While Amazon provides an incredible platform for launching and growing an eCommerce business, relying solely on it comes with significant risks. Amazon’s marketplace is crowded, competitive, and subject to constant changes in algorithms and policies. To ensure the long-term success and sustainability of your business, it’s crucial to build a strong brand presence outside of Amazon. In this post, we’ll explore why diversifying your brand beyond Amazon is essential, how doing so can increase your business’s value, and practical strategies for establishing your brand across other platforms and channels.
The Risks of Relying Solely on Amazon
Amazon’s Control Over Your Business
When you sell exclusively on Amazon, you’re playing by their rules. This means you’re subject to their fees, policy changes, and even the possibility of account suspension. If your entire business relies on Amazon, any disruption—such as a sudden change in their algorithm or policy—can severely impact your revenue stream.
Intense Competition and Price Wars
Amazon’s marketplace is incredibly competitive. Sellers often find themselves in price wars, with thin margins and constant pressure to lower prices to stay competitive. This environment can make it difficult to build brand loyalty, as customers often prioritize price over brand when making purchasing decisions on Amazon.
Limited Customer Relationship Building
On Amazon, you don’t own the customer relationship—Amazon does. This limits your ability to directly engage with your customers, collect valuable data, and foster brand loyalty. Building a brand outside of Amazon allows you to create a direct connection with your customers, offering a more personalized and engaging experience.
The Benefits of Building a Brand Outside of Amazon
Establishing a Unique Brand Identity
By building your brand outside of Amazon, you have full control over how your brand is presented to your audience. You can create a unique brand identity that resonates with your target customers, differentiate yourself from competitors, and build a loyal customer base that values your brand for more than just low prices.
Diversifying Revenue Streams
Expanding your brand beyond Amazon allows you to tap into multiple revenue streams. Whether through your own eCommerce website, social media, or other marketplaces, diversifying your sales channels reduces your dependency on a single platform and increases your business’s resilience against market changes.
Enhancing Customer Relationships
Owning your brand outside of Amazon means you can directly interact with your customers. This opens up opportunities for personalized marketing, customer retention strategies, and loyalty programs. You can collect customer data, understand their preferences, and build a community around your brand, all of which contribute to long-term customer loyalty.
Achieving a Higher Multiple When Selling Your Business
Amazon brands that have developed strong off-Amazon sales channels often command higher multiples when they sell their business. Buyers value diversified revenue streams and a strong brand presence across multiple platforms because they reduce the risk associated with relying on a single marketplace. A well-established off-Amazon brand signals to potential buyers that the business is more sustainable and has greater growth potential, making it a more attractive investment.
Understanding the LTV Pyramid
When expanding your brand outside of Amazon, it’s crucial to understand the LTV Pyramid. At the top of the pyramid are customers who purchase directly from your website and then subscribe to ongoing services or products, representing the highest LTV. Next are customers who first purchase on Amazon and then subscribe directly through your website. Lower down are customers who subscribe directly on your website, followed by those who subscribe on Amazon. Finally, at the bottom are customers who only make one-time purchases on Amazon. By focusing on the upper tiers of this pyramid, particularly through direct sales channels, you can significantly enhance your overall LTV and brand value.
How to Build Your Brand Outside of Amazon
Develop Your Own eCommerce Website
Creating your own eCommerce website is a crucial step in establishing your brand outside of Amazon. Your website is your digital storefront, where you can fully control the customer experience, showcase your products, and tell your brand story. Use platforms like Shopify, WooCommerce, or Magento to create a professional, user-friendly site that reflects your brand’s identity.
Leverage Social Media for Brand Building
Social media platforms like Instagram, Facebook, and Pinterest are powerful tools for building your brand’s presence. Use these platforms to connect with your audience, share your brand’s story, and showcase your products in a way that resonates with your target market. Engaging content, regular updates, and interactive features like polls and stories can help you build a loyal following.
Invest in Content Marketing
Content marketing is a powerful way to build your brand outside of Amazon. By creating valuable, relevant content that addresses your audience’s pain points and interests, you can establish your brand as a thought leader in your industry. Start a blog, create video tutorials, or offer downloadable resources that showcase your expertise and provide value to your customers.
Build an Email List for Direct Communication
Email marketing is one of the most effective ways to build and maintain customer relationships. Start by building an email list through your website and social media channels. Use email campaigns to share news, special offers, and personalized content with your subscribers. This direct line of communication allows you to nurture leads, drive repeat purchases, and foster brand loyalty.
Explore Additional Marketplaces
In addition to your own website, consider selling on other online marketplaces like eBay, Walmart, or Etsy, depending on your product category. Each platform has its own audience and advantages, and diversifying your presence across multiple marketplaces can help you reach a broader customer base.
Case Study – A Brand That Thrived by Expanding Beyond Amazon
A Health Supplement Brand’s Success Story
A health supplement brand initially launched exclusively on Amazon, quickly gaining traction due to the platform’s vast customer base. However, the brand faced increasing competition and fluctuating sales due to Amazon’s changing algorithms. Recognizing the need to build a more sustainable business, the brand decided to expand its presence beyond Amazon.
Steps Taken:
- Website Launch: The brand developed its own eCommerce website, offering a direct purchase option with exclusive discounts for website customers.
- Content Marketing: They started a blog focused on health and wellness, providing valuable content that attracted a dedicated audience.
- Social Media Engagement: The brand leveraged TikTok, Instagram and Facebook to share customer testimonials, product updates, and educational content, building a strong online community.
- Email Marketing: By collecting email addresses through their website and social media, the brand launched personalized email campaigns that drove repeat purchases.
Results:
The brand saw a significant increase in revenue from their own website and a substantial improvement in customer loyalty. Additionally, when the brand later considered selling their business, the diversified revenue streams and strong off-Amazon presence allowed them to command a higher multiple, making the business a more attractive investment for potential buyers.
The Path to Long-Term Success
While Amazon provides an excellent platform for launching a business, building a brand outside of Amazon is crucial for long-term success. By establishing a strong brand identity, diversifying your revenue streams, and directly engaging with your customers, you can create a resilient business that thrives in a competitive market. Start by developing your own eCommerce website, leveraging social media, and investing in content marketing to build a brand that lasts. Remember, a well-established brand outside of Amazon not only enhances your current revenue but also significantly increases the value of your business when it comes time to sell.