There’s a couple of good things coming out of the Northwestern retailer.

With grim news all around for retailers, the expectations on Wall Street were an earnings decline for Amazon during the past quarter, but they were able to buck the trend and report highly favorable numbers, not long after reporting their best numbers ever.

As a result Amazon closed up 17.6% on Friday, proving that online retail, at least in this case, is still going strong as people hunt for as many bargains as they can.

In other news, a long awaited feature from Amazon has finally arrived, dealing with their Amazon Product Ads line.

While known primarily for a one stop retail shop, as well as being a marketplace in which users buy from 3rd party merchants directly on Amazon’s site, their Product Ads line is the lesser known, PPC/CPC program, in which the process is more similar to the way comparison shopping works.

More information can be found on Amazon’s site, but essentially the ads are displayed on the side, and once a user clicks through, they are taken to the merchant’s site (as they would on a shopping engine) and in turn the merchant pays Amazon a fee for it.

Up until now then the only way a merchant can submit a feed is through their own browser, which was much less practical for any merchant with a sizable amount of products that required constant updating–but now Amazon has released an FTP feature which practically all major CSE’s currently have, and do.

FTP (File Transfer Protocol) Support for Product Ads uploads, our most-requested feature, is now live! You may now use FTP to send us your Product Ads data files. With FTP, you can schedule uploads so that your ads are always up to date.

Currently Product Ads is lesser known in the markets, and can probably be described as a combination of  PPC advertising, such as Google Adwords, since they’re contextual based–as well as comparison shopping, since people searching on Amazon are looking to purchase items anyway.

This presents a great opportunity for merchants looking to expand their campaigns, if for no other reason than Amazon’s shear traffic numbers.

Well it’s a happy holiday for at least one online retailer out there, as Amazon is reporting that it’s 2008 shopping season is it’s greatest ever, in spite (or perhaps because) of the state of the economy.

With the wallets of consumers being a bit tighter this year, and with the tech saviness of the average shopper increasing, more and more are going online to find bargains that they would otherwise not find in retail stores.

It will be interesting to see how other channels of retail, both online and off have fared during this season. We’ve already seen a major spike in traffic for the top retail sites–and if all goes as expected, this may be the definitive point where we truly see online shopping become a true alternative to brick and mortar shopping.

Even if the economy booms again, people may just rather enjoy shopping with their mice and having all the inventory of the world at their hands, rather than heading out to crowded malls, dealing with hectic traffic, only to see items on their shopping list be out of stock.

The next few years will certainly be some to keep your eye on.

While our backgrounds at CPC Strategy revolve around the comparison shopping engines, we’ve found that the marketplaces are an extremely beneficial spot to sell your products as well.

In this post we will discuss the benefits of selling on the marketplaces, such as Amazon, Buy.com, and Overstock.com, and what sorts of advantages a merchant can get here as compared to the CSE’s.

1. Potential Traffic is Limitless – The charts below, generated courtesy of Google trends and Alexa respectively demonstrates just how much more traffic the mother of all retailer websites, Amazon gets than all the rest–in fact, the traffic that all the shopping engines fails to even come close to how much traffic Amazon gets, combined. The number of potential eyeballs just to have access to your products can be overwhelming.
   
2. Rev Share Models Make Sure You Don’t Overspend – One of the major hassles of managing a CSE campaign is getting wasted clicks that don’t amount to anything that the merchant is forced to pay for anyway. With a marketplace such as Amazon, each click that your product generates is completely free of charge, and you only pay Amazon a fee (usually 15%) when a transaction is successful.
3. Cost of Sale % Remains a Constant – Cost of sale % (defined as spend/revenue) can often fluctuate on a daily/weekly/monthly basis on the shopping engines. Depending on a merchant’s margin of revenue, a target COS% can be anywhere from 5 – 25%, and generally the more constant and predictable the value, the better. With Amazon a merchant is essentially guaranteed a 15% COS on all products sold, which may be an overall improvement, or a minor (but predictable) drop off.
4. Associating Your Products with Amazon – As one of the original spots to purchase items online, the name “Amazon” is associated with reliability and quality. It’s a spot where a customer expects to purchase high quality goods combined with a high level of service. You can be sure then that if a customer finds your product, he/she will generally feel safer purchasing through what they think is Amazon.

In fact a lot of consumers won’t even realize they’re purchasing from a 3rd party when they go through Amazon, as they won’t go toward your landing pages at all. Compare this to a typical CSE where a consumer has to click through to a merchant’s landing page in order to complete the purchase.It can almost be thought of as franchising the Amazon name for your products.

Of course, there are a few catches when listing on a marketplace that may be a bit problematic for merchants who are only used to listing on the shopping engines.

Since merchants who post on the marketplaces are essentially piggybacking on the Amazon (or Buy.com or Overstock) name, they expect as a high level of service to be provided as they would with Amazon.

This means that each product has to be highly detailed in accordance with the marketplaces specifications–that is to say certain specifications cannot be omitted when sending a data feed (generally the shopping engines aren’t as strict). For certain merchants who’s data feeds aren’t very dynamic, this can cause issues with the initial feed if a merchant cannot provide these specifications for their products.

Secondly, and this is perhaps the most important detail–merchants must uphold a certain level of positive feedback in order to stay listed on Amazon. Once feedback levels drop below a certain threshold, Amazon reserves the right to delist or even blacklist a merchant from posting on their site again.

It is important to stress then that if you are a merchant thinking of listing on Amazon, be sure that you are:

• capable of handling an increase in orders
• able to ship out all your listed products in a timely fashion and that everything is in inventory

There have been occasions where a merchant gets a sudden, unexpected overload in orders that they are unable to fulfill to Amazon standards, and this minor slip-up causes their feedback to drop suddenly. And once a merchant falls below that threshold and gets delisted, it can become extremely difficult to be able to list on there again.

In essence then–not only can it be a maze to get listed, but to stay listed is no walk in the park either.

-Tien

Want to list on the engines but feeling overwhelmed? Maybe CPC Strategy can help you out Give our presentation a look through and contact us.