1. Unlike traditional brands that have a pull based logic, new category brands require education and awareness. So your typical keyword research activities fail. And your typical Amazon PPC folks fail because they follow a template. Unfortunately templates don’t work in new categories.
2. For high AOV brands, it’s impossible to compete on price. So you need to spend more on photography and your listings and optimise for conversion rates using thoughtful content. The correlation between this investment and ROI is usually unclear and ambiguous so founders (esp first time) fetter.
3. Meta and Amazon roas has to be measured together because your meta efforts will increase Amazon ROI. Much more than it will for a traditional D2C brand.
4. Most big brands figure out meta first and marketplace later. That means - when a brand is young, when you have younger talent, they are doing meta. By the time the D2C brand enters marketplace, these younger folks have quit and started their own agencies or D2C brands.
This leaves them with decent knowledge of the 0-1 journey through meta but limited knowledge of marketplaces.
5. I have very rarely seen agencies take a new category brand and crush it on Amazon. It has always been hustly founders who usually crack this.
Case study
Deep Bajaj, the founder of Sirona hygiene cracked Amazon for his brand himself. And then he trained his team on it and later on hired an agency to scale the system he built. Here’s how he would have done it ig.
The search volume of “menstrual cups” Sirona’s hero product was non existent back in the day. So they had to run ads on other sanitary pads and related products to build and use engaging creatives to pull people into their funnel.
(Check in: do you think your keyword warrior PPC agency that you pay 5k per month can crack this content piece on their own?)
This is expensive to do but is the only way to build awareness on Amazon.
6. Expensive to do.
This brings me to my final point.
In new category brands, you will rarely see bootstrapped brands doing well on Marketplace. That’s because for the first year, you will bleed to acquire customers. 1-1.5 roas is all you can expect. But what this does is - by the time your category matures and people actually start searching for your products, you will be ranking organically.
And when this happens, your blended roas will start climbing as you keep getting more organic orders.
That is why, not investing in marketplace could prove to be the most exensive mistake for your new category D2C brand.
PS. As a bootstrapped D2C founder who did not invest in marketplace when competition was low, I now regret it for sure. Our category CPCs are 5x higher than they were 4 years ago and leaders in my category have reduced spends because all organic rankings are owned by them because of the timely investments they made.
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