Readying Your Business for the Amazon Prime Rate Change
Today on May 11th, the cost of a 1-year Amazon Prime membership is rising from $99 to $119. While the $20 increase doesn’t sound like a lot when spaced out over the course of a year, some retailers are still understandably nervous about the impact this change might have on notoriously-fickly online shoppers. So, how do we recommend dealing with the potential fall-out from the Prime price increase?
By doubling down on your Amazon optimization strategy.
Amazon’s Growing Role in Consumers’ Lives
According to Amazon’s April 26thearnings release, net sales increased by 43% in Q1, going from 35.7 Billion to 51 Billion. This info is backed by the fact that over 75% of adult online shoppers in the U.S. gave a resounding “yes” when asked if they had made a purchase on Amazon in the past few months. The convenience of an all-in-one, always-accessible marketplace has become an integral part of consumers’ lives. In addition, the nearly-always competitive prices Amazon offers have led people to prefer the ease of trusting Amazon pricing rather than comparison shopping for individual items. At this point, Amazon isn’t just a shopping destination – it’s a way of life, meaning it’s extremely doubtful that the Prime price change will deter users from renewing their subscriptions.
According to a recent report on Bloomberg, about 49% of people start a product search on Amazon, compared to only 15% going directly to a retailer’s website. From here, the conversion rates also diverge greatly. According to the Internet Retailer, the average conversion rate of a website is 3.32%. The conversion rate of Amazon Prime members is 74%. Even non-prime members convert at 13% on Amazon.
Making Sure You Don’t Miss Out on Sales
This ubiquitous and ever-growing Amazon reliance means that if you’re not selling on Amazon, you’re giving money away to your competitors. And, because of the increasing levels of trust consumers are giving to Amazon search results, you need to have a comprehensive optimization strategy for your products in order to make sure they get seen. This includes thoroughly thinking advertising on Amazon, making sure your product is Prime eligible, and optimizing to appear in voice search results. In the same earnings report released on April 26th, seven of the points in the Highlights section discussed the growth of voice search and Alexa-based shopping.
Does your business have an Amazon strategy in place? Whether you’re a manufacturer or vendor, doing Merchant fulfilment or FBA, target a niche or a broad market – if you’re not optimizing for Amazon, you’re leaving money on the table.
Here are just some of the facets of Amazon strategy you need to consider:
- Qualifying for Prime
- Adjusting for storage cost changes
- Winning the Buy Box
- Investing in product ads
- Search optimizing product titles and descriptions
- Testing for Alexa
- Researching competitor strategies
- Shopping for your products through Google and Bing ads
- Ensuring consumer trust with credible ratings and reviews
The digital selling space is changing fast. If you need help figuring out how to reach Amazon Prime’s 100 million plus members, get in touch. We’d love to help.