By Martin Heubel, Founder and Director of Consulterce, a strategy consultancy for B2C Household & CPG brands.
Many vendors struggle with Amazon being a price follower. Low margins and high frustration levels keep them up at night.
Brands that are in this phase have one thing in common: They haven’t differentiated their portfolio yet.
The result?
Amazon matches its prices to big retailers while representing only a fraction of their sales.
Once you realise that this is a feature and not a bug in Amazon’s business model, you can reverse engineer your portfolio strategy.
Here’s how:
- Identify your current top-selling items
- Adapt their packaging to the e-commerce channel
- Launch them in bundles that cater to customer needs
- Relaunch successful bundles as exclusive Amazon selection
- Increase their revenue share by focusing your ad budgets
As you can see, the above list is far from exhaustive. It’s also not a process that happens overnight.
But focusing on differentiated product offerings is the starting point to escape Amazon’s price matching.
And the secret to achieving higher margins.
For further insight and support, contact Martin Heubel here
