SUMMARY
Launchpad programme identifies exciting new products from startups and helps them launch and accelerate their growth on Amazon
The Launchpad programme might seem steep for Indian ecommerce as the margins can take a significant hit
Joining the Launchpad programme is NOT going to be a magic ticket to Amazon success. D2C brands need to get their basics right — good product, team, and operational capabilities
To join Amazon’s Launchpad programme or not is a dilemma that most D2C startups in India face. Having worked at Amazon US when this programme was scaled and being part of a D2C brand in India that won the ‘Fastest Growing Startup on Amazon’, I think I have a unique position to offer my honest opinion of this programme.
What Is The Launchpad Programme
The Launchpad programme identifies exciting new products from startups and helps them launch and accelerate their growth on Amazon. In the US, the eligibility criteria is much more stringent. They need to be a funded startup, have a unique product, or need to sell client-friendly certified products.
Amazon India has so far been accepting bootstrapped startups. I believe that funded startups can hire a team to support their Amazon businesses. It is bootstrapped startups that need help until they hit PMF.
How Do Indian D2C Brands Benefit?
Launchpad programme advertises a lot of benefits, but below are the ones I found helpful. If any of these resonate with you, you should consider joining the programme.
Amazon Enhanced Brand Content (EBC)
EBC, also known as A+ content, gives the D2C brands extended flexibility to add more details about the products. It is a standard offering that Amazon offers all the sellers on its platform. D2C brands can add images with informative content to the product listings. It also includes the use of bullet points in product descriptions to present the data more concisely. Sellers who are registered on the Amazon Brand Registry can enhance their product descriptions and modify them.
When a customer is looking at a product on Amazon, they automatically gravitate towards those products that use EBC listings. This is because EBC or Amazon A+ content allows them to have explanatory pictures about the product and its features along with how and where to use it.
Enhanced Brand Content is the best way to decrease Advertising Cost of Sales (ACoS) and increase conversion rates. This is because it plays a huge role in the optimization of your product listings. Brands that have used A+ pages include names such as SOLARA and BoAt.
Another feature is A++ or Premium A+ content. An exclusive, invite-only feature by Amazon, it offers brands the ability to add videos, mobile-optimised images with the ability to add more modules in the A+ page.
It’s accessible to the big players in the game like luxury brands or massive internationally known tech products. Amazon charges vendors more than $250K per year for Premium A+ content. Though it is offered for free to the brands that have joined the launchpad programme.
Account Management
Once your D2C brand is onboarded an account manager is assigned to you. The account managers help the startups navigate the internal processes. It is highly recommended for brands that want to scale their business on Amazon to hire an Amazon account manager. With the Launchpad programme, startups get automatic access to key account managers.
Global Selling
D2C brands should start exploring the US and the European markets from day one. With the Launchpad programme, entrepreneurs get support to showcase and deliver their products to the global market. Increased exposure through Amazon Launchpad storefront placements, category-focused email campaigns and banner ads help the brands go global.
Costs
The Launchpad programme is not cheap. Amazon charges a 5% commission on top of the standard commission. For example, if the standard commission is 11.5% once you join launchpad, it will be 16.5%. On average, the margin for D2C brands in India is 10%. So, Amazon takes away half of your margin.
Though once you cross INR 30 Lakh per month for three consecutive months, the commission will be adjusted down to 2%. While the margin might be steep for Indian ecommerce businesses, entrepreneurs should consider using the programme and aim to get into the 2% bucket in the first year.
Entrepreneurs need to assess when they will be able to hit the 2% mark. Otherwise, the brand’s margins will take a significant hit and there won’t be enough to allocate on spend-to-growth initiatives.
As an entrepreneur, you have to realise that joining the Launchpad programme is NOT going to be a magic ticket to Amazon success. You need to have a good product, team, and operational capabilities. Think of it as a supplemental programme. It’s designed to jumpstart and accelerate the brand’s journey. So I recommend first getting your basics right before joining the programme.
