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A successful ecommerce strategy takes more than an online shopping cart for your product or service. You’ll probably want some kind of online ads.
But that can be hit or miss. How do they really work? What can you do to create a truly successful ecommerce strategy?
Chris Moe explains how in this information packed episode.
What You’ll Discover About eCommerce Strategy:
* The 5 pieces of information every successful ecommerce strategy includes on their Amazon page
* How to include a realistic investment level into your ecommerce strategy
* How to find the search volume on Amazon for better product placement in your ecommerce strategy
* The biggest mistake businesses make in trying to create a successful ecommerce strategy
* And MUCH more.
Guest: Chris Moe
Cartograph Co-Founder, Chris Moe
Chris is the Co-Founder of Cartograph, a team of 60+ people that help CPG and e-commerce brands grow their companies on Amazon. They currently manage $100M+ in GMV.
Their clients include Magic Spoon, Four Sigmatic, Lemon Perfect, Popchips, and Kin Euphorics.
Chris himself has 10+ years experience in sales and marketing. Before Cartograph, he worked at McKinsey as an Engagement Manager helping consumer companies in the US, Canada, Brazil, Europe, and Australia, with growth and pricing,
He attended Cornell University, where he led a group that recycled and sent computers to developing countries and interned at Google on the Google Earth team.
Related Resources:
If you liked this interview, you might also enjoy our other Marketing episodes.
Contact Chris and connect with him on LinkedIn and Twitter.
The Amazon Research Tool Chris mentioned during the interview
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How to Create a Booming eCommerce Strategy
Welcome to Business Confidential Now, the weekly podcast for smart executives, managers, and entrepreneurs looking to improve business performance and their bottom line. I’m your host, Hanna Hasl-Kelchner, and today’s amazing guest is Chris Moe. He’s the co-founder of Cartograph, a team of more than 60 people that help consumer packaged goods and ecommerce brands grow their companies on Amazon. Welcome to Business Confidential Now, Chris.
Thanks. Thanks for having me. I’m really excited to chat today.
Me, too. Chris, you’ve helped a number of brands build a successful ecommerce strategy, and everyone loves the idea of making money online while you sleep. But most of us suspect…
Yeah. [Laughter]
…that a successful ecommerce strategy doesn’t happen overnight. Help us understand what basic building blocks are necessary for a successful ecommerce strategy.
Sure. So just to set it up a little bit, we work primarily with CPG brands, so mostly stuff that you would see in a Whole Foods are our clients. And so we sell about $150 million per year online between around 70 of our different clients on Amazon. And so ecommerce strategies, first and foremost, they start with a good product and I think that’s tricky.
Like, you can’t fake that. You have to make a product that you know is good quality and speaks to your audience. And only once you do that, and it usually takes a fair amount of time and a lot of testing offline, can you start to then venture into the online world.
Well, all right. But there’s some building blocks that you need. You don’t just say, “Click and buy my line,” do you? Maybe you do.
Yeah. You know, I mean, once you have a product, it’s actually pretty easy. You know, you register on Amazon. Usually, what you’ll do is you’ll use Amazon – Fulfillment by Amazon network which is one of the largest logistics networks in the world and lets you, for very low cost, ship your product anywhere, Prime shipping to everyone in the US. And so you register for that.
It can be really helpful to build a basic P&L to understand exactly how much money you’re going to make per unit and how you should price your product. And then, once you’ve got the product into Amazon, usually while you’re sending it into Amazon, you should really focus on building compelling content and compelling pages that not only show, but also tell the story of not just what your product is, but why someone would want it and how it would fit into somebody’s life.
Aha. So, there is more to it than just click, click, Amazon, here I am. [Laughter] All right, now we’re getting somewhere, Chris. We’re getting somewhere. All right. Compelling pages. Give me an example.
Well, what you’ll find is if you look at a compelling page, a high performing page on Amazon, and compare it to an average page on Amazon, at first glance, they might look similar, but on further inspection, they’ll be actually quite different in a lot of small ways. The first place we’ll start is the hero image or the main image. This is the image that shows up in a search on Amazon or whenever you type in a term, it’s the first thing you see there.
And actually, I want to focus on that little square that you see in search, because that has four or five of the most important components of really of what the content is on Amazon. So the first is the title. So the title, you want to be descriptive. You want to make sure that you have the word highlighted on there that you know your consumers care about. In the food world, it’s often something related to a specific diet, a specific nutrition fact or a flavor, or is it vegan, is it keto, is it low sugar, or something like that? Next item on there is the hero image. And so that’s the main image.
And what we try to do on that is make sure that it really does a good job of telling exactly what you get. A perfect example of where this is confusing is if you buy beverages on Amazon. Sometimes they’ll put a single can or single bottle on the image, or other times they’ll put a box on there. And to the consumer, it’s not super obvious what you’re actually getting.
And so what you can do to show exactly how much you get, we actually even Photoshopped the labels or photoshopped the boxes to tell you exactly what’s in there can have a huge impact on your performance. And then your ship speed. I mean, anyone who shops on Amazon knows that if they can get it tomorrow, that’s way better than having to wait for next week. Price obviously matters. And then finally, your reviews matter a lot, and it’s really important to make sure you have a good review base.
All right. So, we got those five pieces. That’s really good. Thank you for that. I appreciate that. Now, what about advertising online? How important and what role does that play in a successful ecommerce strategy? Because what you’ve told me up to now with these five components, it’s like if you build it, they will come. Just do a good job building it. But I have a feeling, you see these ads all over the place and maybe somebody did do this.
Maybe they need to tweak it a little bit more. Okay, I’ll grant you that. But they want to be able to accelerate their sales. They want to accelerate their visibility. You know, John Wanamaker, the founder of Wanamaker Department stores at the turn of the last century, famously said, “Half my advertising spend is wasted. The trouble is, I don’t know which half.” In your experience, is that the case on Amazon?
It certainly can be, but I think you can know a lot better than John did back years ago, because you actually know exactly what every single click goes to and whatever every single dollar goes to.
Tell me more about that.
Yeah. So I think first, let’s start with why you would advertise on it. The way that Amazon works is Amazon is actually a jack rank of every product sold on the website in terms of how many units are shipped per day. And that’s how the entire site is structured. It has categories and subcategories, so there’s ranks by category.
But really, that’s the metric you’re trying to amplify the most when you advertise. Because Amazon has all of this extra space on their pages. It’s on the home page, it’s email recommendations, it’s on the side of product pages, it’s in search results. And what – really what the ROI is on Amazon is if you are able to get your sales rank, which is that stacked rank, it’s the Amazon term for you.
If you’re able to get your sales rank up, then Amazon will give you free traffic. And so not only do you want to make money on every sale on Amazon, but the real ROI, the feedback loop, what people in the Amazon world call the flywheel, is when you get that sales rank up and you start to get traffic to your pages.
Well, how much do you have to increase it in order to get the traffic?
It’s a good question. It really depends upon by category. What I’ll say is that it probably is a smaller number than most people think in category. I mean, we were recently talking to a popcorn brand and they were a rather big deal and they ended up in the top five of all microwave popcorn. And they were surprised that it was only $5,000.00 a day.
Doesn’t have to be an enormous number to be a really good selling product. But really, with all of that logic of you’re trying to get your sales rank as high as possible, really what you’re trying to do with your ads is get as many sales as possible driven by advertisements. So the cheaper the ad, the better the ad, it will get you better sales rank and it’ll get you more sales.
All right. Well, how do you do that? Because not everybody has a budget of $5,000.00 a day.
Right.
That’s $35,000.00 a week. You do the math.
You’re right.
The small, medium-sized business doesn’t have that kind of extra cash lying around. And so how can they just get their toe in the water and just be successful? What – where would they start? I mean, yeah, you talked about those five factors on the page, but this free traffic, I mean, it sounds like a gift. How can they start?
Sure. So, yeah, I definitely wouldn’t start with $5,000.00 a day. And first, a couple of benchmarks. So on average, the average Amazon brand spends about 10% to 20% of their sales reinvesting back into ads. So that’s a good place to start and it’s a good place to kind of benchmark your budget, too. You know you’re spending in the right ballpark if that’s about how much you’re spending on ads.
So the biggest thing to know about ads, and this was true when ads weren’t on the Internet and this is true – especially true now that ads are on the Internet, is the most important thing is relevance. It’s that you’re serving your ad up to people who want it and really care about it. Because what that will do is that will drive how many people ultimately click your ad and then how many people convert after clicking your ad.
And so as a brand, when you’re getting started, what you’re going to want to make sure you’re doing in the beginning is serve it up to the most relevant people. So the most relevant people are people typing in the exact name of your product. Oftentimes, it includes your brand. We call this the branded segment of your advertisement. And so making sure you’re saturating that and that no one has any trouble finding your products when they type in your brand is usually the first place to go.
And then, you start to think about where are other places where, if I put up that square with the five features on it, would people actually click it versus some of the other alternatives on the page near them? So you usually start with stuff very specific to your category, but not necessarily your brand name. And then you can expand out from that a little bit and say, “Okay, I want to put it on another product’s detail page because I think I’m a really good alternate, a really good substitute for that product.”
I think one of the places that people get caught up a little bit is you have to be very realistic about what you’re relevant for and what you’re truly a good substitute for. I’d say something to my team that the Cheeto is still undefeated. We have a lot of brands that say, “Oh, let’s put our product next to Cheeto.”
And the problem is your ads will not perform well because people won’t want to put it next to those. And so being really honest of like, what is my product actually a good substitute for and considering do I have similar reviews, do have similar content, is it a similar price, and does it ultimately offer a similar value prop as the competition?
Now, when you’re counseling clients about a successful ecommerce strategy, where do you get the most pushback from them? Where like, “Oh, Chris, I don’t know if I want to do this.” What is some of the sticking points?
I think some of it comes down to investment level. You certainly need to build yourself a certain degree of momentum in order for the channel to work. It’s not the place where you say, “Okay, I’m going to just put a tiny bit of work into it and then hopefully it’ll start to catch steam.” It’s one where you need to give it a little bit of momentum, and then only once you get that are you able to get sufficient reviews and does your product perform such that it actually starts to capture some of the good sales and the good traffic.
And so I think that’s probably the place that if you want to get started in ecommerce, you really have to be willing to make sure you have good content. You have to be willing to invest a little bit of money to make sure that you have good reviews, that you’re able to actually get some momentum on your listings.
All right. Let’s say I’ve got the product, okay? It’s a winner. It is a home run, no question about it. All right. Just not enough people know about it. So how much time do I need to give for this momentum to build? How do I know when I’ve given it enough time?
It’s a really tricky question because Amazon’s a funny platform. It’s actually not that much of a discovery platform. You don’t browse on Amazon the same way you browse in a grocery store. Amazon is a lot more spearfishing, right? When you type in its search bar, it’s very specific. And one fun anecdote on this is the search term ‘vegan protein powder’…
Yeah.
…is searched way, way more, I want to say at least ten times as much as the word ‘vegan’ on Amazon. Because people are on there looking for specific things. And so if you have a winning product, what you need to first assess is – and you can find this pretty easily online just by searching “What is Amazon’s search volume,” to assess how many people are actually searching for my product. And therefore, if I made a reasonable assumption on how much of that I could capture, do I have a business here that’s worth getting out of bed in the morning?
Is that worth it? And so looking at the competition in your category and saying, “Okay, how big are these? How many reviews do I need to catch up to in order to steal some of their market share?” And there’s some sales estimation tools out there as well.
That’s how we approach it, where we say, “Okay, if we do a really good job on Amazon here and we build good listings and run some ads that are efficient to the people who matter, here’s about how big we think the business could be.” That’s how you set expectations in the category of what you could do online.
I appreciate that, Chris. Now, tell me, where do you find Amazon’s search volume?
If you just type in ‘Amazon’s search volume’, there are a number of tools that will come up right at the top of Google. The one I like to use the most is called ‘Ahrefs’, A-H-R-E-F-S. And especially for small brands and small businesses, one of the things that’s often really interesting is you built a business outside of Amazon, and so how many people are searching for you on Amazon?
Sometimes people are surprised. Sometimes there are hundreds or thousands of people per month who see your product or see your business somewhere and then pull up Amazon and try to search it. I mean, one of the things that we talk to brands about, it’s a very common behavior of consumers, is people will see an ad online. They’ll open up the app on their phone.
Type in the brand name and see what’s up on Amazon. And we’ve actually measured this a number of times that for every dollar you spend in online ads outside of Amazon, you roughly make about $0.25 in sales unattributed from sales on Amazon.
Interesting. Very interesting. I appreciate that link for a resource. I think that’s going to be very helpful. We’ll definitely add that to the links on your episode page because I think that might be helpful for people to say, “Hey, maybe I should be out here on Amazon. I hadn’t thought about it. This is another way to expand.”
Totally.
In your experience, Chris, what do you think is the biggest mistake people make in trying to create a successful ecommerce strategy?
I would say the biggest mistake is not thinking through the strategy in totality, start to finish. The biggest problem that we run into with our clients is going out of stock, which is funny. It’s like it seems like the easiest thing to avoid. But oftentimes, people are not prepared for being successful or they haven’t adequately really thought through how they can fulfill things or how they communicate with their warehouses, or how we keep track of how fast things are selling in order to stay in stock.
And so I think that’s just one example of not thinking through what will happen for this in order for this to grow. And there’s a big cost of going out of stock, too, the sales rank that I mentioned before. You’ll fall back down and you’ll have to build it up again. And so you really don’t want to do that. The other mistake that we run into a fair bit is around either assortment or pricing.
Some brands will price in the wrong place, so they’ll come to us and say, “Hey, I sold $1 million on Amazon last year, but I just ran the numbers and I lost money. I didn’t make anything from it.” That’s a lot more common than you might imagine. The other thing, too, is they might sell something that just isn’t compelling because it’s too expensive based on the shipping or it’s too big of a unit.
It’s not that interesting to buy eight bags of the same type of pretzel. A lot more interesting to buy a three-pack variety pack. And if you get that right, you have a much better chance at being one of the better selling pretzels online.
Awesome. That’s good to know, Chris. Thank you. We’re just about out of time here, and I really want to be able to leave the listeners with just a few other points because you’ve made some really great ones. And I think for people who are exploring the possibility or trying to improve where they are in their ecommerce strategy, they’ve got some good things to take away here. But what would be the biggest thing you’d want listeners to take away about building a successful ecommerce strategy?
What is the number one most important thing? If you forget anything else that you’ve said here on the program, what would it be?
I would say make really great content. Ultimately, you need to make people excited about your product when they see it. Assuming you have a good product, assuming that you’ve thought through the numbers and you’re not going to lose money every time you sell it, make sure that the image really shows what you’ve got and why it’s exciting, and you look at your peers and make it really – make it as good or make it better than what the competitors are doing.
That’s the area that I think almost every brand, big or small, can have a ton of games and ton of growth implemented.
Terrific. Thank you, Chris, for giving us more insight into what happens behind the curtain of a successful ecommerce strategy. We’ve all been online consumers, but without an expert such as yourself explaining how things work, creating a successful strategy can literally be nothing more than throwing darts in the dark, which can be expensive and frustrating, and nobody likes that, no matter what size business you are.
So, if you’re listening and you’d like more information about Chris Moe and his work helping companies with their ecommerce strategy, his contact information and the transcript of this interview can be found in the show notes at BusinessConfidentialRadio.com.
Thank you so much for listening. Please be sure to tell your friends about the show and leave a positive review. We’ll be back next Thursday with another episode of Business Confidential Now, so until then, have a great day and an even better tomorrow.
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