The Amazon Trap for DTC Health Products

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When it comes to owning the e-commerce domain, no one beats mega online retailer Amazon. With health brands vying for space on Amazon’s marketplace, the question quickly becomes: is selling on Amazon the best strategy for direct-to-consumer health brands? Some health brand marketers may argue “yes”, as Amazon gives little-known brands the chance to get in front of its 197 million shoppers each month. But, beware, reliance on this channel alone denies you the chance to build consistent sales volume and attract new customers in search, social, and display.  

Despite the “on paper” upside potential of leveraging the planet’s largest online marketplace, Amazon has a dark side that could hurt your health brand.

That’s because when customers buy on Amazon, they’re generally not searching for your brand in particular. Instead, they’re looking for the lowest cost retailer with a high-quality product that can ship to them fast (and preferably through Amazon Prime). Amazon also offers recommendations of similar products that others viewed and “today’s deals” that can steal away the intent to purchase your specific product. 

So, in the end, you may make the sale, but you don’t own that consumer relationship. Amazon does.

What you can gain in sales volume, you inevitably lose in brand awareness, consumer engagement, and the key long-term sales driver, brand loyalty. Simply put, consumers shop on Amazon for its convenience, its breadth of products, and its low prices. And, they are not equating those things to your health brand specifically.

All Amazon Searches Are Not Created Equal

With each sale through its platform, Amazon is able to amass billions of data points to know exactly what drives sales for some products, commonly searched keywords, even times of day to maximize sales. This puts them in the most powerful position to capitalize off of your health brand’s sales in the largest way possible: by making their own brands to push your products further out of the radar of its rigged algorithm.

And when you lose the Amazon keyword bidding war, your sales volume can (and will) take a drastic hit.

The more successful your brand is on the platform, the more likely one of Amazon’s 140 house brands can ramp up a competing product and grab some share from you.  

For example, take Amazon Elements, which includes a line of vitamins and supplements from the Whole Foods 365 Organic brand. If your supplements are comparable in price and quality, offering the customer the same health benefits, it is always in Amazon’s best interest to get their products seen first. What’s the key takeaway here? Amazon can be a powerful sales driver, if you know how to play its bidding game. But, investing all of your marketing resources into using it as your sole way to get in front of consumers is a big “no-no”. Instead, use it as one of many distribution channels, but find ways that you can attract, engage, and maintain those key consumer relationships using your own e-commerce platforms.

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