What is Amazon Launchpad?
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Are you a small business looking to get started on Amazon?
It takes being technical savvy to succeed on Amazon, from designing your brand detail page to enrolling in Amazon fulfillment services, and beyond. And with so many vendors in the crowded Amazon marketplace, it can be difficult to make your products stand out. One solution for this is to find agencies that offer Amazon marketing services.
There are other ways to win in the Amazon marketplace as well. That’s where Amazon Launchpad comes in.
The Amazon Launchpad program is an opportunity for small businesses to collaborate with Amazon marketing liaisons in the hopes of boosting sales and creating a strong foothold with the eCommerce giant. Partnering it with your knowledge of what Amazon pay is and knowing what Amazon logistics is can definitely increase your chances of succeeding in the marketplace.
Is Amazon Launchpad right for your startup? Read on to learn more.
Amazon Launchpad Structure and Benefits
Since 2015, Amazon Launchpad has helped small businesses promote their products.
In effect, the program functions as both a specialized storefront within Amazon and the brand’s in-house marketing agency for small businesses.
Let’s take a look at both aspects of the service.
The Launchpad Storefront
Many people want the convenience of Amazon along with the feel-good experience of buying from small businesses. Much like Amazon Fresh, the Amazon launchpad also has its own grocery.
The Amazon Launchpad Storefront introduces such consumers to a curated list of Amazon verified small brands.
- Brands featured in the Launchpad Storefront have Amazon’s seal of approval. Consumers who are worried about low-quality imports come here when they’re looking for unique, well-made products.
- Category pages create a fun, curated browsing experience similar to a local boutique, rather than what a general Amazon search for a product like “towels” or “stools” can yield.
- Amazon Launchpad partners must use Fulfillment by Amazon (FBA) services, stocking their products in Amazon or partner warehouses. As a result, Launchpad products are eligible for Amazon Prime shipping and arrive ultra-fast. Understanding how to use Amazon coupons will help you use this service better.
- Brands must maintain specific customer satisfaction ratings to stay alive in the Launchpad storefront, which serves as an additional quality guarantee.
Appearing in the Launchpad Marketplace can make you more visible and discoverable. As long as your product delivers, you’ll develop brand recognition and generate sales as you get started on Amazon.
How Launchpad Provides Marketing Help
Previously an invitation-only service, businesses can now apply to receive the following benefits through the Amazon Launchpad program:1
- Liaison support – Have you tried selling with Amazon in the past, only to struggle with the technical requirements? Reading through FAQs can only get you so far. But when you’re finally accepted to Launchpad, you’ll be assigned a liaison to help guide you through the steps to success.2
- Launchpad brand portal – Access to unique selling tools gives you an edge. Have questions about optimizing your product descriptions, choosing your categories, or anything else? The brand portal serves as your one-stop shop for webinars, how-to guides, and other potentially valuable tools for small business owners.
- Support with presentation and branding – Your brand’s detail page is almost like a second web page. With the Launchpad program, you can create a media-rich environment with videos, carousels, and other attractive content that can draw customers in. You’ll also have access to the Imaging Services Team, which can help ensure your branding stands out and measures up.
- Opportunity to go global – Amazon hosts Launchpad storefronts in nine different global markets. Once you’re plugged into the company’s infrastructure, it’s possible to start marketing and shipping your product to international audiences.
- Some reduced fees – Launchpad comes with an additional cost as compared to regular Amazon selling services. (We’ll discuss this more in the next section.) However, you’ll pay lower fees when running promotions like lighting deals and seven-day deals.
If these benefits sound attractive, read on to discover the fine print.
Launchpad Conditions and Terms
As noted above, Amazon Launchpad is like a storefront and an agency.
It’s no surprise, then, that the valuable marketing advice that you get through the program isn’t exactly free.
Let’s take a closer look at the terms of the Launchpad Program.
Who is Eligible for Amazon Launchpad?
Amazon Launchpad is designed to help highlight and promote innovative startups that meet the following criteria:
- Less than $5 million in annual sales on Amazon
- Already enrolled as an Amazon seller (even if you’re brand new)
- Ready to start shipping products immediately
Initially, Amazon Launchpad mostly featured emerging brands funded by venture capital firms or crowdfunding platforms. However, it’s now expanded to include other small businesses that meet these criteria and submit compelling applications.
Once you apply, you’ll receive an answer within a week or so. With it will come the terms for enrollment.
Conditions at Signup
Once you’re accepted to Amazon Launchpad, you agree to a 12-month contract that lays out various terms and fees.
- When you sell on Amazon, there’s always a cost. Depending on your product category, you can expect to pay Amazon a referral fee for each sale. This is either a set price or a percentage of the sale, often around 15% (although it’s lower or higher in some categories).
- Launchpad membership attaches an additional 5% to the fee schedule. If you’ve typically paid Amazon 15% or $15 of each $100 shoe sale, you’ll now pay 20% or $20.
- You’re also required to enroll with a Fulfillment by Amazon (FBA) service. If you currently handle your own shipping, you’ll need to transition to a new logistics and fulfillment system, which has its own cost. Then, you’ll be responsible for FBA shipping fees.
The good news? As your business grows, you could potentially see lower fees. Amazon sometimes chooses to lower the additional fee to 3% when you gross over $1 million in sales on Amazon. (The decision is up to their discretion.)
The bad news? You’ll be locked into this arrangement for twelve months (unless Amazon dismisses your brand).
Maintaining Your Status
While you don’t have the ability to sever your Launchpad contract with Amazon, they can always decide to take your product out of the Launchpad Storefront.
To maintain your status, you’ll need to maintain an average 3.5 star customer rating across five or more reviews.
After the First Year
If you’re still billing under $5 million after your first year as a Launchpad brand, you could always choose to remain in the program (canceling with 30 days’ notice anytime thereafter).
The benefits to opting in include:
- Continued presence in the LaunchPad storefront
- Ongoing access to liaison support
But you’ve learned all you can from a year of webinars and A/B testing, and you feel confident that you can maintain your sales volume without access to the Launchpad Storefront. In that case, you could end your term and go back to selling on Amazon as a regular vendor.
In this case, the number one benefit is lower referral fees on Amazon transactions.
Is Amazon Launchpad Worth It?
Now that you know the answer to the burning question—what is Amazon Launchpad—you’re likely wondering if the service is right for you.
Launchpad comes with clear benefits as well as concrete costs. To perform your own cost-benefit analysis, consider the following factors.
Where Else Are You Selling?
Are you planning to sell your new product exclusively on Amazon? Or do you use additional sales channels like the following?
- Your own eCommerce storefront
- Etsy
- Instagram and Facebook in-app sales
- Google shopping
If you sell across various platforms, a strong Amazon presence is just one aspect of a successful marketing strategy.
After all, you’ll need to optimize each storefront and focus on a consistent brand image (rather than one designed specifically to perform on Amazon).
- If you only plan to sell on Amazon, Launchpad could help you excel on your platform of choice.
- If you’ve diversified your eCommerce presence, an independent marketing agency can help you boost your Amazon sales without ignoring other potential sources of revenue.
Are Referral Fees a Concern?
If you only sell on Amazon, you’re committing to a lifetime of referral fees (which the company can change at their discretion). That’s not to mention the fees associated with FBA services.
- The additional 5% premium on referral fees may not sound like much, but it can add up, especially as you scale. And if you’re selling in a product category where base fees start at 20% or 30% of the sale, you’ll likely lose a significant portion of your margin to Amazon.
- Before signing up for Amazon Launchpad, calculate your net referral fee to Amazon based on your anticipated sales volume. Then, consider whether this money is better to spend on Amazon referral fees or external marketing services.
Do You Need Flexibility?
Don’t want to be locked into your contract with Amazon for twelve months? Unfortunately, Amazon Launchpad doesn’t provide much flexibility here.
Many small business owners find that fluidity is key for their early financial health. If this sounds like you, opt for a different marketing partner.
Power Digital Marketing for Amazon Sales Channels and Beyond
At PDM, we’re industry leaders in eCommerce marketing.
Are you looking for ways to grow your small or medium-sized business? Marketing and selling on Amazon can be a great way to connect with millions of potential customers. At the same time, there are more places than ever to sell your product, from Amazon to social media and more.
Get in touch today to find out more about the best approaches for your small businesses, including our Amazon marketing services.
Sources:
- Amazon. Launchpad. https://sell.amazon.com/programs/launchpad.html/
- Business News Daily. Growing your business with Amazon launchpad. https://www.businessnewsdaily.com/15294-growing-your-business-with-amazon-launchpad.html