4 Tips on Migrating Customers From Amazon to Your DTC
A Beginner’s Guide to Customer Migration
Introduction
Selling on Amazon is an amazing way to build a business. The platform provides sellers with access to 150m affluent Prime Members, 200m unique visitors a month, a massive fulfillment network, and better cash flow and payment terms than any other vendor.
That being said - the top priority for most sellers I know is to diversify off of Amazon and build their DTC business. In this article I’m going to explain why sellers are trying to move off of the platform and provide you with a road map for moving your customer base.
Benefits of Selling on Amazon
Selling on Amazon might be a giant pain, but it is typically worth it. Amazon obviously provides traffic to sellers, but there are a number of other benefits to selling on Amazon that you may not know. I have outlined the top reasons below.
Built in Traffic: Customers come to Amazon to shop and go to Google to learn. Amazon has a built in traffic base that is hard to beat.
Amazon Supplied Infrastructure: Amazon provides sellers with a suite of tools to help manage their business. Beyond providing traffic, Amazon supplies sellers with a fulfillment network, customer service support, warehousing, and reporting dashboards. Amazon Seller Central functions as ‘business infrastructure in a box’ for many sellers.
Speed to Market: Amazon makes it easy to get a storefront up and running within days. No development time or technical expertise is needed to get started. With some basic copywriting skills, photoshop, and effort you can have an item listed on Amazon within a day.
Cash Flow: Amazon pays sellers every two weeks. This is unheard of timing in the retail world where 30-60 day terms are the standard. Improved cash flow will give you the ability to reinvest your profits into advertising, new product development and other initiatives necessary to building your brand.
Common Pain Points for Sellers
If the benefits above sound awesome, it’s because they are. However there is no such thing as a free lunch. Here are a few of the major challenges with operating as a seller on Amazon.
You Don’t Own the Customer: Even though a customer may have purchased your listing, that does not make them your customer. Amazon does not share any any personal data about the customers so it is a challenge to build a deep long-term relationships.
Amazon Self Deals: Amazon is able to look at the data across their platform and cherry picks the best opportunities to private label. This doesn’t mean you can’t win, but the challenge just because a little harder.
Sellers are Treated Really Poorly: When I first started selling on Amazon, I assumed the the ‘world’s most customer centric company’ would treat all of their customers well. I was wrong. Sellers can have listings suppressed for issue as small as having an all caps title, to malicious actors attacking your listing, or suppressions due to Amazon incorrectly translating your listing into a foreign language without your consent.
Fees, Fees and More Fees: to operate on Amazon, we pay fees for commissions, advertising and fulfillment which total >45% of total sales. That means that we only keep $0.55. out of every dollar we make before we account for the cost of our product, pay employees, etc.
These major challenges with selling on Amazon are the driving force why sellers are looking to build their DTC business as fast as possible.
How to Migrate Customers
The biggest problem that you will run into when attempting to migrate customers is a lack of an ability to directly communicate with your customers. You will not have the customers’ mailing data or a channel to reach past purchasers so what do you do?
Leverage Product Packaging
The first thing you need to do is make the customer aware that you have a real presence off on Amazon. While it is currently against Amazon’s Terms of Service to drive customers to your DTC site, there is no rule against driving customers your Instagram page. Driving traffic to your social channels gives you the ability to start building real relationships with customers. Here are a few suggestions on how to drive traffic to your owned channels.
Product Stickers and QR codes that drive to either your social handles or a value-add digital page. For example, you can drive traffic to a page that offers a ‘digital workout guide’ as a bonus gift for purchasing on Amazon. Have the customer submit their email and Amazon order number to receive the guide and you are now building out a DTC database.
Add inserts to your product packaging or poly bags that call out some copy around your brand’s ‘reasons to believe’ and list your DTC’s URL.
Update your product packaging to call out your site or social handles on the label.
There are countless additional examples but you get the idea on how to start promoting your social handles through your product and packaging collateral.
Facebook Custom Audiences
While you may not have all of the data you need to start mailing your Amazon customers, you do have enough info to find them on Facebook. Let’s start with FBA orders, you will need to access the Amazon Fulfilled Orders report for customers prior to April, 2021 and will use Tax Remittance Reports for customers post April of this year.
You will now need to pull the following fields into an excel file and load the file into Facebook Ads Manager.
First Name
Last Name
City
State
Zip
Without email address or street address you will most likely have a ~30% match rate (the percentage of customers that Facebook can identify) but that is enough to start. Once you start running a campaign to find these customers, you should add an aggressive promotional offer to entice customers to make a purchase on your site.
Building a custom audience is an easy tactic to launch and has the added benefit of building look-a-like audiences that share the same characteristics of your past-purchasers. Look-a-likes will help you find highly relevant pools of new customers and can be a big driver of growth for your DTC. The downside of this strategy is that it will require you to spend some money to target and message these customers.
Surprise & Delight in MFN Shipments
This should go without saying, but if you fulfill you own orders, you will have all the data of you need to start directly market to customers. Not only will you be able to capture all of the address data you need, but you control the post purchase experience. You can add product samples, bounce back coupons or free swag (everyone likes a tee shirt) to the order — all tactics that help to build affinity for your brand.
Send Direct Mailings
Once you have aggregated all of the FBA and MFN data outlined above, you will be able to send direct mail pieces to your customers. This throw back tactic has proven to be effective as it now stands out compared to a one off email. The key to driving redemptions of the mailer is finding the lowest discount needed to drive strong redemptions. Bonus - you can now build automated direct mail into Shopify through the use of an app, so no need to find a new vendor.
Conclusion
Trying to migrate customers off of Amazon is a tough and risky process, but if you are able to diversify your risk off of Amazon you will sleep much better at night. Now that you have some customer data and a starting point to grow your DTC you have open road to experiment on how to best connect with your customers and build your brand off of Amazon. Remembers - regardless of what tactics you use to try and move your customer base, the most important thing you can do is to deliver an amazing product to your customer. This more than anything else will make your customers loyal to your brand.
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****Using the data from MFN shipments for marketing activities is definitely against Amazon’s terms of service, if caught this can result in a permanent ban.