#121: 5 Ways to Increase Your Amazon Conversion Rate

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Claus Lauter: Hello, and welcome to another episode of the e-Commerce Coffee Break. Today we talk about Amazon. I know normally we are talking about Shopify, but Amazon is and should be a sales channel for every merchant that has a multi sales strategy. Amazon is his own beast, his own universe, and therefore I have an expert with me so that we can dive a little bit more in the Amazon side of things.

So joining us today here is Ryan Flanagan. He's the CEO and founder of New Nuance and International eCommerce Marketing Agency. He's an expert in gross. Driven advertising. Ryan helps top brands stay ahead of the curve when selling on Amazon. With so many products available that it's easy to get lost in the noise, Ryan helps brands stand out and accelerate revenue.

As an Amazon partner with a combined client base revenue over $1.5 billion, he and his team have sold hundreds of millions of products online. Including making one client 18.5 billion in a five week period with a staggering return on investment of 5200%. So Ryan's definitely the right person to talk to.

Hello Ryan. How are you today,

Ryan Flannagan: , great. Plus, thanks for having me today.

Claus Lauter: Ryan? Tell me a little bit about yourself before we get started.

Ryan Flannagan: , sure. I've been focusing in marketing in such, , nuances, about 12 years old at this point, and , we started way back when in 2010. , and really where we focus, and it's funny because I'm the CEO and the founder of Nuance, so the brand and me get very related with these type of things. , but basically what we really do is we focus on e-commerce strategy, best practices, and really how to grow brands.

Particularly on the Amazon platform, but we do do a lot on Shopify too. So I think we can get into some great, tricks and tips today. , and really more than anything, what we're about is a win-win situation, , for everybody we're talking to. We really believe in giving back to the community, , helping out, , educating people, working through those things.

And personally, I've been quoted by buzzfeed, Martin Retail. , so pretty active in, in the thought leadership space. So we're really excited to get into e-commerce , and how Amazon works with Shopify. And any questions you and your audience may have.

Claus Lauter: Okay. Very cool. Now, our listeners are usually dealing with Shopify related topics. That is s. Conversion rate optimization, paid traffic, all of this, and they start learning about this getting better and this, And then I look into Amazon and one of a sudden they start from scratch. So all of this isn't in Amazon.

It's a complete different universe. Things look different, feel different. Give me a bit of a background how things work in Amazon.

Ryan Flannagan: The first thing to really look at is your established brand on Shopify, and you're making sales. And you're not on Amazon, the first thing that I would do if I were you, would be to search for your brand name on Amazon and see what competitive products are coming up and see if competitors are basically stealing your sales.

That's the real kind of halo effect that we see, particularly if you're a Shopify brand. Or you're on Shopify and you're doing a lot of social media marketing, what typically happens is people come to your Shopify website, say, Hey, this looks great. But then they may do the lit, see test, and then go look on Amazon to see what they believe are more, , authorized reviews.

Because reviews hacking does happen, at least from , a end user perspective. So the first thing that we typically recommend is if you're thinking about gain on Amazon or anything to that level, is go look on Amazon, see if your brand's being searched, see who's coming up competitively and all those type of things.

, the second thing that we like to think about with Amazon and particularly Shopify, is where they play differently, in the marketplace. What we see on Amazon is Amazon's a very elastic market, meaning that, , people are very price sensitive when it comes to elastic, , into the market. So they'll go for the thing that's, , lower by a dollar if all things are equal.

If they don't have brand affinity, , if there's not reviews or if they're same similar amount of reviews, like a hundred units on both the listings are optimized, those type of things. Kinda , the standard conversion rate stuff that we. Now the real difference on Amazon compared to Shopify is that your customer acquisition cost is significantly lower on Amazon.

We see overall that your conversion rate on Amazon's about five x what you have on Shopify, and we do a good amount of Shopify as well. , and that's because , they kinda have the system, the returns, rates, all these type of things really work. Now that sounds great to the end. The business owner in this case, the problem is the lifetime value is significantly less cuz you don't own , the user data, right?

So I'm sure a good portion of your users are using Clavio or Clavio Var. We're a big fan of Clavio, the nice thing about email marketing is you do a new product launch or anything like that, then you can shoot that out and get instant sales and kind of get that. Amazon, that's not possible unless you're using Amazon as a customer acquisition channel.

Now, I can talk about the customer acquisition strategies in a little bit if that's something that you want to discuss. Now, the interesting thing that we see on Shopify is the customer acquisition cost is higher, but the lifetime value is higher as well. So it's a great opportunity for cross sales and up sales and doing those type of things on Shopify.

So those are the two primary different things that we see on the market. On Amazon too. , a major difference that we see is Amazon is about hero products more than anything. So on Shopify, , , it does make sense, , to have a larger catalog cuz you can cross sell, you can upsell, , you can do those type of things.

But on Amazon, what we typically do when we work. , partners emerging on Amazon that already have established brand is we go through an Amazon action plan, make sure it makes sense for you, set expectations, do all those type of things. Cuz if we're gonna spend tens of thousands of dollars launching into this marketplace, let's make sure that's gonna be profitable , or we're not gonna have a long term relationship right now looking at.

, you come in, you do that assessment , on what you're seeing there, but instead of putting your full catalog up, we see on Amazon what we like to call the Parrado principle being 20% of your products make 80% of your revenue , on steroids, right? We have different ASINs that we represent on Amazon.

That one Asen makes $10 million plus a. . One product because how Amazon works, that's significantly different than Google because Amazon does take a percentage or referral fee when they're doing this, , being standard about 15%. So the pleasure of doing business with Amazon is they take 15% of your overall margins, right?

with that, , in Google, for example, Google doesn't care if you're selling one unit a day or 5,000 units a day, right? It's backlink building, it's on page optimization. It's all those type of things. On page optimization and conversion rate. Exact same on Amazon, just as critical as it is on your Shopify website for sales.

But the difference is the more sales you make on Amazon, the higher you rank organic. So if we get a product in the top three on Amazon, and this is kind of similar to top three in organic search on Google, but we will see the top three typically get 30% conversion share, let's talk about that for a second.

If you have a term that's getting searched 50,000 times on Amazon and you get in the top three and we just cut that out, 10, 10 and 10, and it typically. and a half and 2% within, those top three. But if you're just kind of evenly at 10, 10 and 10 50,000, that means 5,000 units you're selling a month based on just gaining the top three.

there's some different elements that you have to play with. There's some different elements that you have to look at, and your marketing strategy is different. It's not just and what am I gain on this? Or looking on the Amazon metrics as a cost. It's actually how it affects your whole organic sales as well.

So even how you think about the process of marketing and those initiatives, what goes on with.

Claus Lauter: No, very good overview that you gave there, so obviously somewhat. To Amazon has already a buyer intention. People go to Amazon because they wanna buy something. Somebody who's ending up on a Shopify store on a merchant's website probably is more of a browser in the first place unless they know the brand.

think huge difference there. So obviously a huge advantage of Amazon and that reflects in these high conversion rates. Now you said you need to hack sort of Amazon to get in the top. What parts of your Amazon strategy are the most important? You mentioned conversion rate optimization, your product detail page, , the listing, , paid ads.

How does that go in hand to hand to get into the top three or top five?

Ryan Flannagan: The first thing, and this is why before we work with anybody, we always do an Amazon action plan where we sit down for two weeks. We really look at the market, and again, we decide if it's a good idea, but it's a assessing the market. . So how much demand is there out there? , on Amazon. The beautiful thing about this is you can actually get really strong data on Google.

We don't know what's kind of happening and wherever product sales, cause all the data is created proprietary on Amazon, it's not as proprietary. So we can look at your top a hundred competitors on that, look at the market trend and say, Hey, your. Is actually up 40% and we're only up 10%, so we're losing, Or your market is down 40% and we're down 10%, so we're actually gaining market share.

there's a little bit more data, but when you're looking at if you're gonna be successful on Amazon, there's a few factors. A brand affinity, if you're RA making sales, if you're already doing social media, if you're already doing brand awareness, If you go on Amazon, you are going to make sales by putting something up, right?

And quite frankly, if you're big enough, your resellers may already be doing that. So we get in the conversation of where we were in social media about 15 years ago, when brands are saying, Well, should I be on social media or should I not be on social media? And the reality is it's happening with or without you.

So it's better to be there and kind of controlling that situation if it's going on, right? So first thing is if you're looking for a growth strategy on Amazon, Your price compared to the competitors, Making sure you have a limit optimized listing images, annotations, listing optimizations, a bit different on Amazon than your Shopify site.

, and then seeing if there's really a growth strategy , for doing that. Now with that being said, With a lot of established brands, which I'm assuming a lot of your listeners are, , we also can use it as maybe a growth strategy, but then also a new customer acquisition strategy or, , a additional case.

So let me give you kind of some quick numbers, right? So if you're competitive on the marketplace, you're going after a strong ad budget and you're doing all those type of things, cuz you. Superior product. You're competitive on pricing. You have good reviews. Those are the three main things, Great. We can go after that.

And we actually have clients that do, 70% of their sales through Amazon and only 30% of their sales are Shopify. I have this exact same conversation with the lot of partners on, Hey, I'm on Amazon now I need to go to Shopify, right? Because people are looking for my brand and all those type of things.

And so vice versa. Hey, I'm on Shopify. I need to look at. . So if you have a premium product, a product that's more expensive than what we're seeing on there, still has good reviews and those type of things, then the revenue split switches the other way that 70% of your sales are on Shopify, and 30% of your sales are on Amazon.

But at the end of the day, if you're doing brand awareness via social media, , YouTube ads, whatever you're doing on those type of things, compared to just strictly inbound on the channel, , we do see a halo effect. Of all tides rise all boats , or whatever that saying is. I'm completely butchering that.

, but essentially if you're doing that, you're gonna see sales for both channels dramatically. The other thing that I'd like to mention here too, just for the state of the market so people understand the opportunity on Amazon, if we talk just about inbound search, , Amazon's about 48% of inbound search in e-commerce in the United States.

So people searching for products go to Amazon about 48 to 50% of the time Google. That only happens 35%. , So it's actually a larger market. Now, if you have both of those products search wise, you're at 80 plus percent in the market, right? So you're in a good. , but it's all about laying out the right strategy for your brand, making sure there's an opportunity there, understanding the investment and making sure if you do this, what does this look like all those type of things.

, so that's just some overall levels. We can talk about optimization a little bit more. I highly do not recommend just throwing up listings willy-nilly. There's some plugins that will sync directly to the marketplace on. If you wanna just get MVP up there , and start making some basic sales, you can do that.

But I highly recommend not doing that because if there's any miscommunication about your products, about what this is and people give you bad reviews, then it can tank your sales. To give you a quick example of this, , the other day I got a Facebook ad that, we all get and was about a mosquitoes aper that was revolutionary developed by a 12 year old, got 15 million of funding, had a new light ray , and light fear sphere, and basically killed all mosquitoes within a kilometer.

And you never had to worry about mosquitoes again. Oh my God, I want this yesterday. But because it was, $50 or so, I went and checked on Amazon before purchasing this and it had 2.5 stars. No way I'm buying that on their website that's why it's very important if you do this, if you are merging on Amazon, that you have , a strong strategy in place to make sure that you're not tanking the rest of your brand.

And if you don't have a good product, you're getting bad reviews, if you're doing those type of, don't go on Amazon cuz it's just gonna kill you right now. problem is competitors can, not even resellers can still go up there and you're not part of that conversation, but just kinda, food for thought on that.

Claus Lauter: Yeah, if you have a bad product, don't sell it at all. . So,

Ryan Flannagan: Yeah. Better motto. Better motto.

Claus Lauter: yeah, not, you are not doing any, anyone a favor with that by selling a bad product. You touched on a lot of good things. One thing that I wanna go into as a Shopify merchant, having a store, obviously I want to have the best of both worlds.

Obviously, Amazon is not the cheapest marketing channel or sales channel that is out there. Amazon holds back a lot of data that you can use for building up the customer lifetime value. Gets you , the customer on the other side. You have all the flexibility in the world with your Shopify store, you can build up your list.

how can you combine these two things that each of the site basically profits from what you do?

Ryan Flannagan: . , it's looking at your margin. Seeing what your margins are and see where that works out. So on average, to be candid, with the higher cost per acquisition on Shopify, we see that the margins with, even with Amazon taking that 15% kind of work out to be about the same, if not a little bit lower on Amazon, just cuz the conversion rate's so much higher, , on those things.

Once everything's optimized and you're going , and so on and so forth. When you're looking at this strategically, I would recommend, , either working with an agency or a coach or something like that. Don't put your full catalog up there. Look at, your brand search on Amazon. What are your hero products?

What are the ones with the best margin? Where we typically work with our partners on is let's work closest to the wallet out. Don't try to do your full catalog. Because this is true in most Shopify catalogs as well, that you have some products that do a lot more sales than everything else. So let's put those products up on Amazon.

, and then if you can do a customer acquisition strategy on that. So we have a number of clients that either offer a lifetime warranty if they register. Then you can do that type of, or some warranty or some value add, and that's a customer acquisition strategy that they buy on Amazon, but they come to your website to register in one way or another, and now you're getting the data.

And now Amazon's actually a customer acquisition channel compared to just a sales channel. . So there's different ways to do that. That can be buy one, get one free. That can be some other ways to build people, to get them to come to your site and leverage that as a customer acquisition channel.

But honestly, every brand is different. Every brand is different , in their. , brand journey and where they are with their customers. So typically it's a no-brainer for me to be on Amazon is if you have a good product, you're making over 10,000 a month in sales on Shopify, and you're already doing some brand awareness ads.

If you're not on Amazon, you're basically. Missing out on a acquisition opportunity, a customer acquisition app opportunity, and more importantly, , competitors could be poaching a lot of your customers cuz you're doing all this brand awareness for this, , security alarm for women that's on your key chain.

And then they just search Amazon and they go buy. So that's the other type of thing. You're doing all this awareness to get people into your funnel, to build 'em, to say, Hey, I have the best product. And they go, Oh, this is great. How much does it cost on Amazon? I'm just blown by.

Claus Lauter: Okay. Yeah, I'm on the same page with you. I have seen also both scenarios, people coming from Amazon, wanting to go into Shopify, and clients of mine who do it the other way around. Now, obviously, I would just wanna touch on three things with Amazon. First of all, if you have the right tools, it can be very transparent, not only for you, but also for your competitors.

A little bit of a risk. Then the second one is that the system itself and Amazon is relatively complex, so I wanna learn from you what's the learning curve there and what you would recommend there. And thirdly, when it comes to their advertising system, is that something you would, , recommend to have a certain budget going in there, or would you just focus on conversion rate optimization and working with the system instead of throwing additional money in there?

Ryan Flannagan: Yeah, there is a risk from the data. People will be able to read your data, see how much you're doing, those type of things. , with that being said, I think there's a lot to be learned and assessed on before you get on there, like how other people are doing and assess really what the marketing opportunity is.

. Double edged sword, right? You can look at those. , when we look at, the second question, clouds, again, if you don't, can remind me.

Claus Lauter: Was optimizing the system, so learning the system itself.

Ryan Flannagan: . So Amazon is a fickle mistress, , to be, pleasant about that. We, for example, with a seek cover that does hundreds of thousands per month , on like basically one product, family, and their seat cover got flagged as the stic. For some reason by Amazon, right? So that was down, a number of days and then you have, everybody freaking out cuz sales are just plumbing.

During that period of time. There are risks and rewards with the system. Amazon is complicated. I would recommend if you're just starting out , that, if you have the budget, if you don't have the. Find a coach, find a system, and , all those type of things. If you do have a budget, , then work with an agency that's vetted that knows how to do this, cuz the risk reward is, really pertinent.

And if you don't do it right, , you can have issues with that. , and then also just to mention, , If anybody is looking for these services, obviously Nuanced Media does a service, but if we're not the right fit for you, we're launching a service called Nuanced , Connection, which we basically have built up a expertise, , network of different people in the e-commerce space.

we don't fit for you for one reason or another, we can actually refer you to another Amazon partner that we think will be a better fit for you, that can help you do that , to meet those things. , it's a service that we just provide because really this is about win-win, and helping people win.

, the third thing is, Advertising only happens when you're brand ready. for the kind of Shopify analogy, you're not gonna start throwing a ton of money on ad spend when your Shopify websites the barebone theme. You don't have any images up, you don't have any content, any of those things. Where we recommend is go in, do the full listing optimization.

Make sure you have brand registry. Brand registry is critical on Amazon. Go in, do the listing images, annotations, value prop, the copy on that, build out your brand story in your a plus area, and then once you get to about 30 reviews, then start spending money on marketing. . So the tricks of the trade that we really use is we will build up brands.

If you submit to Amazon Vine, Amazon Vine is a program that Amazon offers to brands that have brand registry and have FBA fulfillment by Amazon on that. And basically you can give 30 products away and get up to 30. So a new product you can do that, you can submit that way. So you have some reviews before you start putting in money on the advertising side of things.

. But something else that you can do is, what we do a lot of times is we'll build up the reviews on Amazon and then we will. check with your attorney on this cuz there are copyright laws and all these type of things. But then we will scrape those and basically put them on the product on your Shopify website too.

So am Amazon aggregates a lot of reviews at the bottom. We write a little copyright and link 'em back to listing so . Customer understands that a lot, these reviews came from Amazon and or the property of Amazon as well. But if you're using these strategies congruently, there is opportunity for even improving what you're doing on your Shopify , program by aggregating those reviews.

Cuz reviews, as we all know, , are kings on that.

Claus Lauter: Quite right. Yeah. So it already shows that Amazon is a complex beast, , with lots of moving parts and you wanna do it right. What is, first of all, for Nuance Media, the perfect client? And what would you recommend at which size as a merchant? Should you have someone being full-time or halftime on Amazon because it's so complex.

Ryan Flannagan: , there's full service marketing agencies like us that do inventory management. We basically do everything like that. And we're the extension of your team , and our relative price on this is the cost of hiring somebody full time. . That's basically where you come in on that.

When you're setting things up and getting listings, that can be a little bit higher cause there's a lot of infrastructure. But once you get into maintenance, it's that, Or it could even be a little bit lower depending on amount of products in sales. Now, when you are looking at . The capability and the opportunity and who's the perfect client for us.

We really like brands that RA have a customer loyalty base that are looking to emerge on Amazon, or RA is selling on Amazon and they're just not doing a very good job. They're not aggressively trying to grow or scale or do those things. And we have a full other. Service line, that's called growth driven advertising that does product split testing on advertising for that.

And just by even, split testing something that's native to your audience, everybody's used to that. And particularly there's social media advertising and such, but like we've done some split tests on , the main image and we've driven, for one client, we increase their click through rate by 678.

By split testing the main image, , we had another one that we increased clickthrough rate by about 102, and then the other one increased sales by doing this by about 64%. So once you're on there and you're working on that, there are ways if you start working with a agency that knows what they're doing is to take your brand to the next model.

So where we really work with is establish brands that are looking to either get on Amazon and scale, or are on Amazon. And just don't think they're really getting everything that they can get with that.

Claus Lauter: on that, are you only working with clients in the US, Canada,

globally,

Ryan Flannagan: oh. Globally, we have clients out of Portugal, Switzerland, , all, , all over. And we have a number in the US too, but we're a global organization. I'm based in Arizona, but I have employees all over the world. , but yeah, we work.

Claus Lauter: Okay. Final question from my side is like how much of a homework and a timeline needs emerg to do before they should look into outsourcing?

Ryan Flannagan: , we always recommend doing your due diligence, looking into those type of things, but at the end of the day, just like all design is not the same, all Amazon listings are not the same, so you can go shop this out relatively inexpensively to get a listing built for Amazon, but does the image look good or the keywords done right?

Somebody actually wanna think outside of the box , when driving this and those type of things. You know what I typically say if we're looking at Christmas 2024, right? Or 2023, you really want to start looking at everything probably first quarter, , because you wanna get your listing up that if you're doing a listing well, and you're building, that can take four to six weeks to get up a plus content, copy, imagery, , , all those type of things, right?

But then after you get that up, it takes another six weeks to aggregate the review. you're looking at a minimum of a two month timeline before you're even ready to start marketing on that. And then once you start marketing, there's about a six month ramp phase that you're basically running your advertising, you're finding better keywords, you're split testing, you're doing all these type of things.

So it is a long process , and when I say this, I'm talking about one product and trying to get up to, 30 to $40,000 of sales on a monthly basis, if not hundreds of. When you look at Amazon, you have to think that it's a big game. It's not a small game, you have to look at your product and see if there's an opportunity before you do any of that in the first place.

Claus Lauter: Very good. definitely you should look into Amazon if you are on Shopify right now and you need to have a good plan to do it right. Where can people find more about you and your owns media?

Ryan Flannagan: , we're located@nuancemedia.com. , that's with a nuanced with a d media.com. , we actually have a Amazon growth strategy guide on the website, so if you go on the website, It'll pop up after you've been on there in about five seconds or so, and you can download that guide. Talks a bit more about growth driven advertising, the stay of the market and all those type of things.

, we're on Facebook, , LinkedIn, on Twitter, all the standard places, and so am I. So if you put at Ryan Flan again, pretty much everywhere, you'll find me as well,

Claus Lauter: Cool. I will put a link in show notes as always. Then people can find you with just one click. Ryan, thanks so much. There was a ton of good tips in there. , a lot of gold nuggets and I should give people a good understanding how and why they should start on Amazon. Thanks

so much.

Ryan Flannagan: Yeah. Do yourself a favor and search yourself and your brand on Amazon and see if people are reselling, cuz , that's a big deal. You're not controlling that. So thanks plus, I appreciate the time.

Claus Lauter: so much. Talk soon.