What Amazon’s move to NZ means for NZ Businesses
The ecommerce market is enormous. eMarketer predicts global ecommerce sales will surpass $4 trillion by 2022, with Amazon dominating the ecommerce market’s growth.
Amazon NZ launch
Amazon has had little presence in New Zealand (only Amazon Kindle ebooks were on offer to kiwi consumers). This all changed mid 2021 when Amazon announced it’d ship from it’s Australian warehouses to NZ.
Shipping rates are currently high for bulkier products but this is set to come down as demand rises and supply chains come back online. Coupled with the fact ecommerce is expected to grow by 43% in 2021, ecommerce is big news for NZ businesses wanting to reach the world.
So how can New Zealand businesses take advantage of ecommerce and specifically Amazon?
Sell without an Ecommerce Website
The Amazon Ad portal is quite different to Google and Facebook’s ad platforms . Technically you don’t need an ecommerce website to take advantage of Amazon ads, just a well optimised Amazon landing page can do the trick!
If you produce a product, you can get started with reaching a global audience within minutes.
Manufacturers benefit from Amazon – for now.
Manufacturers have an advantage here. They can sell their products on Amazon directly and benefit from feedback, reviews, price comparisons etc. This is a good place to build your brand but beware, monopolies rarely end well.
However small ecommerce businesses can also benefit from this move with Amazon’s sponsored product ads.
Dropshipping & Fulfilled by Amazon
Not only is Amazon marketing effective at targeting specific customers but you don’t even need to hold product in stock.
You can take advantage of Amazon’s ecommerce platform, they offer a ecommerce service called “Sold by Amazon” which allows you to sell products but without stocking any inventory. What this means is all fulfillment is handled by fulfillment centers who are handling returns, sorting orders and shipping. Sellers are charged a commission for the service with prices varying depending on where the customer lives, depending on location there may also be customs charges.
How does it work?
Sellers create their products on the platform and set their price, delivery time and additional product information. When an item sells it is shipped from the nearest fulfillment center.
But how do these ecommerce ads work? Let’s take an example: I want to buy a new phone case online. The first step is typing the right keywords into the search bar. If I type in “Turtle phone case” chances are I’ll see something like this:
Sponsored Ecommerce Ads on Amazon
The ad above is an ecommerce sponsored product ad which only contains the keyword “Turtle Phone Case.” The advertiser has paid around $1 every time someone clicks on their ad. The price for these Amazon ecommerce ads varies according to the product being promoted and how many competitors there are bidding on keywords.
These ads are a great way to beat out the competition and reach a larger audience.
Target users by Amazon Search History
Amazon also lets advertisers target users based on their search history across Amazon properties long after they leave your product page. Retargeting ads target users with the items they were looking at in the past for better recall and conversions.
Amazon v/s Facebook v/s Google
As mentioned earlier, the ad platform Amazon uses is different to what most marketers in NZ are typically used to: Google Ads and Facebook Ads. This is because Amazon was never an option or area of focus. If you’re familiar with the other platforms, picking this one up should take a week – allow 1-2 months to cycle through your tests depending on your ad budget.
The learning curve on Amazon can be steep and expensive. Luckily, we’ve been working with Amazon sellers for over 2 years now and can offer your help with set up, management and regular optimisation so you can get the most out of advertising on Amazon. At the time of writing, we’re the only marketing agency in NZ offering Amazon Marketing and can get you started for less than $1000
