Amazon FBA: Organic versus advertising-led growth

If you’re selling on Amazon, you can get two kinds of sales: organic or advertising-led.

First of all, you may get organic sales. These are sales that you get because people are actually searching for the keywords that you’ve used, or looking for your brand, or repeat buying. Usually, if you have good SEO (search engine optimization) and good content on your product listing, you’ll be able to get good organic sales.

Secondly, you can get sales through PPC advertising. PPC advertising will increase the visibility of your products. You can bid on particular keywords, or sponsor your product listings.

One question that gets regularly asked by FBA beginners is “What’s the right balance between advertising and organic sales?” It’s actually impossible to answer. Each kind of sales has its benefits and its disadvantages, and you’ll only find the right balance through experience.

Organic sales are great, because you’re paying nothing for them. People arrive at your product because they’re looking for it. Once you have a good brand, good reviews, and great content, you’ll get quite a few organic sales. The difficulty is that this can take a long time to build up. If you’re relying on organic sales for growth, you’ll have to wait a while.

Advertising works much faster. It’s vital for product launches. But of course, it costs money; and since there are other sellers competing for the same keywords, who may have deeper pockets than you, it can make a big dent in the budget unless you get smart. Using long tail keywords can help minimize the budget; for instance, “accounting software” would be expensive, but “accounting software for freelances” or “accounting software for dentists” could be much cheaper and get customers coming to you rather than a bigger business.

Remember, organic versus advertising is not an either/or question, it’s about getting the optimum mix for your products, your business plan, and your resources.

Doing organic sales right can help you understand your audience and get good demographic insights. If you’re a brand registered seller, you have access to the Amazon Demographics Report through Seller Central, which gives you information on your customers’ age, income, education, gender, and marital status. However, it will only include products once they have more than 100 customers (a reason advertising is important to get your product off the ground).

If you’re limited in what you can spend on advertising, then there are two places your ad spend should be focused. First of all, spend money on advertising your new listings so they get sales and reviews quickly to put them on the map. Once your fledglings can fend for themselves, you can gradually cut back the amount of ad support you’re giving them.

Secondly, sponsor your top listings. You already know these products sell, so you’re not taking a big risk, and you can supercharge your sales figures with a bit of investment.

Don’t forget that you have various tools available to ensure your ads are working. For instance, you can use split testing to run two versions of your ad, with different photos or different text, and see which one works best. You can also look at your campaigns in Seller Central, which shows Advertising Reports, so you can see your click-through rates, conversion rates, and so on, and focus your spending on the most productive advertising.

Remember that the skills you need to find the right keywords and create the right content are, by and large, the same skills you need to create great ad campaigns. Finding the right blend of ads and organic sales will take some time, but once you’ve got there, you’ll find it’s a breeze – the two types of sale will complement each other nicely.

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