Prime Day is rapidly approaching, but independent third-party sellers on Amazon Marketplace can still take some steps to help ensure success.
Chain Store Age recently spoke with Charlie Chanaratsopon, co-founder of boutique acquisition company Boosted Commerce and CEO/founder of Charming Charlie, and Joe Kiernan, VP of product and growth at Perch, an acquirer and operator of Amazon brands. The two executives shared some insight on the impending June 21-22 Amazon Prime Day sales extravaganza and how it will affect small-to-mid-sized sellers on Amazon Marketplace. Both companies specialize in acquiring independent brands that sell products directly to consumers on Amazon and other e-commerce marketplaces.
How can brands on Amazon Marketplace prepare their fulfillment/logistics for Prime Day in the short time left?
Chanaratsopon: It takes months to get inventory from the majority of oversea suppliers. Therefore, you cannot realistically do anything that is logistically impactful for digital or physical commerce in the next few weeks. This is the reality for independent sellers, large chains and e-commerce platforms alike. Amazon also limits what you can do on the back end.
At Boosted, we have been preparing for Prime Day since late 2020, making sure our 3PL/logistics providers have more inventory stocked up and our Fulfillment by Amazon (FBA) capacity has increased by months, not weeks, in advance. We knew we would have to react to Amazon Prime Day, which would be around this time in 2021.
Kiernan: More than in years past, there is an acute challenge this year in that the entire CPG supply chain is gummed up. In the last year or so, there has been a significant challenge in getting product from the manufacturer through the supply chain to Amazon Marketplace.
There is a lot of volatility in terms of the product we have inventory for, versus product we are trying to get more of into Amazon and other marketplaces, versus product we don’t have. Amazon has had significant delays in inventory turns and reduced their inventory limits. Changes in the supply chain, Amazon search results, and new Amazon ad formats has put increased onus on brands and CPG companies to stay on top of what Amazon is doing.
How can brands on Amazon Marketplace prepare their front-end operations?
Chanaratsopon: On the front end, the main thing is to participate in Prime Day! Take all the offers they give you. If you have good ‘Fifth Avenue of digital real estate’ on Amazon, you will sell product. This is in addition to doing what I would call ‘ongoing maintenance,’ ensuring that your brand works well for your keywords, delivering great products and amazing customer reviews. If you approach it holistically in this manner, you will successfully sell during Prime Day.
Kiernan: Be thoughtful about which items you should prioritize for Prime Day. Make sure you are able to get enough inventory of items you want to promote, and avoid pushing smaller-tail SKUs you are not expecting to have blowout Prime Day sales results. There are two forms of Prime Day ads – Lightning Deals, which you must do ahead of time, and Prime Exclusive, which offer more flexibility. Focus on Prime Exclusive ads, and identify competing advertisers based on prior experience.
If you have a deal, target specific competitors with it. Prime Day is a major media event and its deals are compelling. Ensure that you have visibility with your publishing partners and with relevant influencers. E-commerce has become much more than a collection of products on a search results page. There is whole ecosystem you now interact with beyond the four walls of Amazon.
Do you think Prime Day will mark a June kickoff for back-to-school and/or holiday sales for 2021?
Chanaratsopon: It will start an earlier kickoff for the back-to-school season as it typically starts in July. On the other hand, Prime Day this year is more a kickoff of the post-pandemic ‘Roaring 20s' when consumers are getting ready to head out and buy new things.
As for the winter holiday, consumers want to make purchases again, but many are not currently buying for the holiday season. We believe Prime Day is not kicking off back to school or the holidays, but the reopening of the country for its first collective shopping experience since before the pandemic.
Kiernan: I haven’t heard rumors of further Amazon sales or deal cadences, but I wouldn’t be surprised if there were some. We’re in a unique COVID-19 landscape. We are coming out of lockdown, people are working, there is more energy and volatility. We have been in a stagnant lockdown state for the past year.
Is there significance to Amazon waiting to announcing an official date?
Chanaratsopon: Shortages and logistical challenges related to COVID have made it difficult on retailers’ and brands’ supply chains over the last year. Amazon may have wanted to wait and see how businesses were fairing with the complexities of their marketplace.
It’s important to note that Amazon is also scaling extremely fast. While they are responding to the data they receive, the rest of the retailers remain agile and nimble while they wait to understand their next steps. We’ve had seven years of e-commerce growth pulled up in the first four months of the pandemic; it’s remarkable growth. It is so exciting to see Amazon execute this particular day across the U.S. It’s incredible to watch and be part of.
Kiernan: Amazon has been fighting not to lose customers back to brick-and-mortar retailers following the increased transition to e-commerce in the past year. Amazon wants to make sure stores don’t lure customers back, which is part of the reason for the earlier shift of Prime Day to June. E-commerce is continuing to establish itself not as an alternative, but as the primary way to shop.