amazon for small business: friend or foe?

July 26th, 2017

ABOUT NETELIXIR

OUR TEAM:

100+ fanatically analytical search

marketers, operating in three

countries.

OUR PARTNERSHIPS:

We are a Preferred Partner of both

Google and Bing.

OUR VALUE:

We combine our expertise and our

proprietary technology to help

businesses get found, convert visitors

to customers and acquire game-

changing consumer insights.

TECHNOLOGY{ }

PAID SEARCH& SEO

PAID SOCIAL MANAGEMENT

MARKETPLACE AD MANAGEMENT

SERVICES CONSULTING++

LXR RETAIL:ENTERPRISE PAID SEARCH

TECHNOLOGY FOR RETAILERS

LXR GUIDE DIY PPC RECOMMENDATION +

MANAGEMENT TOOL

LXR MARKETPLACE:FREE SEARCH MARKETING TOOLS

FOR SMALL BUSINESSES

CONVERSION OPTIMIZATION

E-COMMERCE MARKETING STRATEGY

E-COMMERCE TECHNOLOGY

SUPPORT

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SPEAKERS:

Marketing Manager,

NetElixir

Alyssa Zaremba

Strategic Account Manager,

NetElixir

Anthony Turco

AMAZON FOR SMB:

FRIEND OR FOE?

July 26th, 2017

5

AGENDAE-COMMERCE LANDSCAPE TODAY

SURVEY RESEARCH + METHODOLOGY

RESEARCH FINDINGS + INSIGHTS:

• SMB Challenges + Investment Plan

• Amazon Pros + Cons

• Amazon Advertising

• Omnichannel Marketing

AUDIENCE Q + A

POLL:

Is Amazon a friend or foe to your

business?

A. Friend

B. Foe

E-COMMERCE

LANDSCAPE

People Don’t Just “Google It” Anymore

E-COMMERCE

LANDSCAPE

• Amazon has 43% of US e-commerce

market share. (FoxBusiness)

• Prime Day 2017: Sales grew 60% YOY to

an estimated $1 Billion. (BusinessInsider)

Who Has the Advantage in Post-Amazon World? (Op-Ed)

Top Reasons

Customers Buy Online

Advantage

Price Business

Convenience Amazon

Inventory Amazon

Quality of the product N/A

Reputable store Amazon

Customer experience Business

METHODOLOGY

• Tool: Google Consumer Surveys

• Method: Online Survey, 10 Questions

• Audience: Small to mid-sized

business owners and managers in the

United States on the Google

Consumer Surveys Publisher Network

whose company sells products through

Amazon as a vendor, seller, or both.

• Sample Size: 503

• Collection Period: May 10th–19th 2017

60% OF SMB

OWNERS/MANAGERS

SAID ACQUIRING NEW

CUSTOMERS IS THEIR

BIGGEST CHALLENGE.

27% OF SMB PLAN TO

INVEST THE MOST IN

PAID SEARCH WITHIN

THE NEXT 5 YEARS.

Understanding Your

Investment

Paid Search = #1 channel for new customer

acquisition.

Set long-term goals

• Think omnichannel

• Think customer-centric

Investing in your own site allows companies to:

• Craft a unique user experience

• Optimize customer’s journey to purchase

• Improve brand image/perception

• Gather customer analytics to better marketing

strategy

BIGGEST BENEFIT?

52% increased sales

volume potential.

BIGGEST DOWNSIDE?

45% lower margins.

Is Amazon Right for You?

High Sales Volume is Not a Guarantee

• Businesses must be able to...

– Competitively price products

– Manage inventory

– Take advantage of Prime and manage

delivery expectations

What has NetElixir seen for our clients?

Companies That Succeed on Amazon…

• Offset margins with lower overhead

– Fulfillment by Amazon

• Embrace Amazon custom programs

– Keep brand in tact

40% OF THOSE

RUNNING AMAZON

PAID ADS SAY THEY

ARE INEFFECTIVE.

LACK OF KNOW-

HOW WAS THE TOP REASON

FOR INEFFECTIVENESS.

Need Dedicated Resources

Online advertising is an increasingly complex and

competitive space.

• Have a plan

• Have the resources dedicated to the channel

• Keep up with constantly changing trends /

product releases / algorithms

THE MAJORITY OF SMB

ARE SEEING A 50-50

SPLIT IN E-COMMERCE

SALES DERIVING FROM

THEIR WEBSITE VS.

MARKETPLACES.

Invest in Your Brand’s Future

Most small to mid-sized businesses are currently

seeing sales from Amazon.

For the 8% who are not, 40% of them plan to invest in

Amazon over the next 5 years.

Businesses must think long-term.

• Who do you want to be as a brand?

• Diversification is good, but not at the risk of brand

commoditization.

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WHAT UNIQUE VALUE ARE YOU

DELIVERING TO YOUR CUSTOMER?

22

YOUNIQUE

Increasingly consumers want

products and services that are

tailored to them personally,

and communications that

target them directly.

Marketers have access to

reams of data now that allows

them to microtarget

consumers.

SUMMARY OF RESEARCH STATS

● 60% of SMBs say acquiring new

customers is their biggest challenge.

● 27% plan to invest the most in paid

search within the next 5 years.

● 52% of SMBs noted the potential for

increased sales volume as the biggest

benefit of selling on Amazon.

● 45% of SMBs noted lower margins as

the biggest downside of selling on

Amazon.

● 40% of those running Amazon paid

ads said they are ineffective.

● Top reason for Amazon paid ad

ineffectiveness was lack of know-

how of SMB.

● Most SMBs are seeing a 50-50 split

in e-commerce sales from their

website and marketplaces.

Talk to Us About

Improving Your Amazon

Marketing Strategy

Visit: netelixir.com/contact

QUESTIONS

SUBSCRIBE TO

Consumer Insights

Weekly consumer insights/search marketing

stats delivered to your inbox.

Visit:

netelixir.com/consumer-insights

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Join the conversation:

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APPENDIX

SURVEY QUESTIONS ASKED:

1. The company I work for/own sells products through Amazon. *†

2. Out of the following, what do you believe is the biggest challenge to your small business? *

3. Where does your business plan to invest the most within the next 5 years?

4. What is your company's opinion on selling on Amazon? - Is Amazon helping or hurting your business? *

5. Out of the following, what is the biggest benefit of selling on Amazon? *

6. Out of the following, what is the biggest downside of selling on Amazon? *

7. Which of the following best describes the type of products your company chooses to sell on Amazon? *

8. Is your business currently running paid ads on Amazon? Have they been effective? *

9. If your business' Amazon paid ads are not effective, what is the reason likely why? *‡

10. What percentage of your e-commerce sales are from website vs. Amazon/Jet/eBay?

* Indicates the winning result is statistically significant based on sample.

† Indicates survey filter question. Respondent was opted in to the survey if their company is an Amazon vendor, seller, or both.

‡ Indicates question allowed for multiple answer choices.

SURVEY BIAS:

Demographic report from question #1 shows respondents that were opted-in to take the survey. Similar

bias represented throughout survey.

SURVEY BIAS:

Demographic report from question #1 shows respondents that were opted-in to take the survey. Similar

bias represented throughout survey.