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Nov 10, 2024 12:00AM

Paid advertising no longer scales revenue effectively on Amazon. Optimized brand stores can drive 10% of total revenue while increasing average order value, offering a more sustainable growth path than traditional paid advertising methods.

Jason Landro | Link to post

Brands are facing more pressure than ever to grow revenue at the same time as profit

The standard playbook of investing more and more in paid advertising to scale revenue doesn’t work anymore

Because paid ads provide diminishing returns at scale

The solution is to find ways to drive traffic without paying or at a lower cost AND convert that traffic

Essentially, you want to drive incremental revenue to improve profitability

And you want that incremental revenue to grow at a higher rate that your ad spend

That can come from existing customers ordering more or ordering more frequently

It can also come from net new customers

One great way to drive incremental revenue from both groups is to invest in your Amazon brand store

An optimized brand store can drive at least 10% of your total revenue

Yet lot of brands are only driving 1-5% of their revenue through their brand store

In addition, Amazon's own data shows that consumers have a higher average order value and units per order when shopping on the brand store

(as opposed to PDPs)

So this is relatively low hanging fruit

Here are some tips to analyze whether you can do a better job with your store:

-Are you featuring at least a few of your top-10 best selling products on your homepage?

-Do you have design elements on your homepage and subpages?

-Are all your subpages getting sales and meaningful traffic?

-Are you minimizing similarly priced options on your store to reduce friction in the path to purchase?

This is just the start, candidly

If you're doing $5 million or more a year on Amazon, it's almost a no brainer to put this on the roadmap for 2025

If you need help or want to chat about whether you can improve your store, don't hesitate to reach out

P.S. The below store hompages are ones the Nectar team created recently for Shark, Earth Rated, Hero Cosmetics, Souper Cubes, Vibes, Crazy Muscle, and Gotham Steel

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