Online spending represented 21.3% of total retail sales in 2020, according to estimates. Amazon accounted for nearly one-third of all eCommerce in the United States.*
Consumers spent over $860 billion shopping ecommerce in 2020 just on U.S. merchants alone. That’s a 44% increase year-over-year, not to mention the highest annual U.S. ecommerce growth in at least twenty years. And guess which digital commerce giant accounted for nearly one-third of all ecommerce in the U.S.? If you didn’t guess Amazon, guess again…
Amazon: America’s #1 eCommerce Platform
As the number one digital commerce platform in the nation, Amazon is an online tool eCommerce brands can no longer afford to ignore. With 300 million users and counting (as of January 2021), Amazon a no-brainer behemoth for small business owners looking to get their products in front of a sea of paying customers.
In a similar vein, Amazon’s paid advertising (PPC) reaches just as far and wide. In fact, the digital commerce giant boasts one of the largest online advertising systems today, alongside Google, Facebook, and Instagram. However – seeing as we’re in the business of teaching small businesses how to get down and digital for themselves – we’d like to use this blog post to address two FAQ’s from our clients: “Are Amazon ads worth it for small businesses?” and “What should I know before advertising on Amazon?”. Keep reading to learn more!
Are Amazon Ads Worth It for Small Businesses?
In short, yes— Amazon ads are definitely worth it, especially for small businesses.
When it comes to where small business owners would like to focus their digital marketing efforts, Amazon isn’t usually first on their list. In fact, we’ve come to learn that many small business owners view Amazon as “intimidating” or “beyond reach” for smaller brands like theirs. Our take on the matter? This couldn’t be less true.
Perhaps the best thing about running advertisements on Amazon is that it enables brands to put their products directly on a platform where their audience is already making purchases. This means that when consumers see your ad, they’re already primed to buy. What’s more, paid Amazon ads allow small businesses to reach their targeted audience, rather than spending their resources on irrelevant ones. This is especially important for smaller-sized businesses that don’t have big-brand budgets.
What Should I Know Before Advertising on Amazon?
Small businesses everywhere can benefit from running advertisements on Amazon. Here’s what you should know if you’re considering running Amazon ads for your small business:
- Your account type matters. Free seller accounts aren’t meant for sellers intending to run ads. The cost of a paid seller account depends on several factors, including product category, fulfillment strategy, and selling plan. Individual and professional selling plans are available. To learn more Amazon’s selling plans, as well as additional fees and costs, click here.
- Amazon ads work on an auction-based system. If your ad is relevant to someone’s search, it will be shown so long as your bid was the highest. However, you’ll only get charged a slightly higher amount than the next highest bid (aka the second-place bid). So, be sure to choose keywords carefully!
- The campaign type that’s best for you will be dependent on what you’re selling. Usually, a combination of sponsored brand ads and sponsored product ads will be the best plan of attack. Choose sponsored brand campaigns if you have a new line of products to show off. Choose sponsored product ads to showcase one product page in particular.
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