Brian Burt, Founder & Chief Executive Officer, Canopy Management shares a few thoughts on how SMEs can drive sales and growth through the Amazon product ecosystem:

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Welcome to this MarTech Series chat Brian, tell us more about Canopy Management’s story so far… 

Brian Johnson and I were Amazon sellers in 2014. 

I hired him for $37 an hour to manage my PPC. I said “You’re brilliant. Would you mind if I bring a film crew from Chicago to Austin to film a course?” We called the course “Sponsored Products Academy.” It became a cornerstone of the industry. We sold $2.2 million worth of courses in six days. We then did “Sponsored Products Academy II.” 

The courses gave us a lot of notoriety, we filmed part of Austin from a helicopter, got footage of Brian Johnson in a shower shaving his head. People started asking us to manage their brands. We kept saying no. Then some big brands asked us. We still didn’t want to do it, so we asked for the highest price we could think of. They said, “Sure.” So I moved to Austin, and immediately we were making more than six figures a month. We’ve been incredibly profitable ever since. 

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What are some of the top marketing trends in eCommerce that are in focus today? 

We see Direct to Consumer, or D2C, brands on the rise, particularly away from Amazon. CPC prices are rising. Live Shopping and Live Streaming are growing in importance, particularly overseas, and we expect those formats to make big waves here, soon, as well. In-app and social shopping are becoming increasingly important — really, all forms of social commerce. And multi-channel approaches are on the rise. 

Interestingly, although the conventional wisdom views Amazon’s position as unshakable, we see customer sentiment outgrowing Amazon. Amazon’s business certainly continues to grow, but COVID-19 inspired many consumers to shop in other channels.  

We’re also seeing a rise of buy-now, pay-later companies. Square’s $28 billion purchase of Afterpay sent the message that companies like Afterpay, Affirm and Uplift are reshaping the marketplace.  

Finally, we attribute increasing importance to “micro influencers” — non-celebrity, ordinary people whose passions or skills have helped them attract more than 3,000 followers. It takes too much time and effort for most marketers to reach those kinds of influencers, which may be why their influence remains so strong. Their followers view them as genuine.   

For new entrants into the Amazon eCommerce product ecosystem, what are some of the top tricks/best practices that they should be following? 

It’s three parts, really: 

1. Create a listing that converts highly 
2. Build & accelerate in Amazon paid advertising, making use of Sponsored Product Ads (SPA), Sponsored Brand Ads  (SBA), and Sponsored Display Ads (SDA). 
3. Use Amazon Demand Side Platform, or DSP, to reach shoppers off of Amazon 

We recommend that new entrants start building their social platforms … NOW. Instagram, Email, Facebook, TikTok, Snapchat, and YouTube: Be everywhere you can be.  

And source locally when you can. Thanks only in part to COVID, shipping and storage problems are legion. Freight forwarders are charging additional fees. Moreover, products labeled “Made in the USA” outsell their competitors.  

We recommend working with Influencers to build a “PipeBurst” Launch Strategy. That involves reaching out to a ton of micro influencers, and giving them free products in exchange for their filming an unboxing and posting it on a social platform. What makes it ‘burst’ is that you give them a date when the unboxing should post — “Everyone post this on August 21st,” for example. Posting them all on one date sends an insane amount of referral traffic, and it converts well, because their audiences trust the influencers. And it’s disparate traffic, from many sources — Amazon likes that.    

How can SMEs and individual business owners drive more success with their Amazon Business in today’s market? 

Taking advantage of Amazon DSP, or Demand-Side Platform, is a must. It’s one of the best ways to reach shoppers off of Amazon.  

We also recommend that sellers diversify their traffic sources. Make the most of both organic and paid. And as you do, be authentic. For better or worse — mostly for better — there’s no such thing as a faceless brand anymore.  

Continue to invest in research and development on your products as well as your marketing. Find out what works, and do more of it. Listen actively to your buyers and your audience. Don’t just read, but document all of the reviews your products receive — positive and negative. Each negative review offers a learning opportunity.  

If you’re ready to go to the next level, you may want to take a look at Ryan Levesque’s ASK Method. Run paid surveys with SurveyMonkey, OutGrow or JotForm. Look for groups of people interested in products like yours, and poll them. As you build your own email list of former customers, current customers, and prospects, survey them from time to time to learn what else you might do to serve them better while increasing your revenue. 

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 What are the top five aspects that Amazon businesses should be weary of when they are trying to scale? 

• INVENTORY FORECASTING  & LOGISTICS: This is typically the top problem for any Amazon business. 

Use the Inventory Performance Index, or IPI, to track your products’ performance over time. Amazon has drastically reduced the volume of inventory allowed in its own storage facilities, so it’s wise to lessen any dependency you may have on Amazon warehousing.  

• THE PRICE OF CPC, or Cost-Per Click, ads on Amazon rose 41% during the past year, and is expected to keep rising — in part because there’s $3 billion in aggregator money in the space, which raises rates for everyone. 
• COVID EXPECTATIONS are out of whack. We see sellers trying to project growth based off of COVID-induced spikes in 2020 — even as we see many consumers, relieved to be able to shop in person, happily taking a break from their computers. 
• AMAZON COMPLIANCE / TOS: Regular updates to Amazon’s Terms of Service have devastated many brands.  
• GIVEAWAYS / PROMOTIONS: Amazon is cracking down on these practices heavily, suspending a number of sellers for engaging in them. Pay very close attention to Amazon’s rules. If you violate them and are found out, the price may be high. 

A few Amazon Ad tips that can help drive digital ad ROI? 

Although Amazon still accounts for less than 10% of the total ad market in the U.S., as per eMarketer, Amazon’s #1 revenue driver is advertising:  

Using the 80/20 rule, put 80% of your ad spend toward the highest-converting products.  

When it comes to attributing your revenue, though, apply a 20/80 Rule: 20% of your total revenue should be accountable to paid ads, while 80% should come from organic sales via keyword rankings. 

Nothing is more important than increasing the conversion rate of your product listing. Doing so has a direct impact on ad profitability. Additionally, the ‘A9’ algorithm is based on that conversion rate: The higher the conversion rate (known on Amazon as User Session Percentage), the higher the keyword rankings.  

Traffic from off of Amazon back to Amazon has helped organic keyword rankings & sales tremendously. In this area, it’s wise to focus more on duration of spend than amount of spend. 

Some last thoughts and takeaways for marketing and sales leaders to keep in mind through 2021?

Thanks to COVID, online shopping has become a new habit for many — particularly for older people, like my mom. So this year’s Back to School, Halloween, Cyber Monday, Black Friday and the holidays in general are shaping up to be the biggest on record for eCommerce. 

Social Commerce and Buy Now, Pay Later will continue to rise. They will become permanent parts of the market habits of Generation Z, and of all the generations that come after them.

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