42% Of Brands Advertising On Amazon Generate Half Of Ecommerce Sales From The Marketplace

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Some 73% of the 1,000 brands that participated in a survey conducted in November and December in 2019 advertised on Amazon last year — up from 57% in the year prior, according to a recently released report.

Among those, 83% said they see at least a four-times return on their investment with Amazon.

Feedvisor’s second annual analysis, Brands and Amazon in the Age of E-Commerce, was conducted by Zogby Analytics. The research documents U.S. brands and their unique relationships with Amazon, including an analysis of their media spending and advertising strategies, how the platform fits into their overall e-commerce mix, annual revenue figures, and areas of challenge and opportunity.

Forty-two percent of the brands participating in the survey said they generate at least half of their ecommerce sales from Amazon. Nearly three-quarters of brands surveyed say Amazon represents between 26% and 75% of their total online sales.

Only 8% of brands selling on Amazon report that three-quarters or more of their e-commerce sales come from the platform, which makes sense considering the value that brands place on having a diversified e-commerce portfolio.

The Feedvisor report found that 26% of the brands selling on Amazon spend between $41,000 and $60,000.

Third-party sellers — 3Ps — who sell direct to consumers from the Amazon platform are more likely to spend between $81,000 and $100,000 each month on Amazon Advertising. Among their first-party counterparts, 1Ps — which sell direct to the marketplace and then sell to the buyers — only 7% spend that amount, compared to 15% of 3P brands.

Some 69% of brands selling on Amazon know their average customer acquisition cost on Amazon. More 3P brands — 69% — are likely to know their CAC, compared with 59% of 1P brands.

Brands that said their Amazon CAC is less than $100 are on par with industry standards that report.

For example, an average CAC for retail is $10, while consumer goods is $22, and manufacturing is $83, according to the report. Some 30% report their Amazon CAC is more than $500, and 25% reported that their cost falls between $100 and $500.

About 23% of brands selling on Amazon have not yet begun advertising on the platform. More than three-fifths of brands that sell on Amazon spend more than $40,000 per month on Amazon Advertising — up 33% compared with the year prior. About 38% spend more than $60,000 monthly on Amazon Advertising.

Of the brand marketers who said they do not currently sell on Amazon, 48% believe they will start this year — up from 26% last year. Some 32% say they are not sure about selling on Amazon, and 16% say they would like to given the opportunity.

Click here to read the original article. This post first appeared on Media Post Dot Com.

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