Most sellers understand how important it is to have a tight, competitive supply chain strategy when selling on Amazon.
This is where businesses like BMBMatrix comes in to help with the financial, operational, inventory planning portion of your Amazon business. Getting these elements right have a huge impact on bottom-line profitability on Amazon.
This post specifically explores how Amazon PPC is impacted by a poorly managed supply chain, and what can be done to minimize this. Whether you’re running ads on your own or partnering with an agency like Incrementum Digital, these are things all sellers should know about their supply chain’s impact on PPC performance.
Here’s how your supply chain impacts PPC performance on Amazon:
Sponsored Brand Buybox does not toggle ads on or off.
When a Sponsored Product ad is launched, the ad will automatically shut itself off when the seller is out of the buybox.
Unfortunately for sellers with complicated supply chains, this is not the case for Sponsored Brand ads.
When a seller advertises a product in a Sponsored Brand ad while buybox is split, they should expect to split the attributed sales accordingly. Amazon does not automatically shut Sponsored Brand ads off when buybox is rescinded.
Consider that Amazon’s DSP and Sponsored Display ads operate in the same way, only worse.
When you pay for impressions (remember that these two are not PPC based ad units) through DSP or SD ads on Amazon, nearly 90% of the traffic that ends up on your listing comes from a “view-through” action. This means that between exposure to your ad and the customer landing on your listing, a search engine was used to get from point A to point B.
When a product doesn’t have buybox, or 2-day shipping, or isn’t even visible on the page due to Georanking, sellers end up paying for visibility that ends up benefiting their competitor.
Sponsored Product ads can run while your listing isn’t 100% back in stock…
In case you were wondering this about Sponsored Product ads specifically, know that Amazon will automatically shut your ads off when sellers run out of stock.
Here’s the caveat: before the stock reaches amazon’s warehouse your ads will go live even if the product is not inside the warehouse yet.
This is a feature which can be toggled off through Seller Central, and something Incrementum’s team encourages all clients to do as soon as the first ad is launched.
Georanking can have a huge impact on organic visibility…
Did you know that Organic ranking varies depending on the location of the customer and their proximity to the nearest warehouse?
If a competitor’s product is well stocked near a customer in Minnesota and your product is not, know that Amazon’s Georanking-capable A9 algorithm will show the competitor’s product first. This emphasizes the importance of a diverse warehouse strategy across the marketplace of your choice.
Consider the surfboard example: If you’re selling wetsuits especially designed for surfing, it makes more sense to stock warehouses near the United State’s coastlines vs. the middle of the country.
Longer delivery windows will hurt conversion rates, ultimately tanking ACoS…
Convey, Inc.,ran a survey to explore the impact shipping speed has on conversion rates. Here’s what was found: Of more than 1,500 shoppers surveyed, 98% confirm that shipping impacts brand loyalty and 84% report they are unlikely to return after just one negative experience—a 34% percent increase from 2017.
For better or worse, Jeff Bezos has trained consumers to expect access to 2-day shipping from almost anywhere in the United States.
Choosing fulfillment by Amazon is the #1 way to improve the shipping experience on Amazon.com. If FBA isn’t an option for your business, establishing the fastest delivery times possible within your FBM network should be high-priority for your business if you’re running sponsored ads on Amazon. Sellers pay for clicks whether the customer converts or not.
In conclusion, here are three things you can do to prevent your supply chain from having a negative impact on your PPC performance:
- Only advertise products with strong buybox. If you’re running ads through an agency, bring the following question to your next checkin: “what percentage of my Sponsored Brand and/or DSP ads are advertising products with poor buybox?”
- Find your way to the stranded inventory page in Seller Central and select “edit automatic-action settings”. For listings that you don’t want automatically relisted, select Opt out of auto action in the drop-down arrows to the right of the listing.
- Partner with a provider like Seller Plex to ensure that your georanking, delivery times, and overall supply chain strategy aligns with your brand goals.