In this issue of the Amazon FBA deep-dive, we are analyzing SproutBrite, an FBA brand in the educational poster category.
There are a lot of things to like about this brand but there are multiple easy wins that are being overlooked.
The estimated monthly revenue for this brand is $191,439/month. We anticipate it can be increased by 20-25% 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!
SproutBrite Brand Overview
The first listing for SproutBrite went live on Amazon in January 2019 and their product catalog has blossomed since then. Now they sell over 97 different products on Amazon – all different types of educational posters.
The brand is doing $191,439 in revenue on Amazon across their entire product catalog.
The number one listing for SproutBrite is their educational posters for toddlers which is estimated to be bringing in $73,000/month in revenue (approximately 38% of overall revenue).
- Diversified revenue across product portfolio (top product only accounts for 38% of revenue)
- Strong review structure (almost every product is rated 4.5 stars or above)
- Custom artwork lends itself to IP/copyright protection from competition
- Low average order value of $14 could make advertising on Amazon difficult as CPC continues to rise
- Large product catalog makes inventory management difficult
3 Easy Ways to Grow SproutBrite by 30%
There are opportunities to significantly grow and differentiate this brand. We break down the following wins:
- Cross sell other products using ads, A+ content, and virtual bundles
- Improve listing images to improve conversion rate
- Use Store Spotlight Campaigns to improve advertising efficiency
Let’s get into it!
➡️ Win #1: Cross sell other products using ads, A+ content, and virtual bundles
SproutBrite currently has a core listing with over 8,000 reviews driving 38% of overall revenue. These educational posters for toddlers are the perfect introduction to the rest of the catalog.
There are 3 separate ways they can increase cross selling.
- Use Sponsored Display ads to advertise their other products on their hero listing
Sponsored Display allows you to easily advertise your products on your own listings and competitor listing. With this ad unit, you’ll get the chance to put a headline and piece of creative.
- .Use A+ content
To advertise other listings, use your enhanced brand content and put in a product comparison table. This allows customers who come to one of your listings to easily see your product catalog and click through to other listings.
- Use Virtual Bundles
Contrary to almost all of the brands we review, this is something Sproutbrite already does! Shown below is their example:
➡️ Win #2: Improve listing images to increase conversion rate
The core listing for SproutBrite is solid (scores 10/10 on the Helium10 Listing Checker) but it could definitely be improved to improve conversion rate.
The main image could be enhanced to add depth to the image. It also needs a splash of a distinct color – maybe a red banner or something to draw the eye more on the page.
The listing images are solid – they are pictures of the various posters but they could show the dimensions of the posters better in the image and incorporate more lifestyle imagery.
For readers, how do you know if your listing conversion rate is bad? There are 3 main ways to check
- Go to Advertising Console -> Brand Metrics -> Check your conversion rate compared to your category.
- Use Search Query Analytics and determine your conversion rate on your top 3 keywords versus the category average
- Use Business Reports & Brand Analytics
➡️ Win #3: Use Store Spotlight Campaigns in their Advertising Strategy
For brands with large product catalogs (all in the same category), developing a comprehensive advertising strategy can be extremely difficult.
Often you’ll be bidding on the same keywords across half of the products in your catalog. And while you won’t compete with yourself in the ad auction, the data in the ad console can be confusing.
What I’ve found for brands like this, is Store Spotlight campaigns work really well to drive top line growth across the entire product catalog.
Store Spotlight campaigns look the below. They are a Sponsored Brand ad which directs traffic to 3 separate pages on your Amazon storefront.
This allows you to show your entire product catalog without allowing competitors on the page. To fully show the impact, compare a Storefront landing page versus the traditional search results.
On your storefront you can feature select products, manage the design, and create a true landing page/experience for shopping for your products.
On regular Amazon search results, you’re bombarded by competition, look a likes/copycats, and your competitors can even advertise on your own listing.
How Much is SproutBrite Worth?
SproutBrite has 97 different products all in the educational posters category on Amazon. While the products are low-priced, there is the opportunity to introduce IP with their custom artwork and copyright images to help prevent competition.
In one aspect, the low prices are an advantage. It’s not feasible to sell a $14 product using Facebook or Google Ads anymore because the customer acquisition cost has gotten too high. That leaves Amazon and other online retailers has the best place to find low priced products.
SproutBrite is estimated to be doing $191,439/month which equates to $2,297,268 per year in revenue. Given the niche, I’ll assume a net margin of 22% (somewhere between 20-25% would be reasonable). That gives you an annual profit of $505,398.
2 Actionable Takeaways
Here are actionable takeaways that you can apply to your business today:
- Are you utilizing all of the resources at your disposal to cross sell your other products in your catalog? Take advantage of these strategies and use your existing listings to help your new ones.
- Use Store Spotlight campaigns to help direct traffic to your store and advertise your entire product catalog.