From product power to brand power, how do cross-border sellers “advance step by step” on Amazon?

Chief Writer: He Yang

While many domestic industries are shrinking, cross-border e-commerce is booming, which has undoubtedly given sellers a lot of confidence. However, how to maintain growth and avoid the dilemma of "increasing revenue but not profits" is also a problem faced by many people.

"Cost increase is an established fact. In the absence of any differentiated advantages, ordinary sellers only have the weapon of competing on price. In the past, everyone's business operations were relatively shallow, and mainly relied on extensive marketing strategies. In today's increasingly fierce competition, if you only sell goods, your path will become narrower and narrower." A cross-border seller said bluntly.

At the same time, brand sellers have a different situation. According to Amazon data, the growth rate of Chinese brand sellers on Amazon in the past year was more than three times that of non-brand sellers; the compound annual growth rate of brand sellers’ sales in the past two years was more than 1.5 times that of non-brand sellers…

For example, after achieving annual sales of billions of US dollars in the United States in 2020, the sportswear brand Baleaf entered a period of brand deepening and refined operations, and by 2023 it would see an increase in global annual sales of nearly US$200 million; Gtheos, which was only launched on Amazon in July 2023, took less than a year to become the number one in the wireless gaming headset category under its brand strategy.

It is precisely because of this contrast that almost all sellers who want to live better and longer have turned their attention to the path of "branding".

How to effectively enhance brand power in the process of entering the global market through cross-border e-commerce? What brand building methodologies and practical experience can be referred to? This is exactly the question that the 2024 Amazon Global Store Brand Overseas Summit Forum held on July 30th attempted to answer.

Breaking through the profit bottleneck

From "selling goods" to "building a brand"

From cross-border sellers to cross-border brands - this is the common voice of sellers under the pressure of growth.

On the one hand, there is the challenge of increasing competition on the supply side. In the past few years, with the overseas boom, the number of new cross-border sellers has maintained high growth, both on Amazon and in the entire industry. As supply becomes increasingly saturated, sellers urgently need to get rid of homogeneous competition and simple price involution and build their own moat. Building a high-quality brand is equivalent to occupying a unique cognition in the minds of potential customers, thereby gaining significant advantages in profitability, growth rate and repeat purchases.

On the other hand, it is driven by changes in the consumer side. After ending the early extensive growth model, cross-border e-commerce has gradually entered a new stage of development. It is no longer a matter of "whoever has goods, whoever has goods at a lower price, plus a certain level of operation and cross-border transportation capabilities, can make a fortune quietly." After the cultivation of global consumers in the previous stage, and the gradual improvement of infrastructure and supply chains, consumers have gradually adapted to the processes and experiences of cross-border e-commerce, and have begun to demand more innovation and quality from Chinese manufacturing, which corresponds to the middle and upper levels of China's supply chain structure - the product itself must include brand and premium rate.

According to Amazon's research, 95% of Chinese sellers believe that it is very important to build a brand on Amazon, and actual data also shows that brand sellers have more growth potential than non-brand sellers: from 2020 to 2023, the growth rate of Amazon China's brand sellers will be 6 times higher than that of non-brand sellers; on Black Friday and Cyber ​​Monday in 2023, 20% of brand sellers saw a year-on-year sales increase of more than 50%, and 15% of brand sellers saw an increase of more than 100%.

There are also many stories of Chinese sellers on Amazon growing into new global brands, including Anker, Insta360, Roborock, Flower Knows, Govee, and Shokz. Their commonality is that they have achieved compound interest effects in terms of product premium increase, customer decision-making cost reduction, customer loyalty and lifetime value increase through continuous brand building and accumulation of brand assets.

As an industry insider said: "Brand" is the only certain business logic amid all the uncertainties. Brand premium and repeat purchases can hedge against rising costs, especially when the economic environment is unfavorable. Those brands that have been established over the years are the most able to withstand risks and survive the cycle.

However, building a brand is a right but difficult thing to do. Entering a territory that you are not used to and are not good at requires not only determination and a change of mindset, but also new topics, from the formulation of strategic goals and the adjustment of organizational structure to the optimization of various links in daily operations.

“I want to build a brand on Amazon, but I lack ideas and practical experience, and I don’t know where to start”; “I want to transform from distributing goods to focusing on a certain category and building a new brand, but I don’t know which indicators and business links I should examine”; “I’m not sure how to plan the brand’s strategic direction”; “How to measure the input and output of brand building”... These are the real voices of sellers.

Based on these pain points, Amazon has launched the "Brand Growth Ladder", which provides sellers who focus on brand strategy and high-quality development (including both entry-level sellers who urgently need guidance in brand building, as well as mature sellers who are upgrading and transforming their brands) with clearer advanced guides, more focused stage goals, and clearer key indicators.

Building a Brand on Amazon

How to "advance step by step"?

Amazon's "Brand Growth Ladder" divides the process of sellers' accumulation from product power to brand power into four stages. It not only includes the core indicators that sellers need to focus on at each stage of development, but also includes the corresponding tools and solutions required for growth at that stage. In addition, brand protection measures are implemented throughout all stages.

The first stage is to launch the main brand products. Understanding the preferences of overseas consumers through data insights and developing products that meet user needs and have their own unique advantages is the starting point for sellers to build their brands and the cornerstone for them to stand out from the competition.

As Song Chunliang, founder of Gtheos, said: "The era of directly taking existing products on the market to overseas markets and selling them is over. To be a differentiated brand, you must organically combine user thinking with product strategy. Your products must even have insight into what consumers will need in the future."

On Amazon, sellers can use two tools, "Business Opportunity Detector" and "Amazon Brand Analysis", to explore consumers' product needs and formulate effective product strategies. The former focuses on exploring market needs and providing creative product selection ideas for sellers, while the latter can provide detailed data reports including consumer hot searches, shopping behavior analysis, etc., acting as a "military advisor" for sellers.

Sales conversion is a key indicator at this stage. Therefore, after selecting the main product, the seller's focus is to get more exposure and form a business closed loop. In this process, the cross-utilization of tools such as A+ pages, Vine program, buyer reviews, and product promotion ads are all effective ways to improve performance and quickly increase sales. Take the Vine program as an example. It helps sellers quickly obtain high-quality reviews and is suitable for rapid cold start of new products. Amazon's internal research shows that sellers using this program can increase sales by up to 30%.

The second stage is to establish brand recognition. This is an important step for sellers to let consumers distinguish themselves from thousands of similar competing products. Brand flagship stores and advanced A+ pages are important tools provided by Amazon to sellers to establish unique brand recognition. The key indicator is the brand flagship store quality score.

First of all, the brand flagship store is the most important brand position for sellers. Sellers can vividly introduce brand stories, establish brand image, convey brand values, and maintain interaction with buyers, forming a new traffic entrance. Advanced A+ pages can enrich product detail pages through modules such as videos, interactive hot spots, and carousels, thereby promoting sales conversion.

Wang Ye, founder of Shengyao Cross-border, a senior Amazon operator, pointed out: "Everyone thinks that traffic is getting more and more expensive because they haven't turned 'traffic' into 'retention', and brand flagship stores are exactly the place where traffic is retained. To run a good brand flagship store, sellers should not only pay attention to visual design, but also establish a reasonable product structure."

The third stage is to increase brand awareness. This is a process that requires sellers to spread brand influence and increase brand penetration through integrated marketing on and off the site. The key indicator is the number of new customers.

On Amazon, brand promotion ads, display promotion ads, posts, etc. are all common tools for sellers to increase brand exposure and actively establish connections with buyers. For example, brand promotion ads precisely place creative display materials in eye-catching locations on Amazon to allow brands to be discovered by more potential users, thereby improving the effectiveness of commercial traffic; posts are like the brand's "social account" on Amazon. Sellers can bring higher traffic and product sales by publishing video posts.

The fourth stage is to increase brand loyalty. While attracting new customers, whether old customers can make repeated purchases over a long period of time and be willing to recommend the product to others is an important manifestation of the recognition of brand value. Compared with constantly attracting new customers, the growth brought by repeat purchases is often more valuable. It not only means a reduction in traffic costs, but also means that consumers have trust, commitment and emotional connection with the brand.

How to increase the repurchase rate? A good product experience is the first layer; a good service experience is the second layer, which occurs at every touch point between the brand and the consumer, and runs through the entire process from pre-sales, sales to after-sales. At the same time, it is also necessary to conduct precision marketing according to different target customer groups. For example, sellers can use Amazon's brand customized promotions, brand customized coupons and other tools to conduct personalized precision marketing for different target customer groups to increase sales and repurchase.

In addition to the different focuses of these four development stages, a "foundation" that runs through the entire process - brand protection, is related to whether sellers can maintain the brand results they have worked hard to build. To this end, making good use of various tools that combine active prevention + post-reporting, such as Amazon's Transparency program, reporting violations, and automatic brand protection, is also a compulsory course for sellers to develop their branding.

The window period for the birth of new brands

“Organic growth” relies on long-termism

As Lian Jing, founder of Ruko, a home life and entertainment consumer electronics brand, said at the summit: We don’t want to be just a profitable company, but a valuable company, so creating a high value-added brand is the answer.

Under the trend of global consumption change, the relationship between consumers and brands is becoming more "open" - they are more willing to establish connections with multiple brands, especially the Z generation, who are more willing to try new brands and products. This is undoubtedly a window period for cross-border sellers to increase their brand investment in the next few years.

Amazon's research data shows that 80% of consumers will actively seek new products and new brands through Amazon; as of November 2023, more than 35% of Chinese sellers' sales in the past 12 months came from new products created within 12 months, and more than 60% came from new products created within 24 months.

On Amazon, sellers can not only push new products to overseas consumers faster and more accurately, but also obtain real feedback from global consumers in a timely manner, accurately grasp consumption trends, accelerate product iterations, and quickly adjust production capacity and optimize supply chains based on market demand. More importantly, sellers can effectively endorse their brands through a large number of real user reviews on the Amazon site, forming a good word-of-mouth effect and increasing consumer acceptance of new brands and products.

Of course, for sellers, in order to seize the key opportunity of branding leap and create a new generation of overseas brands, they also need to adjust their mindset and manage expectations in the process.

On the one hand, we should shift from paying too much attention to short-term traffic and sales to paying more attention to brand building and long-term channel construction; on the other hand, we should shift from "giving it a try" to "persistent" investment, and maintain strategic focus and perseverance in the face of various challenges, so that we can move forward steadily.

What sellers need to realize is that brand building is not something that can be achieved overnight. It may take three, five, or even ten years to slowly take shape. What you are doing now is to let users see you, remember you, choose you, spread you, and choose you repeatedly. As Ruko founder Lian Jing mentioned in her sharing, today's investment may not necessarily yield output today, but as long as you continue to invest day by day, you will get a long-term return.

In today's competitive market environment, a truly competitive brand ultimately relies on comprehensive strength. In addition to good products and services, it also requires operational capabilities such as data insight, traffic conversion, and market awareness, as well as brand marketing literacy such as advertising and understanding consumers' minds. In addition, with the rapid development of AI technology today, how to use it to reduce costs and increase efficiency in operations, marketing, and other scenarios is also a necessary skill in the process of brand growth.

Looking to the future, whether or not a cross-border seller can achieve organic growth reflects their core competitiveness and long-term development potential. Only by achieving natural growth through refined operations and internal innovation, and following the brand model of high customer unit price and high repurchase, can the business be healthier and longer-lasting.

"Whether it can grow into a real brand or not is not the question for now, but the best way to combat growth anxiety is to return to rationality and change the way of business operations. Brand transformation actually forces yourself to consider longer-term issues," an industry insider said with emotion.