Chapter 2 Selling Swimwear to Alaskans: How 3 Retailers Successfully Expanded on Amazon
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It was a typical work day for Alex Young in 2012. He was at the Kap7 headquarters, his employer's office. It was lunch time, a Wednesday maybe. He had a friend's event that weekend and needed something … shoes, a pair of pants.
It doesn't really matter, because, as usual, he was shopping on Amazon. A tried, tested and trusted 2-day delivery was in his grasp. It didn't matter what he bought, or how late he bought it; he knew he would be able to get the item in his hands for when he needed it.
In fact, Alex and the rest of his co-workers, including the former Olympian founders of the company, Wolf Wigo and Brad Schumacher, all regularly shopped on Amazon. And they did this while running their own, independent online store.
On one of those quick Amazon shopping days, Alex did a query for the product his company sold:
“Water Polo Ball”
It's hard to say what Alex saw years ago, but today, you do a similar search and two brands clearly dominate on Amazon: Misaka and Alex's own Kap7. And Kap7 is the only one that is NCAA and NFHS official.
Kap7 also sells water polo swimwear, so I did a quick search for that, too.
This small, 7-person company headquartered in L.A. comes up third on Amazon, right behind Nike. That's one heck of a search engine optimization success story.
Note: Turbo is Kap7's water polo suit brand.
"We were personally shopping on Amazon all the time, and there wasn't anyone that was selling our type of products there," says Alex. "We needed to take advantage of that. None of our direct competitors have moved onto Amazon yet, so we are ahead of the game in the water polo market. Once you have it dialed-in [to Amazon], it runs itself."
Alex thinks about Amazon as simply another sales channel for his business. Of course, Amazon does play by different rules than a typical webstore.
For instance, Kap7 can often make 50% margin off of its products. On Amazon, that may go down to 25%.
But a 50% decrease in margins for a highly trafficked and high sales channel doesn’t cause a bit of concern for Alex and his team. They have full control over their marketplace selling, understand the industry and when it will spike, and know that different customers shop in vastly different ways.
For Kap7, control, sales and buyer personas make the expansion to Amazon a success — and a no-brainer.
"There are people who only shop on Amazon, and there are people who want to shop on direct ecommerce sites. Both sets of people are growing," says Alex. "Water polo is growing extremely fast in the U.S., and we can get spikes in orders. If we get low on inventory for a product we have to order in bulk, like balls, we will turn off our marketplaces and keep selling on our website."
This level of control and ability to turn on and off selling options on Amazon as needed gives the Kap7 team, and Alex in particular, the freedom to use the webstore in unique ways. For Alex, Amazon revenue is a known. It will come in. People are shopping there.
On a webstore, it’s a different story.
Amazon already has an audience. Independent websites must build an audience –– and that’s tough work. But with Amazon as a steady source of income, Alex has figured out how to use additional tools –– like Google AdWords and Google Shopping –– to target consumers elsewhere on the web and bring them back to a dedicated website targeting their specific needs.
After all, you can customize a website to serve a buyer’s persona. With Amazon, you’re going for keywords and mass relevance.
"We do a lot of marketing to the end-user, who is the age-group athlete, and then the purchaser who is the parents. We try to loop things around with product reviews and videos, and water polo drills and tips," says Alex. "We use BigCommerce to power our ecommerce website, which also gives us more opportunity to focus on really specific groups. For example, we focused on selling Alaska-printed suits to people in Alaska using Google AdWords, and they sold really well for about six months."
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That’s right, the combined power of Amazon and independent webstore earned a water polo company in L.A. a buying audience in Alaska. That’s how to optimize sales channels.
Uncovering 100% Growth on Amazon through Search
We’re in L.A. again. This time, in the home of Emily Ironi, the sole founder and employee of The Dairy Fairy –– a quickly growing nursing bra company serving the likes of Zoe Saldana and Chrissy Teigen.
But this is no celebrity-only brand.
Little over three years ago, Emily Ironi was a new, working and single mom. And like any parent, she wanted to give her kid the best shot at life. To her, breastfeeding was a part of that legacy.
The selection of nursing bras she found, however, were not.
To Emily, they looked like medieval torture devices. They weren’t attractive. They weren’t comfortable. And even though they did the job, allowing a woman to breastfeed with a bra on, they left much to be desired.
For one, postpartum is real –– and no new mom wants to be made to feel unattractive simply by trying to feed her baby.
For two, the pointy and uncomfortable nature made nursing bras near impossible to actually wear as a bra. Instead, you'd need to wear another bra, and then change into the nursing bras before nursing to achieve maximum comfort and functionality from what was on the market.
No one has time for any of that.
So, Emily made her own bra –– patent pending. Today, new moms and older ones alike wear that bra, many of them choosing to continue wearing the bra beyond breastfeeding thanks to its comfort, support and … well … let's just say it's pretty.
In 2013, she launched her online store –– and immediately, sales began rolling in. She’d found a niche market. Customers were finding her by Google and bloggers.
Then, in October of 2015, she looked to Amazon and launched a test run.
"Amazon's been incredible for my business. I started selling on Amazon in October of 2015, and it's doubled my sales," says Emily. "What that tells me is that there's a whole slew of people who didn't know I existed, and they'd just go in and type ‘hands-free pumping bra.' It's working way better than a Google search for me."
Amazon search outperforming Google’s isn’t surprising. Research has shown that 44% of all product searches start on Amazon. If you rely solely on Google search to bring in customers, your first competitor to sell on Amazon will mop up all the buyers that search there first –– much like Kap7 did.
Think about it. Amazon is a search engine for products that likely has your credit card on file, allowing you to checkout in a single click. It’s arguably the easiest shopping destination in the world. If you have an audience that is busy (and all of us are), Amazon is the quickest, most convenient shopping solution for them.
That doesn't mean, though, that your own website isn't relevant.
"Amazon as a business is becoming more of a competitor to some of the brands, and bringing out their own products," says Emily. "I find that it's still critical to have your own retail presence. I have a lot of peers, especially in the baby products industry, their businesses were 100% on Amazon, and now they're starting to catch up and trying to migrate more of their business to their own websites. Ultimately, you have a lot more control over everything and also your interaction with customers. It's about finding that perfect balance."
Customer’s Choice: Using Data to Sell the Products They Want Where They Want Them
Relative to Austin Bazaar, The Dairy Fairy and Kap7 are newbies to Amazon. Seetha Singh, the owner of the instrument retailer, launched her webstore almost simultaneously with her Amazon presence back in 2007 –– nearly a decade ago.
Her goal then and now is still them same: be wherever the customer is. Cost-effectiveness is high on her list as well.
“We wanted to be present wherever customers for our products like to shop,” says Seetha. “Selling direct and via third party channels has helped us broaden our reach. Selling on Amazon affords us the benefit of reaching millions of Amazon customers without spending the advertising dollars up-front.”
And as you might expect from such a seasoned Amazon seller, Seetha has drafted a comprehensive multi-channel strategy for Austin Bazaar.
The company’s Amazon success is no fluke.
It took years of sales data and multiple iterations in the analyzing to determine which products sell best on the channel, and how to optimize each selling point for the highest conversion.
"We do not offer the same products on all channels," says Seetha. "We offer our best selections on our webstore, but also have products that are unique to each channel. The selection offered on each channel depends on the strengths of that channel and the kind of consumers that they attract. By offering specialized inventory on our webstore, we are better able to mitigate the effects of cannibalization that can occur when multi-channel selling."
For Seetha, marketplaces like Amazon are just the right places to be. Too many consumers are already shopping there for any retailer to ignore it. Getting in front of your customers in the way they want to shop is the most important part of selling success.
Your website can offer the who, what, when, where and why –– but your customers get the final say in how.
Too Much of a Good Thing
Know this: Amazon is not a set-it-and-forget-it channel. You can go too big. It's possible you'll need to pull back. But then again, is that the worst problem to have?
"Make sure you are focused on the channels you already have in place, so they are running themselves. Then step over to the next channel and build that," says Alex. "The biggest mistake we made is we tried to go full-bore on all of them – Etsy, Jet, eBay. We've actually pulled it all back because we want to focus on each one, make sure it's perfect and understand why products are selling well, or not. Once they're running well it's just a management and maintenance scenario, which is not that big of a deal."
First, do the competitor research; then launch in the channel; finally use product data to optimize. That’s how these three companies are seeing 100%+ growth in revenue coming from their Amazon channel, plus extra time and money to spend on acquiring new audiences for their independent webstore.
It’s isn’t a no-sum game. In fact, it’s a winner takes all –– and the winner is the retailer. The winner is you.