5 Things You Should Know About Sponsored Products on Amazon

Katie Rex

October 2, 2020

Amazon makes up about 45% of the US ecommerce space. With over 12 million items, brands are more passionate than ever to get a piece of all the Amazon action.

Leveraging Amazon Advertising is almost as important as Amazon itself. Advertising increases organic rank, pulls potential customers into your lieu of influence, and ultimately provides vital data on your customer base, who your competitors are, and more. Download our Amazon Ads eBook to learn some of our best practices.

The best way to start advertising is simple: Sponsored Products. Sponsored Products are advertisements that promote your product against others via search pages on Amazon. They can show up scattered in normal search results, but the best ones are found in spots 1-4.

Here are 5 things you need to know about advertising with Sponsored Products.

1. Win more with keywords that convert

It’s important that every product you advertise has selected keywords. These keywords can be determined by you or Amazon. With manual campaigns, you are able to choose which keywords you’d like to focus on. You can use a variety of tools to do this including Google, Amazon search results, detail pages, and even customer reviews.

Another option is to use automatic campaigns—these are campaigns that Amazon runs for you. They generate keyword lists and give you a better understanding of what people are searching for—make sure to negative your own branded keywords so you are getting awareness keywords in the reports.

2. Be in the right aisle

When advertising on Amazon, it’s important to see where you are in comparison to the other competitors you have on Amazon. If your product has less than a hundred reviews it most likely won’t do as well as a similar product that has 14,000 reviews.

This can be important when determining who to conquest. Another factor to consider is price point. Is your product significantly higher than others? Is it lower? All these questions can help you craft a better advertising strategy for your products.

3. There’s more to ads than ACoS

KPI’s should change and evolve in a full funnel strategy. Remember to look at the whole picture when doing so. Growth is usually everyone’s top priority when it comes to Amazon and the best way to do that is to use more brand awareness strategies.

Awareness strategies often cost more, and they see a lower sales return. This is not all bad. Looking from the 5,000-foot view this might be hard to understand, but if we look from a 30,000-foot view, we can look at impressions, detail page views, clicks and conversion rate. All these data points tell a story—and the story should be growth.

Advertising also helps with organic page rank. Check on organic listings every once in a while and track that growth. Pull a placement report on occasion to see how often you are winning top slots. These are things that help toss ACoS out the window but reaffirm long term growth.

4. Keep track of branded/non-branded spend

Use branded and non-branded keywords to help you understand who is searching for products like yours and who is searching for products branded by you. In any campaign, it’s crucial for each campaign to have a goal for ad spend.

These can easily be determined and best organized by brand defense or brand awareness—also known as branded and non-branded. Both of these types of campaigns should be treated differently. Most times, branded costs less to convert, and has a higher RoAS than awareness.

Awareness spends more, has a lower return, but generally grows your brand through new to brand sales and organic placement. Keeping these two separate is vitally important to understanding the data you can pull from Amazon and in crafting strategy for this quarter and the next.

5. Utilize the reports Amazon supplies

There are many reports in Amazon that you can pull to understand how your advertising is doing. You can select the ad type. For example, a report being pulled for sponsored products, sponsored brands, and sponsored brands video. You can select the time periods, but if you go too far back, Amazon can’t pull it. So make sure you pull these reports regularly so there isn’t a gap in the data.

You can also pull search term, targeting, advertised product, campaign, placement, purchased product, and performance over time reports. Make sure to keep tabs on all the different tests and campaigns you have implemented by using the data found here.

Overall, Amazon Advertising is a great way to grow a brand on Amazon. Using keywords that fit your products is crucial to the success of campaigns. Understanding your products and where they fit in the scheme of things is a challenge, but is a great growth lever in the long run.

Remembering that ACoS is not the end-all, be-all metric is freeing and allows for creativity in growing a brand on Amazon. Keeping track of campaign types through brand defense and brand awareness is pivotal in success. Lastly, utilizing Amazon reports can make or break successful growth on Amazon through sponsored products. Using these tips and tricks can help you plan and grasp true growth.

Interested in wielding Pattern’s expert advertising team to accelerate your brand growth on Amazon and other marketplaces? Schedule a demo with a Pattern representative today.

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1P vs 3P
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Amazon 1P vs. 3P: Pros & Cons Brands Need to Know

Whether you’ve been selling your products on Amazon for years or you’re just starting out, you’ve probably wondered if 1P or 3P is the best selling model for your brand. As the top ecommerce accelerator, and 3P seller, with deep experience on Amazon, we know there’s no “best way” to sell on Amazon—it depends on your products, long-term goals, and  capabilities. 

In a 1P, or first-party relationship, Amazon buys your product wholesale and handles most of the selling details. In a 3P, or third-party relationship, you’re an independent seller on Amazon’s marketplace, which gives you both more control over your brand and more responsibility for logistics.

Deciding between 1P and 3P requires weighing the various pros and cons for your business. Brands should consider several factors before choosing which strategy makes sense. Here is more information about the pros and cons of both 1P and 3P so you can make the best decision for your brand.

1P Pros and Cons 

Pros:

  • Amazon is a well-trusted brand and consumers may trust your brand more if it is sold by Amazon.

  • Your products are automatically eligible for Amazon Prime and two-day shipping.

  • Amazon handles all the logistics: taxes, ASIN, optimization, and customer service.

  • Amazon gives exclusive benefits, such as placement priority and advanced analytics tools, to 1P sellers.

  • Selling your products through Amazon 1P could be the most price efficient option for your brand.

  • You are basically free of inventory risk.

Cons:

  • Amazon has the control to sell your product at any price they see fit, even if it’s below your established Minimum Advertising Price (MAP).

  • You may lose profit margins.

  • Amazon will pay you less frequently than a 3P relationship.

  • You will have little control over availability of inventory on Amazon at any given time.

  • Amazon can drop you as a 1P seller at any time.

Many brands choose to sell on Amazon in a 1P relationship so they do not have to manage most of the logistics and simply prefer Amazon to do it.. In addition, having  a well-trusted brand sell your product is another top consideration in a 1P seller relationship.. 

3P Pros and Cons

Pros:

  • Gives you more flexibility and control in every aspect of the selling process.

  • Strengthens your brand presence.

  • Helps you gain better access to data.

  • Provides more control in the selling process (pricing, inventory, and product listings).

  • Offers complete control over how much inventory to list.

  • You can share inventory across marketplaces, when necessary.

  • Creative control to  develop listings with better optimized content to tell your brand story.

Cons:

  • Inventory risks.

  • Responsible to create purchase orders and handling inventory logistics.

  • You are responsible for your own customer service.

  • Brand must pay additional fees to Amazon for being a 3P seller.

  • Can be subject to account suspension.

Selling on Amazon in a 3P relationship  is an increasingly popular option for brands, and it’s easy to see why. Even though becoming a 3P seller may seem like more work upfront, it ultimately gives you more flexibility and control, a stronger brand presence, and better data access.

How Do I Become an Amazon 1P or 3P Seller?

You can only become a 1P seller through a direct invitation from Amazon. To become a 3P seller, the first step is setting up a Seller Central account. You’ll then provide relevant information and verifications before getting your account approved and finally listing and shipping your products. 

3P Partners and Other Selling Model Strategies

While deciding between a 1P or 3P relationship is a solid start, selling model strategy is a bit more complicated than that. In fact, there are 7 common selling models brands may consider. Two of these models are the basic 1P and 3P models we’ve already discussed. 

Other models include the following:

  • 3P Unmanaged: no active management of your brand

  • 2P: Fulfilled by Amazon (FBA) model

  • Hybrid: leverages both 1P and 3P strategies

  • 3P Network: you create a network of authorized sellers

  • 3P Partner: you partner with one exclusive ecommerce seller

Pattern Proves the 3P Partner Model Works for Brands

In our experience, the ecommerce executives benefit most from a 3P partner model because it provides the most freedom and marketplace control on Amazon, without having to worry about complex logistics. Pattern executes  a 3P exclusive seller model because it gives our partners  the freedom and control unavailable through a 1P relationship, while also taking on the stock, management, and risks that make 3P selling intimidating.

With Pattern as your authorized wholesale partner, we buy your stock and resell the products on Amazon as an authorized seller. Once we buy your product, we’re responsible for all inventory risk, and help you optimize your content and advertising while maximizing your brand protection and brand global distribution. Our sophisticated inventory forecasting, fulfillment, and logistics systems help us predict and manage your inventory, and our experienced teams handle everything from taxes to customer service.

Unlike a 1P Amazon seller relationship, we’re eager to involve your brand every step of the way, including when it comes to branding, promotion, channel strategy, and new product launches. We respect your brand by following all brand pricing guidelines and committing to never drop below MAP policies.

Interested in increasing your margins by transitioning to a 3P relationship and partnering with Pattern? Get in touch today.

Amazon's Sponsored Product ads
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What Are Amazon’s Advertising Products? Sponsored Product, Brand, & Display Ads

What Are Amazon’s Advertising Products? Sponsored Product, Brand, & Display Ads

Utilizing Amazon sponsored ads can be a smart way for a brand to drive greater traffic to a product listing and start increasing sales. While many brands still struggle to manage their advertising strategies, 30% of Amazon brand sellers increased their advertising budgets in 2022. As ecommerce executives (or even on the nose with VPs of ecommerce?)  approve their 2023 advertising budgets, it may be worth it to take a look at Amazon’s advertising products and the benefit they may have on increasing conversions. 

​​Pattern is the premier ecommerce accelerator with all of the expertise, data-driven insights, and technology brands need to gain control on Amazon and maintain their competitive niche. We know the high value of and how to utilize Amazon’s advertising products to drive the most traffic and conversions to benefit and accelerate your brand.

Here are Amazon’s three main advertising products you should know about in order to drive listing traffic to your products and increase conversions: 

For a brand executive who is selling their product on Amazon, you may not already know the differences between campaign type, so we will walk you through the differences and uses for each of these three ad campaigns.

Sponsored Product Ads

Sponsored Products are a mid-funnel advertising strategy that gives visibility to products above the top organic listings (see example below). This strategy uses custom keywords to get products in front of the consumers who are searching for them, however it can be used to capture new audiences as well.These cost-per-click (CPC) ads require no additional copy or images, but usually receive the most interaction of the campaigns and need to be monitored closely.

As you can see, these ads look just like an organic listing, however they say, “Sponsored,” on them. These types of ads can be especially effective forms of advertising because they tend to blend in with the organic results around them. With Sponsored Products, you can get your products in front of qualified customers who are searching for your product in such a way that doesn’t make them feel like they are being served an advertisement.

Sponsored Brand Ads

Sponsored Brand Ads are a top-of-funnel brand awareness tool and function on keywords. This ad format helps show a customer what they may be in need of and where to get it.  Commonly used to promote product lines or best sellers, a Sponsored Brand ad shows up as a banner above the search results (see example below). This type of ad requires that the brand showcase at least three separate products.

Unlike other campaigns used on the Amazon platform, Sponsored Brand ads require ad copy and a unique logo. These ads also can take customers to a custom landing page, or a page on the brand store, that way they get a clear and overall picture about who your brand is, what other products you sell, and why they can trust your brand

Sponsored Display Ads

Sponsored Display ads can be a tactic for top, middle, or bottom of the advertising funnel due to its varying targeting abilities. Although most commonly found under the bullet points of a detail page, these ads can also show in emails, newsletters, and even more locations off platform.

Unlike the previous ad campaigns discussed, sponsored display ads can target shopping behaviors, like repeat purchasers, similar product purchasers, and even people who viewed the detail page but did not buy. Sponsored Display ads help customers discover your brand, drive awareness, and create loyalty. 

The example above shows just one of the many placements Sponsored Display has.

Accelerate Your Sponsored Products With Pattern 

Rather than competing with each other, each of the three sponsored ad products focus on a different section of the sales funnel, allowing you to target your customers and hit your sales numbers, all while edging out possible competitors. When brands use these advertising campaigns, they can better optimize their ad budget to improve ROAS and build revenue. 

At Pattern, we have all the resources to help your brand build successful advertising and digital marketing campaigns on Amazon so you can increase traffic and conversions, which will in turn increase your revenue

How Pricing Changes on Walmart.com Affect Your Brand
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How Pricing Changes on Walmart.com Affect Your Brand

Walmart.com has announced important changes regarding the “Was Price” and promotions on the digital marketplace. These updates make it more important than ever to optimize your price through implementing proper strategies, controlling your distribution channels, and being intentional about your pricing strategy.

And, as with all digital marketplaces, succeeding on Walmart.com requires performing well in all areas of The Ecommerce Equation. Which means as you optimize your listings’ pricing, as well as traffic, conversions, and availability, your revenue increases.

Pattern has the resources ecommerce brands need to optimize on marketplaces for each factor in the ecommerce equation. We have the technology and strategists to help you improve your traffic, the brand dedication and passion to help you achieve greater conversions, connections to econtrol specialists who help brands regain marketplace control, and the data you need to be able to make smart forecasting decisions for better product availability.

Below, we’ll cover how Walmart.com’s recent platform changes impact ecommerce brands’ ability to drive traffic and conversions for their products and how to strategize around them to work best in your brand’s favor. But first, let’s go over the changes themselves.

Walmart.com’s “Was Price” and Promotional Changes

Walmart.com’s newest changes reflect their mission to be the leader in low, everyday pricing. Therefore, Walmart’s customers come to the platform and expect low prices no matter what. Overall, these updates give consumers more visibility into the value they’re experiencing and hold brands more accountable in the pricing information they display.

Promotional Policy Changes

  • Due to Walmart’s updates, in order for your products to qualify for a strikethrough and show “Reduced Price” or “Clearance” flags on Walmart.com, your product’s promotion must be at least 10% off the “Was Price.” (Note: “Reduced Price” is the most common type of badging. Your teams can request this badge when filling out promotion upload files.) 

  • To specifically qualify for “Clearance,” the product needs to be discontinued and no longer replenished after selling through the remaining inventory.

  • Although “Rollback” is sometimes seen on site, it is a form of 1P-only badging.

  • Walmart now prohibits promotions lasting longer than 365 days.

“Was Price” Changes

  • Walmart’s “Was Price” was previously loosely defined and manually inputted on Walmart.com as an MSRP. Now, stricter rules are in place with regulations in the broader market to encourage enforcement and protect consumers. 

  • The “Was Price” is now defined by these terms on Walmart:

    • Either the 90-day median price paid by customers for the item on Walmart.com (excluding special promotions like holiday campaigns, limited time deals, rollbacks, and clearance);

    • Or the median price offered by Walmart or Marketplace sellers for the item on Walmart.com for at least 28 out of the last 90 days (excluding special promotions like holiday campaigns, limited time deals, rollbacks, and clearance).

How to Strategize for Success

1. Plan for Promotions Well in Advance

To protect your “Was Price” from price erosion, be intentional when planning promotions. To be most effective in your promotion, you’ll want to be able to give your customers a large enough discount to qualify for the slash-through and reduced price badging. 

Without the right pricing strategy in place, your products are in danger of falling into deeper and deeper discounting as you chase the ability to achieve slash-throughs and proper badging. Without the slash-throughs and badging, you’ll lose the ability to easily communicate the increased value of your product and the traffic and conversions you’re trying to earn by running the promotion in the first place. 

2. Keep Pricing Consistent

It’s important to keep your products’ prices as steady as possible to protect your promotion periods. As you prevent high-low price fluctuations, you’ll be able to use slash-through prices and promotional badges like “Reduced Price” and “Clearance” to your advantage in driving better traffic and conversions for your listings.

Without the ability to display badging, a promotion falls flat even if the price has been dropped. With steady pricing over time, you’ll be able to keep a stable “Was Price” and ultimately enjoy more rewarding promotional periods long-term.

3. Establish Excellent Brand Control

It’s important to remember that the “Was Price” policy also applies to 1P and other 3P sellers representing your products on Walmart.com. Unfortunately, your other strategies will be ineffective if other sellers are breaking your MAP policy or playing the high-low price game. So, it’s more important than ever for brands to be conscious of their distribution channels and keep rogue and unauthorized sellers in check.

Find Marketplace Confidence with Pattern

By allowing Pattern to be the authorized seller of your brand’s products and working with Vorys eControl law firm to eliminate rogue sellers, you can be confident in creating and executing a powerful  selling strategy on Walmart.com and other digital marketplaces. As a 3P seller partner, Pattern is truly invested in our partners’ success, we’ll help you to create and execute a strategy that truly prioritizes the long-term performance of your products on digital marketplaces.

Contact us today to learn more about the changes on Walmart.com and how you can optimize your performance.