The Amazon Jungle. Rick Cesari

The steps laid out in these pages are inspired by the 7 Steps to Amazon Success, around which my marketing agency was created. This book goes deeper, providing the kind of detail that is meant to help Seller’s navigate the Amazon platform without retaining a consultant. While success on Amazon is not as easy as it used to be, there are literally millions of Sellers on the online platform, growing every day. But the percentage of Sellers succeeding on Amazon is surprisingly low. Of the 2.7 million U.S. Sellers, for example, only 6% (approx. 168,000) are generating sales of $100,000 a year or more, while fewer than 1.5% (approx. 40,000) are at $500,000 a year in sales.⁴ As a former Amazon Top 200 Seller, I have the battle-scars and experience to help Sellers climb in the rankings and the humility to admit it’s not that easy.

      Being an Amazon Seller is hard, really hard, but together with my brothers, we found creative ways to adapt and, ultimately, thrive. But it wasn’t until I met billion dollar brand-maker Rick Cesari that we reached the “next level,” incorporating his merchandising magic into our Seller’s Survival Guide. It was Rick who taught me how to put the customer at the center of every product decision—authentically. And it is here where we 3P Sellers have Amazon beat; where the little guy actually has the advantage.

      While Amazon retail and 1P sellers are limited in the information they can share through product listings, 3P Sellers have greater freedom to create a strong presence beyond Amazon. I can’t stress this enough. Rick and I both like to say that we’re sales agnostic; that a sale is a sale, regardless of its point of origin. While listing your products on Amazon should be a fundamental feature of every product marketing plan, limiting yourself to Amazon hinders your chances of creating an enduring brand. Furthermore, your success off Amazon will enhance your performance on Amazon. In Chapter 10, Rick goes into great detail about the value of expanding your business off Amazon, with helpful tips from his favorite omni-channel approach to marketing.

      Throughout this book, you’ll learn more about the sizable opportunities available to Amazon Sellers, as well as reliable sales and marketing strategies designed to safeguard you from the digital quicksand. Rick and I will share our years of experience both on and off Amazon, with the goal of equipping you with the same knowledge and winning strategies that helped us create brands and consistently grow sales for our clients. The Amazon Third-Party Seller is the lifeblood of Amazon.com and my dream, Mr. Bezos, is for 3P Sellers to have a meaningful seat at your table. Amazon would not exist as the retail e-commerce giant it is today without 3P Sellers, nor will Amazon have a bright future without them. The more that Amazon Sellers succeed today by doing things the right way for their customers, the more I believe my dream will come true.

      Jason Boyce

      Princeton, New Jersey

SECTION I

      Chapter 1:

      FROM NOWHERE TO EVERYWHERE

      “AMAZON IS AN UTTER PHENOMENON AND THERE’S HARDLY BEEN ANYTHING LIKE IT IN THE HISTORY OF OUR COUNTRY.”

      CHARLES MUNGER, LONGTIME BUSINESS PARTNER OF WARREN BUFFET

      My journey on Amazon started in 2003, long before Jeff Bezos realized his vision of the Everything Store we know today. Amazon offered products in multiple categories, like books, electronics, even clothing, but it wasn’t anything like it is now. After the dot-com bubble burst in 2001, Amazon was hurting and relied on a deal it struck with Toys “R” Us in August of 2000 (among other deals) to keep it alive. Under that agreement, Toys “R” Us paid $50 million a year for 10 years, plus a percentage of sales, for an exclusivity provision with exceptions that made them the sole seller of toys on Amazon.

      But in 2002 Amazon started allowing other businesses to list their goods on the Amazon.com platform, including toys. I know, because in the holiday season of 2003, I was making daily trips in a U-Haul Truck to a Los Angeles distribution center to fill orders for the Razor Scooters I’d sold on Amazon the night before—thousands upon thousands of them. My brothers and I were selling the same scooter on Amazon that Toys “R” Us was selling, and we were killing it! Not surprisingly, Toys “R” Us was not pleased, and they later filed a lawsuit against Amazon that took them more than a decade to win. In the meantime, Amazon doubled in size and Toys “R” Us went bankrupt.

      Not only was Amazon inviting greater competition among Sellers who were selling to Amazon, known as first-party sellers (1P), but Team Bezos had opened the door to Third-Party Sellers (3P), who sold products on Amazon. Saul Hansell, in an article for The New York Times explained Amazon’s virtual surge as motivated by the desire “to replicate the success of eBay,” whose first-of-its-kind digital auction-style format was kicking Amazon’s butt.⁵

      In 2003 we were one of the first to get a phone call from Amazon, back when desk telephones were still wired to the wall, about selling our basketball hoops in their brand new Sports & Outdoors category. At the time, the hoops, for which we were driving online traffic (at a nickel a click) were noticeably outperforming other hoops on search engines like Overture.com (later acquired by Yahoo). In fact, we were selling basketball hoops on Amazon.com before Amazon itself was selling basketball hoops on Amazon!

      Of course we weren’t the only ones being recruited to expand Amazon’s stake in the virtual marketplace. Amazon was calling everyone with an online presence. What began as an easy new sales channel for us pioneers quickly became harder as more sellers flocked to sell their wares on the new online marketplace. Back then, my brothers and I were selling other people’s brands, a model that later became unsustainable for us on Amazon because every time a new Seller launched the same product, they’d do so at a lower price to win the sale. In response, we were forced to lower our prices and our profit margins began to shrink—fast. To compound the problem, Amazon itself got into the game, buying our same products from the same brands and selling them for less.

      Spalding was a top-selling brand for us at the time. In fact, we sold so many Spalding basketball products online that Spalding gave us all-expense-paid trips to attend NBA All-Star games for four straight years in a row. The best part? We were booked into the same hotels as the NBA legends. I’ll never forget telling Shaq in a hotel elevator how he broke my heart when he left Los Angeles for Miami! But as competition exploded on Amazon, boosted by the Prime Free 2-Day Shipping rollout in 2005, we went from owning the coveted Buy Box for most of Spalding’s top-selling products to losing them all to Amazon, along with that all-expense-paid All-Star experience. Oh well, thanks for the memories.

      We knew this would happen eventually, but we were shocked by how quickly Amazon bought and resold every brand imaginable. They had the traffic data, product data, sales data, and knowledge from 3P Sellers like us to literally take over entire categories—overnight. Add to it the tremendous buying power of Amazon; then subtract out the small guys’ ability to compete. The only way to maintain our sales and stay in the Buy Box was to lower prices. This race to the bottom became an inevitable consequence of Amazon’s Marketplace structure, and it was no doubt part of Mr. Bezos’ original vision to have the lowest prices, no matter what. This phenomenon still vexes Sellers today, and it eventually forced my brothers and me to rethink our entire approach to selling online. This process repeated itself four times over the years until we finally landed on the strategy that I will share with you in the coming chapters.

IT’S BIGGER THAN YOU THINK

      Amazon is everywhere. It is on a speedy trajectory to become the largest retailer in the United States as it continues to gain on Walmart. Nearly half of the U.S. e-commerce market share already belongs to Amazon, with eBay, once the dominant leader in the field, in a distant second position with just 6.6% of online market share.⁶

      Ironically,