The pros and cons of a reputation-management strategy that focuses on feedback from consumers on Amazon versus on retailers’ own websites.

Jay Lagarde, founder and president, eComEngine.com

Jay Lagarde, founder and president, eComEngine

Success in e-commerce depends heavily on a merchant’s ability to build and maintain a stellar online reputation. A handful of unhappy, vocal customers can quickly undo something that has taken years to build.

The question, therefore, is not whether merchants should be proactive when it comes to their online reputations. For most sellers, the question is usually a matter of where to focus attention. Specifically, many sellers find themselves torn between an Amazon-focused feedback strategy and their own websites.

In this post, we’ll explore the tradeoffs of reputation management on Amazon versus your own website.

Why Amazon Is a Popular Choice

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Some industry analysts estimate that Amazon.com, Inc. has as many as 85 million Prime members in the United States. Countless other Americans, although not Prime members, also rely on the e-commerce giant for a fast and reliable shopping experience. Globally, Amazon operates eleven different marketplaces, serving hundreds of millions of shoppers across 180 different countries. Simply stated, Amazon represents a huge selling opportunity for third-party merchants. (In fact, Amazon has publicly stated that 3P merchants account for nearly half of all units sold.)

Beyond the obvious revenue implications, Amazon also has some of the most highly engaged customers in all of e-commerce. Thanks in large part to its lenient return policies, ongoing commitment to online innovations (such as 1-Click ordering), and the integrity of its 5-star rating system, Amazon keeps giving its customers more reasons to remain loyal. Shoppers have a vested interest in vocalizing their opinions in the form of feedback—in particular, opinions about third-party merchants. Our data shows that a customer’s willingness to leave feedback can vary based on the merchant’s solicitation process and the quality of such solicitations. In general, however, it’s safe to say that up to 5% (and sometimes even more) of Amazon buyers leave feedback—which is very strong when compared to similar audiences.

Up to 5% (and sometimes even more) of Amazon buyers leave feedback.

In addition to buyer engagement, Amazon feedback also provides several tangible benefits to sellers. Having helped thousands of merchants manage their Amazon reputations, we consistently hear of sellers leveraging feedback to achieve these goals:

Capturing a better Buy Box position: You typically can’t win the Buy Box with a poor feedback rating. All things being equal, the seller with a better feedback rating is likely to capture a greater share of the Amazon Buy Box.

Maintaining a healthy relationship with Amazon: Amazon uses feedback data in calculating a number of seller performance metrics, including order defect rate. Letting your negative feedback rating exceed 5% could get you in hot water. (Soliciting positive feedback can help reduce the impact of negative ratings.)

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Realizing better ROI for the effort: As we’ll discuss in the next section, building an online reputation is an admirable priority. Unfortunately, proactive reputation management across all platforms may not be feasible. Building your own rating system comes with a quantifiable cost and requires ongoing technical support. On the other hand, an Amazon-centric game plan offers clear ROI with fewer headaches.

Your Own Website & Social Media Have Perks, Too

There are clearly many benefits to building your reputation on Amazon. Are there any drawbacks to an Amazon-only approach?

Here are a few questions worth considering:

  • Does an Amazon-only strategy fit with the long-term plan? If a merchant intends to scale his or her off-Amazon presence, then focusing all reputation management resources on Amazon may not be wise.
  • Do you truly “own” your Amazon reputation? Sure, each seller has a public page on Amazon.com, which displays feedback history data. But, does the seller actually “own” such a reputation? Probably not. If you accidentally get suspended or decide to leave Amazon, you can’t take it with you.
  • What if Amazon significantly changes its feedback policy? If you’ve sold on Amazon for very long, you know that Amazon is always tweaking things to enhance the customer experience. By focusing only on your Amazon seller reputation at the expense of your web properties, you may expose yourself to an undesirable situation in the future.
  • Do you plan to launch your own private-label brand? An increasing number of retailers are choosing to launch their own brands. Doing so creates differentiation in the marketplace and presents higher margin opportunities. To pull off a successful launch, however, it’s best to have a captive fan base to serve as beta testers and early reviewers. An Amazon-only approach restricts your ability to cultivate such an audience.
  • What about the missed SEO opportunity? Each new feedback contributes to Amazon.com’s unbelievable SEO presence – instead of your own web property. Search engines love user-generated review data, as it is the definition of “organic” content.

With questions like these swirling through the seller’s mind, it’s understandable why some merchants hedge their bets. By publishing customer reviews (that didn’t originate from Amazon.com transactions) on their own websites and social profiles , sellers can:

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  • Feel more confident in the ownership of review data
  • Increase conversion rates and SEO rankings
  • Diversify revenue streams
  • Reduce vulnerability to major Amazon policy changes
  • Set the table for long-term growth beyond (or in addition to) the Amazon channel

Is an “All-of-the Above” Strategy Feasible?

Clearly, the case can be made that an “all-of-the-above” reputation management strategy is prudent. The seller could achieve the best of both worlds, steadily building credibility both on Amazon.com and his or her own website.

But the big question is this: Is doing both actually feasible?

Large merchants, especially those who employ full-time staff, are certainly more equipped to implement such an aggressive strategy. Soliciting Amazon buyers and non-Amazon buyers can consume significant man-hours and require complex tracking methodologies. Although resource-intensive, an all-of-the-above strategy can create a virtuous cycle for the retailer, driving awareness for the brand across all channels and mediums. This often leads to greater sales volume and more loyal customers.

For growth-minded sellers that are somewhat resource-constrained, technology is now available to help you streamline your reputation management efforts. For example, our FeedbackFive tool has helped sellers streamline their on-Amazon reputation workflows since 2009. Since then, a few other tools have popped up that offer somewhat similar functionality. Likewise, there are countless other marketing automation platforms for off-Amazon use. Before you sign up for any software, review your specific goals and business practices. Pick the tool that will best help you free up capacity, build your reputation, and stay within budget.

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Take Control of Your Reputation

So, should you focus only on your Amazon reputation—or should you spend more time driving reviews on your own website? Before jumping to conclusions, spend time evaluating your short-term and long-term business goals. Only then can you develop a reputation management strategy that makes sense for your e-commerce brand.

eComEngine provides software that helps merchants manage feedback, inventory, pricing and other tasks on Amazon.

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