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    Common Mistakes: Having Too Large of an Amazon Catalog

    Written by Tristan Williams
    on March 01, 2021

    Introducing Common Mistakes by Envision Horizons

    In the ever-changing world of e-commerce, navigating the world’s largest online marketplace can be confusing even for experienced Amazon sellers. That’s why Envision Horizons is excited to introduce the first ever episode of Common Mistakes, a new video series hosted by our founder, Laura Meyer. 

    In Episode 1 of Common Mistakes, we discuss the issue of having too large of a catalog on Amazon and Walmart. For brands with a large production selection (including many brands that fall within the Fashion, Beauty, Grocery, and related categories), it is often strategic to choose quality over quantity when it comes to catalog curation. We have recapped our CEO’s top five reasons why you should reconsider listing your entire catalog on Amazon or Walmart.

     

    Mistake 1: You’re saturating your own consumer base and limiting your discovery

    When building up your SEO on a marketplace like Amazon, it is important to understand the flywheel effect. If you are selling multiple products that are very similar, it is best practice to funnel all of your sales to the top selling style. If you do keep several similar styles, you must ensure that it makes sense for them to live under the same parent ASIN.

    This is because of how Amazon’s A9 algorithm works. An ASIN on Amazon receives a better Best Seller Rank (BSR) the more units it sells. For example, let’s consider two brands that both have 1000 customers a month, however Brand A sells a single mascara style and Brand B sells five mascara styles. Other factors excluded, eventually Brand A will outperform Brand B. This is because Brand A’s single mascara ASIN will have a better BSR, and will therefore rank higher organically on Amazon. 

    Additionally, customer reviews will be consolidated in this same manner, which will improve click through rates from the search engine results page (SERP) to your listing and create an even stronger flywheel effect.

     

    Mistake 2: You’re giving your customers decision fatigue 

    Product detail pages where a listing has over 10 variations can be overwhelming for consumers.  There is also customer fatigue from an Amazon storefront perspective when there are too many products that are similar. This can lead to a drop off in customer engagement and even loss of business to a competitor whose products are more straightforward. In conclusion, don’t bewilder your customers with too many choices.  

     

    Mistake 3: Not all of your SKUs are profitable on Amazon 

    It might seem obvious to not sell a product with a negative margin, but sometimes companies can get caught up in the top line sales number or have too many SKUs, resulting in difficulty keeping track of profitability by ASIN. This is why MyHorizons, the software solution built by the software team at Envision Horizons, has a tool that analyzes the profitability for every ASIN, making it easier to scrub your catalog of negative margin products. 

    If you are having to compete for the buy box or you have agreements with other retailers, it is extremely difficult to increase product prices. Even with FBA’s small and light program, products that are under $10 are better off bundled or removed from your catalog. There are also situations where a category has become so commoditized that to compete with top sellers, the list price hardly covers all of the Amazon fees. Avoid pointless races to the bottom as much as possible. 

    Estimated-Profitability-By-ASIN

    MyHorizons Estimated Profitability by ASIN Tool 

    Mistake 4: You’re choosing quantity over quality   

    There are only so many hours in a day, ad dollars to spend, and warehouse storage space. There is a massive opportunity cost for trying to do too much at one time on Amazon. It is much better to go deeper into building a strategy for a single product than to try to put up a bunch of listings and see what sticks. An Amazon marketer’s time is wisely invested by focusing on one product and researching competitors, finding best keywords to use, fine tuning the visual storytelling and creative assets, and building out robust advertising utilizing all of Amazon’s new ad products. Taking the time to perfect your listing for one product will bring more benefits than listing 50 ASINs with lazy images and an overwhelming amount of SKUs to manage. 

    Our advice is to use your existing Amazon data (or data from your own DTC) to create an in-depth content calendar that you strictly follow, and try not to get distracted with other products or problems. It can also be beneficial to revisit your top sellers in depth quarterly, or even monthly, to make sure they remain fresh and that you are never complacent. It is a common mistake for brands with hundreds of SKUs to get the majority of their sales from 3-5 products. 

     

    Mistake 5: You’re listing products that should remain on your DTC exclusively 

    Amazon is a giant search engine and building SEO within the A9 algorithm takes time. Because of this, products that are limited edition, part of a seasonal collection, and will be discontinued or have limited stock should not be sold on Amazon. Amazon is a channel that works best for evergreen products. We usually advise clients in the luxury fashion and beauty industry to keep their more exclusive or expensive products on their own website, using Amazon as a channel for brand awareness and for entry level products that will sell much higher volume. 

     

    In Conclusion...

    Less is more. Quality over quantity. If you have a lot of products on Amazon but your sales are stagnant, the solution is to not add more products to your catalog. Take a step back and focus on the products that have already shown promise. With a little love, optimization, and upper funnel custom ad dollars, these products can become a “best sellers” in their category. 

    Stay tuned for our next episode and blog recap of Common Mistakes by Envision Horizons.

     

     

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