Your Amazon Marketing: In-House vs. Agency Model
To hire an agency or not to hire an agency—that’s a question every consumer company must answer as they seek to grow their eCommerce business. But what factors should inform this decision? And how do you know what to look for in a partner and when to make the switch? We’ve outlined five key things to consider:
1. In-House eCommerce Expertise and Capacity
As you think about whether or not to hire an agency, the first thing you should consider is your team’s existing expertise. If you’ve specialized in traditional retail for the last few decades, chances are that’s an area where your team really shines. You probably know all the nuances of the store walk and understand how small changes in signage placement or end cap configuration can impact sales. In other words, you understand the challenges and constraints that exist in this space and know what adjustments can be made to boost your sales and market share.
Just like brick-and-mortar stores, the eCommerce space has its own nuances, rules, and insider business strategies that demand a high level of contextual understanding. If you’re not familiar with the ins and outs of eCommerce, it’s exceptionally hard to determine what techniques to use or where to focus your marketing efforts to produce the desired outcome. To complicate things further, eCommerce also demands a different type of technical and operational expertise. Rather than being managed year-to-year or even week-to-week, eCommerce must be managed in “real time” and often requires the help of automation. In addition to having the right strategic intent, you need to know how to use eCommerce-specific tools and applications to set your strategy in motion and measure your progress.
Keeping up with the fast-moving digital marketplace demands quick action and an agile marketing and sales approach. If you don’t have a solid foundation to work from, building that knowledge and keeping up with marketplace best practices (and your competition) can be an uphill battle. Partnering with an eCommerce marketing agency is an easy way to gain all the operational, technical, and strategic expertise you need to keep moving forward.
2. Your Brand’s Growth Rate Versus Category and Channel Norms
In order to remain competitive in the eCommerce world, you need to be doing more than just surviving. If you’re not growing at a rate of 30 to 40 percent per year, then you’re probably losing valuable market share—and regaining that market share is even harder (and more expensive) than properly defending it in the first place.
Waiting to fix your growth also presents an “opportunity cost.” Every day, week, and month you stall translates into more revenue left on the table. This is especially important in seasonal businesses where procrastination can have an even bigger impact.
In addition to growth rate, consider the ROI of your recent eCommerce marketing efforts. If your campaigns are performing poorly and you’re struggling to figure out what’s going wrong, you may not have the luxury of learning through trial and error. A good strategic partner will know how to quickly diagnose your issues and then optimize your marketing efforts to get more bang for your buck. What seems like an expense today could be a big money saver in the long-term if it helps you optimize your spending.
3. The Cost of Building Internal Capability
If your company doesn’t have the right eCommerce expertise, you’ll need to add new talent to your business. This usually means hiring more than one specialized role. The person who can best support you with great item page creative, for example, is likely not the same person who can help you design an efficient eCommerce supply strategy.
First, you’ll need a strategic leader who understands the eCommerce space and who knows what success looks like in that context. In addition, you’ll need operational and analytical talent to set up the campaigns, create a sound reporting infrastructure, and provide insight through data analysis. Strong digital marketing teams also include SEO, creative, and content marketing expertise to attract and engage new shoppers. You may also need to hire different specialists to help you win on your key accounts because Walmart, Amazon, Target, and other platforms each have their own nuances.
The costs of building this team can quickly add up. As you decide whether to keep your marketing in-house or hire an agency, consider the number of in-house employees you’d need to hire to accomplish your goals and weigh the associated costs. By comparing those figures to the cost of hiring an agency, you’ll gain a clearer idea of which option makes more sense from a financial standpoint.
4. Your Company’s Scale
Determining whether to build out your team or hire an agency isn’t always an either/or decision. If you’re a larger company with many brands, it may be smart to build an internal eCommerce marketing team. As you add more people to your team and hire different specialized roles, an agency can augment and enhance your in-house efforts as needed.
For smaller companies with big ambitions, it’s typically much more cost-effective to use an agency because the cost of even one employee will likely surpass that of a multi-functional external team.
For smaller companies struggling to afford any kind of help (internal or external), “eCommerce coaching” can be a viable alternative. In this scenario, you don’t get the benefit of a full team, but you gain expert guidance to help guide and shape your approach. Some external partners (including Bold Retail) offer low-cost options for companies who will be forging their own path, but need a little help along the way.
5. The Value of Your Time
In addition to cost, managing an eCommerce marketing strategy requires unwavering attention, especially considering the rate of change now impacting this space. If your team doesn't have the time to keep up on business and technical changes, then it’s easy to fall behind. Even the best talent won’t be able to create results if they’re spread too thin.
For an agency or consultancy, eCommerce marketing is their product and lifeblood. In order to survive and grow their own business, they must keep up with changes so that they can remain thought leaders in their space. If you’re planning on keeping your eCommerce marketing in-house, you should be prepared to devote the same degree of energy and attention in order to remain competitive.
If you do decide to bring on outside help, it’s important to choose the right type of agency based on your unique needs. However you choose to staff, you’ll need a plan. Learn how to build and execute a successful Amazon eCommerce marketing playbook in our latest e-book.