How times change...
In the years 2020 to 2022, this was the motto for most of our customers:
Growth at any price.
Profit? Was usually secondary. Higher advertising budgets were often the first instrument to push sales. The ROAS & ACoS values of Amazon? For many, the only guidepost.
This has changed in 2023. The focus has shifted away from the top line and towards the bottom line. The days of blindly relying on ROAS & ACoS values are over. Flexible budgeting and a well thought-out marketing quota are now the key to success.
What I hear again and again:
→ Aggressive advertising is out.
→ Profitability is now assessed more accurately and on a product-related basis.
Among other things, we know of sellers whose monthly turnover is 15% lower than the previous year - but at the same time their advertising costs have fallen by 85%. This means that although these sellers have less turnover, their finances are much more stable.
Another interesting aspect is that many sellers who used to focus on their entire portfolio are now taking a closer look. This is because the profitability of each individual product is at the center of their strategy.
This teaches us that Change is the only constant, especially when selling on a platform like Amazon. And while tactics and strategies change and evolve, one thing remains the same: The desire to be successful on Amazon.
How can this change be concretized? Which aspects are part of the change?
- Possible market shift: Those who do not keep up can maneuver themselves into the sidelines. The result is a market in which only the most efficient and profitable providers survive.
- More efficient advertising strategiesInstead of burning money, advertising is more targeted and qualitative. Every euro spent pursues a clear goal and is part of a well-considered advertising strategy.
- Sustainable growth: The focus is on slow but steady and, above all, sustainable growth.
- Greater competitiveness: Suppliers who can adapt strengthen their market position. They are better equipped to react to changes and maintain their competitive position.
For us as an agency, this means that we need to expand our services and also want to act more as consultants. We are not only focusing on profitability, but also on supporting our customers in expanding their product range.
We are already providing support with profitability calculations and optimal pricing, but selective distribution to our customers' sales partners is also currently at the top of our list.