The phrase “he’s gonna eat your lunch” or “steal your lunch” refers to the euphemism about school-aged bullies stealing kids’ lunch money. So, it has become a colloquial term for someone essentially taking what’s yours.
Who is coming for Amazon sellers’ lunches though? What do school–yard bullies have to do with e-commerce at all?
The truth is, Amazon sellers have had it “easy” for years. Free traffic, in the form of marketplace visitors, only moderate competition, all primarily competing for PPC impressions, and a focus on product novelty. This is an easy environment to thrive in, relatively speaking.
Contrast that with e-commerce sellers growing their own websites. The traffic doesn’t just come, so they have to become adept at SEO for organic visibility, and ad platforms like Google and Facebook.
Product novelty is important, but they also have to stand out in an enormous sea of sameness on the interwebs, so to survive they must also become incredibly creative.
Like children that get everything handed to them that they want, Amazon sellers have been a little spoiled. This is not necessarily their fault, however. It’s due to the way Amazon has their marketplace set up.
Amazon takes care of traffic, catalog organization, listing layout, optimization, retargeting, and so much more. What is left for the seller? A moderate level of optimization and product differentiation.
Don’t agree? Look at the number of listings that are bare-bones, with only one image, or even low review rating, but still great keyword and sales rank. How does this happen? Because Amazon is doing most of the heavy lifting.
Meanwhile, sellers on Shopify don’t have it so easy. There are a number of skills essential for a successful Shopify store owner to master. First, they are responsible for the entire look of their website. They don’t just have to optimize the words and the product images, they have to optimize EVERYTHING.
Next, Shopify store owners also have to drive their own traffic to their websites. This requires SEO specialization, in order to rank on Google. For reference, yes, there is a level of SEO specialization on Amazon, but the number of competing sites on Google is vastly larger.
Beyond SEO for organic visibility, Shopify sellers also have to master paid advertising. Sure, Amazon has its own complex PPC platform, but it is still all Amazon PPC. Meanwhile, Shopify stores must consider if Facebook, Instagram, Google, Snapchat, or Tiktok are the right ad platform for their products.
Successful Shopify store owners master getting attention, and leveraging various audiences to do so. This puts them ahead of the curve. They understand the importance of excellent creatives, testing, and optimization on a level that Amazon sellers haven’t had to deal with.
You might ask, but aren’t they already here?
Some are, sure. However, there is still likely a wide divide. There are good reasons for this. Owning your own website gives you more control. You control how the website looks and feels. You control the customer experience. Most importantly, you control the communication you have with prospective customers.
Another big factor making Shopify more attractive is that all profits after marketing are kept. No sharing 30 to 50% with Amazon.
For these reasons, the Amazon seller and Shopify seller have been two different entrepreneurs for a long time.
And if we look at the numbers, they suggest the same.
Amazon currently has about 1.5 million active sellers, around half of which sell in the United States. There are currently 2.6 million live Shopify sites in the US, however. That means that, even if every US Amazon seller also had a Shopify site (and we know this statistically cannot be true) there would still be almost 2 million sellers that don’t currently sell on Amazon.
Ok, if this is the case, then why are they “coming to the Amazon marketplace?”
In the last couple of years, two of the largest platforms in the world announced that they were updating their privacy policies, which included ending support for certain key targeting functions.
Google announced it will no longer support third party cookies, as well as put an end to behavioral targeting. At the same time, Apple announced that with iOS update 14.5 they would enable app tracking transparency, allowing users to choose whether to let advertisers track their behavior across apps.
Safari and Firefox browsers also no longer support cookies, and later iOS updates now automatically opt users out of app tracking unless the user specifies otherwise. Roughly 95% of users remain opted out of app tracking.
What does all that mean? Conversion metrics, behavior metrics, geolocation data, and more are now no longer visible for marketers on the largest ad platforms. This has a negative impact on audience sizes and targeting in Facebook, Google, LinkedIn, Gmail, and many other popular ad platforms and mediums.
This has led to decreased audience sizes, decreased retargeting effectiveness, increased cost per impression, and decreased ROAS. Ad algorithm learning phases are also taking longer, all leading to less profitable ads.
For these reasons, the Amazon platform is becoming a more attractive option. When ad data made selling “easy” for savvy marketers, sharing so much margin with the Amazon marketplace didn’t make sense.
Now, the advertising effort is less worth it. Combine that with the fact that Amazon itself is continuously increasing the robustness of its ad platforms, and you have a compelling case for selling.
Amazon is rolling out an interesting new offering called “Buy With Prime” that will extend the benefits of Prime shipping to external websites. Currently the feature is invite-only (as with most new Amazon solutions) but the marketplace has plans to roll it out to everyone.
Buy With Prime is essentially an additional checkout option. It adds a button that aptly says “Buy With Prime” below native checkout options on an e-commerce site. When customers click it, they’ll get all benefits of their Prime membership; primarily free 2-day shipping.
This could definitely be interpreted as Amazon looking to court Shopify sellers with an easy means to pull them into their ecosystem. While it still requires FBA and all other becoming-a-seller hurdles, the appeal for Shopify sellers is obvious.
Offering customers a way to use their Prime benefits from an e-commerce site they clearly trust will undoubtedly increase conversion rates. Successful Shopify sellers mostly being conversion-maximalists will see the advantage this provides.
This also means they’ll be able to offer their customers free shipping. The marketing appeal of $0 shipping is strong and Shopify sellers know this.
Once they are in the Amazon ecosystem it will take little effort to shift some focus to selling products on the marketplace itself.
Ok, so what? New sellers come to the platform all the time. What difference does this make?
Let’s go over a short list of what an e-commerce store owner has to do in order to stand out in the insane sea of competitors online.
The way our human attention spans work, imagery and video are the ways to get noticed. This is why platforms such as TikTok took off so much, as well as YouTube and Instagram before that.
Amazon listings are somewhat limited in what media a seller can display. At least, that’s the excuse most use to not put full effort into their listings. In contrast, Shopify store owners are competing in a much larger pool (all of the internet as opposed to just Amazon) and they have control over all of the media placement on their site.
That is why successful e-commerce store owners have to get excellent at creating compelling media. They become masters of understanding how imagery impacts mood and emotion. They understand why it’s important to include recurring themes and create mental associations. They get really good at drawing the eye to where it needs to be and grabbing attention.
The successful Shopify seller can convey a powerful message that leads to conversions with images and video. They’re forced to compete at a much higher level, so conversion optimization is the key metric.
While Shopify conversion rates are lower than the average Amazon conversion rate, this is because they compete with tremendous irrelevant traffic. When these skills are applied to Amazon, the results can be astounding.
Not only is this creative imagery superpower applicable to listings, but it is also deployed regularly in advertisements. Facebook ads, for example, require creative media in a regular rotation, meaning sellers are creating images, carousels, videos, and more weekly, if not daily.
Furthermore, the constantly evolving media types that these platforms make available mean that new creative angles are always tested. And as Amazon’s vast advertising offerings expand, these skills become directly transferable.
One of the biggest advantages that e-commerce store owners have over marketplace sellers is their conditioning to testing. Due to the constraints of marketplaces, many new sellers don’t learn the value of testing until they become much more advanced.
Whereas, in order to find success with your own store, testing is a beginner-level skill you must develop quickly.
Shopify sellers are constantly testing images, copy, and layouts, becoming quick to identify what works and optimizing on the fly. Whether it be ads, landing pages, or listings, these sellers are in a constant state of testing, tracking, evaluating, and adjusting.
And if you don’t think that would be a valuable skill on the Amazon platform, you’d be sorely mistaken.
The deprecation of third-party tracking has definitely cut into advertisers’ profits. However, that doesn’t mean they’ll abandon ad platforms.
This means that once these Shopify-new-to-Amazon sellers figure out that Amazon rewards external traffic with ranking, they’ll be wiping the floor with the average seller who has yet to figure out how to run ads on external platforms.
Just as Amazon sellers start to grasp the concept of Google ads to their listing, Shopify veterans will be outperforming them on Facebook, Instagram, TikTok, Snapchat and more. Often with better creatives, better copy, and better strategies.
The moral of this story is, the Amazon easy ride is about to end. Competition is going to push the space into actually treating their brands like real brands. When this happens, those with extensive experience building a brand will win out.
So how do you prepare?
Gone are the days where you could just get someone on Fiverr to put together some passable 3D mockups of your products and call it a day. In order to dominate your space, you’ll need to take optimization seriously, and you do that with amazing creatives.
That is why Signalytics offers top-notch image and video services for Amazon sellers. Our expert graphic designers and video editors apply consumer psychology principles to make your products look as desirable as possible.
We put effort and forethought into every element, from brand logo placement to color scheme, angle, background, and more. If you want to compete with, and win against, Shopify competitors on the Amazon marketplace, amazing creatives is how you can do it, and we are here to help.
What about testing?
Amazon sellers have a number of options for testing available these days. Brand experiments is an A/B testing platform available on the Amazon Brand Analytics back end. This is a fantastic tool, but it has its limitations.
For starters, when you A/B test, you are still restricted to the creatives and copy you input. But what if all of your images and copywriting aren’t very good? Testing bad against worse will provide some improvement, but you won’t really know how you can do better.
As a response to this, many sellers are turning to survey services. Logically, it makes sense when you are wondering which image or copy would be most appealing to just ask people their preference.
The problem is, this is incredibly inefficient. The reason is because we humans really don’t know why we like what we like, or choose what we choose. Countless experiments have uncovered that, despite our feelings to the contrary, our motivations are a mystery.
The better approach is to level up your data with heat maps. Heat maps are popular among Shopify and other self-hosted e-commerce stores. They provide invaluable information about where shoppers’ eyes are drawn, what content they spend time-consuming, and what ultimately motivates a click or a purchase.
Unfortunately, since Amazon owns your listings, installing heat map software isn’t possible on the platform. Thankfully, however, Signalytics has a solution. Using the power of artificial intelligence, we can accurately simulate Amazon buyer behavior and uncover the precise layouts, wording, fonts, imagery, backgrounds, and more, that get shoppers to buy.
Ok, but how do you master external traffic?
Regardless of what changes are made to ad platforms’ privacy policies, external traffic will always be an important element of scaling an e-commerce operation. Learning to master media buying can be a daunting task, but it needn’t be a challenge you take on alone.
Signalytics offers some of the most talented media buyers that get real results for our clients. We can gain your brand visibility on a number of ad platforms (TikTok is one of our most popular). We also offer managed Amazon advertising solutions, including DSP.
Amazon’s DSP is another effective way to gain external exposure without loss of data (using Amazon 1P data).
The future of building a brand on Amazon may begin to get more intense, but you don’t have to get your lunch money stolen. Prepare for the incoming fight, defend your brand against would-be bullies, and secure a profitable future for your e-commerce business.