Exploring Amazon Launchpad: Amazon’s Most Controversial Program

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If you haven’t heard of Amazon Launchpad, you’re not alone.

Since 2015, Amazon has offered this service to support small sellers, start-ups, and ambitious entrepreneurs. Launchpad provides tailored resources, gives access to insider advice from an Amazon representative, and generates new opportunities to expand globally. 

To date, upwards of 6000 start-ups worldwide have grown with the help of Amazon Launchpad’s services and features, including 1300 in Europe alone. But despite this, very few sellers seem to be aware that Amazon offers an entrepreneur program. 

What is Amazon Launchpad?

Amazon Launchpad is a scheme designed for entrepreneurs searching for ways to grow, expand, and develop their small brand. It offers several opportunities to help smaller sellers attract new audiences and engage better with their existing customer base. As of 2021, the program has rolled out across six categories:

  • Health and beauty
  • Electronics
  • Home
  • Baby
  • Toys
  • Groceries

Amazon EU Seller Services VP Francois Saugier says that Amazon Launchpad “is designed to empower inventors. We support them with fulfillment solutions, customer service, dedicated merchandising, and more, allowing them to focus their efforts on what they do best, which is building cool products that will improve customer’s lives.” 

The scheme is open to both existing Amazon sellers and those signing up to use the platform for the first time. To be accepted into the program, sellers must have a professional Amazon account selling their own brand products for fewer than four years. In addition, the account must not earn more than $5 million in gross sales per year. 

Amazon Launchpad focuses on three areas of dedicated support:

1. Awareness – Improved visibility of small brand products

  • Product placement in dedicated Amazon Launchpad storefronts
  • Mentions in relevant email campaigns sent to Amazon shoppers
  • Banner ads displayed off-Amazon on third party sites
  • Video-focused storefronts for improved discovery
  • Free participation in Lightning Deals and other promotional events

2. Content – Free access to A+ content features

  • Access to widescreen-formatted content
  • Video opportunities
  • Content carousels
  • Hotspot images
  • Ability to add enhanced product comparison tables

3. Support – Tools and resources for insight and information

  • Invitation to Amazon seller webinars
  • Free access to digital quick-start guides
  • Complimentary AWS credits
  • Help setting up Amazon account
  • Support in optimizing pages for maximum impact 

Support is available in all Amazon markets participating in the scheme. This includes the United States, India, Australia, France, Germany, Italy, Spain, and the United Kingdom. In addition, free translation services are offered to help sellers optimize their content to engage with international buyers. 

On the surface, the program seems to make a lot of sense. After all, attracting buyers is one of the biggest challenges facing start-ups today, especially in the post-pandemic landscape where shoppers have more online choices than ever before and are more budget-conscious. 

Wait… Isn’t This The Same as Amazon Accelerator?

It sounds similar, doesn’t it? The truth is that the two schemes are very alike. Amazon Accelerator offers a somewhat similar level of support for small sellers and entrepreneurs, but there is one significant difference between the two program:

  • Amazon Accelerator absorbs the brand into the Amazon ecosystem, meaning Amazon sells these products as their own. This program is designed for production-focused start-ups who want to be Amazon Private Brand suppliers. 
  • Amazon Launchpad allows entrepreneurs to retain control of their brand. It’s designed for start-ups that want to grow into more prominent, more visible brands but require additional support from Amazon experts to help get them there. 

The Big Question: Why is it Controversial?

Amazon Launchpad was initially introduced in a way that made the program seem like crowdfunding. It targeted unknown entrepreneurs with great ideas who just needed a little helping hand to get off the ground and was very much viewed as a way to introduce diversity to the market. 

That all sounds good, but Amazon Launchpad was quickly determined to be crowdfunding without the crowdfunding. Not only are there no clear and direct financial benefits to using the program over standard Amazon Selling features, but entrepreneurs also have to pay to use the service. Fees are hefty, with an additional 5% of sales paid on top of the standard 15% Amazon fee. Participants also must sign a minimum 12-month contract. To make matters worse, Launchpad offers no reporting option to show how this fee is spent or whether Amazon Launchpad features and tools directly contribute to impressions, traffic and sales. 

Of course, things were very different in 2015 than they are today. Back then, Amazon didn’t have the same integrated features for sellers as it does now. The platform has been consistently launching new seller functions every year, with 225 new introductions for SMBs in 2019 and an additional 135 new selling tools rolled out throughout 2020. This may explain why Amazon Launchpad has become more controversial over time. 

Another frustrating area for sellers is that Launchpad’s promotional opportunities are often very unevenly distributed, and there are no guarantees about who or what will feature in promotional events. Instead, it seems to depend greatly on how product features and brand values connect with the relationships Amazon is currently pursuing. For example, a number of STEM products were selected for promotion due to Amazon’s partnership with the London Science Museum. 

But now we have to ask, could the pandemic be breathing new life into this scheme?

The COVID Effect

According to the 2020 Amazon Launchpad Innovation Report by Amazon Australia, more than one-quarter of local SMBs are now feeling more creative and more inspired to reinvent their business plan as they’ve had more time to reflect during lockdown. 

The most common post-COVID business plans include:

  • Generating new revenue streams (27%)
  • Launching a digital brand (23%)
  • Adapting an existing product (18%)
  • Reaching out to international audiences (18%)
  • Building a new product (17%)

The updated report for 2021 suggests that these figures are rapidly growing. This year, an additional 21% want to expand into new markets, and an extra 15% either want to adapt an existing product or bring a brand new product to market.

According to the survey respondents, the number one thing businesses need most to achieve their goals is marketing, advertising, and social media support. This suggests that the Amazon Launchpad resurgence could be about to begin. 

Does Amazon Launchpad Really Work?

Despite the frustrations and controversy, there have been multiple success stories to emerge from the program.

One of the most notable case studies comes from Eero; a home Wi-Fi system that boosts the signal across every room. Within six days of being approved for the scheme, CEO Nick Weaver had sold thousands of units. Within10 months, Eero had generated 1,800 reviews with an average customer rating of 4.5 / 5.

Eero is just one of many stories. In 2019, Amazon Launchpad announced that within 12 months, it had helped more than 250 start-ups generate $1 million or more in sales. 

Is Amazon Launchpad Right For You?

If you have a very promising product but lack an in-depth understanding of what’s needed to get a start-up off the ground, Amazon Launchpad can help. It’s often recommended that anyone thinking of signing up to the scheme test and validate their unique ideas through a crowdfunding platform first to maximize their chances of success. 

While Amazon Launchpad isn’t directly connected to funding, it does offer opportunities to raise funds for future growth and development, so it’s also worth looking into the program if you’re seeking financial support. The annual Amazon Launchpad Innovation Awards are free to enter and typically offer a top prize of €100,000 for the ‘Start-up of the Year’ winner. There are additionally five finalist awards worth €10,000 each. However, in 2021 alone, the awards received more than 1,800 entries from entrepreneurs and start-ups across 26 countries, so it is a very competitive landscape. 

When deciding if Amazon Launchpad is right for you, it’s important to remember that there are several requirements for maintaining your place within the program:

  • Maintain an order defect rate of 1% or less
  • Maintain a cancellation rate of 2.5% or less
  • Maintain a late shipment rate of 4% or less

If you are unsure that you have the capacity and resources to meet these requirements, it is better to build up the strength of your on-Amazon brand first. 

Is Amazon Alone Enough?

It can be. Amazon Launchpad has some advantages, the most notable being free access to A+ content creation, promotion through the dedicated Launchpad storefronts, and advice from a real Amazon growth representative. 

However, in many cases, signing up for Amazon Brand Registry and using the standard seller features and functions should be all you need to grow and develop. 

We are a specialist Amazon Marketing agency, please get in touch with us if you need assistance.

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