The Status of Amazon Product Launches: Are They Valid?
There is a lot of confusion and disinformation going around the Amazon seller community regarding the use of product launches. There are many that claim product launches are one or more of the following:
- Against Amazon Terms of Service
- Ineffective at ranking products quickly on Amazon
- Pure rank manipulation
Many critics of the system may not fully understand how a product launch works or its purpose.
Manny Coats had a historic roundtable discussion with product launch experts from Six Leaf, ZonJump, Viral Launch, and Rebate Key on the AMPM Podcast to discuss this very matter in detail.
Check out the video podcast here:
Let’s start with some basics:
What Are Product Launches?
A product launch is more than simply flipping a switch on in Seller Central from “not on sale” to “on sale.”
Product launches are more like marketing events that actually start even before a product is ready to be put on sale.
One of the most common forms of a product launch is the use of distributing discount coupons for your new product to encourage early high-volume sales. The products sold via these coupons are often known as “giveaways” because the discount is so heavy (ranging from 50% or more off full price), sellers may feel as if they are virtually giving their inventory away for free.
Coupons are typically distributed by using launch companies, through email lists, social media outlets like Facebook, and PPC campaign ads. The coupon offer will usually depend on specific keywords used by potential customers.
For example, if you are trying to launch a new ice cream scoop and someone on Facebook has either searched something related to ice cream or follows a page that relates to ice cream, that person would be a good target for a Facebook ad offering a coupon for your new scoop at a heavy discount.
Since the discount is often so tremendous, potential customers are much more likely to purchase the new product merely because of the low price point, whether they truly desire the product or not.
The high volume of sales generated by people using these coupons will be noticed by Amazon’s algorithm, letting your product rank higher for your keywords as a relevant and profitable product for that specific search term. This result is due to the fact that when people purchase the product, they click on a link that takes them to the search results of that keyword phrase.
The Anatomy of a Product Launch
The number of “giveaways” a seller must sell in order to begin climbing the rankings depends on some, but not all, factors, including:
- Number of Competitors – How many results are there that come up when searching for your target keyword phrase?
- Search volume – How often are customers searching for that keyword phrase?
These factors all play a critical role in determining not only how many coupons you need to give away, but also for how long you need to run a giveaway campaign.
Helium 10 offers the CPR Method to streamline the guesswork for giveaways for a successful product launch:
Common Product Launch Questions and Misconceptions
Here is a list of some of the most common questions and misconceptions we hear about product launches using giveaways:
The Terms of Service does not forbid offering your product at a discount as part of a launch promotion. Amazon has not taken disciplinary action against any sellers who utilize product launches in their marketing strategies.
Giveaway coupons are common in the Amazon seller community for special deals like any retail store.
Amazon may take issue with your listing if you are running coupon codes indefinitely as a means to subvert competition. Additionally, Amazon will take issue with any fraudulent or misleading claims or activity from you or your ads; as long as you are transparent and offer a real product, there should be no problem using a product launch strategy.
New sellers should be aware that every year, the competition among most product niches grows. There are more sellers per niche than ever before, so junior sellers may find it harder to launch a successful product than they did only a few years ago.
Amazon is also consistently changing its algorithm to better serve customers looking for relevant products, so staying compliant is also a constant challenge. Often, a trick you used to use as a seller may now be against Terms of Service or had the loophole closed—something Amazon is getting quite good at doing.
Blackhat sellers are also becoming an increasing problem, employing sneaky tactics that enable them to hijack more listings than in previous years. Many of these threats are originating outside the US, so be careful whom you share product information with, particularly with overseas entities.
The 2-step storefront URL is one of the most widely used ones still. Some have transitioned to brand URLs, and other URL structures that better reflect the traits of an organic search.
Coupons are not inherently flawed in concept, but they can be misused by careless sellers. Often their perceived lack of efficiency is due to outside issues, including interference from Amazon algorithm changes or hijackers.
When used for limited periods of time as a product promotion, coupons can be quite powerful in bringing revenue and attention to your brand on Amazon. However, sellers who keep heavy discounts active indefinitely are going to be subject to scrutiny by Amazon, questioning the legitimacy of the product offering.
While it’s always possible that product launches will not cause a product to rise in the rankings, there are often other factors at play as to why this occurs, including:
– The seller chose the wrong product from the beginning
– The giveaway strategy wasn’t well executed
– The seller went as cheap as possible on any marketing campaign piece
– The seller is trying to revive a product that sold poorly to begin with
The average time period for most product launches is 7 to 10 days, but some products may require more or less time based on the keyword competition and demand for the product.
When Amazon observes a sudden sales spike for a day, they typically think of it as nothing spectacular because anyone can have sales spikes for a variety of reasons. The main reason the one or two-day product launches fall off rapidly from rank is that if you don’t immediately start converting organically, Amazon recognizes that temporary spike as an outlier, and thus decreases your rank.
Maintaining a steady sales velocity beyond one or two days will have a more significant blip on Amazon’s radar, particularly when you gain organic sales at full price after the launch period.
Amazon tends to favor new products by giving them a “honeymoon” period during which the sellers are able to give less than normal units out to get to page 1. Also, Amazon will give more love to newer products for other keywords related to the targeted keywords, even if they aren’t necessarily being targeted directly. We don’t know exactly how long this honeymoon period is, so relying on a solid marketing strategy for your product launch is imperative.
As part of the Amazon algorithm, existing products have data history that can either help or hurt a product relaunch. If your older product suffered in sales from when it first launched and did not climb in the rankings, that negative history prevents Amazon from ranking your older product higher.
Amazon may do this despite any jump in sales due to giveaways. While it is certainly possible to revive an older product, you may have to extend your giveaway period beyond the 7-10 days for it to significantly offset the sales history accumulated.
Yes, because the longer your listing remains open with no sales, your trailing history of sales velocity is taking a hit. By closing the listing, it gives kind of a “freezing” effect to your rankings.
Amazon will only penalize fake or fraudulent accounts that make false statements to customers, or fake customer accounts that are used to coupon stack and take inventory for reselling. There is no evidence of Amazon penalizing legitimate products being sold with coupons.
After a certain period of time, Amazon will begin to expect that your product’s sales velocity comes from organic sales rather than through coupons providing heavy discounts. Having you sell your products at heavy discounts indefinitely is against their interests of making money, and will move you down the rankings. According to some product launch experts, you will need to wind down your product launch coupons after a few weeks with an absolute maximum of three months.
Some of the most common keyword mistakes observed include:
-Not allocating enough units for the giveaway period<
-Not fully researching how competitive specific keywords are
-Not striking a balance between product listing SEO and readability
-Not including the target keyword in the product title
-Listing is not optimized to convert for that keyword (images, copy, price, etc)
Successful products typically have been well-researched and have the following traits:
-High-quality product photography with lifestyle shots and product information
-Optimized product title, description, and bullet points with keywords
-Run effective product marketing campaigns across multiple channels, including Amazon, social media, search engines, and exterior websites
Some things you can do to maintain your page 1 ranking include:
-Studying your competitors and make notes about what they are doing well and not well
-Regularly update your listing to reflect any changes in keyword competition, product niche demand, or Amazon compliance issues
-Continue aggressive marketing campaigns across Amazon, social media, search engines, and exterior websites
-After the initial product launch period, use a secondary launch period that tapers off coupons over time until your sales are mostly organic
-Use Amazon analytics to gauge how you are doing with your keywords with tools like Helium 10’s Keyword Tracker
While this answer can depend on your keyword competition and product niche demand, finding one or two keywords that are relatively low competition, high search volume to target is ideal. Once you dominate those keywords (most often longtail keywords), you can branch into the more competitive keywords with more revenue and positioning power on Amazon.
Spending your marketing dollars as efficiently as possible can make a tremendous difference. If you have a big budget, then there would be nothing holding you back from targeting the large keyword phrases from the get-go. But if your budget is limited, targeting multiple keyword phrases that do not require as many units to be given away would be more ideal.
While this answer can vary based on the product niche you are in, generally speaking, it’s better to diversify your traffic given the sheer amount of competition for keywords on Amazon. That way if you lose ranking with one keyword, you are still getting traffic from the other to supplement your organic sales. If you rank for one great keyword and get pushed out by another product, your sales may suffer overall.
One of the most common misconceptions we see is that product launches are not Amazon Terms of Service complaint. As mentioned at the beginning of the article, doing a product launch in of itself is not against Amazon policy, but abusing it can get you in trouble later. We also see stories about coupons or URL types not working, which data has disproven time and again.
If you have questions about product launches and their use in debuting a product on Amazon, let us know in the comments below!