How retailers can put Amazon to work for them
Many brick-and-mortar businesses have come to view Amazon as a threat to their bottom line, but columnist Adam Dorfman illustrates how smart business owners are using Amazon to their advantage.
Attention retailers: Amazon doesn’t have to be Public Enemy Number One.
Yes, Amazon has a well-deserved reputation for disrupting (and obliterating) brick-and-mortar retailing. But offline retailers can learn to get along with Amazon and even generate more sales working with them. Just ask Aaron Jarvis, who operates Near Mint Games.
For the past few years, Near Mint Games has successfully sold popular card games such as “Magic: The Gathering,” “Yu-Gi-Oh” and “Pokémon” out of a small, nondescript storefront on Chicago’s North Side. (Disclosure: Not a client. All money in our relationship flows from my son and I to them so we can get more Pokémon cards.)
Near Mint Games is the kind of place where gaming enthusiasts not only shop but also hang out and play against each other in events organized by Jarvis. His store is a fixture in the Chicago TCG (trading card game) community, but his offline presence is only half the reason for his success. He earns nearly half his income through a storefront on Amazon.
As Jarvis explained to me recently, Amazon is the classic “frenemy” — both a threat but also a resource for retailers. His approach is instructive for any retailer that operates a brick-and-mortar storefront. Here are the ingredients to success in Amazon’s world, based on Aaron’s experiences:
Don’t fight Amazon — be on Amazon
“I am all about finding more people who want 10-15 percent of my money to let me sell my things,” Jarvis told me. Amazon provides a convenient destination to sell products ranging from Pokémon cards to accessories such as card sleeves.
And Amazon offers access to third-party tools, such as a bot that helps him price his products. Amazon simplifies his life and adds to his revenue stream, though with lower margins than he gains from his offline sales.
Put the efficiency of digital to work for you
To be sure, selling on the web means reducing his margins on sales – but he also improves his margins on the buying side. His approach is to utilize audience targeting when advertising on Facebook for products he’s interested in buying, which invariably results in product purchases at a lower price than if he had searched offline.
Interestingly, Facebook is not a commerce destination for him but rather a platform for purchasing and advertising promotions and events at his brick-and-mortar store.
Offer something your customers cannot find elsewhere
The key to keeping his offline store thriving is to provide products and experiences that you won’t get on Amazon or at an offline Target.
As Jarvis pointed out, “We provide a deep inventory of Pokémon cards. Coming here and getting access to a complete set of cards is not something you can do at Target, which has only the latest issue of cards, all of which sell out quickly.”
Moreover, his store, like many other hobby stores, is a destination for gaming enthusiasts to play in tournaments and trade cards. As I was writing this article, Near Mint Games was promoting on Facebook 10 events over an eight-day period, including a bi-weekly “Yu-Gi-Oh!” Tournament and events for beginning “Pokémon” enthusiasts. You can’t have these types of community experiences on Amazon.
In addition, events give Near Mint Games another way to avoid competing on price. “You cannot acquire customers based on price,” he said. “There is no loyalty there.”
Maximize the value of your offline location
Near Mint games is more than a storefront. It’s also a distribution center and warehouse for fulfilling online orders. By relying on his staff to manage the heavy lifting that comes with product sorting, packaging and mailing online orders, Jarvis manages his business in a more cost-effective way. His rent pays for both a store and a warehouse.
His experiences also underscore the influence Amazon is exerting across the ecosystem that Amazon helped shape, along with publishers such as Apple, Bing, Facebook and Google. Amazon is increasingly not only a retail center but also a hub for being found.
According to a PowerReviews study released last year, 38 percent of shoppers start their search on Amazon versus only 35 percent for Google, and other studies have pegged the percentage of shoppers searching first at Amazon as high as 55 percent. It makes sense for Amazon to increase its presence as a data platform, even for businesses that don’t sell there, similar to the way Amazon Web Services powers other businesses.
Regardless of how Amazon evolves, it’s clear that there are often ways to utilize Amazon to grow your local business the way Near Mint Games has done. In addition to the tips and insights Jarvis shared with me, consider also:
- Use tools Amazon makes available to advertise for your products. The Amazon advertising platform is similar to Google AdWords in that it relies on targeting methods to refine your messaging. Tools such as Sponsored Products and Product Display Ads can increase your awareness on Amazon. For instance, Sponsored Products promotes single products using keyword-based campaigns, among other features. Product Display Ads rely on display advertising on Amazon. If you are fluent with AdWords, Amazon’s ad tools should be easy to learn. Check out these case studies for examples.
- Hedge your bets by relying on Google AdWords to drive and capture traffic beyond Amazon. For instance, Google Shopping campaigns offer features such as Merchant Promotions and Google Ad Extensions help you raise visibility for text ads in search engine results.
It’s Amazon’s (and Google’s, and Apple’s, and Facebook’s) world. How are you surviving in it?