Introduction
For D2C (direct-to-consumert) retailers, Amazon often represents a significant growth opportunity and, at the very least, is worth investigating to see whether it could deliver profitable revenue.
Amazon can work so well because it gives brands access to an enormous pool of customers, sophisticated fulfilment infrastructure, and a marketplace where consumers are already primed to make a purchase.
But succeeding on Amazon is rarely as simple as creating a few product listings and waiting for the orders to arrive. It takes time, patience, and expertise to make it a success. Just some of the reasons are that Amazon has its own advertising ecosystem, algorithms, operational requirements and reporting tools. For retailers without extensive in-house Amazon expertise, getting all these elements to work together can be challenging.
Hiring an Amazon consultant can alleviate some of the stress associated with navigating the marketplace and ensure that it delivers the results retailers are seeking. However, specialist expertise requires an investment, so it’s important that brands thoroughly evaluate whether hiring an Amazon consultant is right for them.
As a specialist Amazon consultant at Fluid Marketplaces, I have put together this article to explain what we do, what the costs cover and what retailers need to consider when deciding if instructing an Amazon consultant is right for them, and crucially if it is worth the cost for their business.
What does an Amazon consultant do?
An Amazon consultant helps retailers improve how they sell and operate on Amazon. The exact scope varies considerably depending on the consultant or agency, but the role will typically combine strategic advice with specialist marketplace expertise.
For a retailer considering Amazon for the first time, a consultant should assess the commercial opportunity, develop a launch strategy and determine how the marketplace should fit alongside the brand’s existing D2C channels.
For an established Amazon seller, the focus should be on improving performance. This should typically involve optimising product listings, analysing account data, developing an advertising strategy, improving organic visibility and identifying operational problems that are restricting growth.
The important point is that an Amazon consultant should not simply be another pair of hands. Their value comes from applying specialist knowledge to help a retailer make better commercial decisions.
Where can an Amazon consultant add value?
One of the biggest advantages of working with a specialist is experience, and many Amazon consultants, including myself, have worked in-house at Amazon in previous roles.
As any brand that has launched on Amazon will tell you, the process is a significant learning curve. A retailer building its own marketplace strategy needs to understand everything from catalogue structure and keyword optimisation to advertising, fulfilment, inventory planning and performance reporting.
An experienced consultant worth their salt will already be up to speed on all those areas and be able to provide strategic guidance to brands.
That can be particularly valuable for D2C retailers, as Amazon needs to be part of a broader channel strategy. Decisions made on the marketplace can have implications for pricing, margins, inventory, and the retailer’s own ecommerce operations.
A good consultant can help a business answer questions such as whether its entire product range belongs on Amazon, which products should receive the greatest advertising investment, how marketplace pricing should relate to the D2C website and whether fulfilment through Amazon makes commercial sense.
There are several areas where specialist support can make a material difference:
- Developing an Amazon strategy based on commercial objectives rather than simply chasing marketplace revenue
- Improving product discoverability through stronger listings, content and keyword optimisation
- Making advertising spend more efficient by analysing campaigns and allocating budget appropriately
- Identifying operational issues, such as poor inventory availability, that may be limiting sales
- Building more meaningful reporting so that decisions are based on profitability and performance rather than revenue alone
The potential benefit is not only higher sales. In many cases, the more valuable outcome is avoiding expensive mistakes and reaching better decisions more quickly.
The cost needs to make commercial sense
There is, however, an important caveat: for some brands Amazon consultancy can be an expensive overhead.
Retailers will need to pay project fees, monthly retainers, performance-based fees or combinations of several pricing models. If the consultant is also managing advertising, creative work, or other specialist services, a separate budget will be required for those elements.
For a large Amazon seller, these fees may represent a relatively small proportion of marketplace revenue. For a smaller D2C retailer, they can be more significant, and the pressure to deliver results quickly is heightened.
This is particularly important when margins are already under pressure.
Amazon sellers already need to account for fulfilment costs, advertising spend, returns, promotions and the cost of stock. Adding consultancy fees on top of those expenses can leave relatively little breathing space if the underlying economics are not strong enough.
Retailers therefore need to resist evaluating a consultant purely on whether they can generate additional sales. The better question is whether they can generate sufficient incremental profit, efficiency or strategic value to justify what the business is paying for their expertise.
Another area covered by a consultant that can be incredibly valuable for brands is being able to hand over the Amazon trouble shooting heavy lifting. This is something we do a lot of for our Amazon clients at Fluid Marketplaces and we find it is a service of great importance when it comes to managing the many pitfalls that Amazon presents.
When might an Amazon consultant be worth the investment?
Consultancy tends to be easier to justify when there is both a meaningful commercial opportunity and a clear expertise gap within the business.
For example, a retailer may already be generating substantial Amazon revenue but believe its advertising performance is inefficient. Improving that performance even modestly could potentially create enough additional contribution to justify specialist support.
Similarly, a retailer preparing for a major Amazon launch may decide that investing in expertise at the beginning is preferable to spending months learning through trial and error.
Consultants can also be particularly useful at moments of change. A business expanding internationally, restructuring its Amazon operation, or attempting to address persistent performance problems may benefit from an experienced external perspective.
The strongest case usually exists where the retailer can clearly define the problem it wants the consultant to solve.
When might consultancy be harder to justify?
There are circumstances in which hiring an Amazon consultant may be premature.
A small retailer with limited marketplace revenue, tight margins and relatively straightforward products may struggle to generate enough incremental profit to cover consultancy fees.
The same may be true for a brand that has not yet established whether there is meaningful demand for its products on Amazon.
If a retailer is still testing the marketplace, it may be more appropriate to keep the initial operation relatively lean, establish the economics and then invest in specialist expertise once there is clearer evidence of an opportunity.
There is also a risk in hiring external support without having sufficient internal ownership. Even when an agency or consultant manages much of the work, somebody within the retailer still needs to understand the objectives, review performance and challenge decisions.
Outsourcing expertise should not mean outsourcing commercial responsibility.
What should retailers consider before hiring an Amazon consultant?
Before making a decision, retailers should first establish what they actually need help with.
“Growing on Amazon” is too broad an objective. A business may need help launching into the marketplace, improving advertising efficiency, increasing organic visibility, solving operational problems or developing a longer-term channel strategy. Those are different challenges and may require different expertise.
Brands should view the hiring of an agency as an essential operational cost to help them to make Amazon work. The idea is that the agency becomes an invaluable resource, without incurring the overheads and responsibilities associated with permanent staff.
Retailers should look closely at the commercial opportunity. Consider your existing Amazon revenue, gross margin, marketplace costs, advertising expenditure and realistic growth potential. This provides a much stronger basis for determining how much external support the business can afford.
It is also worth considering the capability that already exists internally. If your team has strong ecommerce expertise but limited knowledge of Amazon Ads, for example, you may only need specialist advertising support rather than comprehensive account management.
Finally, think carefully about how success will be measured. Revenue growth alone can be misleading. Depending on the retailer’s objectives, useful measures could include contribution margin, advertising efficiency, organic sales growth, conversion, inventory performance and overall marketplace profitability.
Before appointing a consultant, retailers should be able to answer four fundamental questions:
- What specific problem are we paying them to solve?
- What would we realistically expect to achieve without external support?
- How will we measure the incremental value they create?
- What level of improvement is required for their fees to generate a worthwhile return?
If those questions are difficult to answer, it may be worth doing more work on the Amazon strategy before committing to ongoing consultancy costs.
Consultant / agency or in-house expertise?
Hiring a consultant is not the only way to access Amazon expertise, although it is often faster, more effective and more efficient than putting in place an in-house Amazon staff member or team.
A consultant or agency should also provide access to a broader range of expertise and more executional resources, along with a greater emphasis on strategy, audits or helping with specific challenges.
However, while often costly, there are benefits to building an in-house team when the time is right as this offers greater ownership of a retailer’s Amazon offering and allows marketplace knowledge to remain within the business.
For some retailers, a hybrid approach works particularly well. External expertise can be used to establish the strategy, processes and measurement framework while internal teams gradually develop the skills required to manage more of the operation themselves.
The right model depends on the scale of the opportunity, the complexity of the Amazon operation and how strategically important the marketplace is to the wider business.
So, is hiring an Amazon consultant worth it?
For the right retailer, absolutely. Specialist Amazon expertise can shorten the learning curve, improve performance and help businesses avoid costly mistakes.
But hiring a consultant should never be viewed as an automatic requirement for selling successfully on Amazon.
For some D2C retailers, particularly those with smaller marketplace revenues or tight margins, consultancy costs may be prohibitive. In those circumstances, developing internal knowledge or purchasing targeted specialist support may provide better value.
The decision ultimately comes down to economics and capability.
Retailers need to understand what Amazon could realistically contribute to their business, where their internal expertise falls short and how much additional value a consultant would need to create to justify their cost.
When those elements align, an Amazon consultant can be a valuable investment. When they do not, paying for expertise simply because Amazon feels complicated is unlikely to produce the return a retailer needs.
The goal should not be to spend more on Amazon. It should be to make better decisions about where to invest, what to prioritise and how the marketplace contributes to profitable, sustainable growth.
Talk to the Fluid Marketplaces team
If you’re selling on Amazon and wondering whether hiring an Amazon consultant could benefit your brand, we’re happy to help you assess the opportunity.
At Fluid Marketplaces, we work with retailers to understand their current Amazon performance, identify opportunities for profitable growth and determine where specialist support can add the most value.
There’s no obligation and no hard sell, just an informal conversation about your brand, your ambitions for Amazon and whether additional expertise could help you achieve them.
Contact the Fluid Marketplaces team to arrange an informal chat.
