Due to coronavirus, online sales have increased by more than 70% year over year. And, as many people are now avoiding in-store shopping, Amazon has become a necessity for brick and mortar or retail-only brands. However, beginning to sell on Amazon or another online marketplace is seldom simple. Continue reading to learn more about the transition from traditional retail to e-commerce and why catalog prioritization is key.
To be successful in a new arena, especially e-commerce, it's important to have the appropriate mindset. In part, brands need to remember, a product's performance in traditional retail shouldn't define its potential on Amazon.
This is primarily because the competitive landscapes aren't comparable. There's limited shelf space in brick and mortar or retail stores. And as a result, there's generally a smaller number of similar products for brands to compete with. On Amazon and other marketplaces, the opposite is true.
It's much more competitive when selling online because there's unlimited shelf space. Brands that successfully compete on Amazon have taken the time to view their product assortment through a new lens. This allows them to focus on the core products that will drive the most sales.
When getting started with new clients, MPS strategists have found catalog prioritization to be invaluable. Teams begin by evaluating a brand's product assortment and consider a number of factors. For example, existing product reviews, sales velocity, inventory, and more. All of which play to Amazon's algorithm and can predict a product's profitability on the channel.
During this process, a list of core products is identified. With this list, MPS is able to allocate budget and focus toward the most important ASINs. We often recommend brands start small and slowly optimize and advertise remaining ASINs. Otherwise, taking on too many SKUs at once can become overwhelming and negatively impact profitability.
This approach has been successful as we've found many brands earn the majority of sales through a small number of products. And oftentimes, high-performing products on Amazon aren't best sellers in a traditional retail environment.
Catalog prioritization helps brands start strong on Amazon or another marketplace. But it's also worth revisiting your product assortment on a regular basis. At MPS, we analyze our client's catalogs on a quarterly basis to uncover opportunities and address any areas for improvement.
Selling on Amazon is a very nuanced process and requires specific expertise. That's why catalog prioritization shouldn't be overlooked. This foresight allows brands to position themselves for success in the short and long term.
To take a deeper dive in to catalog prioritization, sign up for on-demand access to our recent webinar. In less than one hour we also provide suggestions on how to create feasible goals and determine whether Seller or Vendor Central will be more profitable.
If you could use the support of a strategic partner, schedule a free consultation. And, as always, we’re here to answer any questions about your brand’s catalog prioritization efforts.