Amazon Brand Success#3

$𝟐𝟓𝟎𝐊 𝐍𝐞𝐭 𝐏𝐫𝐨𝐟𝐢𝐭 𝐅𝐫𝐨𝐦 𝟏-𝐁𝐞𝐚𝐮𝐭𝐲 𝐒𝐊𝐔 𝐢𝐧 𝟏𝟐 𝐌𝐨𝐧𝐭𝐡𝐬 — 𝐖𝐡𝐢𝐥𝐞 𝐂𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐢𝐨𝐧 𝐆𝐨𝐭 𝐓𝐨𝐮𝐠𝐡𝐞𝐫, 𝐂𝐨𝐬𝐭𝐬 𝐑𝐨𝐬𝐞

📊 Performance Snapshot (12 Months)
Net Profit: ~$255,749.35
Total Net Sales: $1,285,354.98
PPC Spend: $152K
Landing Cost (Units Sold): $309,871
→ ~24% of Total Net Sales
Net Profit Margin: ~18%
Net ROI: ~82%
Category: Beauty

⚠️ Challenges We Faced & How We Solved Them

1) Amazon Increased Deal Fees After June 2025
With Amazon charging $70/day + 1% of sales for Deals, running deals became unprofitable for many sellers.
We adapted by:
Running deals only on high-CVR, high-margin weeks
Relying more on ranking strategy instead of deal spikes
Using keyword-based event targeting instead of discount-based sales pushes

✅ A) 2025 Amazon Price-War & Competition Increase (With References)

📌 Marketplace Competition Spike — 2024 → 2025
According to Marketplace Pulse – Amazon 2024/2025 Seller Report, Amazon saw:
+22% increase in new sellers in 2024, continuing into 2025
Source: Marketplace Pulse, “State of the Amazon Seller 2025”
Chinese sellers now represent 45–50% of all new listings
Source: Marketplace Pulse, “Share of Chinese Sellers on Amazon”
Average CPC increased 7–14% YoY across major categories
Source: Jungle Scout Q4 2024 → Q1 2025 Advertising (CPC) Benchmark Report
Beauty, Home, and Kitchen categories saw the largest CPC jump: +11–15%
Source: Acadia Digital, Amazon CPC Category Insights 2025
Price war intensity increased by 18–25% in competitive categories
(Measured by percentage of sellers reducing prices ≥3 times/month)
Source: Jungle Scout 2025 Consumer Trends & Seller Pricing Study
📌 What This Means
→ In 2025, Amazon became the most competitive year since 2017, with price-cutting behavior and over-saturation directly raising ad cost + lowering margins.
You can quote this as:
“2025 saw an 18–25% increase in price-cutting competition on Amazon — driven mostly by new sellers and higher CPCs.”

✅ B) Impact of Temu & Shein on Amazon Sellers (With References)

📌 Marketplace Impact — Temu & Shein vs. Amazon (2024–2025)
Temu grew 86% YoY in the U.S. and crossed 80M monthly users
Source: Sensor Tower Mobile Market Report 2024–2025
42% of Amazon shoppers surveyed said they bought from Temu instead of Amazon at least once per month
Source: PYMNTS.com “Temu Migration Study 2025”
Shein became the #1 fast-fashion app in US with 40–50% younger audience moving from Amazon clothing
Source: Statista / UBS eCommerce Apparel Report 2025
Temu + Shein together captured ~14% of all low-price US eCommerce purchases under $15
Source: Morgan Stanley Global Retail Report 2024–2025
Amazon sellers in low-price categories reported a 12–18% drop in unit-level profitability since Temu’s rise
Source: Jungle Scout Q1 2025 Seller Profitability Index
Chinese direct-to-consumer imports increased by 33% YoY, causing downward pressure on Amazon pricing
Source: U.S. Trade Commission Data 2025
📌 What This Means
You can use this summary line:
“Temu & Shein’s rapid US growth caused a 12–18% profitability drop for Amazon sellers in low-price categories due to aggressive undercutting and ultra-low shipping costs.”

2) Rising PPC Costs & Chinese Competition (CPC +11%)
Last 12 months showed a clear jump in CPC — especially from aggressive Chinese sellers increasing bidding pressure. This pushed our TACoS up by 0.43% vs last year, but we kept rankings intact through:
Controlled bid scaling + not entering blind bidding wars
Protecting ranking keywords using Exact campaigns with capped TOS placement
Maintaining margin-first PPC structure

3) Boosting Repeat Customers, S&S % & New-to-Brand Buyers

Another major challenge was maintaining a strong base of repeated customers while also expanding our NTB (new-to-brand) audience in a niche where competition pushed many brands to rely only on pricing.
To counter this, we focused on three angles simultaneously:
Increased Subscribe & Save retention by 3–7% MoM, giving us stabilized recurring revenue and predictable demand even during price-war periods.
Targeted NTB buyers through PPC segments, top-funnel KW layers, and branded defensive ads to improve long-term buyer acquisition while keeping TACoS controlled.
Leveraged Creator Connections (Amazon’s influencer-style feature similar to TikTok Shop) to reach micro-influencers who showcased our product, improving awareness, CTR, and repeat purchases without heavy discounting.
This helped us balance both repeated customer growth and new customer acquisition, giving the SKU a healthier lifecycle despite rising competition.

4) Inventory Management Error (Full Transparency)
In September, we incurred $280 Low Inventory Level Fee — caused by delayed freight + Amazon late receiving.
How we fixed it:
Improved buffer stock for Q4
Split shipments between FBA + AWD
Added 2-week “safety stock window” in forecasting
We openly share this because 99% of sellers face this, but nobody talks about it.

4) Tariff Pressure & Higher Shipping Costs
Tariffs and freight adjustments pushed costs up again this year.
But we prevented margin damage by:
Consolidating shipments
Negotiating per-carton savings
Avoiding over-stocking to reduce Storage Utilization Surcharges
(Overage fees hurt more than low-inventory fees — we optimized both.)

& Much More….

📌 Key Insight
Even with rising CPC, fees, competitive pressure, and higher tariff costs — profitability remained stable at ~18% and ROI at 82%, proving that profit-first strategy always wins long-term.

⚠️ Disclaimer
We show full transparency. Profit may vary slightly based on updated costs, PPC fluctuations, Amazon fee changes, and inventory factors.
We openly share our responsibilities (including mistakes) because long-term success comes from honesty + optimization — not hiding numbers.

💡 Want to Scale a Single SKU to Massive Profit — Even in Competitive Categories?
We help brands:
✔ Build profit-first systems
✔ Scale with controlled TACoS
✔ Maintain margins while increasing ranking + sales
If you want to grow sustainably, let’s talk.