Why Brands Fail on Amazon: Case Studies and Insights You Need to Know
While full of potential for profit for manufacturers and brands alike, Amazon’s marketplace platform is also a place of intense competition where most players will fail. Due to the stiff competition, only a small number of brands will thrive on Amazon. This one truth is often not highlighted, especially by Amazon agencies trying to sell you their services.
While success is a possibility, brands must navigate the platform’s unique challenges of price competition and competitive features. We’ve seen the highs and lows firsthand, and while we’re not afraid to share the lessons we’ve learned from our clients’ falls, we’re here to help others learn from these experiences.
To change the e-commerce industry here in Taiwan, it’s best we all face the truth first that many brands who will go on Amazon will fail. There are two main factors that affect your success on Amazon:
- Pricing: To beat China’s factories on pricing will be difficult, so most Taiwanese brands don’t have that particular advantage unless they own or run a factory in China.
- Superior Product: Lowballing prices on Amazon isn’t the only way to win on Amazon, if you have a superior product with better features that the consumer are willing to pay a higher price point for, you will also win.
Almost all of our company’s successful clients belong in those categories, so it’s important to take a look at your product and ask yourself if you do, if you don’t, then it’s best you don’t go on Amazon.
Case Study: Silicone Reusable Earplugs
Our client entered Amazon with a product that’s similar, if not carbon copies of similar products on Amazon already—silicone reusable earplugs designed for comfort and sustainability. They came to us with big dreams, but we quickly realized their product faced a tough challenge. The market for earplugs is packed with similar products at lower prices, and without anything that made them stand out, it was hard for them to compete. We told them it wouldn’t be easy, and we tried our best, knowing it was an uphill battle.
Being in a market where this product isn’t something people buy namebrands for, most people who are on the market for silicone earplugs on Amazon are only looking at price and number of reviews, not the brand who’s selling it.
Even though we had a strong start and sold over 250 pairs in the 3rd month, but we couldn’t sustain as China seller were selling the exact same products at a lower price with a ton more reviews than we were. The product started falling and soon we could barely more than 50 pairs a month due to the competition. We ended up closing up the account and sending the earplugs back to Taiwan.
Key Insight: If you’re going to sell the exact same product already out on the market with no improving features, then we better have a lower price point than the current Amazon sellers OR the other sellers on Amazon aren’t yet strong players (not many reviews, ideally under 100-300).
How to Win on Amazon?
- Know Your Market Inside and Out: Do your homework! Understand what your competitors are doing and how your product stacks up. If your product lacks something unique or cannot compete on price, it might not be the right fit for Amazon. Sign up for our research report to learn about your market as a first step.
- Pick the Right Keywords: The right keywords will get your product in front of the right people. Do some research and make sure you’re targeting high-intent search terms. You don’t want to waste time with super broad keywords that are too competitive.
- Make Your Product Stand Out with Great Branding: People on Amazon buy based on visuals. So, ensure your product photos are clear and professional, and show the product in use. Good images can make a big difference in helping your product stand out.
- Write Listings That Convert: Your product listing needs to tell customers exactly why they should buy from you. Highlight the benefits and features clearly, and don’t forget to make it easy to read and digest.
- Be Competitive on Price: Price is key. If your product is priced higher than the competition, offer something special. Whether it’s quality, features, or an extra benefit, make sure customers feel it’s worth paying more for.
- Build Trust with Reviews: Reviews are everything on Amazon. Positive feedback from customers can help boost your credibility. Make sure you deliver a great experience and encourage satisfied customers to leave reviews.
Why Work with Real Digital?
At Real Digital, we’re not just here to set up your account and leave you to figure things out. We offer a free 30-minute consultation where we dive into your brand’s potential on Amazon. We’ll also do in-depth product research to make sure your products are set up for success. And if you want to test the waters, we offer a 3-month trial to see how committed we are to getting you results.
Don’t let the competition scare you – with the right strategy and guidance, your brand can also thrive on Amazon. Let’s make it happen!
Book your Free Consultation with us, or get in touch here: [email protected]