In this issue of the Amazon FBA deep-dive, we are analyzing AudioSoul, a niche FBA brand in the audio/visual equipment space.
This brand has a dominant Amazon presence with thousands of reviews and a top-selling listing. However, as competition on Amazon has gotten more fierce, there are a number of easy wins that can be implemented.
The estimated monthly revenue for this brand is $52,800/month. We anticipate it can be increased by 30% through the easy wins below.
This is what we cover in this deep dive:
- Business Summary
- 3 Easy Wins to increase revenue
- What is the exit valuation of this brand?
- Actionable takeaways
Let’s get into it!
AudioSoul Brand Overview
The first listing for AudioSoul went live on Amazon in December 2020 and they have quickly grown their Amazon listings to thousands of reviews per listing.
- Category leader listing with thousands of reviews
- Product is large and may be hard to ship
- Large revenue concentration – if something happens to the main listing, revenue would go to 0 instantly
3 Easy Ways to Grow AudioSoul by 45%
There are opportunities to significantly grow and differentiate this brand. We break down the following wins:
- Optimize listing by adding video and Enhanced Brand content
- Cross sell other variations through Sponsored Display and bundles
- Implement Amazon advertising strategy to expand marketshare.
Let’s get into it!
➡️ Win #1: Add a video and Enhanced Brand Content to the Amazon listing
Currently, the main listing has an high organic rank on most of the top keywords for the category. However, there are significant improvements that can be made to the listing to instantly increase conversion rate.
There are two improvements that would instantly increase conversion rate.
- Add a video to the listing
- Add Enhanced Brand Content
In today’s age, it is necessary to have a video for your listing. The video can be as simple as a PowerPoint animation pointing out key features of the product. What I would do though is remix the existing customer review videos shown at the bottom of the listing.
However, videos have been shown over and over to increase conversion rate by up to 25%.
They should also put A+ content on their listing. While not a huge differentiator, A+ content is important for mobile browsing – where it is the first thing customers see as they scroll past the listing images (even before the bullet points.
Win #2: Create a product defense campaign to upsell the different variations
AudioSoul currently has 3 variations: 12, 24, and 52 – all different sizes of their core acoustic panel listing. For FBA brands that only have one listing, having 3 variations is ideal because it enables you to use ad units such as Sponsored Brands.
Currently the best selling variation is the 52 sq ft pack. What I would do is
- Create virtual bundles with the different variations to increase cross selling
- Create a Sponsored Display campaign and target your own listing with upsell/downsell headlines.
We’ve talked about virtual bundles extensively already so I won’t delve too deep here. Sponsored Display ads should be used to increase sales of the different variations though.
I would advertise the lesser selling variations here with a headline like “Mix or match different sizes for the perfect audio set up!”
3. Test Amazon Advertising to increase revenue
Currently AudioSoul is running zero Amazon ads which is almost certainly impacting overall revenue.
The product is already ranked very well in the category but with Amazon increasing ad placements and reducing organic search, running ads on Amazon is a must if you want to maintain or increase marketshare.
My strategy would be to look at keywords where the listing is not already in the top 8 of organic results. The top 8 organic results (in particular the top 4) receive the majority of search traffic on Amazon.
By starting advertising only on these keywords, you could limit cannibalization of organic sales and drive incremental lift of revenue.
How Much is AudioSoul Worth?
Amazon listings like these are in high demand because they are typically operationally simple and low complexity. AudioSoul is a category leader and there are multiple growth opportunities that must be factored in as well.
AudioSoul is estimated to be doing $52,800/month which equates to $633,600 per year in revenue. Given the niche and products, I’ll assume a net margin of 15%. That gives an annual profit of $95,040
Here are actionable takeaways that you can apply to your business today:
- Look at your listing today and make sure you have a video on it. Or make plans to create a video and upload it to your listing.
- If you are currently not running any Amazon advertising, look at keywords where you’re currently ranked outside of the top 8 on Amazon. This represent the best potential to increase your marketshare without cannibalizing existing organic sales.