If you sell to Amazon as a Vendor - Increasing revenue does not mean you're commercially successful
Amazon should be one of your most profitable channels. But sales alone don't tell you whether it's being run commercially.
You can be growing steadily, hitting your internal targets, and still be capturing a fraction of what the market would actually give you.
Most brands don't know that, because they've never had a number to check it against.
The only benchmark most brands have is last year
When I ask a brand how Amazon is performing, they'll quote me a growth percentage. But when I ask them what share of their addressable category it represents, most brands don't know.
Often, last year's number is the only benchmark most businesses have, so it becomes the only one that matters. If you were up 11% year on year, Amazon looks like it's performing. It's rare for me to talk to a brand that's asking the harder question: performing against what?
That gap matters more the bigger your range gets. A brand with a handful of products can eyeball whether their portfolio is doing well. A brand with a thousand products selling across multiple sub-categories can't. Somewhere in that catalogue there are products winning and products barely contributing, and without a proper view of the opportunity in the market, all of them get treated more or less the same.
Why it happens
It's not that nothing's being done. Ads are running, listings are optimised, sales numbers and ad spend are being monitored. The problem is what all that activity is being directed by.
Without a sense of the real opportunity size, you default to optimising what's in front of you. Best sellers get the attention because they're already selling. Everything else gets a bit of budget spread thinly across it, on the basis that more products covered must be better than fewer done properly.
Advertising, creative, catalogue work and product pages usually happen in isolation too, each one making its own decisions about what matters, none of them working from the same list of priorities. That's not a strategy. That's a lot of activity that happens to be running at the same time.
There's a reporting problem sitting underneath this as well. A growth percentage is an easy thing to put in front of a board. It's positive, it's simple, and it doesn't invite follow-up questions. A share number, by comparison, can be uncomfortable, because it tends to say the opposite of what the growth number implied. Nobody in a reporting meeting is rushing to swap an easy win for an awkward truth, so the growth number keeps being the one everyone reports, and the share number never gets built.
A recent example
We worked with a brand selling over a thousand products on Amazon. They came to us to launch new products on Amazon. Amazon was doing about £1.05m a year and growing at roughly 11% year on year, so internally it was viewed as a positive channel.
During the scoping call, we asked some challenging questions: about the strengths and weaknesses of their current portfolio, what their plans were for launching new products, and what the internal justification was for launching even more. So before we touched the launch, we stepped back and asked a different question: are you getting everything out of what you've already got?
The market analysis said no. Across their relevant addressable categories, that £1.05m represented roughly 4.8% share. There was a lot more available than the growth number suggested.
The catalogue told its own story too. Around 94 products, under 10% of the range, were generating about 80% of Amazon revenue. Investment and attention were spread far more widely than that across the other 90%.
We identified around 60 products with genuine headroom and prioritised 25 of them for the first phase. Rather than pushing ahead with the planned launches straight away, we recommended concentrating on capturing more of the existing opportunity first. Advertising, creative, product page work, catalogue and variation strategy were then built around that same set of priorities, not run as separate workstreams that happened to touch the same products.
Variation strategy in particular stopped being treated as catalogue housekeeping and started supporting the advertising plan directly, feeding cross-sell and upsell into the products that were being pushed hardest. And because the priorities were set out properly, the team had an actual roadmap: what to work on first, what came next, and why, rather than a list of tasks to get through.
This is a real piece of Zeal work. I've deliberately left the brand unnamed and adjusted the figures to protect confidentiality, but the story and the direction of the results are accurate. Over the following twelve months, illustrative outcomes were: Amazon revenue up from £1.05m to £1.42m, a 35% increase, with the priority range up 52%. Category share moved from around 4.8% to 6.4%. Conversion across the priority product pages improved 21%. And TACOS actually came down, from 16.7% to 14.9%, despite putting more investment behind the priority products, because that investment was going somewhere specific rather than everywhere at once. The account became easier to manage and, most importantly, more profitable.
What to check this week
You don't need a consultant to start this. You need three numbers.
What percentage of your Amazon revenue comes from what percentage of your products. If it's a small slice doing most of the work, you already have your priority list.
What your realistic addressable category share actually is, not your growth rate. If you don't know it, that's worth finding out before you decide Amazon's doing fine.
Whether your advertising spend, your creative and your catalogue work are actually pointed at the same products for the same reason, or whether they've each settled on their own priorities without telling the others.
If the honest answer to that last one is "not really," that's not a marketing problem. It's a commercial problem.
None of this requires new products, a bigger budget or a new agency. It requires someone to sit down with the products you already sell and work out which ones actually deserve the investment they're getting, and which ones are getting it out of habit.
The decision this actually comes down to
Before you add more, more products, more spend, more range, work out what share of the opportunity you already have is being left uncaptured. Adding to a business that isn't converting what it's got just gives you more to spread thinly.
What would your Amazon revenue look like if you were only working from a proper share number, not last year's?
