- What exactly is an Amazon agency?
- What do they do?
- Why might a business choose to work with an Amazon agency and how do you pick the one that is right for your needs?
These are only a few of the many questions that come up when a business decides to work with Amazon in any capacity. Whether selling on Amazon or just advertising on the e-commerce platform, businesses can benefit greatly from the expertise of an Amazon Agency to help them maximize their performance.
Amazon is quickly expanding to all corners of the e-commerce world, including inventory and content, as well as search and display advertising, targeting, video and reporting. There are a lot of opportunities but also a lot of responsibilities when it comes to building up your Amazon business. Amazon is a major vessel that requires specific knowledge and a lot of experience to operate- this is where an agency can help.
This article will outline:
Also check out our webinar with our founder and former Managing Director Marc Aufzug and ex-Amazonian and Principal Retail Amazon, Alexandar Ortner where these two experts explain all you need to know about finding the right agency for your business.
Any brand manufacturer deciding to sell on Amazon requires expertise, experience and manpower devoted solely to their Amazon business. Unfortunately, many businesses do not have the capacity for that, and instead turn to an agency for support. There are many reasons to work with an Amazon agency:
1) Specialist expertise and experience
Maybe you don’t have enough experience in-house yet, either in the Amazon field (content creation, advertising, management or strategic advice), or category knowledge. Maybe you have a good feeling about Amazon in general, but need an expert in your category to help you expand your current knowledge and level up.
Agencies have entire teams devoted solely to Amazon and are, therefore, the experts in all these items. They can also help you build up your internal knowledge by guiding you through working with Amazon.
2) Flexibility and higher capacity, fast
For those who already have experience, an agency can provide the extra manpower needed to really get the job done. For everyday business or especially when you are launching new products, entering into a new category or building up your product portfolio, starting fast is key! It could be very difficult to set this up internally, so an external partner can be very useful to set up at least the first steps, and maybe support through the ongoing steps.
3) Unofficial audit
An agency can also apply its expertise to perform a sort of “audit,” by taking a snapshot of the setup and processes of a business’ internal team. The agency can determine what is working and what isn’t from a professional standpoint – for example, look at the advertising activity or content and evaluate the market position and competitor activity to determine the potential for improvement and how to exploit it.
Visibility is evolving rapidly on Amazon, so much so that external support is becoming necessary in order to keep up. You have to take a proactive rather than passive approach to gain and maintain substantial visibility and agencies have the expertise and manpower to help you do just that.
It is possible to internalize bits and pieces of the process and build up your own team to perform different tasks, but an agency can support your business in doing so. Ultimately, businesses will gain expert input, an extra set of hands for fast and efficient portfolio tasks and getting the job done efficiently and at an expert level.
There are a few steps to take when deciding on an Amazon agency, but first and foremost, you must evaluate the market. Which agencies are there? What clients are they working for? How long have they been in the game and do they share their knowledge publicly?
This last point is especially crucial to determine the most capable agencies- those who have the most expertise AND are willing to give away their knowledge. Evaluating Whitepapers, workshops, webinars, blogs, etc. from an agency can inform you about what they are able to deliver, if they are a good fit for your business and if they have experience and a broad range of knowledge.
Keep these points in mind to narrow down your choices. For example, if you started by looking at 10 agencies, maybe you can bring it down to five by choosing those that specialize in your category. And from those five, you could determine who has the greatest skills in the topics you are searching for, for example, content creation or paid advertising.
The next step would be to reach out to these five agencies. This could be in the form of a 30-60 minute call to obtain a first impression and establish your status quo. Explain your current standing and challenges with Amazon and what exactly you are searching for. You can also learn what, specifically, the agency has to offer. Maybe they have cases and examples of experience specifically in your category. It is also helpful to inquire about the length of time they are working for a client on average.
Usually, after this call the agency should be able to send you a sample calculation of the budget you would need in order to determine pricing. Depending on the complexity of your demand, you can then move forward, working with your top three of the five agencies. With those three, determine what services should be added or removed to create a concrete pricing structure and list of services to receive an offer.
Finally, you enter a final negotiation with two agencies. This includes contract terms and services as well as timing and more concrete pricing. From here, you can select the agency and services that would work best for your business and move forward to finalize the contract.
This entire process can take anywhere from 2 weeks to several months, with an average of about 6-8 weeks.
Keep in mind: How would you like to measure the success afterwards? Look at the path to the result rather than just evaluating revenue. Full transparency and measurable goals are very important. Amazon is 100% data-driven, so brands and agencies should be as well. Keeping track of measurable aspects throughout the process will show you very quickly where changes are needed and how your business can be improved.
Some services lend themselves very well to comparison, for example content creation. You can look at the before and after of content optimization and content quality and see quite easily which agency is performing the best.
We at factor-a offer what we believe to be the best-proven solution, especially in terms of keyword creation and distribution and this part of the Amazon management can be compared quite well.
For other services, like advertising management or strategic analysis, it is a bit more difficult to compare directly among agencies. You would need to obtain sample material or a proven track record and KPIs (i.e. average length of cooperation with clients). It is very important to consider these items rather than the lowest price in order to find the BEST agency for your business.
While shopping by price can be tempting, it is most definitely not the best in the long-run. Deciding based on price only works in the fields in which you have complete transparency and a 1:1 comparable offer. Since this is rarely the case with comparing agencies, consider the price but do not make it the top decision criterion. Ultimately, the budget you use on an agency will be an investment, on which the returns you get from high quality work will make the price worth it in the long run.
Tip: Price can be used as a catalyst for more in-depth discussions. Challenge the agencies offering the lowest prices to determine what exactly they can offer.
Mistake 1: Selecting the cheapest agency
Keep in mind that all agencies have the same business model, which is an exchange of time, knowledge and experience for money. Be wary of those agencies that ask for only half the price of others as a lower price will likely mean lower quality and/or less time spent on your account. These often go hand-in-hand as the less time the agency spends on your account, the lower the performance and worse the outcome will likely be.
Mistake 2: Choosing the agency that makes sky-high promises
Watch out for huge gaps in outcome and performance among agencies. The more an agency promises, the less likely it is to fulfill all of those promises, especially when they are much higher than the rest of the agencies you are considering. Don’t be fooled by flashy numbers and boasts of big success, but rather look at the agencies offering realistic outcomes.
These agencies are likely more sure about the real potential, competitive situation and the resources provided by the client, and can use those aspects to build a realistic proposal that is likely to be achieved.
Of course, don’t just settle for the lower forecast, but instead, ask these agencies for details about the reasoning for their goal proposals and challenge the agency with the loftier promises on these aspects as well.
Remember: A forecast is always just that: a forecast. It depends on numerous factors that are hard, if not impossible to influence. For example with pricing, in categories with aggressive internal and external competitors, Amazon’s way of dynamic pricing and price matching often leads to loss of the Buy Box or other sanctions. However, agencies that know Amazon well are not afraid of these facts and will openly discuss the risks along with the opportunities as well as solutions to minimize these risks.
Sometimes, newer companies and startups want to base their business on Amazon, but directly externalizing that service doesn’t necessarily make a lot of sense for a few reasons.
Firstly, new companies need to build up their core competencies on their own, before outsourcing to an agency. It may take a lot of effort and manpower in the beginning, but will ultimately pay off in the long run.
Another case in which an agency may not be the best choice is when a business’ expectations exceed their budget. This can cause an expectation gap in which they want to deep dive into a topic, but an external partner cannot help them meet their goals on the available budget. In these cases, it makes more sense to build something internally, dedicating time and resources to creating a strong foundation within the company and maybe even hiring a part-time worker to be devoted solely to this topic.
Agencies fill the gap between Amazon and brands. There is no possible way for Amazon’s vendor managers to provide the level of support necessary to help brands thrive on Amazon, purely because volume is too great.
Agencies have become a kind of unofficial vendor management, enabling brands and manufacturers to understand, develop and improve their Amazon business. Agencies also serve Amazon because ultimately, helping businesses grow helps Amazon grow. For all three parties, it is a win-win-win situation.
As a pioneer in the field of Amazon agencies, we have the experience and expertise in not only how Amazon works, but also how to collaborate with big, international corporations. We pride ourselves in our ability to effectively communicate and tackle project management.
Our scalability and bandwidth of services put us a level above the rest. We exceed in not just the operational implementation (i.e. content, advertising and account handling) but also the strategic side in terms of market shares and the competitive situation. We have a team of more than 100 people completely dedicated to Amazon, with native speakers from all marketplaces as well as specialists in technology, consulting, account management and advertising.
We specialize in finding the perfect balance between technology and manual implementation. We use technology where it makes sense, but also know how and when to deliver manual implementation where it is necessary.
Finally, we have adapted a mindset that allows us to look through the eyes of the Amazon consumer. We actively listen and understand the wants and needs of both our clients and the consumers, which allows us to “reverse engineer,” finding solutions from the challenges that both face and addressing them with our work.
Have a specific question about working with Amazon or an Amazon agency? Send it our way and we will arrange a free appointment for you to discuss with one of our experts.
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