The Catch-22 of Amazon Product Launches
Life on Amazon is tough.
The days where people can easily find and sell new products have passed. The times where Amazon sellers could easily build what feels like a six-figure business overnight are over.
If you want to be successful on the platform – as a seller or vendor – you need to put in the hours. This is especially true for launching a new product.
No matter if you are newbie or seasoned seller, launching a new product on Amazon is difficult.
But why is it so hard?
The Catch-22 of Amazon Product Launches
There are a few different metrics in the Amazon A9 algorithm that determine the ranking of your product. One of the most important factors is sales velocity, indicated by the click-through rate (CTR) and conversion rate (CR). They, in turn, are determined by:
- CTR: main image, reviews, title, price
- CR: copywriting of the listing, remaining product images, price
Seems pretty straight forward: sell some product, your ranking will improve, leading to more sales and eventually your Amazon dream sets off. Unfortunately, that is not how it works in real life (even though there are loads of ‘Amazon gurus’ telling you so).
Here’s the problem: for a product to sell, it needs to rank high. And for a product to rank high, it needs to sell. So where do you start? That’s the logical conundrum of Amazon product launches – a Catch-22.
It means you have to create initial sales and rank high – both at the same time.
3-Step Strategy for Launching a New Product on Amazon
Let us warn you early on: During the launch phase of a new product, you will often have to operate at break-even point or even accept losses. The goal is to improve ranking rather than making profits. Be prepared to spend a little.
It truly is no child’s play. But it is not impossible. Here is how you do it:
Our 3-step strategy starts with generating the first few sales and encouraging your early customers to leave product reviews. Once you have collected 3-5 reviews, you drive paid traffic to your product to set off the Amazon flywheel, further push sales, and eventually start ranking on the first few pages in the search results.
Please keep in mind that our strategy assumes that you have done thorough product research and already created an SEO-optimized product listing that is ready to go live when you need it to. The following articles can help you with that:
- How to optimize your Amazon product listings
- The complete guide to Amazon SEO and higher ranking
- Complete guide to Amazon product image optimization
1. Get the Ball Rolling: Develop an offer customers cannot refuse
Reducing the price of your product is the easiest way to increase initial demand – especially if you make people feel like they are getting a really good deal. That is why each of our proposed strategies to create sales includes a product discount.
Amazon Giveaway (US only)
You can offer your new product as part of a giveaway on Amazon itself. While the winner receives your product for free, other contestants can purchase your product at a discount. The key is to require people to watch a product video before they can enter the giveaway in the hope that it will induce participants to make the discounted purchase even if they do not win.
The disadvantage? You have to have a very good product video at hand, which is often quite expensive to produce.
Upsell through already successful Amazon product
Unfortunately, simply giving a regular discount for the new product doesn’t work, as people first need to find the product to then purchase it – and you won’t be ranking well initially. You can use one of your high-ranking products to overcome this problem of visibility.
Create a discount structure where your new product is tied to one of your best sellers. People then receive a discount if they purchase the two products together. You can set this up under ‘Manage Promotions’ in the ‘Inventory’ tab of your Seller Central.
The disadvantage? This strategy only works well if the new product is complementary to one of your best sellers. Otherwise, the probability of people purchasing the two products together is very low.
These two approaches work within the system Amazon provides you with. Success rates have been varied. In fact, online seller feedback and our own experience suggest that the best way to create the first sales is by directing outside traffic to your new Amazon listing.
Channel off-Amazon traffic to your product listing
Making initial sales on Amazon is problematic as products that rank lower than the first few pages in the search results are barely viewed by customers. The point of using external channels is, therefore, to get your Amazon product listing in front of potential customers that are willing to make the purchase.
The key is to find and connect with your target group – early adopters of your new product. This is easier if you are already selling your products on Amazon and have actively been building an audience.
Offer exclusive discount codes to your Email list
If you are running an online store off-Amazon where you’ve been collecting email addresses already, you can leverage them to your advantage. Most of the people in the list have probably either bought from you before or shown interest in your product range. Offering them an exclusive discount via an email newsletter with a link to your new product listing dramatically improves your chances of making a few sales and creating a successful product launch on Amazon.
Building an email list from scratch, however, is a lot of work – but it usually pays off in the long run. So if you are currently preparing to extend your product range and have a few months to plan the launch, building a new email list via Social Media, your online store, or a landing page could be an effective way to create external traffic to your product listing – now and for every future product launch.
Another way to reach a suitable audience is via Influencer Marketing. You can assign a discount code to an influencer in your niche and require them to link to your product listing. This might also help in providing social proof when product reviews are spares. However, keep in mind that you are losing additional revenue as you have to often pay a hefty commission to the influencer.
Connect with your audience via Facebook
There are three ways you can make use of Facebook.
Depending on the product you want to sell, you can find relevant Facebook Groups with members who, based on their interest or hobby, might be the right target audience for your new product. Make sure to message the group admin and ask for permission to post a link to your listing with a corresponding discount code.
Another way to leverage the power of Facebook is via advertising. Facebook allows you to fine-tune the targeting of your ads so that you can reach people that are likely to be interested in your offers. However, if you’ve never done Facebook Ads before and aren’t exactly sure what you’re doing, it can quickly bleed out your marketing budget for the launch (and beyond).
Using a Facebook Bot adds an interactive element to your Facebook promotions – and is the most effective way we know to make the first few sales. We’ve already discussed this strategy in an earlier post in the context of creating the first reviews for a product.
2. Create Social Proof: How to get Reviews for your New Amazon Product
With the first few sales comes the challenge of convincing customers to then leave a review. Customer reviews are important for two reasons:
Conversion: a product without any reviews look suspicious. Social proof and the opinion of customers who have already tried and tested the product are influential factors in making purchase decisions for many shoppers.
Marketing with PPC Campaigns: We’ve found that PPC campaigns for products without at least a few reviews often fail. Therefore, you should only start PPC campaigns (and thereby create more crucial sales) once a product has received a minimum of 3-5 reviews.
Here are your options for collecting your first product reviews:
Amazon Early Reviewer Programme (US only)
When it comes to reviews, Amazon is a bit of a pickle. They are very well aware of the value of reviews, and how much sellers struggle when introducing new products to the marketplace. At the same time, the E-Commerce giant has been coming down hard on anyone trying to trick the system and generate fake reviews.
To solve this pickle, Amazon has introduced the Early Reviewer Programme (sellers) and Amazon Vine (vendors) in the US.
|Early Reviewer Programme for Sellers||Amazon Vine for Vendors|
|For a fee of $60 (per SKU), Amazon sends follow up emails to people that have purchased your products and offers them a reward of $1-$3 for leaving a review. Only products that have less than 5 reviews and cost more than $15 are eligible for the Early Reviewers Program. The program will stop either after one year, or when your product has received 5 reviews.||Customers with a track record of leaving lots of reviews that are perceived as useful and trustworthy are invited to be part of ‘Vine Voices’. Participants receive free products to test and provide honest reviews.|
Check out our assessment of the effectiveness of the Early Reviewer Programme.
Create Unexpected Value
On Amazon customers expect to receive a well-functioning product in a timely manner. Meeting these minimum standards of customer service will hardly get you the first few reviews. That’s why you should try and create unexpected value for your customer and thereby encourage them to leave a review – for exceptional customer service.
This unexpected value might come in the form of a freebie, a discount for their next purchase order, or valuable information/online resources that complement your product. Our post on Packaging Inserts explains the concept in more details and might give you some inspiration.
The Sellics Strategy for Generating Reviews for New Products
Our team has devised and tested an effective (but also costly) method of generating the crucial, first reviews for a newly launched product on Amazon. We have already mentioned this strategy in the previous section on generating early sales. You can find it again here – and so far it’s the best we know.
A Word of Advice: Stay within Amazon’s TOS
We understand that every beginning is hard. And while you might be tempted to revert to black hat tactics to accelerate the launch, let us tell you: it is not worth it. Recently, Amazon has increasingly been cracking down on sellers using SuperURLs or showing unnaturally high sales velocities (especially as a new account). Trying to trick the algorithm is almost guaranteed to lead to account suspension.
3. Get found: Start a PPC Campaign for More Traction
Now, we reached the final stage of our launch strategy: pushing your product out there and making it more visible via PPC marketing.
And when we say ‘push’, we mean push!
PPC campaigns help you overcome the problem of not ranking in the early days of a newly launched product.
If you’ve been following Sellics for a while, you probably know our optimized PPC strategy by heart. This is what we found works best and have been preaching ever since. Check out our PPC Manual for Maximum Success – it includes everything from finding the right keywords to setting up and optimizing your PPC campaigns.
Since a product launch creates some special circumstances, there are a few alterations we would suggest to our usual PPC strategy:
- You will want to bid a bit more aggressively. Your goal at the start is not necessary to make a profit but to get your product out there.
- A little while ago, Amazon introduced dynamic bidding. Since your goal is to create the maximum amount of sales (no matter the cost), you should turn off dynamic bidding and stay with fixed bids.
- Add Product/ASIN targeting to your PPC strategy. Attaching a PPC ad to one of your more successful product listings serves two purposes: (1) you can catch the eye of customers who are already interested in one of your products and potentially upsell them, and (2) if the targeted product already has a bunch of good reviews it might serve as social proof for the new product you are advertising.
You initial PPC efforts should be quite aggressive. They are the key to your launch and allow your product to be found by potential customers. Just make sure your campaigns are continuously optimized and cared for to avoid unnecessary dollars spend.