This article is by Jelena Nuhanovic of Amazonia PPC.
Amazon Launchpad is a special program aimed at startup businesses, with the goal of helping them launch new and innovative products on the Amazon marketplace.
Launchpad includes a number of benefits, which help businesses set up their products and market them to customers. It has its own section on the marketplace dedicated to these new products, and Amazon promotes Launchpad to customers who have shown themselves to be early adopters of new technology and innovative product types.
Some brands have found Amazon Launchpad to be extremely helpful to get the word out about their products and find enthusiastic new customers. But it comes with a cost, and there is an application and approval process to complete. Launchpad isn’t right for everyone, so in this article I will explain all the pros and cons to help you decide if it’s the best way to go.
What is Amazon Launchpad?
Amazon Launchpad is a program created by Amazon to help sellers with unique, innovative products find millions of customers. It has criteria for the kind of sellers and products that are eligible, and an application process to go through. Sellers who are accepted onto Launchpad receive special support and marketing benefits to help build sales for their product.
Launchpad is aimed at the startup business environment, where a lot of the funds come from crowdfunding platforms such as Kickstarter, Indiegogo and Patreon (although it is also open to products which are funded in other ways). Amazon has partnered with many of the largest crowdfunding sites to try and get new products launched exclusively on the Amazon marketplace.
So, if you have a physical product that was successful on Kickstarter or another crowdfunding platform, the chances are that you are a good candidate to enter the Launchpad program.
What does Amazon provide to Launchpad brands?
Amazon Launchpad brings a lot of benefits for brands that are ready to sign up to the program and pay the additional fees. Many of these benefits are not available even to the most experienced sellers in the standard Seller Central environment.
- An Amazon support consultant: this will be your own supporting agent who works for Amazon and knows a lot of inside information that is only shared with participants of the program.
- Sponsored Products advisor: a dedicated advertising specialist from Amazon will be available to you for advice related to your PPC campaigns. This can be especially helpful if you’re new to Amazon advertising.
- Premium A+ Content: standard A+ Content is available to all registered brands, but Premium A+ Content is a special perk for Launchpad products and provides additional modules that are usually very expensive and only available to large brands.
- Additional placements: your product can be featured on exclusive placements such as: Amazon Launchpad category page, Amazon Launchpad new releases page, and the standard new releases page. These can provide additional exposure and lower competition.
- Email newsletter promotion: Amazon sends emails to selected shoppers with a selection of products from the Launchpad program. This provides traffic from external sources to your listing, and thus improves your listing’s organic ranking.
- Thematic campaigns on Amazon: if there is a planned promotion for a relevant category, your product can be featured in Amazon’s marketing campaign.
- Self-service business insights report: this set of reports provides market intelligence that is not available to standard marketplace sellers.
Who is eligible to apply to Launchpad?
All sellers and brand owners are eligible to apply, as long as they have a new and innovative product. Existing sellers can apply for the Launchpad program, as long as they have been on Amazon for less than three years and have sales below $5 million per year. After you send in your application, someone from Amazon will respond with an approval or rejection.
Since Amazon is mostly oriented towards delivering the best possible customer experience, there is some minimum criteria that products need to meet in order to enter the Launchpad program. Your product needs to have at least five reviews, with an average rating of 3.5 or more, and it needs to be eligible for FBA with the Prime badge. This ensures that customers have access to new and innovative products, combined with the Amazon shopping experience that they already know and love.
Aside from these conditions, the products you want to launch through Launchpad need to be registered and eligible in the Amazon Brand Registry.
What kind of products are accepted onto Launchpad?
While it is relatively easy for sellers to qualify for Launchpad, for products there are subjective criteria that Amazon’s team apply, as well as their own estimate of potential sales.
The top five categories for Launchpad products are Health & Personal Care, Home, Grocery, Toys and Kitchen. Amazon also features the Electronics, Sports & Outdoors, Pet Supplies and Clothing & Accessories categories in the Launchpad section on the site.
One way to understand whether your product idea would be a good fit for Amazon Launchpad, is to browse through crowdfunding sites like Kickstarter and discover which products are generating the largest pledged amounts.
A common theme is products that solve old problems in new and innovative ways. Those are the ones that get most easily accepted by the crowdfunding community and also into the Amazon Launchpad program. For example: this new type of coffeemaker solves the problem of having to use different tools to make different styles of coffee.
How much does Amazon Launchpad cost?
If your seller account is accepted onto Launchpad, an additional 5% fee will be added to the standard Amazon referral fees, for all the sales you make from your account.
There is a minimum contract of 12 months, and if your gross sales during that period exceed $1 million, Amazon might lower your additional fee from 5% to 3%.
After the initial 12 months has passed, you can cancel your subscription to the program by giving 30 days’ notice. But if Amazon decides that they no longer want you in the program, for any reason, they can throw you out before the 12 months is up.
Does Amazon take control of my listing and prices?
During the Launchpad program you retain control over your listing and prices. But some sellers have complained that the Buy Box is suppressed if they set their prices too high, and that Amazon makes them give frequent discounts which really hurt their margins.
So, officially you are in charge of pricing, but at the same time you may run into problems if your prices are unrealistic compared to Amazon customer expectations, and the pricing of similar products.
Which global Amazon marketplaces have Launchpad?
All major Amazon marketplaces have access to Launchpad including:
Amazon Launchpad was announced in Japan in 2017, but it is no longer available there. In Canada, there is a simple product category to enable browsing of Launchpad items.
What is the difference between Launchpad and Accelerator?
Amazon has another program called Amazon Accelerator that, at first glance, looks a lot like Launchpad. The two programs are actually quite similar in terms of promotion and marketing support. However, with Launchpad, sellers keep control of their supply chain and their brand, and receive specialized placement for their products. With Accelerator, brands become suppliers to Amazon which then sells their products as its own, on the main marketplace.
Accelerator is a good program for sellers who have created a brand, and grown it on Amazon, but now want to “sell” it to Amazon and watch it get taken to the next level. With Accelerator, Amazon takes control of the brand, and the products become private labels sold as Amazon’s own products. There is shared ownership between Amazon and the manufacturer for products that are enrolled in this program.
We see that most private label and brand owners, who understand selling on Amazon and want to have control over their business, opt for Launchpad. While manufacturers (mostly from China) choose Accelerator. It provides these manufacturers with a great option to enter the marketplace at scale, while focusing on what they do best – production.
If you are interested in Accelerator, make sure you don’t mind handing control over branding and supply chain to a bigger, much more powerful partner.
Is Amazon Launchpad worth it?
If Amazon does its part and delivers the benefits promised as part of the Launchpad program then yes, it is worth it. However, we hear a lot of sellers complaining that the Launchpad support system is terrible and they don’t receive answers to their questions for weeks.
Also, many sellers say that their sales are not as high as they expected, even with the exclusive product placements that Launchpad has to offer. So, like many sales programs, Amazon Launchpad is far from perfect.
So, before considering applying for Launchpad there are a few things to keep in mind:
- Understand that you can’t get out of it for 12 months – this is very important to keep in mind, considering that some sellers are disappointed with low profitability in the product launch phase. You must be comfortable with waiting for a year to pass before you can leave the program.
- Verify your product idea using crowdfunding platforms – some products just don’t sell, for a variety of reasons. Maybe customers don’t get what the product is about, or it’s too early for it to be accepted. Maybe they don’t like the design. Even if you don’t need additional funding, test your product on a crowdfunding site to see what feedback you receive.
- Have a serious long-term plan before you start – products on Launchpad need to be sent to Amazon’s warehouses before a single item can be sold. This places a significant financial risk on the seller, as you will need to have plenty of stock ready right from the start and ready to go at regular intervals for replenishment.
- Leverage your crowdfunding supporters – you can use crowdfunding and Amazon together. Email your crowdfunding supporters a link to your product on Amazon so they can order additional items, generating sales and improving your search ranking. Keep them up to date with new versions, accessories and refills to maintain interest.
Above all, don’t expect Launchpad to be an easy ticket to success. The additional placements can provide a sales boost, and Amazon’s support is valuable if they respond quickly enough when you need them. But it still takes a lot of work and investment of your own.
Perhaps the biggest benefit is Premium A+ Content. Used well it can really help your product page stand out, and has the potential to lift your conversion rate. For some brands, that alone is enough to make the 5% fee worth paying.
This article was by Jelena Nuhanovic of Amazonia PPC, an Amazon marketing agency providing services including PPC campaign management, copywriting, conversion rate optimization, A+ Content creation, and programmatic advertising through the DSP platform.