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So, What's Your Marketplace Strategy?

As a brand grows, seeking new sales channels becomes near inevitable. In this lesson, learn how to use Amazon and other retailers as part of your distribution strategy without diluting your brand.

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Aaron Orendorff
Editor-in-Chief at ShopifyPlus

In this lesson, learn how to use Amazon and other retailers as part of your distribution strategy without diluting your brand.

How Amazon Has Changed the Way People Shop Online

When we think about Amazon as the Goliath of the eCommerce world, we’re often thinking about revenue. But one of the biggest ways that Amazon has changed the game is actually product discovery. According to Mary Meeker’s Internet Trends Report, 49% of product-related searches now start on Amazon. However, while most of these purchase journeys begin on Amazon, they don’t necessarily end there.

This puts brands in an interesting position of having to play with the lion in the room, especially direct-to-consumer brands selling fungible goods. It’s near impossible to grow past a certain point without a multi-channel strategy. At Shopify Plus, we’re seeing more and more fast-growing D2C brands approach this shift by carefully strategizing about what and how they list on marketplaces like Amazon and Walmart.

Controlling Your Brand Experience Across Channels

A direct-to-consumer brand can’t just go blindly into Amazon. You have to walk a line that gives you control over your customer and product experience. Depending on your vertical, there are two ways to do this: first, by creating an exclusivity cycle off of Amazon or, second, by creating an on-site experience within Amazon.

For the first, you don’t just go all in, but instead list only bestsellers or staple products. People coming with generic product expectations will discover your brand, but they won’t get your full product catalog. They’ll have to go to your site to get exclusive product lines or your newest items — this way people will be enticed and willing to get off Amazon and check out your site.

This exclusivity cycle can also be built into different parts of the customer journey. Amazon rules discoverability, which then leads to what you do and don’t list, and they also rule fulfillment. But they definitely don’t rule the unboxing experience with that plain brown box and a single layer of tissue paper.

If you’re going to play in their world, the differentiator isn’t going to be speed. It’s not going to be cost because you can’t beat them at those two. The differentiator is the experience of unboxing: branded boxes, branded tissue paper, little extras like handwritten notes, personalized coupons, or surprise gifts. These sort of things go a long way towards building a cult following that somebody is willing to come back for again and again.

When you fulfill your Amazon orders, even if you’re selling something that’s not necessarily a premium product, you can create a premium experience to differentiate yourself. A great example of this is John’s Crazy Socks — they’ve grown like mad in recent years. They do all in-house fulfillment across the board no matter where the order comes from. They have this red branded box with red tissue paper. They put two coupons inside every box — one for the person that ordered and one for them to give to a friend — and they always include candy. Their unboxing experience matches the brand perfectly. They’ve earned a massive following because they’re doing something different.

The second winning multi-channel strategy — and there are some really smart brands on Amazon doing this — is creating an almost on-site experience inside your product pages. This is particularly effective when you’re in a vertical with high-ticket items that involve a lot of comparison shopping. If you take mattresses as an example — you have to really list everywhere to come out ahead. The trick is building a cohesive customer experience across channels by investing heavily in design and branding elements.

Leesa is a good example of this approach. Their Amazon pages are incredibly robust, with embedded videos and similar branding elements that recreate the same customer experience from their site at every touchpoint. They’re playing with industry competitors on Amazon, but they’re differentiating their shopping experience at the same time.

Flirting With Physical Retail

The last major piece of the multi-channel puzzle for direct-to-consumer brands is physical retail. We’re seeing more and more brands open their own stores or start selling through retailers. Both of these can be risky if they’re not done right.

Brands like Allbirds have started selling at Nordstrom, but it’s not really wholesale. They are essentially partnering with Nordstrom to have on-brand kiosk displays that are typically featured at special pop-up events. The experience is very curated and very much controlled by Allbirds.

For larger brands who have the bargaining power to negotiate everything from the appearance of the display to the staff that will be selling their product, the world is your oyster. You have to be very wide-eyed and draft up very specific agreements to protect your brand. But it’s super tough to do that when you’re scaling past one million in sales.

Investing in your own store is similarly hard to do when you’re starting out. Instead, many brands are testing the waters through retail-as-a-service companies like B8ta. These companies let you either set up your own retail location for a certain period of time or you can rent space within one of their existing retail locations. This allows you to essentially determine whether brick-and-mortar is working for you without the usual enormous cost of doing a full retail launch and without giving up control to a major retailer.

Conclusion

  • Multichannel is essential. These days, you have to play on Amazon, Walmart, and other marketplaces, so do it smartly.
  • Tame the beast. Depending on your vertical, either list limited products on these platforms and drive traffic to your site for exclusive items, or invest in branding your pages and creating a stand-out unboxing experience through fulfillment by merchant.
  • Test out brick-and-mortar. Look for retail-as-a-service opportunities to test out physical retail without investing in your own store.
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