Jay Lagarde, founder and president, eComEngine.com

Even if Amazon accounts for very little of your overall revenue, there is still much to be learned from the site’s wealth of consumer ratings.

Here are four reasons why you should pay closer attention to what people are saying on Amazon.

1. Amazon Has Millions of Highly Engaged (& Vocal) Customers

There’s no doubt that Amazon.com, Inc. is the dominant player in e-commerce (ranking #1 in the Internet Retailer Top 500 Guide). In fact, some reports estimate that Amazon now accounts for 40% of all online retail sales in the United States. And, with more than half of its US customers participating in the Prime program (now likely approaching 70 million members), statistics like these are impossible to overlook.

Many Internet retailers find themselves searching for the best way to capitalize on Amazon’s growth. Obviously, one option involves leveraging the FBA program, which certainly has its perks (streamlined fulfillment and inventory management to name a few). However, some retailers are still torn between the pros and cons of an Amazon presence.

Here’s the good news: even if you choose to bypass Amazon as a distribution channel for now, simply paying attention to Amazon marketplace activity can be beneficial. This is particularly true when it comes to the millions and millions of customer product ratings. Keep in mind that Amazon is home to the most highly engaged online buyers. Why are customers so engaged? A major reason is the review community itself. Customers are not only sharing their feedback to the manufacturer and seller; they’re (more importantly) letting other buyers know about their experiences. This helps buyers reduce risk and make more informed decisions, which, in turn, further magnifies the popularity of the review community.

Alternatively, getting just a few of your own customers to provide feedback can feel like pulling teeth. Even when you’re successful at extracting such information, there’s still a tangible cost associated with making sense of it all. Why not instead turn to Amazon’s existing review community? Rather than reinventing the wheel, simply see what Amazon customers are saying about the same stuff you sell. Your competitors already are.

2. Amazon is Serious about Review Integrity

With such a strong interest from buyers and sellers alike, it’s no surprise that Amazon is very serious about maintaining the integrity of its review system. Recently, Amazon has taken aggressive legal action against entities involved in fake reviews. And, to take things one step further, in late 2016 Amazon issued updated community guidelines for what is (and isn’t) allowed with regard to incentivized reviews. As the guidance points out, “Our community guidelines have always prohibited compensation for reviews, with an exception—reviewers could post a review in exchange for a free or discounted product as long as they disclosed that fact.” The updated guidelines go on to prohibit the practice of offering free or discounted products (with the exception of books or items provided via the Vine program).

Although these policy changes caused many sellers to take a second look at Amazon’s review guidelines, they more importantly reinforced the company’s commitment to consumer trust. After all, Amazon knows that today’s online shoppers value reviews as much as personal recommendations. That’s a good thing to know if you’re Amazon, the owner of the world’s most prolific product review platform.
(It’s important to note that sellers may still ask customers to leave reviews. However, pressuring the customer to leave a review—or trying to influence the outcome of a review – is strictly prohibited by Amazon.)

3. Review Trends Predict Future Profitability

Consumer preferences are constantly changing. New technology, cultural shifts and variances in product quality can collectively shape buying patterns.

For a single merchant managing a few hundred SKUs, it’s difficult to identify meaningful macro trends from his own customer base. Even with the right data, the daily grind of business leaves little time for predicting shifts in customer demand.

Luckily, each transaction on the Amazon marketplace is an important piece of a much larger puzzle. A puzzle that is highly visible, even to outside observers. In fact, in a recent study of 625 merchants, we found that 75% of those surveyed regularly check Amazon customer reviews when making business decisions (i.e. restocking and sourcing).

Not only is each customer review visible – more importantly, each one is date-stamped, making an item’s review history completely sortable. By reviewing recent star ratings and open-ended customer comments, you put yourself in a much better position to answer difficult questions, such as:

• Is recent feedback consistent with the item’s historical rating?
• If not, what is causing such a shift?
• Is the shift negative or positive?
• Are such shifts even relevant to my business?
• What do such shifts mean for my inventory strategy?
• Should I consider increasing or decreasing inventory based on what I’m seeing?
• Is it time to get out of this product (before my competitors do)?

Despite Amazon review data being highly accessible, repeating this process for more than a handful of SKUs can be very time-consuming. Our research shows that most merchants who track reviews do so manually (74% according to our study), but a growing percentage (24%) use a third-party review monitoring and tracking tool. Software use is especially popular among private-label brand owners.

4. Your Identity is Intertwined with What You Sell

Finally, your reputation is directly linked to what you sell. And, whether you like it or not, many of your customers are checking Amazon to see what others are saying about what you sell (Amazon is now the #1 product search engine). Keeping close tabs on Amazon reviews not only helps you make smarter decisions, but it also helps you avoid becoming too closely aligned with downward trending products.

Your business reputation is simply too valuable to ignore what’s being said on the world’s top e-commerce platform.

EComEngine.com provides a variety of technology and services for Amazon sellers.