Hire In-House or Partner with an Amazon Agency?
Building a successful business on Amazon requires a lot of work. In addition to the company’s ever-changing protocols, there are currently 2.5 million sellers competing across all Amazon marketplaces. It’s not just a matter of being on the platform; it’s a matter of distinguishing your brand from your competition. Business owners who are serious about growing their brand on Amazon will inevitably need help. Thus, the following question always arises: should you build an internal Amazon team or partner with an agency? The right answer will depend on the size of your business, your available resources, your experience with Amazon, and – most importantly – your goals on the marketplace. For brands that simply want to have a presence on Amazon, going in-house is a viable option. If you want to build your Amazon store into a significant sales channel, however, there are many hidden factors to consider – some of which come with expensive risks. To help you make an informed decision that will minimize challenges and maximize profits, below are the primary advantages that a reputable Amazon agency can offer your business.
1. Reduce Costs
Not surprisingly, cost is one of the primary factors in deciding whether to partner with an Amazon agency. At first glance, brand owners often assume building your Amazon business internally is more affordable. Many quickly learn that it takes more than one person to manage and grow your brand on Amazon. On average, running an Amazon business internally requires two to five full-time employees. The cost of these additional salaries, benefits, and payroll taxes can add up quickly – and it doesn’t stop there. Company training, staff management, and turnover also contribute to the true cost of employing an in-house Amazon team. Partnering with an agency, on the other hand, reduces and simplifies your Amazon-related operating expenses. You don’t have to worry about employee compensation, payroll taxes, turnover, training, or any other costs associated with maintaining a new department in your company.
2. Increase Talent and Expertise
Another misconception about growing your brand on Amazon is underestimating the diversity of tasks involved in day-to-day operations. Let’s assume your business bears the cost of adding two full-time employees to run your Amazon department. Your success on the marketplace will depend entirely on the bandwidth and core competencies of these two employees. Can the two of them produce optimized copy and images for product listings, create and manage effective PPC campaigns, leverage timely promotions like Coupons and Lightning Deals, forecast inventory efficiently, anticipate and meet key Amazon deadlines, provide insightful data analysis, manage customer reviews, and troubleshoot account issues – all with an equally high degree of skill and efficiency? Partnering with a recognized agency like Channel Key puts your Amazon operations in the capable hands of 6 – 8 experienced professionals who each specialize in a particular function. Instead of two generalists with limited bandwidth, you’ll have an entire team of dedicated specialists.
3. Secure Access to Exclusive Amazon Agency Benefits
In the early days of Amazon, sellers had direct access to an Amazon support representative who would answer questions, provide recommendations, and even help guide the growth of your business. Those days are gone. Securing a designated Amazon Account Manager now costs a minimum of $1,600/month + 0.3% of your total sales. When you partner with a proven agency like Channel Key, we become your designated account manager. You instantly acquire the in-depth, round-the-clock support of a dedicated team of experienced professionals devoted to managing and growing your business. In addition, our close relationship with Amazon unlocks numerous benefits not available to individual sellers. As an Acknowledged Amazon Integrator and Global Advertising Partner Development (GAPD) Member, Channel Key receives early insight into new Amazon Advertising tools, analytics, metrics, and beta programs, which gives your brand a competitive advantage.
4. Minimize Amazon-Related Complications
Amazon is complex, compliance-driven, and ever-changing. The platform is always introducing new programs and protocols. An honest mistake can lead to inventory delays and even account suspensions, halting sales and sending your team scrambling to troubleshoot problems. For example, you may remember in 2020 when Amazon suddenly increased the Inventory Performance Index (IPI) threshold to avoid storage restrictions and penalty fees. A few months earlier, Amazon abruptly suspended inbound shipments to its fulfillment centers for non-essential items. As a recognized Amazon agency, Channel Key is your safeguard against unexpected complications that often arise in the ever-evolving Amazon ecosystem. We provide you with a dedicated team including a strategic brand manager, content strategist, marketer, and data analysts who monitor your account daily to anticipate challenges, minimize problems, and keep your Amazon business functioning efficiently and profitably.
5. Save Time and Maximize Efficiency
The Amazon Marketplace, which includes Amazon Advertising, is a robust platform that grows more competitive by the day. New sellers are joining, more products are being listed, and more brands are advertising on Amazon. At this point, each day is an opportunity to increase your brand awareness on the platform, which will translate into more conversion power behind your ads in the future when they are shown against those of competitors with less awareness. Partnering with a proven agency streamlines the day-to-day operations of your Amazon business through efficiency to keep your brand growing. In addition to carefully developed processes designed to create alignment and maximize results, Channel Key has assembled an ecosystem of proprietary algorithms, technologies, and data sources that are available nowhere else. This includes analysis of Amazon market share, keyword Share of Voice within Amazon Search, bid management and analytics tools, and our own proprietary insights dash. This and other technologies will only increase in importance as Amazon continues to become more competitive.
6. Eliminate 3rd Party Technology and Software Expenses
As mentioned, developing an in-house Amazon team is cost-prohibitive for many businesses. Unfortunately, these costs don’t end with employee expenses. E-commerce is technology driven. Growing your brand on Amazon’s competitive marketplace requires advanced software and technology that provides essential data and insight. Channel Key’s team utilizes more than 40 best-in-class applications including SEO and keyword research software, competitive analysis technology, videography and photography services, data analysis programs, and more. These important tools not only require costly licenses, but also the knowledge and proficiency to use them effectively. When you partner with a proven agency like Channel Key, you don’t need to worry about either.
7. Enable Scalability
One of the biggest challenges that brands eventually face with an in-house Amazon team is limited scalability. Selling on Amazon is labor-intensive. As your brand grows on the marketplace, the amount of work involved increases. It is likely that your in-house Amazon team is already operating at full capacity. Limited bandwidth and resources can easily prevent your business from raising the bar, setting higher goals, developing new campaigns, implementing additional marketing levers, and ultimately growing – which is the key to increasing sales. An established agency like Channel Key is positioned to scale your brand on Amazon from the beginning.
8. Reduce Risk
Developing your brand on Amazon requires a considerable investment of time and resources. Even then, there’s no guarantee. Such is the nature of business. On a marketplace with more than 2.5 million sellers, you’re going to need help. Employing an in-house team is certainly one approach, but it comes with each of the above-mentioned risks. Partnering with an agency that has a proven track record of increasing Amazon sales for businesses in many industries will lower this risk. With a combined 30 years of experience selling on Amazon, Channel Key has helped complete millions of e-commerce transactions and managed more than 145,000 SKUs, resulting in cumulative sales approaching $500 million. On average, our proprietary Amazon strategies help our clients increase year-over-year sales by 83%. In other words, we walk the walk.
CHANNEL KEY TAKEAWAY
Determining whether to take your Amazon operations in-house or work with an agency is a big decision, but it’s not the only one you will need to make. Should you decide the latter is the right solution for your brand, the next step is choosing the right agency. The growing competition on Amazon has led to an influx in agencies and consultants who specialize in helping businesses grow their Amazon channel. Unfortunately, not all can deliver results – not necessarily because they are unqualified, but because the agency and the client are mismatched. A partnership between a business and an Amazon agency is a big decision that both parties should carefully consider. The most important factor is whether your Amazon partner is the right agency for your business, and vice versa.
Channel Key has a successful track record because we are selective about the brands with which we partner. We understand that not every business will be a good fit, and that’s okay. A successful partnership requires a strong foundation. To help secure this, we work with brands who share our core values:
- OWN EVERYTHING – High Standards and Ultimate Accountability
- POSITIVITY IS A CHOICE – Be Aware and Control What You Can Control
- PASSION FOR GROWTH – Reset Your Bar Personally and Professionally
- ROOT THE PROBLEM – Solve the Root Case, Don’t Band-Aid the Problem
- ADAPT DAILY – Growth Mindset, Mental Nimbleness and Flexibility
- HONEST COMMUNICATION – Open, Effective and Honest Communication
At the end of the day, success for our clients means success for us. As a business, you should seek an agency that follows this guiding principle, aligns with your company values, understands your particular needs, is open and transparent about how they can help you, and has the record to back it up.