THE CHALLENGE:
A Costly Lesson in Amazon FBA: When Wiley Wallaby first ventured into selling on Amazon five years ago...
THE STRATEGY:
Reclaiming Control & Enhancing Customer Experience: Neato became an extension of Wiley Wallaby’s sales and marketing team, working closely with them to develop and execute strategies that would drive growth and profitability...
THE OUTCOME:
Market Leadership and Sustainable Growth: Since partnering with Neato, Wiley Wallaby has experienced a remarkable turnaround in its Amazon performance...
Wiley Wallaby has been a beloved brand among candy enthusiasts for years.
Known for their high-quality, delicious licorice, the company has carved out a niche in the confectionery industry. While the brand has enjoyed success in traditional retail settings, it initially struggled to translate this success into the digital marketplace, particularly on Amazon. As the brand embarked on its journey to capture the online market, it quickly realized that navigating the complexities of Amazon required more than just great products—it required expertise in eCommerce operations and strategy.
When Wiley Wallaby faced significant losses and logistical challenges in navigating Amazon, they turned to Neato for expertise. By shifting from a direct FBA model to a 3P seller model managed by Neato, Wiley Wallaby not only overcame their operational hurdles but also climbed to the #1 market share position for licorice candy on Amazon. This case study explores how strategic collaboration transformed Wiley Wallaby’s Amazon presence and led to sustainable growth.
THE CHALLENGE: A COSTLY LESSON IN AMAZON FBA
When Wiley Wallaby first ventured into selling on Amazon five years ago, they opted for a Fulfillment by Amazon (FBA) model, hoping to leverage Amazon’s vast logistics network to reach more customers. However, this approach led to significant financial losses:
Massive Freight Fees: In the first year alone, Wiley Wallaby was hit with $500,000 in freight fees, a cost that severely impacted profitability.Heavy Financial Losses: The brand lost nearly $1,000,000 selling products on Amazon during this initial phase, a clear indication that their current approach was not sustainable.Operational Misalignment: As a manufacturer and marketer, Wiley Wallaby quickly realized that succeeding on Amazon required expertise in wholesaling and retailing—skills that were outside their core competencies.
These challenges highlighted a critical need for a partner who could not only manage their Amazon operations efficiently but also drive profitable growth.
THE TURNING POINT: PARTNERING WITH NEATO
In late 2021, Wiley Wallaby made the strategic decision to partner with Neato, which marked a turning point for the brand’s online presence.
With Neato’s expertise, Wiley Wallaby shifted from a direct FBA model to a 3P (third-party) seller model managed by Neato. This shift allowed Wiley Wallaby to focus on what they do best—manufacturing and marketing—while Neato handled the complexities of Amazon, from pricing strategies to logistics.
THE STRATEGY: EXECUTING A PROFITABLE AND EFFICIENT AMAZON PLAN
Neato became an extension of Wiley Wallaby’s sales and marketing team, working closely with them to develop and execute strategies that would drive growth and profitability. Key components of the strategy included:
Optimizing Product Listings: Neato overhauled Wiley Wallaby’s Amazon storefront, improving product detail pages (PDPs) with enhanced images, videos, descriptions, and A+ content to attract and convert more customers.Streamlining Operations: By managing logistics and inventory more efficiently, Neato significantly reduced the operational costs that had previously eaten into Wiley Wallaby’s profits.Strategic Pricing and Promotions: Neato implemented a tailored pricing strategy that balanced competitiveness with profitability, ensuring that Wiley Wallaby could grow market share without sacrificing margins.Expanding Product Assortment: Neato’s operational expertise in kitting products together increased the variety of multipacks, and their ability to efficiently launch new products expanded Wiley Wallaby’s product assortment on Amazon.
THE OUTCOME: MARKET LEADERSHIP AND SUSTAINABLE GROWTH
Since partnering with Neato, Wiley Wallaby has experienced a remarkable turnaround in its Amazon performance. The results speak for themselves:
Market Leadership: Wiley Wallaby has ascended to the #1 market share position for licorice candy on Amazon, capturing 17.8% of the market share, surpassing well-known brands like Twizzlers (17%) and Red Vines (7.2%).Expanded Product Assortment: Prior to the partnership, Wiley Wallaby had only 10 products listed on Amazon. Within the first 60 days of working with Neato, their product assortment more than tripled, adding 36 new items, including 25 multipacks and bundle options. Today, Wiley Wallaby boasts 90 items in their assortment, with 57 of those as multipacks and bundles.Revenue Growth: In 2023, Wiley Wallaby’s revenue on Amazon soared by 87% year-over-year. Neato projects continued growth, with forecasted revenue expected to nearly double from the previous year. This substantial increase underscores the effectiveness of the strategic partnership, highlighting significant improvements in product assortment, operational efficiency, and market positioning.
In Conclusion...
The collaboration between Wiley Wallaby and Neato showcases the power of strategic partnerships in transforming business outcomes. By leveraging Neato’s expertise in managing the complexities of Amazon, Wiley Wallaby not only overcame significant logistical and operational challenges but also achieved market leadership and sustainable growth. This case study highlights the importance of collaboration, innovation, and strategic execution in achieving business success.
Looking ahead, Wiley Wallaby and Neato are poised to continue their successful partnership, exploring new opportunities for growth and further solidifying Wiley Wallaby’s position as a market leader in the licorice category.
