Only the top 2.1% of Amazon Sellers make over 10 million dollars every year, according to AMZ Insight. Also, the average income from selling on Amazon is nearly $30,000 in annual profits, according to Jungle Scout.
Success is an abstract definition, and most Amazon brands have slow and steady growth, stable and very realistic results.
To give you an example, in the following paragraphs, we will discuss a small Lithuanian “Home & Kitchen” family brand that perfectly represents the slow and steady account growth through the Product Lifecycle.
We are going to talk about a US launch from “scratch” – no reviews and no presence outside of Amazon. It is only what we’ve learned from working with this company and its products in the EU. We are going to cover the EU case study next time.
Before we jump into details, we need to remember the essentials of selling on Amazon and the basics of the Product Lifecycle.
Essentials of Amazon products:
It is essential to offer a high-quality and robust product. The success of any marketing strategy or advertising investment depends on the inherent value of the item being sold.
Low-quality products, regardless of your promotional efforts, are unlikely to achieve successful results. It has to offer a good value for its price tag and something crucial – choose a niche/market that IS NOT oversaturated.
The product we will talk about has all these characteristics.
Based on the characteristics above, we started with multiple parent variations to dominate the search results and advertising real estate if we had enough budget.
Product Lifecycle:
The Product Lifecycle consists of 4 stages. The first two are united in one big time frame – Building Foundations.
After this introduction, it’s time to dive deep into the case study.
We started working with this company in early 2019. They began working with us in the German marketplace on a small scale, with other brands in various categories before they launched their own brand.
By the end of 2019, their company was making around €5K in monthly profit. They launched their brand in the EU in early 2020. By the end of the year the new brand generated €260K in sales and €50k in profit.
In 2021 in the EU we generated around €200K in net profit – €160K from the new brand.
In 2022, we generated €290K in profit – €230K from the “new” brand.
Finally, in 2022, we almost reached “the top” of the market in the EU, and we hit similar numbers in 2023 – €290K in profit and €255K of that from the new brand.
We still believe there is a bit more for us to grow in the EU, but we dominated the market a long time ago, but that’s a story for another time.
For now, let’s dive into the product lifecycle and the US launch
What were our main goals for the brand? To grow as profitability as possible and establish the brand in the new marketplace (amazon.com).
We reached these goals by building a solid advertising (PPC) structure following the Product Lifecycle model.
Phase 0 – Pre-Launch
It always takes some time to get started with a new marketplace and every new brand faces new issues.
In this case, our biggest hurdle was that ALL of our EU ASINs were stolen. There were other brands and products listed under our EU ASINs in the US market including our EU reviews. It seemed like a Chinese black hat tactic.
After several months of fights with Amazon, we decided to launch the products with new ASINs. That means we launched them without any reviews or connection to our established EU presence.
After the listings were created, we began uploading our highly SEO-optimized copies, infographics, and A+ content. Unfortunately, A++ content wasn’t possible at that time for the brand.
One more big struggle hit us! Pesticides! What we suspected was our copies contained quite a few variations of one of the keywords for products related to pesticides.
Since that word is crucial for our product, we had to fight Amazon. It took us some time, but our senior specialists managed to unblock 100+ SKUs. This was what we started with.
Once the listings were unblocked and our client sent the first batch of stock – we were ready to launch.
Phase 1 – Product Launch
We began with 10-15 parent variations. Even before launching, we had a solid strategy in mind.
The brand didn’t have any Amazon history, so we started building advertising foundations from the ground up.
To reach оur goals, we began the product mapping. We started targeting the top 5-10 main search terms we knew that our product should convert. We separated each target into its own campaign. As well as in separate campaigns targeting 5-10 of our top competitors that were already ranking organically where we wanted to grow. The goal of product mapping is to create a proper understanding for the marketplace about what your product is and where it should be indexed.
After the product mapping, we began launching exploration campaigns with the main 20-30 keywords from multiple keyword families.
They consist of
Since we were working with many variations, we had to create hundreds of campaigns, to make sure every parent could be shown in the same search terms, thus dominating the advertising results.
We also expanded our exact and ASIN targeting campaigns of ASINs and search terms, that we had “proof” are already converting from our exploration campaigns and chose to dominate with our assortment volume. The majority of these campaigns only had 1 target within, to allow us maximum flexibility while optimizing ToS and all other metrics per target,
Overall, we spent the first 6 months launching the product, analyzing and growing the advertising structure, and tracking organic ranking, while operating with ~0% profit margin.
If you want to stay for the long Amazon race, you have to be prepared and understand that you will usually work below the 0% net profit margin in the first months or even a year. It is a realistic, expected result because you are still working on the visibility and sales growth of your brand when the majority of your sales come from advertising.
After spending 8 months positioning our client’s brand on the marketplace and reaching stability, it was time to start working on profitability. We hit the second stage of the Product Lifecycle.
Phase 2 – Growth Phase
From an advertising point of view, we more or less managed to dominate the market by separating the individual targets (KWs) into their campaigns. This way, we could control the Top-of-Search at its peak with all of our parent ASINs.
In this stage, one of our strongest moves was to be heavily into a Defence strategy.
This strategy protects your product detailed page from your competitors. The way it works is to fill in all the places where your competitors might advertise under your listing. We make sure to get our ToS IS of ASIN SP campaigns at around 80% and make sure our SD and SB campaigns are always visible under our PDPs.
We would also try to do the same thing for our competitors’ listings, which were receiving a big amount of traffic. This way, no matter what listing the customer landed – they would almost always see our products and nothing else.
The product you see in these images is an example of a Defense strategy. It’s not the case study product.
All possible spots are taken by products from the same brand.
From over a dozen parent ASINs, 90% of our sales come from 5 of them. The other parent variations were used mainly for our Defence strategy.
In the Growth phase, we ran mainly Sponsored Product campaigns to increase our sales and organic ranking.
One of the factors that helped us a lot was the winter season coming up (this niche performs better during the cold months).
We spent another 12 months, building foundations, growing organic ranking, and stabilizing stock levels while being profitable.
What were the results?
We started growing in revenue, and our average monthly profit was over $10K.
It took us 1 more year since launching our products to continuously establish ourselves in the marketplace.
In September 2022, we were at the next level, and we could manage our ad spend even more. In October, we reached $16K in profit.
After the second winter season passed by, we stepped into 2023 at a much higher stage in terms of profit and revenue.
Phase 3 – Cash Cow Phase
The account is now in the CashCow Phase, where we count more on Sponsored Brands and Sponsored Display – to establish the brand even more.
In 2023 we also finally upgraded our A+ content to premium A+ and added a beautiful brand story. This change is helping establish our trustworthiness as a brand even more.
At this stage, we are focused on testing new search terms that appear in the market. We also continue investing in our current products’ quality, manufacturing equipment, and content.
Any new competition that arrives in our niche is “killed” by us heavily advertising under their brand name and ASINs. We do it with a target ToS IS of at least 80% attacking advertising campaigns, and launching new products in similar, highly potential niches.
In the CashCow Phase, the account is averaging $14k monthly profit. The only potential for growth remains new products, natural niche growth, or expansion to new markets.
In 2023 for the US market, we hit the goals we started with:
At this point, we don’t have anywhere else to grow in the niche. The only potential for growth remains new products and natural niche growth.
One of our growing plans was to expand on Amazon.ca. We were able to launch on the Canadian marketplace with our US ASINs and with all the reviews accumulated in the USA market. It took us almost a year to get past all the new marketplace issues, including logistics, compliance, pesticides, suspensions, etc).
Even though Canada is a much smaller market and the potential revenue is not high, after almost a year in this market, we reached a highlight of CAD 7K profit per month.
SUCCESS doesn’t necessarily mean extraordinary numbers or million-dollar daily sales. It hides in each brand’s goals and road to reach them.
What you shouldn’t forget is it takes time and investment (of time, money, and dedication) to start benefiting from the Amazon marketplace.
If you are open to seeking help when it’s needed and you know exactly what you want, you are open to following the natural product lifecycle, you have a good product and patience to grow it, you will win the race!
Do you want to be the next Amazon winner? Leave your message through our form and we will contact you!
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