1P and into 3P selling. Data showed that utilizing FBA for fulfillment of their orders would provide an improved margin, while keeping large portions of their current operational flow intact. As 1P inventory ran low, and then out completely, we replaced those offers with FBA offers from their 3P account by planning and building their FBA Shipment Plans.
As a supplement to the FBA offers, and to complete the catalog, we created new product listings for items in the brand’s catalog that Amazon 1P was not ordering. These items were set up for Fulfillment by Merchant to allow the brand to gain some experience in fulfilling Amazon orders from their warehouse. We identified and implemented the ideal technology stack for order management, inventory, and shipping for their team to manage these FBM orders. Thanks to this process and experience, we were able to open up the possibility of more heavily utilizing FBM in the future if it could improve profit margins further.
Listings Marketing and Catalog Management
In order to improve the conversion rates and search rank for their listings, we undertook the huge initiative of restructuring their catalog on Amazon. Concurrently, we began rolling out content improvements for the core product attributes including title optimizations, bolstered key product features, updated product descriptions, and new images for the image galleries.
Driving Traffic and Conversions with Amazon Advertising
To complete the 3P launch, we performed an extensive keyword evaluation from both inside Amazon and from Google in order to concept, design, and launch a number of targeted Amazon advertising campaigns designed to drive traffic and sales. A strategy utilizing all three Amazon campaign types (Sponsored Products, Sponsored Display, and Sponsored Brands) was utilized covering both branded and unbranded terms. This allowed the brand to continue expanding their reach and converting New to Brand customers.
Brand Marketing
In the months after launching, we successfully applied for Brand Registry for the brand and began leveraging the branding assets available to Brand Registered sellers. We designed and applied a Brand Story to all products offered by the brand and designed and applied unique A+ Content for each product line. We also built a branded storefront on Amazon that allowed customers to shop different product lines all offered by the brand.
The Results
Ultimately, the new 3P launch was a huge success with a seamless transition of offers from 1P to 3P via FBA, and a massive improvement in both units sold and profitability. We were able to help them grow their direct to customer Amazon sales from $0 to $4.5+ million in just 3 years with continued strong growth even after the initial launch. The catalog restructuring, content optimizations, and brand marketing combined with the strategic advertising have created a platform that we are able to continue to expand upon and generate consistent growth through.
