Should your luxury brand be selling on Amazon?

Marketplaces present an opportunity for a range of brands selling online. In the western world, we all know that Amazon is the king of marketplaces. In 2022, its net sales were in excess of half a trillion US dollars.

It’s a huge marketplace where consumers are already searching for luxury brands. For example, in the US, an average of around 30,000 searches a month take place for Rolex – a brand that sold over 1.1 million items and sold $9.5 billion worth of watches in 2022 according to the website, statista.

It’s well known in the luxury industry that demand is greater than supply for Rolex, so they wouldn’t need to be present on Amazon, but they’re there, be it exclusively through retailers. In fact, they have a strong Amazon presence and we’re not surprised. Rolex is a high-volume luxury good with a price point that ranges from HNW to a much lower income level audience, so it makes sense for their retailers.

But what should govern the decision for other brands as to whether they use Amazon or other online marketplaces? Let’s explore this further.

To be (in), or not to be (in), that is the question

The discussions around luxury brands selling on Amazon reminds us of the discussions had more than ten years ago around social media. Consumers are talking about, or searching for your luxury brand on these platforms. The question back then is the same as it is now: “Do we engage them or ignore them?”

A lot of the brands we work with are exclusive, catering to a very wealthy audience. However, some luxury goods brands are more accessible by those that are in the Affluent or Wealthy audience segments: fashion, accessories, and cosmetics brands, for example.

For brands exclusively focussed on HNW and UHNW, one must question what would be gained from joining a mass market such as Amazon. These brands are not looking to ‘shift’ volume and it’s a valid concern that the brand and the exceptional customer service is not easily replicated in a marketplace, versus your own website or store.

Indeed, we know that consumers of all wealth brackets are using marketplaces due to their convenience, speed, no quibble returns, and integration into other services such as Alexa or TV on Demand.

Emerging brands can benefit

For emerging luxury goods brands, Amazon presents an opportunity for exposure and growth. Indeed Amazon itself is trying to cater for the luxury market, recently launching Amazon Luxury Stores:

“Luxury Stores is a shopping experience that features established and emerging luxury fashion and beauty brands. Enjoy access to the latest collections and exclusive items from each luxury brand, with fast, free delivery. Luxury brands and luxury retailers guarantee the authenticity of every item sold in Luxury Stores.” Amazon

Specifically mentioning emerging brands is not a lazy narrative. Amazon must be aware of the reticence of luxury brands to join its platform; the Luxury Store is certainly a step to try to address this. 

For emerging brands, the exposure, not only in the store but also to use Amazon Ads to hold a presence among more established competitors is also an advantage – not only for sales, but for awareness and affinity.

What about high-end luxury brands?

Here at Giant Leap, we know that items with a price point of £10k+ will not generally be bought online in sufficient volume to make it worthwhile, but their journey can start online and drive a luxury brands’ white-glove service. 

That said, another option for luxury brands is to only submit sections of their inventory to Amazon Luxury Stores. 

For example, if you sell luxury interiors, you might choose to list cushions or linen, keeping the beds or sofas away from Amazon. This will make those items more accessible and give you a presence in a huge marketplace to not only sell your lower cost items, but create more brand awareness and even support other KPIs, such as store visits.

5 key considerations for luxury brands thinking of selling on Amazon

  1. Think very carefully about your audience. The HNW and UHNW may not be the only audiences buying your products, particularly if you are a high volume fashion, accessories, or cosmetics brand.
  2. Consider your products and your business goals. If you’re looking for growth, the product price point is not over £10k, and you want high volume sales, it might be worth considering Amazon.
  3. Luxury businesses always think brand first and business second, it’s one of the reasons why their products are of such high quality. However, if it makes business sense to be on an online marketplace, research other luxury brands on Amazon and what it’s doing to support them to build the case for inclusion.
  4. If you’re an emerging brand, consider the awareness and affinity of being included among other, more established, luxury brands as an early adopter of Amazon’s Luxury Stores.
  5. If you’re selling high ticket items over £10k, consider whether your accessories might be a good fit. And don’t just focus on sales as a KPI; Amazon is also a good tool for building awareness and can help to support other areas of the business.

What are your thoughts? Is your luxury brand on Amazon? Or are you against it? We’d love to hear from you.

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