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Case Study
THE CHALLENGE
Madd Tools sells hooks and accessories for pegboard. After they captured marketshare with their web shop, mainly through SEO, they decided to give Amazon a try.
This is a very competitive segment with high CPC’s dominated by Chinese sellers. Madd Tools didn’t feel the competitive pressure on its own web shop (former maddtools.com, now pegboarder.com). Amazon however, proved to be a increasingly competitive. Prices dropped every quarter and it was harder and harder for Madd Tools to stay profitable.
THE goal
Double revenue while safeguarding profitability.
About the brand
Madd Tools manufactures thick pegboard hooks that fit snug in a pegboard and metal accessories such as shelves and baskets.
Category:
Industrial & Scientific
BUILDING STRONG FUNDAMENTS
Madd Tools has a strong selling point. Madd Tools hooks are thicker, and thus less likely to fall out of the board. Madd Tools also sells a range of complimentary tool holders such as a shelf a wrench holder and a towel holder. We listed these on Amazon.com and built campaigns around these products. Some of these products, such as the towel holder, were immediately received positively by the audience.
We enrolled the new products into Vine Review program. This program gives away units for free in exchange for an honest product review. Of the bat, all products could start advertising while having 15+ product reviews.
We optimized the new and existing products, reinforcing the unique selling points. We also set up a ‘list price’ giving the product the permanent impression of being discounted. These two actions significantly increased conversion rate. With conversion being higher, less clicks were needed to achieve a conversion. This left us with more room to roll out our new advertising strategy.
ALTERNATIVE AD STRATEGIES
- We dropped bids for existing Sponsored Product campaigns that performed below our baseline after the listing optimizations.
- We set up strategic Sponsored Brand Campaigns pointing to high-converting landing pages on the storefront.
- We created Sponsored Brand campaigns & Video campaigns for 2 top sellers where CPC was lower than with classic Sponsored Product ads and that had the margin to sustain.
- We set up campaigns where we bought placement on certain competing listings that had negative reviews regarding pain points that Madd Tools’ products solved.
WHAT ELSE?
To free up some margin, we changed the category of some products from ‘Tools & Home improvement’ to ‘Industrial & Scientific’. This lowered Amazon’s referral fee from 15% to 12%. That’s 3% extra margin that could be allocated towards PPC.
Additionally, we enrolled the brand into North-American Remote Fulfilment. This is an Amazon program that allows brand owners to offer the products on the Canadian and Mexican catalog. Doing this, we managed to scoop up an extra 7% of sales.
THE RESULTS
The goal we set up together was to double revenue at similar profit margins. After 5 months this goal was achieved. Madd Tools best sellers even managed to further lower BSR and went from 30 to 80 units sold daily within the first 5 months of our collaboration.
To this date, GoodSellas still manages Madd Tools and has even helped developing new products such as a Pegboard Drill holder.
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Acos
