I met a friend of a friend one time at a Sunday brunch here in Austin, TX. We started talking and I found out he sold $2 million per month on Amazon. He said he didn’t focus on branding at all and most of his products were completely unrelated to each other.
His main focus was finding good product opportunities and improving the quality of those products with every inventory reorder. One of his products even ended up being featured on a big morning talk show in one of their product review episodes. His strategy seemed to work.
But it’s not what we recommend. This guy had a team of software developers deploying advanced, likely questionable, strategies to rank products on Amazon. We don’t have that luxury and I wouldn’t recommend it for the long-term success of your business.
How to Build the Most Valuable Business Possible
Let’s say you build a business with 20 unrelated products selling a total of $10 million per year. If someone buys your business, how do they produce more sales? They have to find more hit products. Each time, they’re starting from scratch with no brand recognition and no customer list.
Or, they have to build out a brand for one or more of your disconnected products. Why not do that yourself? Why start from zero each time you launch a new product? When you build a tightly linked collection of products under the same brand, each new product you sell is easier and faster than the previous one.
First, you should build a customer list via email, SMS, and social media of past buyers you can communicate with. When you launch a new product under the same brand they might like, you let them know and give them a discount. You’ll produce lots of sales and get lots of reviews quickly even before you have to go out and find new customers.
Second, Amazon automatically interlinks similar products. For example, on an Amazon product page, when you click the brand name for that product, you’re taken to the store page for that brand. If you have multiple products under the same brand, you’re automatically getting exposure and traffic for those products from the others you sell. Also, when someone clicks the seller name on a product listing, they can see the other products sold under your account. If all those are disconnected products that don’t appeal to them, it’s a missed opportunity to get more sales. You can also increase sales with bundles and coupons which is more effective when you sell multiple products to the same audience under the same brand.
Most buyers of Amazon FBA businesses want to buy a single brand of products. They want a brand they can grow through adding more products and more marketing channels. If you want to build the most valuable business possible, focus on building a single brand with related products.
What If You Want to Build Multiple Brands?
You may eventually want to build multiple brands. You can do this under a single Amazon Seller Central account. Some accounts have products covering hundreds of brands.
To start, this is the simplest option. Sticking with one Seller Central account gives you less to manage if you’re testing new products and brands.
However, you may later want to split a brand out into multiple Seller Central accounts, especially if you want to sell the brand. It may make it easier for an acquirer if they can take over your full Seller Central account which contains only the brand they’re buying.
Whether you want to sell your business or not, your goal is to build a consistent, profitable business. You don’t want to have to fight for new sales every week and every month. The easiest way to build a predictable ecommerce business is by building a brand a group of customers recognize and trust.
Think about the value of this to Apple. For every new product they release under the Apple brand, they can get millions of people to try it out based on their reputation alone. Thousands of media publications will talk about their new product. This is only possible because they’ve built a brand delivering high-quality products over many years.
You might operate at a slightly smaller scale, but the principles are the same. Imagine working hard to build a brand from scratch. Two years later, you’ve built a list of 30,000 loyal customers. You launch a new product and send a single email with a loyalty discount to that list. 25% open, 25% of them click, 25% buy at $50 each. Over $23,000 with a single email. That’s a good position to be in.
Build a strong brand through ecommerce, with the help of ASM, and you can achieve any financial goal.
Matt Clark is the Chairman and Co-Founder of Amazing.com, a serial entrepreneur, and investor. He’s been featured on Forbes, CNBC, and Entrepreneur.com.