With millions of businesses selling their products on Amazon, growth in competitive markets is a 365-day chase. For most advertisers, this pursuit requires manual monitoring of ASINs to track progress, as well as manually updating campaigns with the correct ASINS to drive profitability.
Brands spend too many hours navigating inefficient processes to make sure their products are retail-ready, with the goal of avoiding huge losses due to margin leakage.
It’s a lot of unnecessary, tedious work.
In this blog, we’ll cover the challenges of margin leakage along with their solutions.
You’ll also learn how to automate the process of campaign analysis and pause underperforming ASINs in your campaigns while also replacing them with other retail-ready ASINs to streamline your current process.
Understanding Margin Leakage on Amazon
As a brand or marketing manager, you have to oversee all daily, business-critical tasks that directly impact margin controls and total revenue generated. With that responsibility, knowing how and where you are potentially losing out on revenue and narrowing margins becomes non-negotiable.
There are a few common ways margin leakage impacts your brand on Amazon:
- Third-party sellers latch onto your product variations
- Underperforming marketing ads slip through the cracks and continue to run
- You lose the Buy Box due to a lack of tracking
- Price matching occurs impacting ACOS targets
Inflation in the U.S. continues to trouble businesses that rely on e-commerce sales to stay afloat, and Amazon’s recent 5% increment in fuel and inflation surcharge doesn’t help. Brands are planning to rebound in 2023 and create frameworks to help compensate for lost revenue this year.
The first step to easing revenue challenges is by solving for margin leakage. By understanding today’s practices and finding new ways to optimize, brands can elevate their efforts.
The Pain of Manual ASIN Monitoring
Every ASIN is essential—and constant monitoring is the only way to ensure your campaign stays on track without derailing or leaking revenue.
With consumers making quick choices online, a single ASIN issue could mean losing countless sales and would-be customers. But many brands still rely on manual supervision of ASINs, which demands a lot of time, energy, and employee commitment. In many cases, eCommerce teams spend weeks calculating which ASINs will drive profitability against current demand only to miss their window because an error was overlooked during manual review.
Manual supervision is simply never going to be 100% error free. And even if it was, it would still be wildly inefficient.
For instance, knowing when to pause an ASIN and replace it with an eligible option is a difficult manual task. Many KPIs like your ACOS help you determine your profit margins and choose the best possible ASINs to activate. But for every new ASIN, the team must monitor near-term profitability before choosing to re-enable that media.
By automating support for retail-ready ASINs—with customized and proactive ASIN margin controls — you can save your team hours each week they can use to seize new opportunities instead.
Finding an All-in-One Solution for Margin Leakage
As a vendor on Amazon, your product is not eligible for ads if you’re not winning the Buy Box. Combine that with the eCommerce platform’s unpredictable price compressions, and you understand the need to stop unhealthy inventory from being moved at the cost of your media dollars.
In such a situation, proactively monitoring all your ASINs that should have media support is the way to ensure profitability in 2023.
Amazon Latitude is a solution that lets users do exactly that.
With Latitude, you can recognize and pause any ASINs that are not retail-ready and replace them with better alternatives without any manual effort. Latitude helps eliminate margin leakage by pointing brands to the best ASINs for media spend. Your advertising team can monitor these recommended ASINs in a fraction of the time, as your custom goals and margins automatically promote retail-ready ASINs and pause products that are below your margin limits. Better still, Latitude will swap out your paused ASINs with retail-ready ASINs.
Additionally, Pacvue monitors your Buy Box to ensure you maintain ownership and that you’re maximizing profits on every campaign you run—automatically. You can monitor every aspect of your Amazon campaign, including your content, reviews, and tickets, so your team can track the growth metrics you prioritize.
How Latitude Helps Brands Solve Margin Leakage:
Now that you know what Latitude is, here are three ways it helps brands prevent margin leakage and drive profits:
- Use Retail-Ready ASINs to drive sales
According to your custom margins, Latitude monitors all active ASINs based on their content score and media support. In the case of low margin, it removes this ASIN and suggests possible substitutes to replace it with.
- Get ahead of price compression
While your campaign is active, if Amazon matches another retailer’s price drop on the SKU, that price compression can make your ASIN ineligible. Latitude will pause any non-viable ASINs for media support and automatically replace them with another approved ASIN
- Drive higher ROI and performance by combining Marketing and Media
Your marketing and media teams can set their thresholds for the campaign’s performance, and Latitude will use those inputs to analyze whether an ASIN has an acceptable review count. In case of a match, you will know that this ASIN is ready to advertise.
As a first-to-market solution, Pacvue has worked with hundreds of brands, sellers, and agencies to create Latitude. The solution provides a way to save time on manual ASIN monitoring and prevents potential loss of sales by automating every step and preventing margin leakage. You can pinpoint any problems immediately, improve campaign performance, and ultimately generate more revenue.
To learn more about algorithmic management that maximizes your eCommerce sales, check out Pacvue Commerce and book a demo today!