For manufacturers looking to increase margins, maintain brand control, and gain valuable insights on their customer base, Amazon provides the ideal opportunity.
Going straight from factory to customer not only removes the intermediary, but it can unlock a whole new potential for growth and expansion. If you’re a business that usually sells to retailers, wholesalers and distributors, adopting the Direct-to-Consumer (D2C) model instead will protect profit margins — while ensuring faster speed-to-market and other advantages.
Manufacturers in traditional sectors such as ironmongery, paint and coatings, building materials, and industrial supplies could benefit too. And you don’t need to have e-commerce expertise or Amazon selling experience to get started.
Your products are probably already selling on Amazon
The current retail landscape means that many manufacturers are powering Amazon’s huge marketplace without even realising it. If you sell stock to retail businesses, it’s likely they’re already selling the stock to customers on Amazon.
Because of Amazon’s huge customer reach, it’s an unmissable opportunity for sellers to tap into a global audience. Third-party sellers get high visibility and benefit from building customer relationships and loyalty, while also gaining a significant share of the margin.
They also get to tap into customer insights using platform tools, and this allows them to stay agile in be responsive to customer needs and desires. So, retailers and distributors reap the rewards and enjoy growth, while manufacturers carry the production cost and risk.
Is it time you cut out the middleman?
There’s a massive opportunity for manufacturers to sell directly to consumers, bypassing intermediaries and retaining full brand, pricing and margin control. Here are some of the benefits of selling D2C on Amazon:
Protect profit margins
Moving from traditional wholesale to selling directly on Amazon can increase margins by over 20%. However, it’s important to factor in operating costs as well as resources or agency costs for running the account.
There are some cases where margins are significantly higher. For instance, with white-label SKUs, surplus stock, clearance runs, or product off-cuts, there’s potential for very high margins — even close to 100% if materials would otherwise be unused/unsold!
Pricing control
Selling direct to consumers means you have full control of the journey. This includes how you price your product. Without a middleman eating at your margins, you can price competitively, giving you a chance to outsell other businesses in your category. As the manufacturer, you can lower your prices and still earn more per unit compared to resellers.
Brand control and data
You’ll also be able to manage brand and customer experience, and build a loyal customer base. With Amazon, you essentially get a bit of a ‘leg up’ in this area. This is because Amazon has global reach, high customer trust, and gives brand owners numerous tools to amplify their brand story and content. Plus, you’ll be able to access invaluable data about the people buying your products, supporting innovation, and helping you respond to market trends.
Why Amazon is ideal for manufacturers
If you’ve considered adopting the D2C model, but don’t know where to start, selling on Amazon can be a good way to do so with minimal risk. This is because, with Amazon:
You don’t need a website
The ready-to-use Amazon platform means you can sell almost instantly, as long as you have stock and can get an account set up. You don’t need to pay for an expensive website build or source hosting. You don’t have to think about checkout flows, UX design elements, or other projects.
Everything you need is managed by Amazon. You just need to store/ship the stock and run the account.
Brand isn’t the only thing that sells
Yes, great branding sells. But on Amazon, there’s less brand dependency compared to traditional channels. Amazon shoppers want the cheapest price, the fastest delivery, reliable products with excellent reviews, and good product functionality.
If you can provide those things, you can still compete against the big names. This is why Amazon is perfect for consumables or practical products like hardware, paints, coatings, and tools.
There are millions of customers ready to shop
Stats suggest that almost two-thirds of all internet shoppers use Amazon as their default search engine, not Google. While this is data from the UK, there’s similar data from the US and around the world. Globally, more and more product searches now begin on Amazon, rather than search engines.
So, manufacturers with no e-commerce experience will not have to build an audience from scratch.
Listing and fulfilment is made easy
While Amazon has its own unique ecosystem and can be complex to navigate, you can get set up and start selling quickly. Even for businesses with no in-house skills/resource, agencies can be an affordable solution to help with store setup or listing creation.
Selling D2C via Amazon increases speed-to-market, creating positive cash flow in your business. There are also different fulfilment models, depending on the type of products you have and what your goals are.
Can small or unknown brands be successful?
The short answer is yes! Amazon levels the playing field for brands of every size, and there’s every opportunity to outperform bigger, well-known brands if you know how to manage listings and inventory effectively.
Manufacturers can play to their strengths too. For instance, you have cost control, you can manage supply reliability, and you have the best product knowledge — all of this gives you the competitive edge when it comes to visibility and building a good brand reputation.
Here are some of the things you’ll need to get right:
Listing optimisation
Keyword research and optimising product listings is essential for gaining visibility. Not only do well-optimised listings appear higher in search rankings, but they can help to lower ACOS (advertising cost of sales), giving you better return when you advertise.
Correct pricing
The way you price your products is one of the biggest factors for success. Strategic pricing will help you win the Buy Box, where most Amazon sales come from. It’s also worth noting that nearly 80% of consumers consider price as the single most important reason for choosing a product, according to data.
Consistent stock availability
To compete with the well-known brands, make sure you have products ready, in the right amount, and at the right time. Running out of stock causes loss of sales, and customers looking elsewhere.
Effective advertising
Ads should be a core part of your strategy, particularly if you have low organic visibility. With Amazon’s advertising tools, you can target high-intent buyers and drive immediate sales.
But what if you’ve never sold on Amazon before?
Selling successfully on Amazon does require knowledge of the marketplace, its unique ecosystem, the different fulfilment models, and various compliance requirements. However, you don’t need to be an e-commerce expert to get started on Amazon.
Most brands choose to work with an Amazon agency so they can get professional guidance on how best to optimise and sell.
Agencies can help with:
Listing creation, optimisation, and catalogue structure
An agency can support manufacturers by creating and optimising listings. This includes keyword research, SEO copywriting, and advising on the best imagery or media to use. They can also help you choose the best catalogue structure to increase visibility and improve customer experience.
Paid advertising and keyword strategy
PPC experts can help businesses create tailored ads and deliver a strategic approach to keyword selection. It’s important to have an experienced team, as they can ensure effective bid management and competitor targeting. The right keyword, targeting and bidding strategies will lower ACOS and optimise ROAS (return on ad spend) — making your money go further.
Competitor and market insights
Some agencies may be able to provide smart insights into your competitors, as well as current market trends. With an intelligence service, you can be better informed on your competitor strategy and correct product pricing.
Inventory forecasting
You’ll also have access to a range of analytics, like demand forecasting, when you work with an agency. By looking at historical sales, seasonal trends, competitors, and other market factors, they can help you better understand demand for the next few months. This makes it easier to ensure optimum stock availability.
Account management
Looking after your Amazon account health can be a time-consuming task. Even more so if you’re a traditional manufacturing business having to learn the art of D2C as you go along. An agency can lighten the load by ensuring your account stays compliant and healthy.
Break into D2C with an Amazon agency
If you’re a manufacturer looking to explore D2C channels, Amazon is a great place to start. You don’t need to build a website and there are already millions of people shopping on Amazon already.
Your product range may already have some Amazon-ready SKUs and by selling direct to consumers, you can claw back any margin loss made by selling to trade customers.
But we know selling successfully on Amazon is only possible with the right skills. A common concern that holds a lot of manufacturers back is the lack of in-house knowledge and not wanting to hire more people. The right Amazon partner can be the flexible and affordable solution if you are in this position.
At Seller Presto, we can bridge the skills gap, helping businesses break into Amazon selling. For years, we’ve been helping manufacturers and brands develop the right growth strategies, ensuring compliance and scalability, and turning Amazon into a predictable, reliable and lucrative revenue channel.
We can help you with the following:
- Amazon Store setup
- Listing creation and optimisation
- Amazon PPC with cost-efficient ACOS
- Amazon DSP (demand-side platform) management
- Full-service account management
- Competitive insights
- Amazon FBA reimbursement service
Want to unleash your Amazon potential without the operational burden? Get in touch with Seller Presto today — we can help you unlock this low-risk growth opportunity!
Contact us and find out how we can increase your margins with Amazon.