Most brands are thoughtful in evaluating the best way to optimize their Amazon catalog, but the decision process often takes months and there is a high occurrence of buyers remorse because the management solution they chose is unable or unwilling to complete the catalog implementation. This blog is intended to help brands thoroughly and expeditiously make this evaluation to determine the best management solution for them. There are five primary criteria for making this evaluation: amount of catalog needing optimization, incentive alignment, support, cost, and time to implement. The three catalog management options are managing in-house, delegating to an existing 3P seller, or working with a professional catalog agency. We have seen all three options work out, and all three options fail, so you’ll also hear about the key indicators when each option is best for brands. There is a comparison chart at the end of this post to accompany the material.
In 2019, savvy brands know Amazon is their most influential marketing channel, so their brand’s presence there is critical. Most brands receive 10 times more traffic on Amazon than their brand’s website. While brands often have a well-crafted message, presence, and selection on their website, their Amazon presence is left to chance. Make no mistake, Amazon makes it much more difficult to optimize a brand presence there than a brand’s own website because brands rent space from Amazon while they own their website. Since Amazon is every brand’s landlord in some way, the key is learning how to communicate with the landlord to build a brand presence that is mutually beneficial to the brand and Amazon.
Criteria #1: Amount of Catalog Needing Optimization
The catalog optimization work itself is tedious, so the number of listings that need to be optimized plays a role in this evaluation. From a 3P sellers perspective, there is a diminishing return on optimizing listings outside of the top 20% because they are only thinking about improving transactions that occur on Amazon rather than the brand’s overall presence. Brands that see the value in having more than their top 20% of skus optimized on Amazon are better off managing in-house or working with an agency who can commit to optimizing as much of the catalog as the brand wants. Finally, if the top 20% of skus represent more than ~10 styles (or Parent ASINs), the volume is typically too much for any 3P seller to handle because of the time it takes to fully implement optimized listings.
Criteria #2: Incentive Alignment
In-house solutions have the highest incentive alignment because the person who executes the catalog is paid to help the brand flourish long term. Agencies are a close second because they are paid for their services, so the agreement between the brand and the agency will create alignment that is satisfactory to both parties. 3P sellers, like any bricks-and-mortar retailer, have conflicting priorities with the brand because they are selling other brands and always have the opportunity to violate MAP in order to get ahead in the short run. For the most part, brands will ask 3P sellers to do this catalog work for free in exchange for the privilege of selling their product. This may work if the brand is big enough and the 3P seller has a track record of implementing catalogs beautifully, but this rarely works out because the 3P seller is ultimately only incentivized to sell more product on Amazon and not care about the overall brand presence as it impacts off-Amazon channels.
Criteria #3: Support
Support varies broadly within each management option. For example, are there two people dedicated to Amazon catalog optimization in-house, or is it managed by one person with competing responsibilities? Most often, managing in-house means there is one employee with competing responsibilities, delegating to a 3P seller means one person with even more competing responsibilities, and an agency has a full team of catalog experts with strategic Amazon contacts to help expedite the process when things get stuck. In order to do this well, the brand must have an appreciation for the amount of time that is necessary to fully implement the catalog. For an average brand optimizing 50 Parent ASINs, this likely means being on the phone or engaging over email with Amazon Seller Support for several hours each day for several months.
Criteria #4: Cost
Since 3P sellers are often asked to do catalog optimization as a favor or requirement to maintain their selling privileges, brands can get away with getting some sort of deliverable for free. As you can guess, the quality of their deliverable is usually sub-par and brands almost always end up evaluating the other two options after a year (or two if the 3P is particularly good at convincing the brand they just need more time!). Managing in-house is going to be less expensive on an hourly comparison to an agency, however the agency should be able to leverage their expertise to finish the catalog optimization between two and five times as fast as managing in-house. Therefore, agencies are a more cost-effective solution compared to managing in-house.
Criteria #5: Time to Implement
An excellent catalog agency sets the bar for how long catalog implementation takes. The average brand who needs 50 Parent ASINs optimized should be implemented within 60-90 days by an excellent agency. This time typically doubles if the listings were originally created by Amazon (called “retail contributions”) when the brand was selling direct to Amazon through Vendor Central. Depending on the amount of support and expertise in catalog implementation, 3P sellers and in-house employees will take anywhere between two and five times as long.
Final Note: No excuses!
More often than not, the catalog is never “fully” implemented because a portion of the optimized listings are held up by Amazon seller support for myriad reasons. Let me be clear, “the catalog can’t be fully implemented because Amazon…” is NOT a valid excuse. It may not be done today, but it can always be done with grit and time. We have done this enough ourselves to be able to confidently say this. Unfortunately, too many brands settle for partial catalog implementation on their most influential marketing channel (Amazon), when they should not. As an agency ourselves, we promise to fully implement the catalog with no excuses. Any agency, 3P seller, or in-house employee needs to be held to the same standard. We are on a mission to create better brand experiences on Amazon, and all brands can do their part by holding their catalog manager to this “no excuses” standard.
Other posts for further learning on this topic: