If you’re already in an organic position, the other piece that I would caution people about is that being in the Amazon space, we are always very aware that there are advertisements at the top. But, there are a ton of people who don’t even know there are ads on Amazon. Even though we own the top organic spot, that tends to be like four listings down. So, there are a lot of people just doing what we do.
I will talk to people and tell them that we optimize Amazon advertising for a lot of different sellers and they’ll say “oh there’s advertising on Amazon.” I had to have them pull up their phone, type in a search and be like ‘you see that little sponsor, those are all ads.”
When to advertise and when not to
So, the key piece is that, if you don’t advertise, you can miss out on a lot of the sales. That being said, if people are very tied to your brand and very tied to your product, and you’ve got a great niche product where they’re not going to defect to other competitors, then, by all means, you can cut back advertising because you are having to pay a lot to own that top of search spot. But if you have other competitors who you feel could steal market share, if they show up on top, that’s where I would be more hesitant to cut back on advertising knowing that you are giving up some margin on your advertising.
Not a one size fits all solution
It’s definitely not a one size fits all solution. It is testing and knowing your product really well and how well it compares against your competitors. If they’ll defect to other competitors. If not, cut back advertising, maintain that top organic spot. You’re going to make a lot more margin, a lot more profit. But if you’re going to lose a lot of sales because of it, then it may not make sense.
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