Amazon just sent out another update to their reviews policy, making sure it’s CRYSTAL CLEAR what you are allowed and now allowed to do. In this post, I’ll outline exactly what I recommend doing – making the old fashioned launch process new again! Our goal is to help sellers prevent suspension issues with their accounts – we don’t want to help you do this when you’ve been suspended; we want to help you change now, and get ahead of your competition.
Here’s what Amazon sent:
We consider a review to be incentivized if you have influenced or can influence the review directly or indirectly, including by monitoring whether a review is written and providing or withholding any future benefit based on whether a review is written or the content of the review. Below are a few examples where a review is considered incentivized and is not permitted:
– You provide a free or discounted product, gift card, rebate, cash payment, or other compensation in exchange for the review.
– You provide or withhold free or discounted products or other benefits in the future based on whether the customer writes a review.
– You use a review service where reviewers’ continued membership depends on writing reviews.
– You use a review service where you can rate customers based on their reviews.
– You use a review service where customers register their Amazon public profile so that you can monitor their reviews of your products.
Incentivizing customer reviews violates our policies and may violate the Federal Trade Commission Act.
The following actions are generally allowed, provided you comply with the above restrictions:
– You may offer discounts that are generally available to all Amazon customers, such as Lightning Deals.
– You may give out free products at trade shows, conventions, or other similar venues where you are unable to monitor whether the recipients write a review or provide or withhold any benefits based on whether a review is written or the content of the review.
We continue to get questions to figure out how to continue to use review groups or services – and this is not the best way to think about this! A wholesale change in approach is needed to resolve this incentivized review concern for Amazon.
A previous product launch process would have included putting product onto a review site, providing claim codes, and allowing customers to buy at steep discounts – it was convenient, easy, and effective – with a clear price to value proposition. That world no longer exists because it was being abused.
So what do we do now??
Amazon has made it clear that this method won’t work, and let’s not poke the bear. Going forward, I recommend: 1) using lower pricing to drive more natural velocity, and slowly increase it to your target price; 2) giveaways on Amazon (they have you “buy” a percentage of your inventory, then you promote it on Facebook, or your own other groups, so they can track all claimants, they like being able to fully track it); and 3) really heavily invest in email campaigns customized to individual products.
This is a lot harder to do! You lose money in organic sales, you have to pay for external ads through social media, and you have to put in time and effort for great digital copy – and we see review rates of closer to 30-40% on these giveaway promotions, rather than the 100% in the previous method, but it’s fully within terms.
Let’s unpack these one at a time.
Lower Pricing: Typical new product launches are initial low price to generate volume. Note, this is NOT the case with new electronic products! Those are introduced at a high price with a “cool” factor to justify the price. Other specialty products like drugs that require years of R&D may also launch with a high price. But typically, consumer goods start lower to drive velocity upon launch.
There are entire courses going over pricing strategies in business school, but the basic idea is that you should be at a minimum breaking even. Break even is your fixed costs divided by sales price minus variable cost.
If my fixed costs to launch a new product (product testing, IP registration, product research, marketing materials, etc) are for example $5000, and my variable costs per unit are $9.12 (factory FOB cost, transportation costs, inspection costs, Customs duties, prep, FBA fees, etc), then I can break even based on the following price points:
5000 / 15 – 9.12 = 851 units
5000 / 20 – 9.12 = 460 units
While you’ll obviously make far more money at $20/unit, you’ll sell a lot more at $15/unit, thereby increasing your chance to get more reviews organically.
Giveaways on Amazon: Amazon has its own giveaways program for sellers to use. This is the most Terms of Service compliant method of running a giveaway… because Amazon is running it! You can see what their expectations are with the method – you have to buy the giveaway items at full price from yourself, and then entrants “claim the offers” from wherever you drove traffic, and you can make every other person a winner, or fewer winners to generate more buzz.
Here, a solid social media strategy is needed. You need to have great images to advertise on Facebook, or Pinterest, or Instagram depending on your product type. In my experience, crafty/handmade images do really well on Pinterest (silicone baking molds); fashion and visually appealing product does well on Facebook (clothing, shoes, scarves); products with great lifestyle images or that would be great with a human instagrammer to promote do well on Instagram (dive knives, running clothes, products that are best shown in use like a windbreaker or umbrella).
We LOVE YouTube for product videos, but with Vendor Express, you can actually upload your own video directly onto Amazon as well! In all honesty, we’ve struggled to see any benefit whatsoever with Twitter advertising.
Customize Email Campaigns: my very favorite example of a great email campaign is for CraftyCroc products. They do a great job of PREPARE, EDUCATE, and CONTINUE – they prepared me for my purchase, they educated me on how to use it, and they continued the relationship through a discount code of 10% (a reasonable, not excessive number) and a request for a review.
In this detailed white paper, Feedback Request White Paper, learn how Crafty Croc engages with their customers, and our recommended methods for developing your own great campaigns with educational attachements. Please find Crafty Croc’s phenomenal educational attachment here: Crafty Croc’s 38 page guide on using their markers
In the end – sellers should use the tools Amazon has provided to do your giveaways and increase velocity – these are their tools that they’ve approved, you can’t go wrong there. It’s so important not to just modify what you’re currently doing that Amazon isn’t approving of – it’s important to toss it out wholesale and follow the spirit of Amazon’s review changes wholeheartedly.