2022-05-10
Amazon sellers seeking to grow their businesses are bombarded with tips, tricks and strategies to increase sales and profit. Some of these ideas are valuable and have a positive impact while many others never deliver the desired results. With all this noise it is easy to fall into the cycle of chasing the next big thing, but when you boil it down there is just one simple metric that matters.

CAC to LTV

The acronym CAC stands for Customer Acquisition Cost, while LTV stands for Lifetime Value. Put simply this is cost to acquire a new customer and the amount of money that customer spends with your business. Say for example you spend $10 in advertising to acquire a customer that spends $100 over their lifetime relation with your business. If the advertising channel was scalable, you could theoretically invest $100,000 in ad spend to generate customers that spend $1,000,000.

On the other hand, if you spend $10 in advertising to generate customers that spend only $10, that would be a poor result and certainly not scalable. This is a typical experience for Amazon sellers using the Sponsored Products PPC program, more on that later.

High Performing Ad Channels

Finding a high performing advertising channel with scalable performance requires thorough testing and exploration. But one opportunity to always monitor is Amazon’s new programs. When Amazon launches a new program, the early movers always reap the greatest gains while late adopters rarely see any positive returns.

When FBA became broadly accessible to sellers in the early 2010’s, brands could immediately get their product listing to the top of the search results by simply converting their inventory to Prime. Similarly when Sponsored Products launched in 2016, brand could achieve high sales for super low ad cost without advanced optimization or thorough keyword research. Those opportunities have long since passed, but the early mover principle remains.

Amazon Live

Amazon Live is Amazon’s new shoppable live stream platform where influencers share their favorite products with thousands or even millions of shoppers. Unlike similar home shopping TV networks, viewers on Amazon Live can simply click through an item featured on a live steam and purchase it in seconds, without the friction of calling in.

This new and relatively unknown ad channel is widely viewed amongst retail analyst to be the future of shopping, merging social media, influencers and frictionless online shopping. As such Amazon has invested heavily in this new channel, recruiting celebrities and promoting these live streams on their heavily trafficked homepage.

This lopsided balance with heavy investment by Amazon and rapid audience growth on one side, and minimal seller adoption on the other side makes this a tremendous opportunity for sellers. Sellers who have been early adopters of this new program have seen low Customer Acquisition Cost and high ROI from this new channel, particularly when compared to alternative advertising options like sponsored products.

Sellers using Amazon’s PPC ad program, Sponsored products commonly see 50-100% ACoS (Advertising Cost of Sale) or higher depending on the age of their product listing. By contrast sellers booking placements on Amazon Live commonly achieve 20-30% ACoS, or as it is now known ICoS (Influencer cost of sale).

More significantly, influencer campaigns are highly effective for new products with few or no reviews. New sellers or brands attempting to launch new products are acutely aware of the challenges of gaining traction for a listing with few or no reviews. Sponsored products is notoriously ineffective and costly for new product listings, and few good alternatives exist.

However with influencer campaigns, the endorsement by a trusted influencer often substitutes reviews, making shoppers comfortable purchasing a product that they may otherwise be weary of due to the lack of “social proof”. Moreover there is some indication that the review rate is higher amongst engaged shoppers who view Amazon live streams, potentially accelerating the accumulation of reviews on your new listing.

How to Get Your Product on Amazon Live

While influencer campaigns on Amazon Live produce great results, they are not always easy to setup. Influencers are notoriously difficult to communicate with, and the process of making contact, then negotiating a deal can be lengthy and frustrating.

To clear these hurdles and accelerate the process of getting your product featured on Amazon Live, consider using Rebaid. Rebaid which has been a well-known deals site has recently added an influencer program centered on Amazon Live placements.

Rebaid has the largest network of Amazon Live influencers to accommodate all products and customer demographics. Sellers who book influencer placements on Rebaid leverage their existing relationships with influencers to get your product featured on Amazon Live in as few as 7-10 days after booking a placement.

Moreover Rebaid pre-purchases placements with Amazon Live influencers in bulk, meaning the cost for a placement is far lower than would be offered by the influencer directly to a brand looking for a one-off placement. With placements starting as low as $100-$150 depending on product category, there is really no reason not to try this promising new ad channel!

Start Your Amazon Live Promotion