I built FoundObjects.com, my first ecommerce site, in November 1999. I'll put an image of one of the first specialty gift B2C and B2B online stores created for a company I started with my ex and brilliant retailer Janet McKean in Resources. After that, I left Found Objects to become a Director of E-commerce for a multi-million dollar website.
Small to medium-sized ecommerce merchants get trapped between two ogres - Amazon (AMZN) and Google (GOOGL). Amazon sets pricing and shipping standards, and Google's organic search controls traffic, making an advanced degree in search engine optimization (SEO) almost necessary. To that end, be sure to read my friend Phil Buckley's latest - SEO Secret Weapon: Google Advanced Search Operators. His tips will improve your search engine results.
To meet the proliferation of Shopify challenge, Amazon has changed ecommerce again with Buy with Prime. Amazon's gambit effectively crowdsources shipping since direct-to-consumer and third-party sellers can protect their brands and retain their customers while adding hundreds or thousands of shipping facilities to Amazon's several hundred distribution warehouses worldwide. Perhaps Amazon realized no matter how much money they have; the Internet favors brave swift action. Adopting an Air BnB-like crowdsource might work for Amazon, but does Buy with Prime makes sense for you, your friend's online store or the store you want to create?
Our Amazon Buy with Prime: Merchant Guide explains how Amazon's new gambit works, discusses if Buy with Prime eliminates third-party resellers' and direct-to-consumer (D2C) brands' pain points, and shares specific strategies for how to implement Amazon's new program to build your brand and convert more visitors to buyers. We also go back to the future to discover the best way to create a new store today, Shopify versus Amazon. In our experience, everyone has a fantastic online store idea, so this post shares tips, tricks, and secrets you can use to realize your dream or take an existing store to the next level.
Amazon scares direct-to-consumer (D2C) brands and third party resellers in two ways - protecting their brands and letting the Big A see and own their customer information. Valid fears because Amazon has been brand neutral at best and brand destroying at worst. Amazon's marketplace favors products, prices, reviews, and free shipping, not brand building. Selling within Amazon's ever-shifting price points can be tricky and all but impossible.
Amazon's addiction is ecommerce at scale. When FoundObjects.com sold $30,000 in specialty gifts for our first Christmas, we thought life couldn't improve. Amazon has million-dollar minutes, so ecom at scale and scale needs momentum. Unfortunately, Amazon's scale eats products with popularity and heat for breakfast. Sustained heat meant Amazon might knock your product off with a cheaper manufacturer destroying your brand and business.
While we don't see Amazon as an ecommerce cuddle toy just yet, Buy With Prime goes a long way to solving these third party reseller and direct to consumer (dtc)brands' pain points with a single caveat - be sure to read our Buy With Prime Strategies and proceed slowly, carefully, and using data. Here's why Buy With Prime solves the brand and customer information problems.
Giving credit where earned, Amazon's fulfillment is impressive. With a growing number of "same day" shipping products waiting, something no buyer does well, as an issue, is disappearing. Finding, buying, reviewing, and returning Amazon purchases is easy, fast, and painless. When porch pirates became a thing, Amazon adapted its technology to notify customers when a package was on their porch. Using scaled world-class systems could help any brand or online store just be sure to read how to continue to protect your brands in the strategy section..
There is no free lunch or free shipping. Moving costs from customer to seller doesn't make them disappear, and customers who don't use Fulfillment by Amazon (FBA) must audition during a "trial period" before earning their Buy With Prime membership, something Amazon calls Seller Fulfilled Prime currently invite only with a waiting list getting longer daily (here’s where you can get on the invite only list). Requirements for prime orders with Seller Fulfilled Prime:
Offer Premium Shipping Options
Ship over 99% of your orders on time
Have an order cancellation rate of less than 0.5%
Use Amazon Buy Shipping Services for at least 99% of orders
Have nationwide delivery coverage for all standard-size products
Use ship methods that support weekend delivery and pick up (Saturday or Sunday)
Meet targets for 1-day and 2-day delivery promises
Deliver orders with our supported Seller Fulfilled Prime carriers
The seller must agree to the Amazon Easy Returns Policy
Allow for all customer service inquiries to be dealt with by Amazon
Retailers will instantly know products that won’t meet those prime orders guidelines. Those guidelines are reasonable for most online stores because if your storefront doesn’t offer free delivery at some trigger, isn't picking, packing, shipping, and delivering in two days, then you have other brand problems, problems Buy With Prime won't fix. Of course, there are retailers exceptions to this rule, such as hand-crafted products buyers know waiting is required, but Amazon's two to three days from order to delivery standard applies for most products.
Driving new converting traffic was the biggest challenge my team and I faced during my seven-year tenure as Director of Ecommerce. Amazon's research identified this "how to drive new converting traffic" concern as the primary issue for many online merchants. When your store qualifies for Seller Fulfilled Prime, you can advertise on Amazon moving traffic from one of the world's largest marketplaces to your store, and that's HUGE!
Amazon's prime customers BUY and they look for the prime button. They use Amazon as a product search engine, but the time between search and purchase must be among the shortest in the world. We watched how many visits it took to convert carefully, and I'd bet Amazon customers your Amazon marketplace ads drive to your site convert faster and at a higher percentage than other forms of traffic.
Amazon's research showed a 25% shopper conversion increase, which is HUGE! When I was Director of Ecommerce, we figured every half a point of conversion increase was worth a million bucks. If you convert 4 out of every hundred visitors and your average order value (AOV) is $100, Buy with Prime's 25% bump means shopper conversion increases to 5 out of every 100 visitors adding another $100, so $500 for every 100 visitors.
No big deal, right? Now let's use the web's law of large numbers to see that for every 10,000 visitors, your 5% conversion rate generates $50,000 instead of $40,000 for every 100,000 visitors, and you're selling $500,000 instead of $400,000.
Every online store should consider Buy with Prime's ability to drive new traffic from marketplace ads while increasing conversion. The PayPal-like way Buy With Prime creates two shopping carts sucks, but review thoughts for how to get around this pain in the strategy section.
Since it is easier to adopt Fulfillment by Amazon (FBA) where your products live in their fulfillment centers and use the Big A’s fulfillment services, let’s focus on Seller Fulfilled Prime (SFP). Once your store qualifies you’ll be able to add the prime badge and offer prime benefits. With more than 150 million prime members in North America looking for the prime logo with its trusted payment processing, seamless checkout experience, shopping benefits, fast shipping and tracking it's not hard to see ways SFP will help merchants.
SFP isn’t free with service fees that are hard to pin down exactly, but are likely to exceed 20%. Expensive, but customer acquisition always is because once a customer is on your list lifetime value (LTV) applies. Let’s go back to our $100 Average Order Value (AOV). If you use retail keystone to guide pricing you spent $50 to make $50. If your LTV shows an average of five purchases every customer (give or take) is worth $500. New customer acquisition is expensive but necessary.
When an Amazon Prime Member sees and clicks on the “Buy with Prime” logo they’re taken to an Amazon pay cart where their Amazon account is checked to make sure there’s a prime membership. We hate the idea of two shopping carts, but offer ideas for how to reap benefits and downplay pan in the strategy section.
Pareto’s 80/20 Rule applies to every ecom store where twenty percent (or less) of your products make eighty percent of the money. Let’s call these your “core products.” I’d use BwP sparingly on your core. Look at your data and consider some of your products that attract initial purchases as good BwP candidates.
Let’s call the other 80% of your products your “long tail”. Most e-commerce retailers balance a handful of core products with hundreds of “long tail” offerings. Some merchants may even have partnerships with drop shipping providers. Unless you are supremely confident of how fast your drop ship providers can fill an order, keeping drop shipped products out of BwP is probably best.
When I was an Ecom Director we sold about five hundred products with five contributing half of our profits. Within the more than four hundred products in our “long tail” finding twenty to fifty for BwP would have been easy. Create a matrix something like this:
Good but not great seller.
Carry enough inventory to meet SFP guidelines.
Can quickly get more inventory if needed.
When out-of-stock immediately removes adding buy button from the site so a backlog can’t form.
Profitable enough to afford BwP costs but not one of the most profitable unless most new customers buy that product.
Most buyers are satisfied so returns are low.
Once you've passed the Buy with Prime audition, I'd create a BwP category. I'd test this "store within a store" concept because of the two-cart problem. Customers who buy from your store will use your cart. Customers who BwP will use Amazon's, so creating a store within a store with copy explaining BwP and watching your analytics for abandonment and when customers fire two carts in close proximity is a good idea.
The two carts, one yours and the other BwP, will provide data for when your prime buyers want something bad enough to create a new shopping cart. Watch this data and dreate merchandising to eliminate the need for two carts if you can afford to include products your Prime customers want enough to open and convert using another cart.
Answering the If I was creating FoundObjects.com today, what e-commerce platform would I use question depends on several things:
Is my brand established or new?
Where will my online store be in two to five years?
Does my team have digital marketing, branding, and search engine optimization chops?
Am I bootstrapping, using profits to fund expansion, or am I using other people's money (OPM?
Is my business a lifestyle business, or do I want to sell it and retire on the cash such a sale could generate?
I've used almost every e-commerce platform, including Shopify, BigCommerce, Wix, WordPress, and SquareSpace. There are things I like and detest with each platform, but keep their ads from fooling you. You'll spend more than their rate card by a factor of two or three, usually due to add-on widgets, and nothing is as drag-and-drop simple as they portray. Using SquareSpace to help PatientsVoices.net recently took more than a week to undestand how their very frustrating platform could give me half of what I wanted and I've created hundreds of websites.
My recommendation will sound self-serving but keep reading and see if you disagree. If I were starting FoundObjects.com today, despite all the "drag and drop" hype, I'd form a relationship with WTE Solutions (or someone similar) here's a story about why.
I wrote all the "static" HTML code for FO.com. I published our list of "cool stores" by city and state. Type "cool store in XYZ" in Google in 2000, and FO.com was the top Google organic listing. Still, table maintenance drove me crazy, so I hired a student from UNC to create dynamic tables. Instead of keeping fity tables current I used a database to make changes and code generated dynmaic pages. And those dynamic pages crushed FO.com's Google listings.
Today I know better, and I work for a rare combination of Chief Technical Officer (CTO) and Chief Marketing Officer (CMO) in Eric Garrison. Eric would have scrapped the dynamic output to flatten my tables and make them look the same as the tables they replaced because he understand the "do no harm" rule of SEO. And this story, in a nutshell, is why I'd find someone like Eric and WTE before using Shopify, FBA, or working with Amazon.com, inc.
Like all marketers, I've had to learn a lot of tech, but we live in exciting yet scary times. Eric knows about cloud-to-cloud backups, air-gapped backups, and how to structure content to play with Google and add Buy with Prime. Eric and WTE would have protected me from making such a crushing SEO mistake. When FO.com was ready to scale and be worth millions, it would have accomplished that goal on Janet McKean's retail genius and Eric's technical expertise. I may have contributed an idea or two.
Using other people's platforms enriches them at least as much as you, and leaving can be a train wreck for SEO and other reasons. Shopify is rich enough, so if you need to start small, ask about AgileSite Lite. On the other hand, if you're an established brand that requires a more customized experience, a good idea for every online store now, interactivity, or real-time analytics using big data and ChatGPT-like AI, then join our mailing list (at least) or give Eric or me a call 1 (866) 994-7467.
Be first to learn new tech & marketing secrets
After publishing Amazon Buy with Prime Merchant Guide, I received questions about what I meant by the "create a Buy with Prime" category recommendation, so here is an example using an e-commerce site I love - SimplyGum.com. I emailed Simply founder Caron Proschan, who told me they are considering BwP for some of their products. If you love excellent-tasting gum - I take lousy-tasting medicine every morning, so I couldn't live without gum - then try the best gum I've ever bought at SimplyGum.com.
This first image shows SimplyGum.com's existing categories in black with a new "Buy with Prime" option in blue.
I'd advise Simply Gum to create unique merchandising for their "Buy with Prime" options. I'd also experiment by creating product combinations to attract "new to file" customers or customers who've never purchased from Simply Gum before. Of course, trading high-margin loyal customers to Buy with Prime could hurt SimplyGum.com, thus the need for unique merchandising. Still, if we focus the category on attracting new customers, the second, third, and tenth sales could make the cost of acquiring those new prime customers worth it thanks to lifetime value (LTV).
This image shows an example of merchandising once customers click the Buy with Prime category gum category.
Buy with Prime customers; click the "BwP" button to fire Amazon's cart. Once they complete the sale, the new customer is redirected to SimplyGum.com. I've not seen an example yet, but "redirect back to your website" is Amazon's BwP promise.
Customer information flows to SimplyGum.com according to Amazon's Seller Fulfilled Prime guidelines, so they own their new customers' emails, shipping information and can include whatever they want in the box.
I suggest that SimplyGum.com add a subscription option for those loyal multi-buyers. I'm about to make my second SimplyGum.com purchase; I'd recommend SimplyGum.com include a card about Simply Gum subscriptions in my order.
Next, I'd follow up with an email with a timed special offer to "join" the Simply Gum subscription club. I'd award points and assign gamified levels. For example, if I opted for a monthly "bronze" subscription, provide an offer to upgrade to gold or weekly level. I'd ask bronze and gold members to share stories about how much they love Simply Gum's flavor, ease of ordering, and support. Let's say Simply Gum's subscription services have five key marketing benefits such as:
Look for customer feedback that stresses those points. If you are still trying to get what you want, write a draft and ask a great customer if they would edit it. Testimonials work when they stress the different pieces of your marketing compass.
Ideas like these become essential because BwP could increase SimplyGum.com's customer acquisition costs, so adding subscriptions and gamification will increase LTV to offset the higher "new to file" customer costs.
We launched FoundObjects.com launched in November 1999. When it made $30,000 that first Christmas I thought we might be on to something. The image was downloaded from the archive before the URL was sold. Janet won the company in the divorce, so the homepage image is a little worse for wear. But you get the idea, and if you've ever bought magnetic words on a refrigerator called Magnetic Poetry Kit or a board where you paint with water called a Zen Board, then you were a Found Objects customer. Thanks. Martin