If your brand is selling on Amazon, then you’re probably familiar with the concept of Direct Importing (DI) through Amazon’s Global Logistics Network. However, not all brands qualify for DI as it is only available if your products are manufactured in or imported from overseas. The choice brands who do import to the U.S. from overseas is simple: use Amazon’s network and resources to distribute your products, removing multiple steps and costs from the supply chain, or to use your own supply chain.
Sounds compelling, right? But also sounds scary since you are giving up a lot of control and process to Amazon rather than keeping it in-house. As a global ecommerce accelerator, Pattern knows how to leverage DI, maintain control of your brand, and find new ways to improve logistics through Amazon’s Global Logistics Network.
Pattern, an ecommerce accelerator and one of the top Amazon sellers, understands the unique challenges brands face getting products from international production facilities to consumers’ doorsteps and manages the entire process for brands. And although DI is not the right strategy for every brand, we know the potential savings and customer benefits you can experience through DI make it an option that’s worth exploring.
The most profound benefit you can experience through DI is massively reducing your supply chain touchpoints—when your products go straight to Amazon’s fulfillment centers, the ripple effect in your cost savings is powerful.
For one thing, you save a significant amount of money by not paying for the processes you’d normally need to in order to get your products to domestic warehouses. Once your items get to their shipping containers, Amazon takes over, freeing you from the responsibility of getting the product from its origin port to the U.S. to your warehouses, then re-packaging and labeling to ship into Amazon fulfillment centers, and finally to customers—with all of the associated processes and costs.
Less handoffs also means less opportunity and responsibility for incurred damages, which is something that pays off in both the short-term, by avoiding replacement costs, and long-term, in customer satisfaction.
As probably the biggest U.S. marketplace in the ecommerce space, one of Amazon’s perks is lower container rates. They have negotiated prices that are considerably lower than a brand would pay as a traditional importer. So, it’s likely that, however you’re importing your products into the U.S. today, it’ll be cheaper to get your products to your customers using Direct Importing.
By leveraging Direct Importing, you eliminate the need to pay tariffs and duties as your inventory arrives in the U.S.. This generates significant cost savings for many brands—whatever you pay to ship your products with Amazon includes the brokering fees instead of adding to costs for you.
When a brand ships all of its orders to Amazon Fulfillment instead of your domestic warehouses, the process generally takes longer. This additional time allows brands and ecommerce accelerators to plan inventory months in advance, rather than a week or two.
For instance, rather than guessing on the amount of inventory you’ll need to ship to Amazon in two weeks, you’d be able to plan much further ahead with purchase orders, as far as months in advance. Typically, this advanced planning gives brands a leg up in leveraging their supply chain to advance order what they need.
Direct Importing also removes your dependency on your domestic fulfillment teams for the manpower needed to get products from their port of origin to your warehouses. Removing these processes allows you to save both the money and the time it takes to unpack, repack, and label your items. Instead, all of those tasks are taken care of at a lower cost at the origin port.
In addition to eliminating time and manpower spent packaging and labeling, you also remove the need to store product domestically, meaning you can save domestic warehouse space and reduce the amount of time spent fulfilling domestic orders.
As your teams eliminate the extra steps in the fulfillment process, you’re able to free up precious time in getting your products directly to Amazon customers. What would you be able to accomplish in getting 2-3 weeks back from your current speed to market model? As you get products into your customers’ hands faster, you can stay more competitive as shipping times continue to shrink across the globe.
As the benefits of DI start to build upon each other, the savings can be significant for brands and the momentum for any brand to achieve new sales potential is truly powerful. Brands that partner with Pattern know they are getting premier resources in logistics and fulfillment as well as the competitive advantage of working with a top seller on Amazon.
Since brands sell their products to Pattern months in advance, they avoid freight, shipping, port, packaging, labeling and other costs associated with their inventory coming from overseas. Additionally, brands who partner with Pattern can also take advantage of time and cost savings as part of their access to our fulfillment resources while, at the same time, experiencing multiple other ways we’re able to accelerate their products on Amazon.
Accelerate your brand on Amazon, starting at the port of origin. Contact Pattern.
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Developing your ecommerce strategy for digital marketplaces like Amazon, Walmart, Tmall, and Alibaba gets complicated fast—there’s a lot to think about, including marketplace SEO, product photography, advertising tactics, disjointed sellers, distribution logistics, managing ratings and reviews, and more. It can be overwhelming for brands, especially those with small teams, to know which behaviors to optimize for for the highest gains in profitability.
The good news? Revenue performance all comes down to data. Pattern was built on a data science approach to ecommerce success. We find the patterns that drive profitability, then apply them to boost our brand partners’ revenue on ecommerce channels.
And a key pattern we follow for all brands on digital marketplaces is the ecommerce equation: revenue = traffic x conversions x price x availability. As brands zero in on these four pieces of the equation, they can simplify and focus their efforts to reach truly profitable ecommerce growth.
The first part of the equation is traffic—you need to get people to see your listings if you want to generate sales. There are two ways to drive traffic to your products: through organic search and paid search. Striking the right balance between both for your brands is crucial to driving enough of the right traffic to your products, ultimately increasing your ecommerce revenue.
Knowing this, Pattern provides the resources and technology needed to drive traffic to your product listings. Our brand management team, advertising specialists, and SEO technicians work in harmony to create a unified strategy to boost your brand’s organic profile and balance that with a paid advertising approach that works for your brand and listings.
Using this method, we took Feetures socks from ranking on longer-tail terms like “no show athletic socks black” to driving traffic on parent keywords like “no show socks.”
Getting customers to your product listing is only half the battle. Once on your listing, you need customers to convert. Conversion is key to the ecommerce equation because it leads to real product purchases and revenue. Traffic without conversion leads to more time and ad spend without the ROI.
Optimizing your images, product description, bulleted details, customer reviews, and buy box performance is key to successful conversion. If you’re going to spend time and effort driving traffic, you should make sure customers can easily and clearly find what they’re looking for when they arrive at your listing.
While your imagery and descriptions are important, you also need to build customer trust to drive conversions. Studies show that your customer service efforts matter too—84% of people trust online reviews as much as friends, making strong reviews an important factor of conversion on marketplaces.
The good news is as you provide a quality product and a great marketplace experience, you’ll build brand equity, increasing your customer loyalty. Then, as your reputation, reviews, and traffic grow positively, marketplace algorithms will recognize your popularity and improve your rank accordingly. Rank drives both traffic and conversions, helping you to optimize your performance further. As your brand equity grows, your conversions will continue to grow with it.
While setting a strategic price is an important step in your ecommerce strategy, it takes more than that to truly control your price on marketplaces.
Without proper control and with wide distribution, your product could end up in the hands of disjointed sellers who lower your marketplace price to sell their inventory and make quick profits. With one seller lowering price online, other authorized sellers and retail partners are forced to lower their price to compete, creating price erosion and sending your brand down the profitability death spiral.
This Death Spiral damages brand equity, hurts conversions, and can lead to Buy Box Suppression on Amazon, hindering traffic as well. And as prices get lower and lower, your profit margin withers away, decreasing your overall revenue.
Using our data-driven insights and Pattern’s eControl partner Vorys, we help brands implement narrow distribution, identify and take-down unauthorized sellers, eliminate price erosion, and control their price online. Focusing on price control, Pattern helped LifeSeasons, a premium supplement company, take back 91% control of the Buy Box on Amazon.
The last piece of the ecommerce equation is availability. It makes sense to think of availability as a contributing factor in conversion, but we felt that it’s important enough to call out on its own—you can fully optimize your traffic, conversion, and price, but without availability, you can’t grow revenue for your brand.
A lack of availability leads to stock outs, losing conversions to competitors, losing possession of the buy box, poor customer reviews, a decrease in traffic…the list goes on. The best-performing brands on ecommerce digital marketplaces optimize their availability with high-end technology, optimize their cash on hand, and inventory time on hand to keep the ecommerce equation powered and optimized in their favor.
Pattern is committed to solving the ecommerce equation. We partner with brands to provide the expertise, resources, and technology needed to drive traffic, create content that converts, protect price, maintain availability, and ultimately accelerate ecommerce revenue and profitable growth.
Interested in improving the results of your ecommerce equation? Schedule a call.
Join us for Ecommerce Innovators, a podcast that brings together the brightest minds in the industry to explore innovative strategies and trends in global ecommerce. We'll analyze what top brands are doing to accelerate their online success and you’ll hear from top executives who are changing the game for their organizations. Our host is John LeBaron, Chief Revenue Officer at Pattern—the premier partner for global ecommerce acceleration.
In our conversation with John Wessel, CTO and SVP of Product & Digital at Fresh Water Systems, he talks about digital transformation, innovation, and growth. Hear about the many hats John’s wears, how the company has transformed since the 90s to stay cutting edge, the pharmacy part of the business, aligning and prioritizing multiple channels, and competing with Amazon.
Content leads to search ranking. For Fresh Water Systems’ ecommerce site, around 70% of their traffic is to the blog. The secret for content is “well-researched, well-written, long form content that is informative”. John explained that they have an SEO team who writes 5000+ word posts that are researched and documented. People read these blogs and comment, which drives more traffic to the blogs.
Ecommerce is changing the shopping game. John shared an interesting story about a plumber who orders parts every Friday night online, from wherever he can get the best price. He doesn’t have relationships with one supplier or an auto-renew subscription for his parts. Instead, he finds the best price just for the parts he needs every week. John thinks the trend of price shopping will continue, especially as ecommerce grows.
Invest in customer engagement, but don’t invest a lot of time into emails. How many advertising emails do you actually read? Companies often spend a lot of time doing A/B tests and crafting the “perfect” email. However, John pointed out that almost no one reads emails anymore. Instead, invest your time into different brand touchpoints you will have with your customer. You can still send emails, but make sure you dedicate less time to the process.
Listen to the full episode for free on Apple Podcasts, Spotify, or wherever you get your podcasts.