To be profitable on Amazon, you must have a strong sales plan. Amazon provides retailers with a clear set of selling guidelines and a summ...
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To be
profitable on Amazon, you must have a strong sales plan. Amazon provides
retailers with a clear set of selling guidelines and a summary of best
practices in Seller Central. However, a lack of an Amazon sales plan still
causes a lot of people to be hesitant to start selling on Amazon or to never
consider it as a new way to do business.
The two most
frequent excuses I hear for not having a plan for selling on Amazon are
1. Lack of time and
2. Time constraints and channel
conflicts (i.e., opening a channel that causes issues with prices in all other
distribution channels)
Amazon is
seen as being too powerful, and the worst part is that it might ruin your
current e-commerce or conventional sales channels.
This is
ludicrous, of course.
Even with
the vastness of the Amazon network, selling on Amazon does not have to be a
binary decision. By the same reasoning, Columbus would not have been able to
set out since he would not have had the time to chart the entire globe. A
carefully thought-out Amazon sales strategy will enable you to expand your
company profitably!
It's also
important to note that, in all likelihood, someone else is already selling your
brand on Amazon if it has any kind of large following. For most brands, the
question is not if they will be present on Amazon, but rather, what kind of
presence they will have in order to safeguard their brand.
Let's
explore your alternatives now.
Amazon
Sales Technique will help you save money and time
Don't
proceed entirely
Nobody has
to sell every item they have on Amazon.com. Start by adding a few things to
your Amazon account to get acquainted with the platform. Setting up a small
number of products at first lets you become familiar with some Amazon
procedures, which you can then use to your advantage as you grow. Most likely,
this is the first time you are putting someone through an Amazon-specific
process or educating them for Amazon sales strategy. Before attempting to
enhance what you are doing, strive to comprehend it first to give yourself the
best chance of success.
If you're
still not convinced about expanding your business to Amazon, keep in mind that
your rivals are already selling there. How can you ensure that the Amazon
customer consideration set includes your brand? If you're not there, your
rivals will take advantage of the more than 200 million active Amazon users and
the more than $100 billion in yearly sales that the company generates.
Even a small
number of products are worthwhile to have there as an extra sales channel.
Manage
well, and delegate tasks to others.
For your
company, expedited shipment, ratings, comments, optimization, and sponsored
search are frequently uncharted territory. All of these are valid worries that
new Amazon sellers should take seriously, but fortunately, there are plenty of
answers available.
It is not
only less expensive but also quite successful to outsource these tasks that are
outside of your area of expertise. For between $10 and $50 per hour, thousands
of Amazon experts are accessible for a range of services. Similarly, Amazon
allows you to assign seller central administration to a third party by creating
secondary accounts within your Amazon listing.
The owner of
the company is the one who knows it the best! Although joining Amazon can be
scary, there is less risk involved if you organize your entry into the Amazon
Marketplace to match your objectives and the organization structure.
Which
choices are available to you while selling on Amazon?
Just as a
Swiss Army Knife is a knife, so too is Amazon a website for purchasing. You are
losing out on 95% of its worth if you only use it for its most basic functions.
When it
comes to selling on Amazon, aim high and you'll achieve even more success! If
you set up your selling strategy effectively on Amazon, you may make a ton of
money with a lot less work.
Here is how.
Fulfilled
by the Merchant Listing
This is just
the basic Amazon listing, fulfilled by Merchant. You design a product listing
on Amazon or take over an already-existing one, handle all customer support,
and handle all product selection, packing, shipping, and return handling on
your own.
Application
As your
principal listing, use the Fulfilled by Merchant option as little as feasible.
As a fallback for your inventory at Amazon's fulfillment centers in the event
of stock outs, it is OK to maintain an active merchant fulfilled listing, but
that is about all that should be done.
The Amazon
search algorithm gives the least weight to these offerings. These are usually
suitable for extremely low-speed sellers or really expensive things that you
can't afford to stock.
How Not
to Do It
You're not
doing it right if a merchant fulfills any of your finest products, especially
in highly competitive areas. To view instances of these listings, just conduct
an Amazon search for any product, then scroll through pages 20 and above.
Do you
believe the lack of Prime-eligible items this far down the results page is
merely a coincidence?
How to
Execute It Correctly
The
best-selling outdoor ice maker on Amazon is shown below. Three things to keep
in mind are that it's heavy, pricey, and doesn't sell very often.
This is how
the merchant should use fulfilled. To begin with, the fact that it is the
category bestseller while only receiving five reviews suggests that it is not a
significant mover.
This and the
second factor, the cost.
Stocking a
large number of these and storing them at Amazon might not be the best idea.
Why not drop-ship them from the manufacturer after you have the sale and cash
in simply by putting up a listing on Amazon? That's probably what's going on.
Finally,
considering its weight of 129 lbs., shipping it to you, Amazon, and finally the
buyer could make using any other option unfeasible.
Completed
via Amazon Listing
The more
advanced iteration of the standard Amazon listing is called FBA. Even when you
send merchandise to Amazon's fulfillment facilities, you are still the seller.
Amazon now
automatically selects, packs, and sends your products to the buyers when an
item sells (for a fee). Additionally, they take care of all routine customer
care duties including tracking and returns.
You can use
this strategy to make your items eligible for Prime. Both customers and
Amazon's search algorithm find this appealing.
Application
When you
want to streamline the online sales process while keeping complete control over
the details and pricing of your product listings, use this strategy. You set
the price, therefore this is especially crucial for vendors that have to
maintain MAP pricing.
How Not
to Do It
The
following vendor has made the decision to buy stock and ship it to Amazon. This
must be done in the hopes that customers who have faith in the brand will not
be concerned about the cost if Amazon fulfills the order. But these goods will
remain on the shelf until their expiration date unless you can offer a lower
price.
How to
Execute It Correctly
Should a
customer choose to click "Add to Cart," they would be purchasing this
item from "Professional Grade Products" for $499. Take note that the
identical item, as displayed in the second image, is available from a different
seller for $399 (plus a small amount for delivery). Why, therefore, does Amazon
advertise the $499 deal and force users to select it by default?
since
Amazon fulfills the order.
Items
fulfilled by Amazon have a significant positive influence from Amazon's search
algorithm. Even while the Prime deal costs $85 more, in this instance, it
believes that it offers the consumer a superior overall value. "Northern
Tool" would most likely always win the Buy Box if there was no Prime
offer.
But another
vendor has increased their margin and volume of sales by employing Amazon
fulfillment.
Employ a
Loss Leader:
Products
that are sold at a loss (either slightly below acceptable margins or below
cost) are known as loss leaders. This highly-liked retail tactic performs
exceptionally well on Amazon.
This could
be compared to the razor and razor blades tactic. For those who are unaware,
the majority of shaving supply firms offer razors at a loss but charge a
significant markup for fresh blades. Since purchasing expensive razor blades
still saves money compared to purchasing new ones, customers gladly purchase
them later. Profit, hey!
So, how
are you going to achieve this with your Amazon sales strategy?
A. Building
Your Rating as a Good Seller
Selling
anything before you have a strong Amazon seller rating is nearly impossible.
You can acquire the initial sales you require to build your reputation as a
dependable and trustworthy seller by selling at a loss.
B.
Increasing Item Reviews Loss leaders can assist in establishing a new brand or product that does not yet have any reviews on
Amazon. Free Book Promotions are especially beneficial for self-publishers who
use Amazon's Kindle Direct Publishing to draw attention to their books before
they are actually sold.
Just be
aware that this tactic can make them believe the product isn't worth the amount
you want to charge afterwards. When attempting to distinguish anything based on
luxury or quality, don't use it.
C.
Attracting Purchasers to Your Seller Listing
Customers
who are considering one of your products could also be interested in the other
items you provide. In order for them to view the rest of your selection, you
consequently want to direct them to your profile.
There are
two primary ways in which offering something for a loss can draw attention to
your profile:
1. When they see your reduced pricing,
they could click on the listing. Next, even if they decide not to purchase that
specific item, they might want to check if you have any other items that they
might find more appealing.
2. After purchasing the item, they might
come back to your business to look for matching accessories or other relevant
products.
Above: A visitor can find your seller
profile by clicking the link on a listing. The link at the top leads to the
manufacturer's online store, while the link at the bottom refers to the
seller's profile who has won the Buy Box.
Below: The goal of this manufacturer's
storefront is to close more deals with customers who are considering any of
their items.
Recommended: Amazon Manufacturer Part Number.
Keep in mind
that this is only viable if you can generate revenue after attracting customers
to your seller profile. Sell complementary mice, mouse pads, keyboards, flash
drives, laptop cases, and so on for substantial profits, for instance, if you
sell a computer at a loss.
This mostly
benefits vendors of related or complimentary goods. It will be more difficult
for sellers that provide a large range of unconnected products to be
successful.
Apply
Data-Driven Pricing
Too many
vendors base their price decisions solely on gut feeling and subjective
judgment. This frequently leads to prices that are either too high to sell at
or too low to make the most money.
Given the
millions of times a day that prices change on Amazon, it may be impossible for
anyone to do the math quickly enough to determine the right price.
Remain
with High-Grade Items
It's obvious
that someone needs to make a sale of a cheaper product, and using loss-leaders
can make it particularly appealing to do so. But using high-quality items alone
typically yields far superior outcomes.
The cause of
this? There is a greater chance that customers will be happy with their
purchases. Less requests for returns and unfavorable evaluations result from
this. For a thorough plan on how to increase your review count,
Reduction of
return requests will help you minimize losses and free up more time for
selling. You also have a far higher chance of making sales if you have a high
Amazon seller rating. Bid farewell to inadequate leaders!
It's also
important to note that Amazon's clientele isn't especially frugal. Serious
bargain hunters reside on eBay, while average Amazon customers are far more
concerned with the product's quality and their overall shopping experience.
Put
Customer Service First to Get the Buy Box
The goal of
the majority of effective Amazon selling tactics is the Buy Box, which is
considered Amazon's Holy Grail. 90% of all Amazon sales are reportedly done
through the Buy Box, and merchants who have won the Buy Box are frequently able
to charge 20% more than their rivals. It's equally significant as having Google
rank #1 for your website.
Amazon never
discloses the precise number of winners of the Buy Box; instead, it uses a wide
range of indicators. But the majority come down to this: give your clients the
best service you can.
Concluding
In the end,
consider how you want the Amazon channel to complement your current business
and select a strategy that suits your needs. It is more convenient to begin
with one approach and add more afterward.
Think about the administrative tasks you can complete quickly and efficiently and the ones you would prefer to avoid. While there is no one correct response, bear in mind that most products that move from full-bring to fulfillment by Amazon see a bump in sales of 10%–20% and 40%–50% when they are sold directly to Amazon.
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