Selling on Amazon – The BigCommerce Blog https://www.bigcommerce.com/blog Ecommerce Blog delivering news, strategy and success stories to power 2x growth for scaling brands. Fri, 15 Jun 2018 16:19:41 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.6 https://www.bigcommerce.com/blog/wp-content/uploads/2016/05/cropped-e8d7fa0a-3b0e-4069-91b1-78460a4d4af1-150x150.png Selling on Amazon – The BigCommerce Blog https://www.bigcommerce.com/blog 32 32 Amazon FBA Sales Tax Guide for 2018 https://www.bigcommerce.com/blog/amazon-fba-sales-tax/ https://www.bigcommerce.com/blog/amazon-fba-sales-tax/#respond Thu, 11 Jan 2018 15:00:26 +0000 https://www.bigcommerce.com/blog/?p=19438 Sales tax is a fact of life for most retailers, whether you sell online, at a brick and mortar store…]]>

Sales tax is a fact of life for most retailers, whether you sell online, at a brick and mortar store or all of the above.

Sales tax for Amazon FBA sellers is a bit more complex than it is for most other retailers.

Are you selling on Amazon? This guide is for Amazon FBA sellers who want the scoop on collecting and filing sales tax.

We’ll explain:

  • What sales tax is & why Amazon FBA sellers charge it
  • When FBA sellers are required to collect sales tax from customers
  • How to get sales tax compliant
  • How to collect sales tax on Amazon FBA
  • What to do with all the sales tax you’ve collected

If you need a refresher on what sales tax is, start with chapter one or see all the tax-related topics we cover.

Let’s get started.

When does an Amazon FBA seller need to collect sales tax?

For the purposes of sales tax, ecommerce sellers are treated just like all other online retailers.

As an FBA seller, you are required to collect sales tax in states where your selling meets two criteria:

  • Sales tax nexus
  • Product taxability

Understanding both will help you determine when and if you are required to collect taxes from your Amazon FBA customers.

Sales Tax Nexus, Explained

Sales tax nexus is just a fancy legalese way to say “significant connection” to a state.

If you have nexus in a state, then that state considers you on the hook for charging sales tax to buyers in the state.

You’ll always have sales tax nexus in your home state, but you may find that certain business activities create nexus in other states, too.

Ways to Have Sales Tax Nexus in Different States
  • A location: an office, warehouse, store, or other physical presence of business.
  • Personnel: an employee, contractor, salesperson, installer or other person doing work for your business.
  • Affiliates: Someone who advertises your products in exchange for a cut of the profits creates nexus in many states.
  • A drop shipping relationship: If you have a 3rd party ship to your buyers, you may create nexus.
  • Selling products at a trade show or other event: Some states consider you to have nexus even if you only sell there temporarily.
  • Inventory: Most states consider storing inventory for sale in the state to cause nexus even if you have no other place of business or personnel.

Inventory Nexus and Amazon FBA Sellers

That last point, storing inventory for sale in a state, is especially relevant to Amazon FBA sellers.

Most states’ sales tax laws say that this creates sales tax nexus. You can find links to each state’s sales tax nexus laws here.

It helps to think of it from the state’s perspective.

From their point of view, any online seller who uses resources in their state (roads for delivery, public safety should an emergency occur, etc.) has nexus.

For this reason, FBA sellers may have sales tax nexus in a state simply from storing their FBA inventory in an Amazon fulfillment center.

Here’s a list of all states with an Amazon fulfillment center as of this writing.

States with an Amazon Fulfillment Center
  • Arizona
  • California
  • Colorado
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Illinois
  • Indiana
  • Kansas
  • Kentucky
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Nevada
  • New Hampshire
  • New Jersey
  • North Carolina
  • Ohio
  • Pennsylvania
  • South Carolina
  • Tennessee
  • Texas
  • Virginia
  • Washington
  • Wisconsin

Keep in mind that Amazon probably will not store your inventory in every state with an Amazon fulfillment center.

You can pull your Inventory Event Detail Report from Amazon Seller Central to determine where our inventory is stored.

Some Exceptions to the Rule

Two states, Virginia and New York, have ruled that if your only nexus with their state is as a 3rd party seller (where another company, in this case, Amazon, handles all the fulfillment and logistics), then you do not have to collect sales tax in the state.

Arizona also recently issued two letter rulings that, though they do not mention Amazon FBA by name, seem to apply.

Arizona has a transaction privilege tax (TPT) rather than a sales tax, which means that the tax is on “doing business” in the state rather than on the sale of goods and services in the state.

While sales tax experts currently disagree, the letter rulings appear to state that if retailers are only doing business in Arizona as 3rd party sellers then they do not need to collect sales tax.

Product Taxability, Explained

Once you’ve determined that you have nexus in a state, your next step is to determine if what you are selling is taxable.

Generally, tangible personal property is taxable while services are not taxable. Of course, as with everything having to do with sales tax, individual states may make exceptions to these two general rules.

Some common product categories are not taxable or taxed differently in some states. These categories include groceries, clothing and textbooks.

For example, clothing and grocery items are both non-taxable in Minnesota. In Tennessee, grocery items are taxable, but taxed at a reduced rate of 5%.

If you have questions about whether or not the products you are selling are taxable, you can check with your state’s taxing authority online or by giving them a call.

Keep in mind that most tangible good are taxable in most states.

How to Get Sales Tax Compliant

Once you’ve determined that you have nexus in a state and are selling taxable items in a state, your next step is to register with that state to collect sales tax.

You can find guides on how to register for a sales tax permit with each state here.

It’s important to register before you begin collecting sales tax. States consider it illegal to collect sale tax without a permit, no matter if your intentions are pure.

Once you receive your permit, you will also be assigned a sales tax filing frequency and sales tax due dates.

Your filing frequency is generally monthly, quarterly or annually and depends on your sales volume.

The more you sell in a state, the more often that state wants you to file a sales tax return.

If your sales dramatically increase or decrease as time goes by, your state may assign you a new filing frequency.

Always be on the lookout for letters or other communications from your state once you’re registered for a sales tax permit.

How to Collect Sales Tax on Amazon

Now that you are registered to collect, your next step is to ensure you are collecting sales tax from your Amazon FBA customers.

Fortunately, Amazon has a very robust sales tax collection engine.

Once you tell it what you want to collect, it will collect the right rate, even keeping up with complicated concepts like whether a state is “origin-based” or “destination-based,” or if a sales tax rate has changed.

It will also allow you to add “product tax codes” so you charge the right amount of sales tax on items like groceries and clothing, and allow you to choose whether or not you charge sale tax on shipping and gift wrapping.

Keep in mind that Amazon charges 2.9% of each transaction in order to collect sales tax.

The alternative, however, is not to collect sales tax from your Amazon customers and to instead pay out of your profits.

Setting Up Sales Tax Collection on Amazon FBA

Let’s go over setting up sales tax collection in Seller Central:

  1. Login to Seller Central
  2. Click “Settings” then “Tax Settings” from the dropdown menu
  3. Choose the option: “View/Edit your Tax Collection and Shipping & Handling and Giftwrap Tax Obligations Settings”

Here you can choose in which states you want to collect sales tax, as well as if you want to collect sales tax at the county and other local level. You can even enter a custom sales tax rate. We don’t recommend this because sales tax rates are subject to change frequently.

Note that you’ll need your state sale tax registration number before Amazon allows you to set up sales tax collection.

This is a safeguard to prevent sellers from unknowingly (and unlawfully!) collecting sales tax without be registered with a state.

Setting Up Product Tax Codes on Amazon FBA

Once you’ve entered your sales tax settings, return to your Seller Central Tax Settings Page (Seller Central > Settings > Tax) and choose the option “View Master Product Tax Codes and Rules.”

From here, you can choose the product tax codes that most closely fit your products. Here are some examples:

  • A_CLTH_GEN: General clothing. Keep in mind that clothing is non-taxable in some states. But in many cases, accessories, formal wear, athletic wear and other clothing types are still taxable. That’s where there are also separate product tax codes like A_CLTH_HBAGS for handbags and A_CLTH_CSTUMS for costumes.
  • A_FOOD_GEN: Use this to label food items. Just like with clothing, not all food is taxed equally, so there are also product tax codes for things like A_FOOD_CNDY (candy) and A_FOOD_SFTDK (carbonated soft drinks.)

If you can’t find a product tax code for one of your products, that’s probably because it is generally always taxed. You should just label that item with “A_GEN_TAX.” And if, for some reason, you never want to charge sales tax on a particular item, you can also label it with “A_GEN_NOTAX.”

PRO TIP

If you sell on other platforms aside from FBA, make sure you are collecting sales tax from buyers in your nexus states on all of your shopping carts and marketplaces.

Once you have nexus in a state, you are required to collect sales tax from all buyers in that state, no matter how you make the sale.

How to Report and File Amazon FBA Sales Tax

Now you’re all set collecting sales tax from your Amazon FBA sales are chugging along.

Soon enough, a sales tax filing due date will roll around.

From here, you need to report how much sales tax you’ve collected from customers in each state, and file your sales tax returns.

Reporting Amazon FBA Sales Tax Collected

The vast majority of states want to know not only how much sales tax you’ve collected in the state, but also how much you collected from buyers in each county, city and other special taxing district within the state.

You can find this information in two ways:

  1. Download a report form Amazon: Login to Seller Central and click Seller Central > Reports > Payments > Generate Date Range Report.  Choose the filing period. From here you can try to slice and dice your info to figure out how much sales tax you collected in each state, city, county, and other jurisdiction. Beware – it’s time consuming to try and figure out which taxing districts each of your customers lives in.
  2. Use sales tax automation: Use a sales tax automation solution to generate a report for you. A sales tax automation will connect with all of your shopping carts and marketplaces, not just Amazon to give you a comprehensive report of all the sales tax you collected from buyers within a state. It will also break down how much sales tax you’ve collected in each county, city and other taxing jurisdiction so you don’t have to spend time with maps and tax tables.

Once you’ve reported how much sales tax you collected in a state, it’s time to file your sales tax returns and remit the sales tax you collected.

Filing Amazon FBA Sales Tax Returns

You can file your sales tax returns in a couple of ways.

  1. Online: Login to your state’s taxing authority website and submit a sales tax return. Then make your payment through the state’s payment gateway.
  2. Automatically via sales tax software: Use a sales tax automation solution to automatically file your sales tax returns and pay what you owe to the state.

And finally, keep a couple of important things in mind when filing your sales tax return.

  1. Always file “zero returns:” File a sales tax return even if you did not collect any sales tax over the taxable period. States still require you to file by the deadline, and some of them will even levy a fine if you don’t file. If you fail to file for multiple periods in a row, they may even automatically cancel your sales tax permit.
  2. Take advantage of discounts: A little over half the U.S. states with a sales tax allow online sellers to keep a small percentage of the sales tax you’ve collected as bit of a monetary “thank you” for your effort collecting and remitting the tax.  While this is generally only 1-3% of the sales tax you’ve collected, it’s still free money!

You should now be prepared to tackle Amazon FBA sales tax. If you have questions or something to say, start the conversation in the comments section.

Want more insights like this?

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How One Pillow Manufacturer Is Putting Amazon Fraudsters to Bed, One Scammer at a Time https://www.bigcommerce.com/blog/amazon-fraud/ https://www.bigcommerce.com/blog/amazon-fraud/#respond Wed, 13 Dec 2017 19:09:30 +0000 https://www.bigcommerce.com/blog/?p=26063 In 1990, my dad set up shop with my mom, selling this pillow with a hole in the middle. He’s…]]>

In 1990, my dad set up shop with my mom, selling this pillow with a hole in the middle.

He’s a dermatologist, and made the pillow to provide relief to patients of his suffering from tender ears caused by a condition called Chondrodermatitis Nodularis Helicis (CNH for short).

They’ve been in business ever since then, and up until this year when my husband and I bought the business from them, they did everything exactly the same as they did back in 1990.

That means no advertising, marketing or sales channel changes in almost 30 years.

So, my husband I took over in January and have since changed everything (it is 2017, after all!)

That’s when our sales doubled!

My parents were shocked. “That’s the power of Amazon!” I told them.

We were going to be the next big Amazon success story –– I just knew it. And then, our listing was deactivated.

Someone else had the lowest price.

“OK,’ I said to my husband, “that’s impossible. Nobody else can have the lowest price for this pillow, because nobody else has this pillow. My dad invented it. We have the lowest price, because we have the only price.”

I was freaking out.

It was the first time either of us had ever experienced fraud — and I had no idea what was going on.  

But that was then.

I’ve since learned that the kind of fraud we were subject to is a huge problem on Amazon.

I’ve also gone through all the necessary steps each and every time to make it stop. And for my business, I have it down to a science.

Let’s start with what not to do.

Take This Book With You

This full guide (all +17 chapters and +50 experts and their insights) is more than 35,000 words. That’s a lot to read on a screen.

So don’t! Download the guide below to print it out, take it with you, and start selling more on Amazon.

Download Now

What Happens When You Call Amazon About a Fraudulent Seller?

After that first incident, in my panic mode, I called Amazon customer service.

At that point, I had tried to do everything I could within seller central.

Nothing was working. So, I picked up the phone.

They wouldn’t tell me anything about the other seller.

I supposed that it made sense, after all, it’s private and it could be “somebody else’s business,” in theory.

But we’re the only ones who make this pillow, remember?

So I told Amazon:

“This person says they’re selling my product and they can’t be! Nobody else has my product. It’s my own product. Nobody has it.”

To be fair, they were very calm about the whole thing and let me freak out over the phone. They asked me to explain the issue entirely –– and that they’d look into it. So, I did.

Here’s what I told them:

  • Another seller listed my item
  • They used my picture with my hand on the pillow
  • They used the description that I wrote myself
  • They had *our* customer service number on there
  • And worst of all, they lowered the price to $5.47 –– when the cost is $59.95.

Let’s get transparent on the pricing part.

Our pillow costs us $20-something to make it. There’s no way somebody could have made a similar or knockoff product for even close to $5.

Of course, they weren’t saying it was a knockoff.

  • They were saying it was the real deal.
  • Our product.
  • Our custom-made, copyrighted product.

It was frightening, but Amazon was able to take that seller down decently quickly.

Problem solved, right?

Wrong.

As soon as that seller was taken down, a few hours later another one popped right up again. It’s part of the scam.

Beware the Amazon Seller Scam

Several years ago, Amazon had a big push to become a global marketplace, and so they opened themselves up and made it super easy for international groups or people to sell and open up a store on the platform.

Essentially, almost anybody, almost anywhere, can sell on Amazon within minutes.

It goes like this…  

One scammer somewhere in the world says to a want-to-be Amazon merchant:

“Pay us a certain amount of money, and we’ll set you up with a store on Amazon. You pay us and we’ll set you up with a store with 20,000 items for sale. People buy the items from you, and all you have to do is drop ship. You never actually hold any items in stock at all.”

Now, I can only assume that somebody has a program which allows a “seller” to select many items at once and set a price that’s some very low percentage of the price that is originally on there.

It’s why our $59.95 pillow was listed at a little over $5.

I say that this is the case because when you go to the storefronts of these fraudulent sellers, they have hundreds, if not thousands of products listed, all at insanely low prices.

I’m at the storefront for HairWOW. You can see at the top left this newly launched store has 114,976 products! Including mine. Hopefully lots of other vigilant sellers are also reporting them. You’ll need the link to this storefront page to put in the email you send to Amazon.

The products they list alongside might be related, or not.

In our case, there was the CNH pillow, plus a lot of other bedding, and then a lot random stuff.

It’s almost always the case, however, that the scammers will target ‘Just Launched’ items, from genuine sellers with few or no ratings.

Yep, there’s my product, being “sold” by another seller and me. HairWOW is on top because of their lower price, and I’m second. If there was another lower price before mine, I would be bumped completely off the page. If that happens, just repeat all the steps in this article with each fraudulent seller. Usually the seller will be Just Launched, as in this case, and offer free shipping.

This has something to do with the way Amazon lists products.

If I’m a new seller (a genuine one) with no reviews, and I’m ‘competing’ as it were with two scammers, listing my product for a fraction of the price, then even though none of us has any reviews, the scammers will appear above me because their offering is less expensive.

Why Does the Scam Work In the First Place?

The scam works in part purely because of the sheer size of the Amazon marketplace.

Even if Amazon had a team dedicated to tracking down the scammers, it would be incredibly difficult to catch them all at launch.

In practice, the scam works because:

  • Before shoppers buy one of these fake items, they’re told it will ship from inside the U.S.
  • Then, as soon as they place the order, the fake seller changes the shipping information from U.S. Post, to China Post, and attaches a tracking number.

How do they attach a tracking number when there’s no product to send?

Yep, it’s fake, too.

Why put a tracking number in the first place?

Amazon pays sellers every two weeks. Items posted from China take between three and four weeks to arrive.

The plan is that they’ll get paid in two weeks, then, when in four week’s time the customer hasn’t received their item, that customer will complain to Amazon.

The customer will be refunded by Amazon, but by then the fake seller has already been removed, and set up shop as somebody completely different.

Even if they succeed in getting a small fraction of those sales to work, the scammers are making money. The customer wastes time, but they eventually get their money back.

In the end, it’s the seller who’s losing out, because:

  • The customers are angry
  • Trust is broken
  • They might never want to buy from you again.

This has been the case with us a few times, and when I speak to customers who have been scammed, the conversation goes something like this:

“Hey, I haven’t received my order.”

“I’m sorry. I have no record of you buying from us.”

“I only paid $7.00.”

And so I explain what’s happened, and usually they say, “Well, that sucks. Can I order now?”

But it’s a waste of everyone’s time.

Is There Anything Amazon Can Do to Fix This?

Probably.

  • Making sellers jump through a few more hoops before being able to list items would be a start.
  • Placing some restrictions on new sellers would help to curb the scammers, or at least slow them down.

But honestly, the way we’ve dealt with things on our own has been really effective, and if it can save you the hassle of going through what we went through, then I would be all too happy to share.

How to Stop the Amazon Scammers

There’s a bit of policing you’ll need to do yourself when it comes to taking down the scammers, but it’s totally worth it.

1. Keep checking your inventory.

If you have just a few items for sale on Amazon, then the first thing you ought to do is go to your inventory page on a daily basis — I do this multiple times a day — to make sure you’ve got the lowest price.

I’ve got my pillow, and I’ve got my extra pillow cover.

Those are my only two items. So I know that I should have the only price on Amazon.

There’s a little green check mark by each item saying, “Yes, you’ve got the lowest price.” I know if that’s the case, I’m fine.

This screenshot is of my inventory page. I checked it this morning and put a red box around the area I was looking at. I wanted to see check marks by both products showing I had the lowest price because I should have the only price, since no one else has my exact product. My extra pillow cover showed I did not have the lowest price, and instead showed someone else had it listed for less. Amazon puts a link there for me to click if I wanted to match their price – which tells me there’s a fraudulent seller out there (or maybe more than one) listing my item.

If you no longer have the lowest price, and you’re the only one selling that item, there could be problem.

If somebody has significantly undercut you on a similar item, do some research before going in guns blazing.

2. Get as many reviews as possible.

If your product has lots of positive reviews, it will help to keep you up high in the listings.

It’s also more work for scammers to fake reviews right after launch.

3. Be open and honest in your product description.

The other thing I do — since it’s my product that I own and manufacture — is to address scamming right there in the product description.

Here’s what I say…

“Beware fraudulent sellers! They don’t have a cheap knockoff version, they do not have a version at all. There is not an item, this is a scam.”

Explaining to people what’s going on –– that if they see something that seems too good to be true –– that it probably is, that helps a lot.

4. Send an email to Amazon.

The third thing –– the most important thing –– to do is to send an email to Amazon.

You don’t want to flood them with emails, or you don’t pester them with phone calls (it doesn’t work) but you do need to reach out.

The email is seller-performance@amazon.com — just send them one email per day.

If you’ve got a lot of fraudulent sellers on your account every day, just pick a time of day and then send them an email.

Here’s the format and process that I use.

  1. Compose an email to seller-performance@amazon.com
  2. Subject line: Possible Fraudulent Sellers
  3. In the email body, put the name of fraudulent seller’s store, with a link to their storefront
  4. Do this for however many fraudulent sellers there are
  5. Underneath, say, “We believe the above sellers are engaging in fraudulent selling activity. Please investigate.”

Presto. They will sort it.

This is what it looks like:

To: seller-performance@amazon.com

Subject: Possible Fraudulent Seller

Body:

Seller Name: HairWOW (or whoever it is)

Link to their storefront: (paste here)

We believe the above seller is engaging in fraudulent selling activity. Please investigate. Thanks!

And then you wait. That’s all. If there are multiple fraudulent sellers, you can just list them all in one email.

Bonus tip: Lay the smack down!

Because I believe that everyone should be held accountable for their actions, I also go to that fraudulent seller’s store and click on the button that says, ‘Ask Seller a Question’, and I hit them with my standard shaming paragraph:

“Didn’t your mother teach you not to cheat people out of their money? Don’t you know you’re hurting people’s businesses? This is not a victimless crime. Shame on you.”

I have no idea how many times that’s worked, but it makes me feel much better.

I hope that helps you to navigate this more seedy section of Amazon, and that you won’t get discouraged from selling on what has to be one of the best platforms we’ve ever used — after BigCommerce, of course!

Want more insights like this?

We’re on a mission to provide businesses like yours marketing and sales tips, tricks and industry leading knowledge to build the next house-hold name brand. Don’t miss a post. Sign up for our weekly newsletter.

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The Definitive Guide to Selling on Amazon https://www.bigcommerce.com/blog/selling-on-amazon/ https://www.bigcommerce.com/blog/selling-on-amazon/#respond Wed, 13 Dec 2017 17:08:18 +0000 https://www.bigcommerce.com/blog/?p=17428 As a former journalist, the plethora of clickbait headlines across the web is nauseating. I’ve had to draw the line…]]>

As a former journalist, the plethora of clickbait headlines across the web is nauseating.

I’ve had to draw the line plenty of times in my writing career, refusing to call something “definitive,” comprehensive” or “all-inclusive” if it wasn’t that.

This piece of content required no such moral delineation.

This book’s headline, Definitive Guide, is the only possible way to describe what you will find in the subsequent chapters.

It is by far the most complete and actionable information out there discussing how exactly to sell on Amazon.  

Here are some things you’ll find throughout the book.

Topics You Will Learn About In Our Selling On Amazon Guide:

  • The benefits of selling on Amazon.
  • Amazon success stories for inspiration.
  • How to determine if you should sell on Amazon.
  • Actionable Amazon SEO strategies.
  • Understanding the Amazon a9 algorithm.
  • 7 skills you must have to win on Amazon.
  • Pitfalls that trip up even the best Amazon sellers out there.
  • A step-by-step guide to determining your actual Amazon revenue.
  • How you could lose on Amazon by winning – and other tips and tricks to avoid a double-sided sword.
  • How expanding to Amazon helped a Water Polo company successfully sell swimwear to Alaska.
  • How to win the Buy Box, as told by Feedvisor, the unencumbered champion of Buy Box wins, where 82% of Amazon’s sales happen.
  • Why mobile matters most – 70% of Amazon customers made purchases on Amazon’s mobile site – and how to optimize for it.
  • Pricing and repricing strategies for both resellers and private label sellers alike – plus tips to make you more, faster.
  • How to get a 320% increase in sales in less than 10 minutes (hint: Amazon has SEO, too).
  • What The Mountain has to do with an Amazon customer review legend – and how you can jump start your own with a simple email.
  • Growth hacking tips and tricks that could earn you $5,000 for every hour you spend focused on Amazon.

Take This Book With You

This full guide (all +17 chapters and +50 experts and their insights) is more than 35,000 words. That’s a lot to read on a screen.

So don’t! Download the guide below to print it out, take it with you, and start selling more on Amazon.

Download Now

This is actually the second publishing for this book – an updated version for 2018.

The original book was eight months in the making –– with the first email sent out to a subject matter expert on January 21, 2016. That first book was launched in August 2016.

That timing is critical.

BigCommerce had just recently published the first ever Amazon Sellers’ Solution Provider Directory –– highlighting more than 200 solution providers across a wide range of Amazon needs and complexities.

It was our most downloaded piece of content at that time.

James Thomson, former head of Selling on Amazon and an an author you’ll see plenty of times throughout this book, was the mastermind behind that project.

His name and proposal landed on my desk in the hibernation days between Christmas and New Years, when most Americans and almost all retailers are in the throes of a rest period following the holiday rush.

“I know it’s the holidays, but please just hop on a call with him,” a colleague pleaded. “You’ll like what he has to say.”

That 30-page book was published two weeks later, forcing itself to the top of priority cycles that typically take much longer –– especially with multiple team members out on vacation.

It was all hands on deck – and I had called them there, asking many to spend a few extra hours to help me make this book come to life.

I was putting my neck on the line – calling in favors before the first day of the new year even began.

It was that good.

Soon, I was sending James emails asking him to review a table of contents for a longer-form, more comprehensive piece on how to sell on Amazon.

It’s safe to say that my call with James that late December day was a light-bulb moment for me.

“This stuff is complex,” I told him, “but the revenue opportunity for our customers is too ridiculous to ignore. Our merchants need the absolute best, most pertinent information to make this work. I won’t waste their time.”

He agreed, and the vetting process began. That first email went out. This 35,000+ word book had its first heartbeat of life.

The 2016 version had 15 chapters, featuring the insights of more than 30 Amazon subject matter experts.

This year’s version for 2018 has 17 chapters, featuring the insights of more than 50 Amazon subject matter experts.

A few include:

  • Andrew Tjernlund, Multi-Million Dollar Merchant and Amazon Consultant
  • Bryan Bowman, Founder, AMZ Profit Pros
  • Eyal Lanxner, CTO, Feedvisor
  • James Thomson, Partner at the Buy Box Experts, Founder of The PROSPER Show, Former Head of Selling on Amazon
  • Kai Klement, Co-founder and Multi-Million Dollar Merchant, KAVAJ
  • Kevin Rizer, Founder, Private Label Podcast
  • Lauren Shepherd, Senior Marketing Manager, Teikametrics

We left no stone unturned, nor did we include any information we believed to be superfluous.

You will find everything you need to start selling and winning on Amazon in this book.

I can also assure you it will be a vital resource you continue to reference as you grow Amazon as a revenue channel.

Even for those sellers already highly profitable on Amazon, there are nuggets of insight to even further increase sales and operationalize your Amazon business.

What are you waiting for?

  • Dive in.
  • Take action.
  • Grow your business.

And let us know if you have any questions.

In the meantime, here’s the quick starting list of everything covered in this book, boiled down to 8 steps.

How Do I Quickly Get Started Selling On Amazon?

  1. Decide on items you will be selling through Amazon.
  2. Choose your Amazon selling plan. The professional plan costs $39.99 per month and individuals pay $0.99 per item sold.
  3. Register to start selling.
  4. List your products.
  5. Drive traffic to your listings (described in detail throughout the guide).
  6. Generate sales.
  7. Ship orders.
  8. Get paid — payments will be deposited in your bank account.

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Selling Swimwear to Alaskans: How 3 Retailers Successfully Expanded on Amazon https://www.bigcommerce.com/blog/amazon-success-stories/ https://www.bigcommerce.com/blog/amazon-success-stories/#respond Wed, 13 Dec 2017 13:00:56 +0000 https://www.bigcommerce.com/blog/?p=17432 It was a typical work day for Alex Young in 2012. He was at the Kap7 headquarters, his employer’s office.…]]>

It was a typical work day for Alex Young in 2012.

He was at the Kap7 headquarters, his employer’s office. It was lunch time, a Wednesday maybe.

He had a friend’s event that weekend and needed something … shoes, a pair of pants.

It doesn’t really matter, because, as usual, he was shopping on Amazon.

A tried, tested and trusted 2-day delivery was in his grasp.

It didn’t matter what he bought, or how late he bought it; he knew he would be able to get the item in his hands for when he needed it.

In fact, Alex and the rest of his co-workers, including the former Olympian founders of the company, Wolf Wigo and Brad Schumacher, all regularly shopped on Amazon. And they did this while running their own, independent online store.

On one of those quick Amazon shopping days, Alex did a query for the product his company sold:

“Water Polo Ball”

It’s hard to say what Alex saw years ago, but today, you do a similar search and two brands clearly dominate on Amazon:

  1. Misaka
  2. Alex’s own Kap7.

And Kap7 is the only one that is NCAA and NFHS official.

amazon-success-stories-1

Kap7 also sells water polo swimwear, so I did a quick search for that, too.

This small, 7-person company headquartered in L.A. comes up third on Amazon, right behind Nike. That’s one heck of a search engine optimization success story.

amazon-success-stories-2

Note: Turbo is Kap7’s water polo suit brand. 

“We were personally shopping on Amazon all the time, and there wasn’t anyone that was selling our type of products there,” says Alex.

“We needed to take advantage of that. None of our direct competitors have moved onto Amazon yet, so we are ahead of the game in the water polo market. Once you have it dialed-in [to Amazon], it runs itself.”

Alex thinks about Amazon as simply another sales channel for his business. Of course, Amazon does play by different rules than a typical webstore.

For instance, Kap7 can often make 50% margin off of its products. On Amazon, that may go down to 25%.

But a 50% decrease in margins for a highly trafficked and high sales channel doesn’t cause a bit of concern for Alex and his team.

They have full control over their marketplace selling, understand the industry and when it will spike, and know that different customers shop in vastly different ways.

For Kap7, control, sales and buyer personas make the expansion to Amazon a success — and a no-brainer.

“There are people who only shop on Amazon, and there are people who want to shop on direct ecommerce sites. Both sets of people are growing,” says Alex.

“Water polo is growing extremely fast in the U.S., and we can get spikes in orders. If we get low on inventory for a product we have to order in bulk, like balls, we will turn off our marketplaces and keep selling on our website.”

This level of control and ability to turn on and off selling options on Amazon as needed gives the Kap7 team, and Alex in particular, the freedom to use the webstore in unique ways.

For Alex, Amazon revenue is a known. It will come in. People are shopping there.

On a webstore, it’s a different story.

Amazon already has an audience. Independent websites must build an audience –– and that’s tough work.

But with Amazon as a steady source of income, Alex has figured out how to use additional tools –– like Google AdWords and Google Shopping –– to target consumers elsewhere on the web and bring them back to a dedicated website targeting their specific needs.

After all, you can customize a website to serve a buyer’s persona. With Amazon, you’re going for keywords and mass relevance.

“We do a lot of marketing to the end-user, who is the age-group athlete, and then the purchaser who is the parents. We try to loop things around with product reviews and videos, and water polo drills and tips,” says Alex.

“We use BigCommerce to power our ecommerce website, which also gives us more opportunity to focus on really specific groups. For example, we focused on selling Alaska-printed suits to people in Alaska using Google AdWords, and they sold really well for about six months.”

That’s right, the combined power of Amazon and independent webstore earned a water polo company in L.A. a buying audience in Alaska.

That’s how to optimize sales channels.

Take This Book With You

This full guide (all +17 chapters and +50 experts and their insights) is more than 35,000 words. That’s a lot to read on a screen.

So don’t! Download the guide below to print it out, take it with you, and start selling more on Amazon.

Download Now

Uncovering 100% Growth on Amazon through Search

We’re in L.A. again. This time, in the home of Emily Ironi, the sole founder and employee of The Dairy Fairy –– a quickly growing nursing bra company serving the likes of Zoe Saldana and Chrissy Teigen.

But this is no celebrity-only brand.

A little over four years ago, Emily Ironi was a new, working and single mom. And like any parent, she wanted to give her kid the best shot at life.

To her, breastfeeding was a part of that legacy.

The selection of nursing bras she found, however, were not.

To Emily, they looked like medieval torture devices.

  • They weren’t attractive.
  • They weren’t comfortable.
  • And even though they did the job, allowing a woman to breastfeed with a bra on, they left much to be desired.

For one, postpartum depression is real – and no new mom wants to be made to feel unattractive simply by trying to feed her baby.

For two, the pointy and uncomfortable nature made nursing bras near impossible to actually wear as a bra.

Instead, you’d need to wear another bra, and then change into the nursing bras before nursing to achieve maximum comfort and functionality from what was on the market.

No one has time for any of that.

So, Emily made her own bra – patent pending.

Today, new moms and older ones alike wear that bra, many of them choosing to continue wearing the bra beyond breastfeeding thanks to its comfort, support and … well … let’s just say it’s pretty.

In 2013, she launched her online store –– and immediately, sales began rolling in. She’d found a niche market. Customers were finding her by Google and bloggers.

Then, in October of 2015, she looked to Amazon and launched a test run.

Sales doubled.

“Amazon’s been incredible for my business. I started selling on Amazon in October of 2015, and it’s doubled my sales,” says Emily.

“What that tells me is that there’s a whole slew of people who didn’t know I existed, and they’d just go in and type ‘hands-free pumping bra.’ It’s working way better than a Google search for me.”

Amazon search outperforming Google’s isn’t surprising.

Research has shown that 44% of all product searches start on Amazon.

If you rely solely on Google search to bring in customers, your first competitor to sell on Amazon will mop up all the buyers that search there first –– much like Kap7 did.

Think about it.

Amazon is a search engine for products that likely has your credit card on file, allowing you to check out in a single click. It’s arguably the easiest shopping destination in the world. If you have an audience that is busy (and all of us are), Amazon is the quickest, most convenient shopping solution for them.

That doesn’t mean, though, that your own website isn’t relevant.

“Amazon as a business is becoming more of a competitor to some of the brands, and bringing out their own products,” says Emily.

“I find that it’s still critical to have your own retail presence. I have a lot of peers, especially in the baby products industry, their businesses were 100% on Amazon, and now they’re starting to catch up and trying to migrate more of their business to their own websites.”

“Ultimately, you have a lot more control over everything and also your interaction with customers. It’s about finding that perfect balance.”

Customer’s Choice: Using Data to Sell the Products They Want Where They Want Them

Relative to Austin Bazaar, The Dairy Fairy and Kap7 are newbies to Amazon.

Seetha Singh, the owner of the instrument retailer, launched her webstore almost simultaneously with her Amazon presence back in 2007 –– nearly a decade ago.

Her goal then and now is still them same: be wherever the customer is. Cost-effectiveness is high on her list as well.

“We wanted to be present wherever customers for our products like to shop,” says Seetha.

“Selling direct and via third party channels has helped us broaden our reach. Selling on Amazon affords us the benefit of reaching millions of Amazon customers without spending the advertising dollars up-front.”

And as you might expect from such a seasoned Amazon seller, Seetha has drafted a comprehensive multi-channel strategy for Austin Bazaar.

The company’s Amazon success is no fluke.

It took years of sales data and multiple iterations in the analyzing to determine which products sell best on the channel, and how to optimize each selling point for the highest conversion.

“We do not offer the same products on all channels,” says Seetha.

“We offer our best selections on our webstore, but also have products that are unique to each channel. The selection offered on each channel depends on the strengths of that channel and the kind of consumers that they attract.

By offering specialized inventory on our webstore, we are better able to mitigate the effects of cannibalization that can occur when multi-channel selling.”

For Seetha, marketplaces like Amazon are just the right places to be. Too many consumers are already shopping there for any retailer to ignore it. Getting in front of your customers in the way they want to shop is the most important part of selling success.

Your website can offer the who, what, when, where and why –– but your customers get the final say in how.

Too Much of a Good Thing

Know this: Amazon is not a set-it-and-forget-it channel.

You can go too big. It’s possible you’ll need to pull back.

But then again, is that the worst problem to have?

“Make sure you are focused on the channels you already have in place, so they are running themselves. Then step over to the next channel and build that,” says Alex.

“The biggest mistake we made is we tried to go full-bore on all of them – Etsy, Jet, eBay. We’ve actually pulled it all back because we want to focus on each one, make sure it’s perfect and understand why products are selling well, or not.”

“Once they’re running well it’s just a management and maintenance scenario, which is not that big of a deal.”

First, do the competitor research; then launch in the channel; finally, use product data to optimize.

That’s how these three companies are seeing 100%+ growth in revenue coming from their Amazon channel, plus extra time and money to spend on acquiring new audiences for their independent webstore.

It isn’t a no-sum game. In fact, it’s a winner takes all –– and the winner is the retailer.

The winner is you.

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Amazon Revenue Calculator: Selling Fees, Metrics & More [Infographic] https://www.bigcommerce.com/blog/amazon-seller-fees-costs-analytics/ https://www.bigcommerce.com/blog/amazon-seller-fees-costs-analytics/#respond Wed, 13 Dec 2017 13:00:53 +0000 https://www.bigcommerce.com/blog/?p=17489 As an Amazon seller, you need to ask yourself one important question: “Is my Amazon business profitable?” The answer isn’t…]]>

As an Amazon seller, you need to ask yourself one important question: “Is my Amazon business profitable?”

The answer isn’t as obvious as you might think.

Many sellers discover they are losing thousands of dollars every year.

What are Amazon’s Current Selling Fees?

  1. Monthly subscription charges: If you are a professional seller (someone planning to sell more than 40 items per month), you’re fees are $39.99 per month. If you plan on selling less, your fees are $0.
  2. The per-item fee: Non-professional sellers (i.e. individual sellers) pay $0.99. per product sold. Professional sellers pay $0.
  3. Referral fees: These are based on product category. Amazon will charge whichever of these two is higher for each item:
    • Referral Fee as a percentage of sale price: It ranges from 6% to 20% (45% for Amazon devices), but it’s usually 15%.
    • Minimum Referral Fee of either $0 or $1: Jewelry and watches are the only two categories with a rate of $2.
  4. Variable Closing Fees: These apply strictly to books, music, videos, DVDs, video games, consoles and software (BMVD products), and they will vary according to category, shipping destination and the type of shipping service used.
  5. Fulfillment Fees: These fees are based on Product Dimensions and weight. This charge is typically between $2.41 and $10.00 for most products, though the price is increasing in 2018. Use this calculator to determine what your fulfillment fees will be.  

Beyond the fees, however, the biggest reason most businesses lose so much on Amazon is because they’re using one-dimensional metrics to determine profitability.

You can’t tell a person’s health by simply checking his heart rate, so why would you do the same for your Amazon business?

To effectively evaluate your profitability, you must analyze every aspect to determine your overall inventory health.

This is what we call the Multidimensional Methodology.

Check out the infographic below for a visual walk-thru, and then read through the methodology and how to do it following the graphic. 

Take This Book With You

This full guide (all +17 chapters and +50 experts and their insights) is more than 35,000 words. That’s a lot to read on a screen.

So don’t! Download the guide below to print it out, take it with you, and start selling more on Amazon.

Download Now

What is Multidimensional Methodology?

The Multidimensional Methodology will help you determine your profitability at the SKU level so you can make the most informed business decisions.

This may be regarding your:

  • Pricing
  • Inventory management and restocking
  • Returns management
  • Vendor negotiations

First, we’ll go through the most effective methods to measure profitability on Amazon, and then we’ll get into the specifics of how you can squeeze the most profit out of each dollar you invest.

Know Your Costs

If someone were to ask you if you knew your exact costs at the SKU level, would you be able to answer “yes”?

Even the most organized sellers are missing out on hidden costs that are affecting their bottom line.

Let’s get started with a review of the minimum list of costs that should be considered in your financial model:

  • Direct costs: Your acquisition cost per SKU, including shipping.
  • Indirect (overhead) costs: Warehouse costs, utilities, insurance, bookkeeping, payroll and benefits, business travel, corporate business tax, product samples, web development, etc.
  • Amazon fees: Sales commission, FBA fees, FBA inbound shipping fees, commission on returned product, storage fees, return shipping costs (both from customer to Amazon fulfillment centers, and from fulfillment centers to you), and returns disposal costs.
  • Costs for handling returns once they are received: What write-down or write-off costs do you have by not being able to sell these returned products as new-condition products?

Determining Your Overhead Allocation Cost per Unit

To calculate this, add up your indirect costs over the past twelve months, and divide that sum by the number of units you sold in the last 12 months.

Use this number as a rule of thumb, as it should be consistent on a month-to-month basis.

Here’s the calculation to use:

You may want to refresh this calculation every 6 months.

Let’s say, for example, that you calculated a $2.00 overhead allocation cost per unit sold. This is how much money you have spent on the sale of the item before you have purchased or sold it.

Typically, we see overhead allocation costs between $1 – $3 per unit.

If your overhead allocation cost is higher than that, it may be time to evaluate your individual business expenses and determine how to streamline your costs.

For example, let’s say Kathy’s Cat Toys is spending thousands of dollars on Amazon Sponsored Products every month to drive traffic to her Cozy Cat Castle.

However, her return on her investment is three sales per month.

Based on the high overhead allocation cost for that particular unit compared to her other SKUs, she will have to determine if that SKU is worth continuing to sell.  

Take a Look at Your Amazon Fees

All Amazon fees can be pulled in one-to-two-week time frames out of Seller Central (Seller Central > Reports > Payments > All Statements View).

Keep in mind your FBA fees will be higher for items that are heavy or large. Also, be sure to monitor any slow-moving SKUs, as stale inventory can cause you to rack up additional fees.

Lastly, while some of your expenses may be SKU-specific, some are not. Once expenses are calculated by individual SKU, the remaining costs should be allocated across all units sold.

This is a very simple approach to profitability calculations and will provide you the minimum amount of information you need to monitor your costs day-to-day, or month-by-month.

To summarize, let’s review your costs:

  • Wholesale cost
  • Inbound/outbound shipping
  • Amazon commissions
  • FBA fees
  • Overhead cost allocation
  • Returns-related costs

Unfortunately, if you don’t have a constant pulse on your profitability by SKU, it can be difficult to make the necessary changes to vendor negotiations, inventory management or product sourcing promptly.

By moving toward a model of profitability by SKU (updated every 3-6 months), having a decent understanding of the overhead allocation cost that you should be applying to all current sales, and knowing the impact of product returns on your SKU-level and overall profitability, you can become a smarter seller.

This knowledge will help inform and educate future buying decisions.

If Kathy’s Cat Toys is selling a lightweight feather toy that is incurring minimal FBA fees, has low overhead costs and sells like hot cakes, Kathy knows to reorder that toy.

However, the Cozy Cat Castle that is heavy, large and slow-moving is a SKU that Kathy should consider no longer purchasing or even remove from FBA so as not to incur further fees.

A lot of smaller brands choose to track all of these calculations through spreadsheets, but this can be extremely inefficient and time-consuming.

Most successful mid-market sellers decide to employ a third-party software to automate this process and help them determine their true profitability.

Identify Trends That Are Costing You Money

1. Returns.

While some products may have a high return rate (e.g., 20% of orders are returned), you may easily be able to resell all of those items as ‘new’ condition a second time if a customer doesn’t open or tamper with the product before returning it.

Other products may have low return rates, but are a complete write-off if returned (e.g., software, vitamins, underwear).

If you are forced to resell the SKU as ‘used’ following a return, there is a write-down cost incurred by not being able to generate the revenue you would have received were the item in ‘new condition.’

For example, if you are selling an iPad and the customer chooses to return it, you would have to sell the item for a lower price as ‘like new’ or ‘used.’

As products are returned, you should be tracking not only the proportion of each SKU being returned but also the cost per return regarding write-downs or write-offs.

This can be found in Seller Central reports or automated through third-party software.

It’s crucial to monitor return rates and return-related costs because occasionally those costs will actually be high enough to warrant removing the products from your catalog.

Alternatively, you may have the option to push part of that cost onto your distributor/supplier with whom you share the returns-related cost data.

For example, let’s say Molly’s Marionettes have seen a large number of returns. After Molly does a returns analysis, she finds that she is losing money.

Once she removes the problem product from her catalog, she sees a 10% increase in profit the next month.

2. Stockouts.

Inventory stockouts happen to even the most experienced Amazon sellers and have the potential to be one of the biggest leaks in your profitability bucket.

How much are inventory stockouts costing you?

Let’s go over an example of just how much of an impact stockouts had on Steve’s Sporting Goods.

Steve is an established Amazon seller with over 5,000 products, and his top-seller is a pair of high-end soccer cleats. The cleats have been flying off the shelves and are selling at an average of 60 units per month, with a profit of $50 per unit.

On average, Steve is out of stock on these cleats an average of 2.5 days per month, equaling a loss of $1,500 in profit over the course of the year ((2.5 days x $50/unit) x 12 months in a year = $1,500). While this may not seem like a lot, let’s consider Steve’s business as a whole.

Using the Pareto Principle, or the 80/20 rule, we can assume that 20% of Steve’s inventory generates 80% of his profits, so 1,000 of his 5,000 SKUs. If we estimate that on average, his profit per SKU sold is $10 and he sells 10,000 of his top 20% of SKUs.

If Steve were able to cut his average stockout time per month in half, he would make an additional $50,000 of profit each year.

Why Stockouts Happen and How to Prevent Them

Scenario 1: An Increase in Customer Demand.

Some changes in demand will be unpredictable, like when Kate Middleton wears a particular dress (known as “the Kate Middleton Effect”) and sales shoot through the roof. 

How to Prevent this Stockout Scenario:

Not all stockouts can be remedied with the same solution. First, take a look at the type of product you’re selling.  

Since the “Kate Middleton Effect” is hard to predict, the best solution is to build a buffer into your buying strategy to prepare for scenarios like these. Keep in mind that this strategy has drawbacks as well. If your product doesn’t sell, you risk paying those pesky FBA storage fees.

Scenario 2: Annual Seasonal Variations.

Every retailer knows that when spring begins, your winter boot sales become slower than molasses in January and your rain boots and sandals begin to fly off the shelves.

For many sellers, this often results in stockouts.

How to Prevent this Stockout Scenario:

If you are selling seasonal items, you’ll want to monitor changes in your historical sales rank and stay on top of other factors, like weather patterns, to help predict inventory levels. This can be tracked through spreadsheets or third-party software.

Scenario 3: Complications with Your Supplier

Occasionally, you will run into supplier issues that are outside of your control. For example, Nike decides to discontinue your best-selling running shoe or your wholesaler ran out of stock.

How to Prevent This Stockout Scenario:

Be your supplier’s best customer and maintain open lines of communications with them at all times. This way, you can be alerted in advance to any changes in their product line or SKU volume and adapt your strategy accordingly.

Most importantly, you’ll know if any of your best-selling items are about to be discontinued, giving you the ability to buy up a bunch of extra inventory so you can continue to enjoy these sales for as long as possible.

Scenario 4: Changes in Demand Resulting from Competition

There are two potential causes for this scenario:

  • Your Kitchen Aid blender has been struggling to sell for weeks and all the sales have gone to your competitor, Kelly’s Kitchen Supplies. All of a sudden, Kelly runs out of stock and you’re the top seller on the listing. This causes demand of your blender to go through the roof and you are not able to keep up, causing you to go out of stock.
  • The opposite scenario happens when Amazon sees the success you are having with your Kitchen Aid blender and begins to sell the same SKU. Now you are never able to win the Buy Box, no matter how low you go with your price.

How to Fix This Stockout Scenario:

It’s crucial to regularly monitor your sales volume and price changes to catch variations in sales velocity for your SKUs. This will help you catch the first cause as quickly as possible so you can adapt your strategy.

Depending on your competition, you may want to increase your price to get even more of a profit margin out of this temporary spike in sales.  

Competitors jumping on a listing is becoming more and more of a common occurrence.

To properly prepare for this particular situation, always be diversifying and expanding your portfolio so that losing a few SKUs won’t make or break your business.

The more diverse you are at the brand, supplier and SKU levels, the lower your risk.  

Always be scouting for new brands to sell so that if your best supplier begins to sell directly to Amazon or if your supplier cuts you off completely, you have more profitable products to rely on in your portfolio.

Know Your Metrics

Key Performance Indicators (KPIs) are crucial for the success of any business.

These metrics can help you evaluate your success at reaching key targets, allow you to spot trends or problem areas, and assess your overall performance.

They are used across all industries but are particularly useful for retail businesses.

The most successful Amazon sellers know to segment their analysis by brands, suppliers and buyers, and review metrics for each of these areas at least once a week.

Here are the most important KPIs to evaluate the health of your Amazon business:

1. Inventory to Sales Ratio.

This key management metric covers multiple areas of your business. It indicates the overall health of your inventory, as well as highlighting your sell-through rate.

2. Inventory Turns.

This ratio shows how many times a company’s inventory is sold and replaced over a period of time. A low turnover rate implies poor sales and, therefore, excess inventory.

3. Gross Margin Return on Investment (GMROI).

GMROI is a ratio used to evaluate inventory profitability. A ratio higher than one means you are selling the merchandise for more than the total cost it took to acquire it.

4. Cash to Cash Cycle.

Cash to Cash Cycle measures the amount of time it takes for capital invested to go from cash to the production and sales process and then convert into cash again through sales. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect cash owed, and the length of time the company is afforded to pay its bills without incurring penalties.

The longer your cash to cash cycle is, the more time your cash flow is tied up. This means you are losing out on potentially more profitable investments.

5. Days of Inventory (DOI).

Quantity on Hand / (Sales During Period/Period)

This KPI will help you see the average number of days an item is held in inventory before it is sold. It’s extremely useful in determining order quantity to ensure you are not overstocking or stocking out of your inventory.

Days of inventory (DOI) is much higher for companies not tracking KPIs.

Profitability Leaks

Tracking your metrics is key because the dollars are in the details. While these details may seem minute, when the mistakes add up they can make or break your business.

Here are some commonly missed profitability leaks unique to Amazon sellers:

  • Returned items that are lost or damaged: Occasionally, items returned by customers are either lost or damaged in transit and the seller of that item never receives it.
  • You don’t receive your refunds: When a customer returns one of your products to Amazon, Amazon immediately refunds the customer the amount they paid for the item. However, occasionally that refunded payment never makes it back to the seller’s account.
  • Amazon does not receive your shipments in full: It’s common for parts of your shipment to get lost or damaged along the way to Amazon’s fulfillment centers. It’s crucial to confirm the SKUs you sent over to FBA match up with the shipment Amazon has received.
  • The SKU quantity sent from your vendor is incorrect: Check, check and re-check again that the quantity you receive from your vendor is the same as the quantity you are expecting.

Now that you know about some of the most common profitability leaks and the key metrics you need to pay attention to in order to evaluate your true profitability, let’s talk about how to squeeze the most out of each dollar you invest.

Use Your Profitability Analysis to Squeeze More Out of Your Dollar

1. Vendor negotiation.

Lay all of the facts out on the table and perform an audit on all of your suppliers. This will help you spot areas where you can negotiate to get better deals.

For example, the seller in the example below should be able to leverage their large sales volume and five-year relationship to negotiate better payment terms.

cost of selling books on amazon

2. Product sourcing.

Now that you know your most profitable SKUs using the metrics we outlined, use your findings to inform your future buying decisions.

Also, remember that the more diverse your portfolio is, the less risk you have of seeing a large drop-off in profit in case one of your product lines is discontinued or your brands go out of business.

3. Historical profitability trends.

If you identify that your pink oven mitt sales have been decreasing over time, it’s time to consider whether or not you want to reorder that product. Remember that all products have a lifecycle –– the key is to pay attention to trends.

4. Consider third party solutions.

Seller Central’s reports are often not thorough enough and spreadsheets can be a pain to update and manage. Save time by automating processes that can be more effectively managed by technology.

If you are interested in learning more about how you can automate the processes outlined above to identify your true profitability at the SKU level, contact the good folks over at Teikametrics.

Want more insights like this?

We’re on a mission to provide businesses like yours marketing and sales tips, tricks and industry leading knowledge to build the next house-hold name brand. Don’t miss a post. Sign up for our weekly newsletter.

 

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How to Master Amazon SEO and Move Your Products up the Search Rankings in 2018 https://www.bigcommerce.com/blog/amazon-seo-strategy/ https://www.bigcommerce.com/blog/amazon-seo-strategy/#respond Wed, 13 Dec 2017 13:00:52 +0000 https://www.bigcommerce.com/blog/?p=17468 Looking back on the past two years, I’m still amazed at the river of money Amazon has provided for so…]]>

Looking back on the past two years, I’m still amazed at the river of money Amazon has provided for so many people –– from stay-at-home moms to major household brands due to Amazon’s growth

And while it’s not always good news (nothing ever is in business), the opportunity is still very real and I believe will continue to get even better.

However, as more competition has entered the marketplace, it means sellers must bring their best cards to the table if they’re going to win.

When asked to write this chapter, I was thrilled.

I wanted to write a comprehensive guide that not only explained how Amazon’s search engine works, but the specific methods and tools my team is using today to help our clients optimize their listings and crush it on Amazon.

The type of guide that can turn you into an Amazon SEO expert in 15 minutes just didn’t exist… until now.

The beauty and burden of Amazon’s search engine –– aka A9 –– is its simplicity.

Amazon provides a very simple-to-use interface where sellers can populate all the data relevant to their product. Once you know what to put in these fields, it makes it very easy to implement any changes.

However, because A9 is a maturing algorithm, frequent and unpredictable updates are a common point of frustration for many sellers on Amazon.

In turn, I’ve done my best to include the most up-to-date recommendations and tips based on both Amazon’s documentation and our own observations after managing 1000s of Amazon listings.

However, the observations and recommendations I make in this guide are subject to change as A9 evolves. Even the best SEO software and tools can’t predict the future.

Therefore, I encourage you to revisit this guide frequently and check the comments section often.

Take This Book With You

This full guide (all +17 chapters and +50 experts and their insights) is more than 35,000 words. That’s a lot to read on a screen.

So don’t! Download the guide below to print it out, take it with you, and start selling more on Amazon.

Download Now

Amazon Optimizations That Get a 320% Increase in Sales in Less Than 10 Minutes

One of my favorite clients in the entire world is Debbie.

In one word, she’s awesome.

She has passion and truly believes in her products and how they can improve people’s lives.

Unfortunately, that passion didn’t translate into many sales because she wasn’t into all that “technical stuff” and she had done a poor job of building a solid listing.

In fact, she had done a very poor job –– like “how have you even sold a unit?” poor job.

So, on day one my team decided to focus on three parts of her listing: images, title and backend search terms. You’ll learn why these are so important in a bit.

She made the changes and, within 10 minutes, they were updated and live. Then, we waited.

Before working together, Debbie was selling about five units per day, give or take a unit or two.

The next morning, I woke up to four missed text messages.

  • She made two sales before 7 a.m. –– this had never happened.
  • By the end of that day, she had made 16 sales. This has been the new normal ever since.

While I can’t guarantee a 320% increase in sales, I can assure you this chapter will help you bring your absolute best to Amazon so you’re ready to compete and get your products onto the first page of search results.

I’ll first cover a bit about Amazon, A9 and ranking factors in the algorithm.

Then, I’ll dive deep into how to create killer listings optimized for the right search terms that help us to compete with and crush our competition.

The One Thing to Remember for Amazon SEO

If you only get one thing from this chapter, it should be this:

Amazon cares about buyers and selling stuff to those buyers.

That’s it.

Yes, that is quite possibly the most obvious statement made by anyone ever.

But, if you can remember this anytime you are making Amazon product listing optimizations, and balance that with your own interests, you’ll quickly start making decisions that will help your products sell on Amazon.

What differentiates A9 from Google Search or other top search engines is Amazon is a buying platform.

As consumers, we rarely hop on Amazon just for product research. We are usually very close to the point of purchase. Amazon knows this.

In turn, Amazon will continually make changes to test what makes shoppers buy more frequently. Therefore, we need to make changes that will help shoppers convert more frequently.

This includes making our products more visible than our competitor’s, so shoppers find us more often. Additionally, we need to make changes that turn browsers to buyer while keeping in mind the goal of the Amazon search algorithm. Some things to think about when optimizing your Amazon listing include:

  • Should you have more images?
  • What should you put in the title?
  • What price should you sell at?

Just remember, Amazon cares about buyers and selling stuff to those buyers. Help Amazon and you’ll help yourself.

Free Guide to Amazon SEO

CPC Strategy + BigCommerce boiled down everything you need to know about Amazon SEO into a few short, PDF pages.

Get your free Amazon SEO Guide here. 

Say Hello to A9, Amazon’s Ranking Algorithm

I’m going to talk a bit about Amazon’s search engine, but only if you promise not to start using “A9” in every other sentence when you’re talking to other sellers.

A9 is the name of the algorithm Amazon uses for product search. As mentioned earlier, it’s definitely a maturing algorithm and will continue to become more complex over time. A9.com, a subsidiary of Amazon, develops the company’s search engine advertising technology.

However, for the time being, it operates on what appears to be a very simple keyword search method without much, if any, regard for how closely a product matches the query.

Examples of the A9 Algorithm in action:

Let me show you an example of an Amazon product search below.

I’ve used the customer search term “Dr tobias multivitamin” and you can see there are 3 results:

amazon keyword ranking

When I simply add my name “Bryan” to the search, there are no results because Dr. Tobias doesn’t have my name anywhere in their product listing – which is nice to know, I guess.

amazon seo expert

In a more relevant example, look at the search results for “multivitamin” and the number of results that appear:

search ranking

Now, look at how the competition gets dramatically reduced when I simply use the variation “multi vitamin”:

how-to-sell-on-amazon-update

So, the competition has been cut by more than half by simply adding a common variation of the search query.

What does that tell you?

Amazon SEO tip #1: Make sure you’re populating as many relevant terms as possible for your listing if you want to increase your visibility, sales and overall rank in the search results. We’ll discuss the how in a bit.

Essentially there are three things you need to optimize for:

  1. Visibility
  2. Relevance
  3. Conversions

More simply, you want to make sure customers will see, click and buy your product. According to Amazon:

“Customers must be able to find your products before they can buy your products. Search is the primary way that customers use to locate products on Amazon.

Customers search by entering keywords, which are matched against the information (title, description etc.) you provide for a product.

Factors such as degree of text match, price, availability, selection, and sales history help determine where your product appears in a customer’s search results.

By providing relevant and complete information for your product, you can increase your product’s visibility and sales. Below are some general guidelines to improve your product listings.”

So, let’s have a look at the different pieces of the listing and how we can start optimizing each of them. I’ll cover the different ranking factors in the categories:

  1. Product
  2. Performance
  3. Anecdotal

For anecdotal, there’s no supporting Amazon documentation; however, we’ve seen a strong correlation between Amazon Search Engine Ranking Position (SERP) and these factors.

The recommendations I’m going to make below are just that, recommendations. I highly encourage you to understand your contract with Amazon and their terms of service. In particular, the documentation on listing optimization.

Product Listing Optimization

1. Optimize your Amazon listing title.

Your listing’s title is the the most valuable real estate on your Amazon product listing. Your product title is the part of your listing that will have the greatest impact (both positive and negative) on product performance in search.

Per Amazon suggested best practices, your title should contain elements such as:

  • Brand.
  • Product line.
  • Material or key feature.
  • Product type.
  • Color.
  • Size.
  • Packaging/Quantity.

The secret to an effective title is how you order these elements, along with one other major ranking factor: additional target keywords.

In our experience, keyword order and keyword choice can dramatically influence Amazon product sales and rank. First let’s discuss order, then we’ll address our favorite way to determine the best keyword choices for a particular product.

Look at the three images below: do you notice anything different in these 3 pictures?

amazon product listing optimization

These are screenshots of the same product result as they appear in organic results, right rail ads and mobile. Did you notice the HUGE difference between all three of these?

Yes, the number of characters in the title!

Title in organic results typically have between 115-144 characters depending on the product/category. Titles in right rail ads have around 30-33 characters and mobile titles have between 55-63 characters.

So what does that tell us?

We must place the absolute most relevant keywords first. This has both practical and algorithmic implications.

From a practical standpoint, we want to make sure every customer, regardless of search result location, knows exactly what we’re selling.

Anecdotally, the algorithm correlates higher relevance with keywords that appear earlier in the title.

Therefore, we recommend making a list of your most important keywords and strategically placing them before each character breakpoint in the title.

One very common question with clients is if they should use the brand name in the title or not.

This particular company has chosen to use VITA ONE at the beginning of the title. Additionally, Amazon’s style guide recommends leading with the brand name.

Frankly, this is something you should test with your own product to see what converts best. We generally always lead with the brand name to establish our clients’ brands as legitimate companies and not generic “multivitamins.”

One thing to note: don’t keyword stuff your titles.

This was a common strategy a few years back. Both shoppers and Amazon are wise to this and it’s no longer effective and may result in an adverse impact to sales.

The backend search terms, however, are a great place to keyword stuff and we’ll cover that shortly.

The Amazon Seller's Solution Provider Directory

Connect with experts who can optimize your product listings by checking out our Amazon Seller’s Solution Provider Directory.

Whether you have an existing listing or a brand-new one, chances are you can always make some tweaks to help optimize for more visibility and sales.

The challenge with a brand-new listing is you don’t have any product data to lean on, so it’s important to see what’s currently working for your competitors and replicate that.

Fortunately, there are tools that help us determine what’s working. My two favorite tools are Helium 10 – Magnet and Keyword Inspector.

By looking at competitor listings and using these tools, we can determine the best words and placement to start with.

From there, we can use Amazon PPC to gather data on which terms help our listing convert and optimize for those keywords. We call it the “optimization cycle” (sounds fancy right?).

Optimizing Amazon Product Titles: Action Steps
  1. Use Magnet to research the most popular two or three keywords for your product.
  2. Additionally, use Keyword Inspector to do an ‘Extensive Reverse ASIN’ search on your top competitor (Or, use our free ASIN Lookup Tool!).
  3. Try to pick a competitor in the top three spots with the most reviews. This is generally an indication they’ve been selling longer, which will provide more data.
  4. Once you have these 3-4 sets of data, combine them and remove any search terms that are irrelevant to your product. Then, use a word and two-word phrase frequency counter and start writing out your title based on this frequency.

A great Amazon SEO tool that can help with this is The Helium 10 Scribbles Tool.

You’ll want to make sure the title reads naturally, yet contains all of the essential elements of the product along with target keywords.

Again, look at your top competitors for guidance.

Make use of special characters, like the ones below, to add some style and naturally break up phrases:

  • |
  • ,
  • &

Next, let’s discuss the bullets and how we can further entice shoppers to buy.

Bullets: Another Chance to Increase Conversions, Relevance and Rank

While the bullet points don’t directly impact your rank in the search results, they are an opportunity to influence two very important factors in the Amazon SERP:

  1. Conversion rate.
  2. Product relevance.

The listing bullets are an opportunity to present the features and benefits of your product.

Most sellers will tell you they know this, yet I’m surprised how often people get their product features and their product benefits mixed up.

For example, leather seats are a feature and the feeling of luxury and arriving refreshed are benefits.

Also, just like the title, words used in the bullets will be indexed by the Amazon A9 algorithm and used to help identify your product when customers use the search bar.

However, in our experience, terms in the bullets don’t carry the same weight as those in the title.

2. Optimize product bullets.

Essentially, whatever keywords weren’t used in the title, from the master list you compiled earlier, should be worked into the bullets.

Again, Helium 10 – Scribbles is an awesome tool for building out your listing as it simultaneously eliminates words from your master list as you populate your listing details.

This is also a good time to point out products your listing may be compatible with.

For example, if you’re selling a phone case you may point out several brands and models it’s compatible with.

In most cases, these terms will get indexed so your listing can appear for searches like “Samsung phone case” or “Galaxy S7 phone case.”

Also, if you have a product warranty, most sellers will typically include these details in the last bullet.

In general, we highly recommend testing the copy and order of the bullet points. On occasion, we’ve seen different combinations result in higher conversions.

3. Create product descriptions that tell a story.

Much like the bullet points, the product description doesn’t directly impact rank.

However, it is indexed and will impact visibility.

Additionally, well-written copy with a strong call to action can certainly have an effect on conversions.

This is a great time to tell a bit about your brand and product, while throwing in some valuable keywords you want indexed.

Also, make sure to include a strong call to action at the end.

Make it direct and to the point (i.e. Buy Now, Order Today, etc.).

Again, this is a great opportunity to keep using the Helium 10 – Scribbles Tool and include as many keywords as you can while still writing engaging copy.

Another tip is to make use of simple HTML. My favorite tool for converting text to HTML is Word to Clean HTML. It’s free and very easy to use. Simply paste your formatted text and click convert. You can then paste the HTML into your product detail page.

Backend Search Terms: Keyword Stuff like it’s 2014…I’m Kidding, Sort of

Way back in the early days of Amazon FBA, around 12-18 months ago, people would create the ugly keyword-stuffed titles, bullets and descriptions.

Like really ugly:

selling-on-amazon-24

Thankfully, the market and the algorithm will penalize you for this type of behavior.

However, there is a place you can stuff all of the remaining keywords from your master list: the backend search terms!

These terms are not visible to customers, yet get indexed just like the terms in your bullets and description — similar to the now-outdated meta keywords HTML tag.

This is a great place to type any terms that will compete and long-tail searches as well.

For example, if you sell a sleeping bag and couldn’t stylishly insert the terms “…for camping that fits 2 big-boned people,” the backend search terms are perfect for that.

How to Use Backend Search Terms

Backend search terms are also a great place to drop some Spanish terms, misspellings and words commonly used in your niche. For example, if I sold dog accessories, I may include the top 50 or 100 dog breeds since most owners will search “dog collar for Labrador.” As for misspellings, Amazon says they account for them but our experience shows otherwise, so we include them.

4. Utilize backend search terms.

Just like before, keep using your Helium 10 – Scribbles Tool to knock out the remaining terms you didn’t capture in the title, bullets and description.

There’s no need for commas

Just separate the terms with a space. Another thing to note is you don’t need to duplicate keywords in your listing. Once a term is typed in the title, bullets, description or backend search terms, you don’t need to repeat it anywhere else.

5. Don’t worry about selection.

Selection is named as one of the ranking factors, although we have not noticed a correlation between selection and the SERP.

Performance Optimization Strategies for Amazon Listings

1. Sales are King.

After all the testing we’ve done, nothing moves the search rank needle like sales.

In particular, your sales velocity relative to your competition.

A spike in sales that your competition didn’t see will dramatically impact your ranking position.

As you can imagine, this is very can be tough to accomplish when you first list and appear somewhere on page 20 –– especially when only 30% of customers ever make it to page 2!

Your first option for generating sales is by driving both internal and external traffic to your Amazon listing. This is part of the full management Amazon SEO service we offer our clients.

You drive internal traffic via Amazon PPC and external traffic via outside ads like Facebook, Google AdWords, etc.

Commonly, AMZ Profit Pro clients will use one of the following strategies for their external traffic:

  • Ad to Amazon Listing
  • Ad to Pre-Sell Page to Amazon Listing
  • Ad to Squeeze Page to Opt-In for Single Use Discount Code delivered by email
  • Ad to Product Sales Funnel

Second, you can use a launch service.

Launch services are meant to create a natural spike in sales that moves the product up the ranks.

Ultimately, whether this rank “sticks” will depend on the organic demand for the product once it becomes visible on page 1 or 2. There is some controversy surrounding these services and whether they violate Amazon’s terms of service.

Instead, I recommend Viral Launch. They have a proprietary system that can help move products up the SERP without violating Amazon TOS and they happen to have great customer service.

2. Product Reviews are Queen.

If sales are king then reviews are queen.

Amazon knows customers rely on reviews to make informed decisions about their purchases.

That is why Amazon has been cracking down so hard on fake review services where people are getting paid to write fake positive reviews — and why improving Amazon reviews is top-of-mind for many sellers.

Reviews serve as social proof and let buyers know it’s safe to spend their money on your product.

Plus who wants to “be the first to leave a review for this product?”

Additionally, reviews factor heavily into product rank in the search results.

I can recall a product one of our clients launched that started selling really well from day one with no reviews. However, it could never break past the page 5 mark.

Once the first two reviews came in, the product jumped to page 2.

Sales continued to come in and once the product received its 10th review, it hit page 1 almost the same day.

So the moral of the story is, do what you can to get honest and unbiased reviews as soon as possible.

The first thing to get in place is an email feedback sequence that communicates with buyers through the buyer-seller messaging service in seller central.

Two of our favorite tools are:

  1. Feedback Genius
  2. Sales Backer

With these services, you can write custom email sequences to your buyers that help develop a customer relationship and ask for honest feedback and reviews.

If you’d like to launch a discounted product campaign in order to generate sales and reviews, I highly recommend working with Snagshout (same company as Feedback Genius).

I’ve had the opportunity to speak with the owner of this service and was very impressed by his commitment to making sure their services are always operating within Amazon’s terms of service.

Anecdotal Amazon Search Engine Optimization Strategies to Help Rank

In this section, I’ve lumped a few ranking factor observations we’ve made that aren’t directly documented by Amazon but seem to have an impact on the SERP.

1. Consider using Fulfilment by Amazon (FBA).

Items that are Fulfilled by Amazon seem to rank higher than items Fulfilled by Merchant, all else being equal.

2. Use brand names in your Amazon product listings.

It appears a brand name which also happens to contain the main keywords may help increase organic rank in search.

3. Include seller name.

Same as brand name, it appears seller name may help increase organic rank if it contains the main keywords for the product.

4. Fill out other fields in the edit product page.

Make sure to fill out all applicable fields in the edit product page as some of these have been shown to influence rank position and filtering in search.

5. Quality photos help rankings and conversions.

Not only do quality photos that zoom influence conversions, which certainly impacts rank in search, it appears that more photos is positively correlated with rank in the search results.

FAQs About Ranking On Amazon

Is Amazon.com considered a search engine?

Yes. Although Amazon.com is an ecommerce marketplace it can also be utilized as a search engine. In many cases buyers use Amazon to compare prices and find products they are interested in purchasing. Sellers often use Amazon for market research, when deciding new products to sell online. Additionally, with the introduction of Alexa, Amazon.com data is often used to answer voice search queries.

How often does the Amazon search algorithm get updated?

Amazon doesn’t usually announce when there is an update to their search algorithm. Because of this, it is impossible to tell how often the Amazon ranking algorithm changes change. Luckily the core algorithm tends to be fairly stable.

What is the Amazon SERP?

The Amazon SERP are the results shown to users after completing a product search on Amazon.com. SERP stands for search engine results page.

What are some of the best Amazon SEO tools you suggest using?

  1. Helium 10 – Magnet.
  2. Keyword Inspector.
  3. Keywords Everywhere.
  4. Feedback Genius.
  5. Sales Backer.

A Final Word

If you’ve made it this far, you’re well ahead of most sellers I’ve ever met.

You now know that Amazon’s search engine algorithm has a name and you have a solid understanding of how it works. You also know enough to be dangerous when it comes to the different components of a product detail page and the effect it can have on your rank in the search results, with no Amazon product ranking service required.

Best of all, you have practical action steps you can put into place today.

Finally, I invite you to check out www.amzprofitpros.com for more information and video tutorials that will walk you step-by-step through the process outlined in this guide, including how to use all of the Helium 10 tools.

Until next time, keep crushing it in your businesses and reach out if you have any questions: bryan@amzprofitpros.com. Good luck with your Amazon SEO strategy!

For a different lesson in SEO, check out our guide for planning and executing a B2B SEO strategy.

Want more insights like this?

We’re on a mission to provide businesses like yours marketing and sales tips, tricks and industry leading knowledge to build the next house-hold name brand. Don’t miss a post. Sign up for our weekly newsletter.

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How to Make $5,000 an Hour Selling on Amazon https://www.bigcommerce.com/blog/how-to-make-money-on-amazon/ https://www.bigcommerce.com/blog/how-to-make-money-on-amazon/#respond Wed, 13 Dec 2017 13:00:52 +0000 https://www.bigcommerce.com/blog/?p=17504 I get it. Don’t worry – I have it covered. I’ve sold tens of millions both on Amazon as a…]]>

I get it.

You don’t understand the complexity that is selling on Amazon, and you don’t have time to learn it.

Don’t worry – I have it covered.

I’ve sold tens of millions both on Amazon as a third-party seller and tens of millions more directly to Amazon.

Those millions sold have been made selling a variety of products, among various industries, at a mix of price points and using several different methods.

However, the basic principles are universal, so while I can’t guarantee you a sales volume on Amazon, I can stand behind a productivity number:

I have personally achieved $5,000 in sales for every hour I spent with my Amazon activities.

So how can you grow your business to make serious money on Amazon?

Let’s dive into some straight talk.

Take This Book With You

This full guide (all +17 chapters and +50 experts and their insights) is more than 35,000 words. That’s a lot to read on a screen.

So don’t! Download the guide below to print it out, take it with you, and start selling more on Amazon.

Download Now

Get Enthusiastic:

Amazon is the future. It’s time to get on board and excited about it.

Don’t just make Amazon part of a growth strategy. Make it the growth strategy for your business.

I’ve worked with an old-fashioned manufacturer that has been in business for several generations. Within 18 months they were selling more on Amazon than through their traditional channels.

How did they do it?

They didn’t mess around when it came to selling on Amazon.

They tossed their whole product line on Amazon, identified the services they needed to outsource and created new internal processes specifically for Amazon.

How to Make Money on Amazon – Checklist:
  1. Identify what items make sense for you to sell on/to Amazon.
  2. Check if the items are already sold on Amazon. Free tools like Keepa.com can help you gauge if the items have already been sold by Amazon Retail at some point.
  3. Compile the necessary information to submit those items to Amazon. Perhaps use existing Amazon listings for your product. Collect pictures, feature data and descriptions.
  4. Identify the processes an Amazon order will follow.
  5. Search for and implement software services that simplify these steps.
  6. Recruit Virtual Assistants for any tasks that are not already performed and core to your business.
  7. Create and document processes that absolutely cannot be done within 4 and 5.
  8. Submit the product data to Amazon (Seller Central or Vendor Express).
  9. Process orders.
  10. Make improvements to 4, 5 and 6 as necessary.

Amazon is not overly complicated and does not have to be your biggest competitor.

In fact, it can be your initial parlay into household name status, and multi-million dollar sales.

Sell Directly To Amazon:

Don’t try to beat Amazon at its own game.

Amazon is growing its direct catalog, so swim with the tide – not against it.

Aside from Amazon becoming your customer instead of your competitor, selling directly to Amazon eliminates the job new sellers are worst at, i.e. forecasting and marketing your product become Amazon’s duty.

Editor's Note

The promotion of your products remains your brand’s responsibility unless you pay Amazon to do it for you. According to James Thomson, former head of Selling on Amazon, “If you sell to Amazon, Amazon doesn’t promote anything unless you step up and pay big marketing dollars. Promoting your brand remains your responsibility.”

Also, many items sold by Amazon sell for more and faster, all things being equal.

There will be a margin difference for FBA sellers that are not competing against Amazon here.

In other words, selling unique goods on Amazon currently not already sold there is how you make the most margin.

Re-read the chapter about why re-selling is the least practical method to Amazon success to understand why this is.

So, let’s see: selling directly to Amazon puts you on the right side of the future, is easier and leads to more sales. Keep in mind; this doesn’t mean it is right for everyone, but it certainly is an option.

One Seller’s Growth with Selling to Amazon

selling-on-amazon-36

Sell On Amazon Yourself:

This isn’t [necessarily] a contradiction to the previous section. Start by selling on Amazon yourself if you find it easier to get up and going, or use this to complement your sales to Amazon.

Selling on Amazon along with selling to Amazon keeps Amazon honest and doesn’t allow the whims of their algorithm to lead to stockouts of your products.

Selling to Amazon also allows you to jump-start sales of new products by giving Amazon’s bots the confidence they need to start bringing it in themselves.

Editor's Note

This practice is not recommended for most sellers, especially sellers that are novice to selling on Amazon. Consult an Amazon consultant before using this method.

A Case Study: How to Sell to — and on — Amazon:

A sheet metal factory in the industrial space wanted to come out with a line of consumer products to sell on Amazon.

Based on some cursory searches on Amazon for sheet metal products and knowing the limits of their machinery, they created a simple folding work bench to be used in congested garages and sheds.

It was made with the machines they already had, hardware they were already buying and sheet metal they already stocked.

Actual Factory

selling-on-amazon-37

Actual Prototype of Product on a Wall in a Factory Hallway

selling-on-amazon-38

Their initial production run was four units.

Yup, four.

The total cost of labor and materials was less than most people’s weekly grocery bill. They put up an Amazon listing and sold two units in the first week.

Actual Amazon Listing Taken Shortly After Product Went Live

selling-on-amazon-39

After that first week and with lifetime sales of only two units, the sellers, who had created an account to sell directly to Amazon, offered the product directly to Amazon.

The price offered to Amazon was similar to the net amount the company received from Amazon when selling through Seller Central.

Since selling commission and shipping costs were no longer part of the equation, the sellers could sell their product to Amazon for significantly less than $149.95 without actually cutting into their margin.

Within a week of submitting the product, the company received an order from Amazon for five units.

Although Amazon’s Order Had Not Yet Shipped They Still Promoted the Product

selling-on-amazon-40

Despite only two sales, the product moved to the third result in relevant keywords, in a similar position to items with as many as 138 reviews.

selling-on-amazon-41

Of course, a sale of five items to Amazon is small time, but the idea of going from product concept to the top of the rankings on Amazon in a few weeks is possible.

It is highly unusual, but it is doable.

Clever Ways To Use Amazon To Make A Profit:

Once you have become familiar with the inner workings of Amazon, you should take a step back.

Look at your business with just Amazon in mind and figure out which services or methods provide you the most benefit.

1. Dropshipping with FBM.

Adding non-stock or custom items to Amazon and then dropshipping to customers can add to your revenue, but it can also help reveal new trends or overlooked items that should be stocked as part of a standard offering.

If you are setting up to dropship already, there is nothing to lose. Here is a list of dropship companies that you may be able to source products.

All costs, including Amazon’s, are variable and since items can be added to Amazon with little set up, even the administrative hassle is minimal.

Think this seller has 2,000 sitting on a shelf? No, but if someone preferred to buy on Amazon, they would get the sale.

selling-on-amazon-42

Amazon allows this seller to be available to millions of shoppers and only produce an item once it has actually been sold.

selling-on-amazon-43

Price Discrimination

Not sure how to price your items, especially newly launched products?

Play around by adjusting the price on Amazon to see what the effect has on volume.

Because pricing is relatively instantaneous, it is possible to offer a product at a variety of different price points so that in a few days or weeks a brand or retailer has a better idea of the optimal price.

This can be helpful because price tags and price sheets have a perceived permanency in the minds of consumers, but online prices do not.

Take advantage of this to test prices for better Amazon margins or velocities, and to optimize those numbers for sales outside of Amazon, like in a retail store or website.

If I didn’t know any better, I would think that the top two organic results for “Pour Over Coffee Stand” were really the same product sold at two different prices to test two different pricing strategies.

Hint: they are.

selling-on-amazon-44

2. FBA for items sold outside of Amazon.

FBA is simply just that. Items are fulfilled by Amazon.

There is the implication that these items are likely also sold on Amazon, but that does not have to be the case.

Many sellers use Amazon’s fulfillment services to pick, pack and ship items that were sold elsewhere like a retail or online store. This is done even when they may have stock in their warehouse.

Amazon’s shipping rates with the major carriers are so low that, even with the additional charges for picking and packing, their total shipment cost can be lower than negotiated carrier rates for many mid-market firms. This can be true even for shipments within a company’s own state.

Editor's Note

Sellers often use this service so they don’t have to split inventory for Amazon and non-Amazon channels. James Thomson, former head of Selling on Amazon warns, “If you use FBA to fulfill orders outside of Amazon (called multi-channel fulfillment), Amazon raises the shipping costs, and you aren’t likely to see much cost saving at all.”

Additionally, Amazon has extremely low 2-Day and Next Day rates, so during the end of the Christmas season, many sellers are able to offer quick shipping for reasonable prices by leveraging Amazon’s buying power.

Cost to Ship from a Warehouse Compared to Amazon Shipping the Same Item

Why not have Amazon ship every unit if you can save 25% in shipping fees, the cost of labor and materials by having them do everything?

Here’s an example from my own product set.

selling-on-amazon-45

Offering Competitive Products

Odds are that you have competition –– and that they are pretty successful, too. Why not cash in on their sales and success by offering their products on Amazon as well?

Not only might you get better insight into their sales numbers and product features, but you’ll be getting paid to do it.

More sincerely, you probably have holes in your product line:

  • You don’t carry a certain color
  • They have metric versions you don’t
  • They have a unit that sells for under $100 and your cheapest offering is $119.

Even if you don’t offer the whole line, you may be able to generate more sales on your own site and on Amazon by extending your product line to include items your competitors offer for which you don’t have a substitute.

Look at these four different clothes dryer lint traps from four different manufacturers.

The only way to make money off of every version sold on Amazon is two win the Buy Box for each one like the seller below, Professional Grade Products.

selling-on-amazon-46

selling-on-amazon-47

selling-on-amazon-48

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3. Amazon Private Label.

Consider offering a line of products on Amazon that is only available on Amazon.

What makes a product unique, technically?

To Amazon, a unique UPC. To most customers, a specific model number.

That’s it. Not a different patent number, manufacturer or even color.

Whether it is a specific bundle or the same item as normally available, but in a different box, many sellers see the best results by having a unique offering on Amazon.

Often, dealers or brands are only concerned about their products and not a brand’s or reseller’s version of a similar product.

In the example below, Vortex is selling the same product, but at a different price point to try to be true to their main “premium” brand, but also get more volume through a generic brand item.

selling-on-amazon-51

The HUGE Opportunities in Private Labeling on Amazon

In the late 2000s, and continuing on today to a degree, most brands that had traditionally dominated big box retail channels shied away from selling on Amazon.

They feared having their items sold on Amazon would diminish their brand and annoy their existing retail partners.

This led to holes in Amazon’s catalog in many high-velocity categories because the brands that dominated that space everywhere else were not represented on Amazon.

Naturally, new “Amazon Only” brands are continually created to fill that space.

Can you create the top brand on the world’s top marketplace? We are in a rare moment in time when you really might be able to.

In a search for “flashlights,” for instance, why isn’t it dominated by Maglight or Rayovac, like many retail stores would be? Have you ever heard of any of these? Some aren’t even branded!

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Editor’s Note

As a private label seller, you are still responsible for respecting existing trademarks and patents, and doing appropriate testing on your products.

Value Your Time:

Amazon is all about automating and simplifying tasks (a principle which can be applied to many facets of an ecommerce business).

All of the other tactics from this chapter lead to sales, but to hit the $5,000 per hour productivity mark, you need to reach out for help.

These outsourcing concepts are so essential to understanding how to maximize Amazon as a platform. So, let’s make these following lines our mantras, and walk through how to actualize each.

  1. Many tasks can be completed by a computer more accurately, faster and better than by a human.
  2. If no one has created a program for a computer to use (based on #1), perhaps it is because that task isn’t worth doing in the first place.
  3. If a task can’t be done better by a computer, but still is worth doing, then there are likely people specializing in that task that can do it more effectively than you.

Many tasks can be completed by a computer more accurately, faster and better than by a human.

This is not an exhaustive list and there are many valid programs in this category and others that may fit your business. However, these are the programs I currently use. Do your own research based on your specific needs to find the best fit.

Repricing

Automatically change your price for an item (with parameters you set up front) to optimize sales velocity.

  • Appeagle: Inexpensive way to automate pricing, but very limited. Basically, it lowers your price from a base level if your competition lowers theirs.
  • Feedvisor: Very expensive algorithmic repricer that optimizes your margin by trying to win the Buy Box most of the time and takes into account other factors that affect who wins the Buy Box aside from price. Unlike any other repricer, it will raise your price (again, within limits) if you can still win the Buy Box despite the higher price. It also has a bunch of other great reporting and tools.

Inventory Management

Keep track of your Amazon vs. non-Amazon inventory and know when to reorder from suppliers.

  • Stitch Labs: Great integration of sales and inventory when selling across multiple channels, like a BigCommerce site and Amazon.
  • RestockPro: Simple but accurate and customizable methods for knowing where your Amazon inventory is, how much it is worth and when you need to reorder more.

Feedback Management

Keep your product and seller reviews frequent and positive.

  • Feedback Five: Automatically send emails to buyers requesting feedback.

Logistics Snafu Recovery

Get credited when shippers or Amazon make mistakes.

  • Refund Retriever: Scans your FedEx and UPS bills for charges that should be waived due to them not honoring their guarantees. 100% variable cost (they simply get a portion of what they recover).
  • Refunds Manager: Audits your inbound shipments to Amazon to file claims for discrepancies (and they do happen). 100% variable cost (they simply get a portion of what they recover).

Shipping

All ground services available for orders from all channels on one screen.

  • Shipstation: Easy set up, few bugs and integrates with any existing shipping accounts. Also, allows non-Amazon orders to be fulfilled with inventory at Amazon fulfillment centers with one click. I ship orders from my phone with their app daily.

Sales Tax

Compile sales tax data and file all in one place

  • TaxJar: Simple, effective and low cost. Not what you associate with taxes.

Warehousing

Store or even process your Amazon inventory as needed.

  • Flexe: Rent local storage space for as little as $5 per day. Take on larger orders or stock up for the holiday season without flooding your store or warehouse.
  • FBAPrep: Send your items (even straight from overseas) to be organized, QA’ed, packed and shipped directly to Amazon’s warehouses according to Amazon’s requirements.This allows you not even to touch the products you sell on Amazon.

Competitive Research

See how your product sales stack up.

  • Jungle Scout: Follows your Amazon searches and seamlessly provides data regarding estimated monthly sales volume. Use this to find new products or estimate your market share.

If no one has created a program for a computer to use (based on #1), perhaps it is because that task isn’t worth doing in the first place.

Many new sellers make the mistake of focusing on the small stuff. They are so eager to succeed on Amazon that they put all their effort into fine-tuning a single or handful of listings even though it makes almost no difference to the customer.

There is no software program that reshuffles your product images in different orders, rearranges your bullet points and A/B tests “cozy” versus “comfy” as adjectives in your listing title.

Yes, you want good listings with beautiful pictures. You want to generate some reviews.

But, with competition always on the same page and just a click away, remember that five minutes negotiating a better price with your supplier or using a cheaper shipping service is more valuable than spending 100 hours perfecting an Amazon listing.

Case Study of Priorities in the Wrong Place

The Search: Silicone Pour Over Dripper

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The top result spent five minutes creating a listing.

They did not pay a service for any product reviews, edit their listing to test different keywords, or frankly, give it a second thought once they sent in their inventory to Amazon.

The picture, title, bullets and description are acceptable. Simple as that.

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What they did do, however, was commit to 1000 units out of the gate and negotiate exceptionally good pricing so that they could afford to sell it for a few cents cheaper than their competition (See the 4th and 5th items that are from the same manufacturer in China).

Also, unlike those listings appearing below the POVA one, no reviews were paid for, so there was no need to factor in hundreds of giveaways and service fees into the price.

Who knew people shopped based on cost alone?

Alternatively, see page 8 of the same search –– a yellow version of the exact item from a different seller with 17 subsidized product reviews, a bunch of staged photos, a convoluted title (it’s not a filter after all) and for what?

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The second mantra put in different terms could be, “Are you productive or busy?”

Are you genuinely adding value to or eliminating waste within the process (like using Amazon integrated shipping software or automating sales tax reporting) or are you trying to “hack” Amazon?

Make no mistake, Amazon doesn’t want to be tricked, so even something that works, for now, may not work in the future.

Stick with proven productivity enhancers like the software programs out there for sellers like you.

If a task can’t be done better by a computer, but still is worth doing, then there are likely people specializing in that task that can do it more effectively than you.

Listen, a lot of Amazon experts and courses will emphasize the value of pictures, bullet points and listing titles. I am not saying those are not important. 

They are, as is:

  1. Customer service.
  2. Compliance.
  3. Advertising.
  4. Listing management.

You need to make sure all of these things get done and are done well. But, you certainly don’t have to do them yourself. Use these services to outsource the work.

Fiverr

Fiverr is easy to set up, has great results and is only $5.

  • Need the backgrounds removed for some product shots? 5 bucks.
  • Want someone to research relevant keywords and add them to your listing? Just 5 dollars.
  • Need someone to scrape data from your site to add to your Amazon listing? $5.

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Editor’s Note

This site also has a bad rap for having been the destination to get fake product reviews. Do not pay for product reviews on Amazon.

Upwork

Thousands of people with Amazon experience are available for custom jobs through Upwork. The general process is:

  1. Search for people with a particular skill set or simply post a job description and wait on applicants –– usually you will have two dozen within 24 hours.
  2. Select candidates, submit any interview questions
  3. Choose a person to hire

There are extensive reviews on most freelancers and Upwork has programs that allow you to monitor progress and keep the workers honest. Many are well-versed in Amazon-specific tasks and can be hired for a single job or on an ongoing basis.

Users can create a stable of freelancers that have delivered well in the past, helping you to build a network that is more and more efficient over time. The productivity gains here are substantial.

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Freeeup

Don’t have time even to worry about hiring people for specific Amazon activities? Of course not, you have been reciting your mantras.

Freeeup was created by an Amazon expert who created a corral of hundreds of Upwork freelancers. Freeeup assigns and manages your team freelancers based on the complexity of the Amazon services.

If you need to create listings, fulfill orders, advise on reorders and handle customer service, you can try to recruit all those people or just send a message to Freeeup and they will handle it all.

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Consultants

Software and outsourcing services can help you execute your plan, but what if you need help developing your plan?

This book should give you a working knowledge of how to concoct an Amazon strategy, but invariably each business has its complexities and complications.

There are a handful of good Facebook groups and message boards, but for tailor-made solutions, consider reaching out to someone who walks the walk.

The Amazon Solution Provider Directory

Looking for more Amazon help? Browse through our directory of solution providers either on the web or via a PDF

Want more insights like this?

We’re on a mission to provide businesses like yours marketing and sales tips, tricks and industry leading knowledge to build the next house-hold name brand. Don’t miss a post. Sign up for our weekly newsletter.

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Amazon Selling Pitfalls Even the Savviest Sellers Forget [Infographic] https://www.bigcommerce.com/blog/amazon-selling-pitfalls-problems/ https://www.bigcommerce.com/blog/amazon-selling-pitfalls-problems/#respond Wed, 13 Dec 2017 13:00:51 +0000 https://www.bigcommerce.com/blog/?p=17457 So you’re up and running as an Amazon seller, and you think you’ve figured out the Amazon marketplace. The good…]]>

So you’re up and running as an Amazon seller, and you think you’ve figured out the Amazon marketplace. The good news is, if you’ve made it out alive (and profitably) through your first holiday shopping season, you’re doing well.

But, there are a number of issues that even large or long-term Amazon sellers don’t figure out.

Selling on Amazon is endlessly complex, with traps that even veterans fall into.

I’m pleased to unveil the pitfalls to you now –– but like a child who thinks she’s figured out how a magician does a trick, you still will need to work hard to avoid the common problems many sellers encounter when they start selling on Amazon.

Knowing these will at least set you up to be more aware of where those pitfalls might be hiding. Use the infographic to help visualize the issues and read through exactly how to solve them in the article below.

Take This Book With You

This full guide (all +17 chapters and +50 experts and their insights) is more than 35,000 words. That’s a lot to read on a screen.

So don’t! Download the guide below to print it out, take it with you, and start selling more on Amazon.

Download Now

Tax Setup

It’s a little shocking how many sellers never set up state tax collection options on Amazon, thinking that Amazon somehow automatically takes care of all sales tax issues from sales on the Amazon marketplace.

It turns out nothing could be further from the truth.

While Amazon is happy to collect state sales tax for you (for a small fee), it’s up to every seller to indicate in which states it wants Amazon to collect tax, and to manage the remittance of the taxes to the appropriate tax jurisdictions across the country.

There are many tax remittance services available for online sellers, but the seller ultimately has the responsibility of paying its taxes.

Here are a few services that can help:

  • Taxjar.com
  • Avalara.com
  • Taxify.com
  • Vertexsmb.com

While a seller may choose not to collect state sales tax (choosing to absorb that as a cost of doing business), the responsibility of remitting the tax is not optional.

A seller can designate its account to collect state sales tax in particular states.

Unfortunately, however, Amazon’s default when setting up new listings is to designate each SKU as having a no-tax label, which can overwrite the seller’s general request to collect state sales tax across all of its catalog.

Set your taxes up right the first go around

My advice is to, immediately upon signing up a new seller account, go into the Settings –> Tax Settings, and designate not only in which states you want Amazon to collect state sales tax, but also set the “Use default Product Tax Code” setting to “A_GEN_TAX.”

Amazon typically defaults to A_GEN_NOTAX, where no tax is being collected.

While the seller may offer products that warrant a slightly different tax rate, that level of tweaking can follow later.

If the seller is using Fulfillment by Amazon (FBA) and isn’t proactively collecting state sales tax in all of the tax-collecting states where Amazon has fulfillment centers, it won’t be long before the seller accumulates tax liability from having incurred tax nexus by way of FBA inventory being stored – even briefly – in these states’ fulfillment warehouses.

Pro Tip

Each FBA seller should invest in a tax consultation with an online seller tax consultant to understand the responsibilities and potential liabilities of using FBA.

Profitability

Too many sellers focus on top line sales numbers rather than bottom line profits.

“I want to sell $1MM/year on Amazon” or “If only I could get to be a $10MM/year seller on Amazon.”

Honestly, other than ego and maybe a few volume discounts, there isn’t much long-term benefit to being a big, but not particularly profitable seller on Amazon.

Focus on bottom growth and account for all costs upfront

I’d much rather see any seller grow its bottom line profits year-over-year much faster than its top line sales.

That typically requires a SKU-level understanding of profitability, incorporating overhead and indirect costs into each SKU’s profit calculation.

This includes certain less-than-obvious Amazon fees, and product write-downs/write-offs.

While I’ll discuss this matter much more in a subsequent chapter, it’s important to focus on those parts of your catalog that make you money and shed those parts that don’t make you money.

Stop averaging everything out, and looking only at your overall sales numbers and margins.

Start thinking about every SKU you sell on Amazon as having its own P&L, its own market forces, and its own level and types of competitions.

Such an approach has helped many a seller rationalize its catalog, focusing on bottom line growth ahead of all other financial goals.

Fulfillment by Amazon

Fulfillment by Amazon – commonly referred to as FBA – is exactly what it sounds like. You send your products to Amazon’s warehouses and they pick, pack and ship your items to meet their strict shipping and delivery timelines.

The Issue with Co-Mingled SKUs

There are a number of problems here, and I’ll start with the use of co-mingled “stickerless” SKUs.

As mentioned in a previous chapter, a seller has the option of sending product into FBA without having to provide SKU-level stickers on each unit.

Such stickerless inventory has the potential to get mixed in with the inventory of other FBA sellers of the same SKU.

Then when a customer places an order from one FBA seller, Amazon pulls the most convenient inventory, even if that inventory isn’t actually the inventory that the seller sent into FBA itself.

And, if other sellers have sent in counterfeit product or used-condition product that they are trying to pawn off as new-condition product, now the seller with this new sale may get itself into trouble with Amazon for selling problematic product to a customer.

Amazon responds when customers complain about product quality –– and the heavy lifting falls on the individual sale-level brand.

At roughly $0.20/unit for Amazon to sticker items or whatever a seller’s own warehouse costs are, we see the costs of stickering FBA units as far lower than the implied cost of having one’s seller account suspended for apparently selling counterfeit co-mingled product to a customer.

Stickerless v. Stickered Inventory

The other complicated issue around stickerless vs. stickered FBA inventory is when a seller designates its account to be stickered.

By default, each new FBA account starts off as stickerless.

When a seller creates a shipment of product to send to Amazon’s fulfillment centers, that stickerless designation will be applied to the seller’s SKUs and will remain forever going forward with that SKU.

So, if the seller wants its FBA product to be stickered, the seller has to change the default setting before creating its first shipment to FBA.

Otherwise, the seller will have to create a duplicate stickered offer on the same product listing.

We’ve seen many sellers not get this sequencing right, leading to situations where they think they changed their account to stickered, only to discover that certain SKUs remain stickerless because they were initially sent to FBA before the whole account got switched over to stickered.

If in doubt, flip everything to stickered (not co-mingled) immediately upon turning on FBA (but before creating the first FBA shipment). Or contact Amazon Seller Support to get clarification if any SKUs in your catalog are unknowingly stickerless.

Bottom line: when you start off, make sure you read up on how to sell on Amazon FBA so you don’t fall victim to these pitfalls.

Repackage Unsellable Customer Returns

Next, Amazon defaults every FBA seller’s account to enabled for “Repackage Unsellable Customer Returns.”

This means when a customer returns an FBA order, if that product’s packaging is damaged, Amazon may apply its own packaging to make the unit resellable.

Unfortunately, it’s not unusual for customers to see this Amazon repackaging as potentially an identifier of counterfeit or used product, resulting in a customer complaint or even an infringement against the seller for selling used-condition product as new-condition product.

Unless you sell your product in a generic polybag or generic cardboard box (with no logos on the packaging), I suggest turning off this repackaging feature immediately, and handling all repackaging yourself to ensure only the highest-quality product (with proper packaging) is presented to Amazon customers.

The Amazon Seller's Solution Provider Directory

Optimize your return flow by connecting with an Amazon solutions expert. For a full list of recommended experts, visit our Amazon Solution Provider Directory.

Listing Optimization

There are a number of sources of data available within Seller Central that can be used to improve the listing quality of your catalog.

For many sellers, the process of building and optimizing listings is a one-time deal, as they understandably turn their focus to other operational matters.

1. Use the Sponsored Product Ad campaign reports.

A significant opportunity, however, lies in using the reports from the Sponsored Product ad campaigns.

In these reports, you can see the exact keywords that were connected to Amazon customers buying your products.

By examining these reports periodically (specifically for automatic targeting campaigns), you’ll find that there are keywords leading to sales that you never anticipated being effective.

Lifting those terms directly into your generic keywords will improve the SEO discoverability of your listings.

I encourage sellers to repeat this process every three months to make sure that customers’ behavior specific to certain words haven’t changed.

And with the generic keyword capacity for words now much larger than ever before, there is room to add many more keywords and get click benefit through SEO rather than paid efforts.

2. Include answers to previous product inquiries on your product page.

It’s also worth paying special attention to the inquiries that you get from Amazon customers.

If customers are asking product-specific questions, newly addressing these issues in your product detail page content is likely to improve customer conversation over time.

For too many Amazon sellers, the customer inquiry process doesn’t include an indexing of questions and answers back to specific SKUs, thereby causing a seller to lose out on known product clarifications or embellishments that are needed.

3. Ask for the category listing report.

I’m a big fan of the “Category Listing Report,” a report available in the Inventory Reports section, but only when requested through Seller Support.

This report will recreate your product listings’ flat file, making it much easier for you to identify any data gaps in your listings (including missing bullet points, generic keywords, improper tax codes, etc.).

While you request this report for only a finite period (i.e., seven days, 30 days), it’s worth pulling this report at least quarterly to make sure your product listings contain all of the necessary data you believe they should.

Boost Your Product Rankings

Read our chapter on optimizing Amazon Search to get more tips on boosting your product rankings.

Operations

And now the biggest category of all.

Managing the operations of an Amazon seller business is the most time-consuming part of every seller’s day.

Too many sellers don’t focus on the right activities, leading them to work too hard to make Amazon money.

1. Returns.

Do you have a clear process for handling returns efficiently?

Do you have a way of testing or grading returns, upgrading packaging where needed, and recovering as much revenue as possible by making these items sellable again on Amazon (or some other channel, as needed)?

For too many sellers, handling returns is something done at the end of the month when they have time, rather than something that is managed strategically through analytics and continuous improvement.

Yes, returned products aren’t likely to be 100% recoverable as new condition products.

However, if you carefully track the return rate of each SKU, the recovery rate of each SKU (i.e., what proportion of expected new-condition revenue you actually recover from each SKU), and which products are most likely to be returned damaged by customers, you can identify which products you need to remove from your active catalog.

You’ll also identify with which products and brands you may need to negotiate a returns allowance with your suppliers/distributors/brands.

Once you have this data in hand, you’ll likely be surprised to discover just how much financial loss you incur because of high return rates and high write-down/write-off costs.

Some of the best sellers on Amazon know, for each SKU, exactly where to sell returned products to get the highest recovery rate.

It’s worth talking with other sellers to figure out if you are unknowingly leaving a lot of money on the table by mishandling returned products, or if you are appropriately managing returned products as a core part of your overall seller business.

2. Duplicate Listings from competitors.

Duplicate listings on Amazon can be an effective way for competitors to divert traffic away from your product listings back to theirs.

It’s worth, at least once a quarter, to search the whole Amazon catalog for duplicate listings of your items.

If you find other listings of the same products, consider filing tickets with Seller Support to get duplicate listings merged.

And, if the duplicate listings were created maliciously by sellers using incorrect data (e.g., irrelevant UPCs or incorrect brand names), it may be worth also filing tickets reporting violations against those sellers.

I have seen far too many sellers confused about why their sales are dropping on top-selling items, only to find that the sales are being diverted to a duplicate listing newly created by a coy competitor.

3. Inventory management skills are required.

Inventory management skills require constant refinement on Amazon, whether it’s actively addressing soon-to-be stale inventory or rebalancing products based on changing customer preferences.

While I see most sellers ramping up inventory levels for the holiday shopping season, few sellers stock up enough products to cover most of January as well.

Often this leads to unnecessary stock-outs caused by higher than expected demand in December or inadequate time to replenish in early January when your suppliers are closed for the holidays.

Either way, I like to see sellers planning their holiday shopping inventory levels in such a way that they potentially overstock a little bit for January and February, thereby giving themselves a little bit of breathing room in December, January and February.

Such an approach is especially relevant for products that are expected to continue to have some meaningful sales after December.

4. Test-buy your competitors.

Test-buying your competitors’ products on Amazon is a very easy way to figure out what your competitors are up to, regarding how they package product, how they follow up through email to customers, and how they handle customer returns (if needed).

While you and your competitors may be selling the same products, there are likely some aspects of your competitors’ overall offering that you can learn through periodic test buys.

5. Plan for Pricing and Procurement.

Finally, with so many changes to competitors and prices on Amazon, I have watched too many sellers be slow to plan how to evolve their catalogs over the next three to six months.

Sellers should, at least once a month, focus a few days on the procurement of new selection, as some portion of their existing catalog will likely become unprofitable or below an acceptable margin threshold, leading to a need for better use of capital on other product selection.

This is particularly the case for resellers that don’t have exclusive sourcing relationships.

It’s only a matter of time before some competitor with a lower margin threshold starts selling the same product, and makes your offers unsellable.

While a brand may think it has decent control of its distribution, Amazon is a very efficient marketplace for gray-market or diverted product to surface, leading you to find that you have to cut your prices just to match some new entrant.

For private label sellers on Amazon, remember that that your product sales successes on Amazon are an invitation for the next private label seller to copy your product and make a lower-priced version; so keep evolving and stay nimble.

The active catalog you have today isn’t likely to be as profitable or relevant in 6 to 12 months from now.

Want more insights like this?

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Is Your Business a Good Fit for Amazon? https://www.bigcommerce.com/blog/what-to-know-before-selling-on-amazon/ https://www.bigcommerce.com/blog/what-to-know-before-selling-on-amazon/#respond Wed, 13 Dec 2017 13:00:35 +0000 https://www.bigcommerce.com/blog/?p=17435 Amazon has made its marketplace welcoming for newcomers. New sellers will find a platform where it takes only minutes to…]]>

Amazon has made its marketplace welcoming for newcomers.

New sellers will find a platform where it takes only minutes to sign up, and a few more minutes beyond that to get product listings live on the site.

With Amazon’s intent to attract as much selection as possible to the marketplace, it makes sense that Amazon wants to make it functionally easy for anyone to start listing products on its site.

Yet, the decision to sell on Amazon should not be based just on ease of signup.

Sellers also need a clear understanding of what it takes to have a realistic chance of being successful on Amazon.

While Amazon still attracts general merchandise resellers that offer the same products as many other companies, the long-term success of those sorts of companies is very much in question.

In a battle of margins and trying to differentiate in a meaningful way, sellers may end up working harder and harder each year to generate the same top line sales, and possibly not the same bottom line revenue.

Before we dive in to discuss which types of businesses are most likely to be successful on Amazon, let’s first review a few fundamentals about the Amazon marketplace to help you determine product fit.

Take This Book With You

This full guide (all +17 chapters and +50 experts and their insights) is more than 35,000 words. That’s a lot to read on a screen.

So don’t! Download the guide below to print it out, take it with you, and start selling more on Amazon.

Download Now

Things Sellers Need To Consider When Deciding To Sell On Amazon:

Almost anyone can list products for sale on Amazon.

Unless a brand has tight distribution controls over its product, it’s not unusual to find dozens – if not hundreds – of resellers offering the same products on Amazon.

This crowding creates price competition, as well as incentives to ignore MAP/MSRP pricing policies or to divert products at low margins, just to get some margin out of holding a particular brand.

Amazon sets the rules of its own marketplace.

Amazon has given itself the advantage of collecting massive amounts of customer search and customer purchase data, with which it shares only the minimum amounts with sellers.

This compendium of information gives Amazon’s first-party business – Amazon Retail, i.e. private label – a huge advantage of picking winners over and over when targeting products that it should sell itself on the marketplace.

Furthermore, Amazon Retail will almost always win the Buy Box, which is the mechanism through which sellers competing on the same product will get ranked to determine who gets the sale when the customer clicks the “Add to Cart” button.

If a seller is competing head-to-head with Amazon on a product, it’s not likely the seller will get many sales, given that Amazon Retail has the Buy Box advantage.

Amazon Retail also has sophisticated re-pricing software which allows it to lower prices to match prices already lowered by competing sellers. And, with Amazon Retail content not making any money (or even losing money) on a sale, it is not likely that a competing seller will either get the sale from Amazon Retail or make any margin from the sale.

Bottom Line

Competing directly on the same listings that Amazon Retail offers is not likely to be an effective business model long-term.

Amazon wants its sellers to use “Fulfillment by Amazon” (FBA).

FBA is Amazon’s fulfillment program that’s offered to all third-party sellers. Sellers put their products into Amazon’s network of fulfillment centers, and when a customer places an order, Amazon does the individual order fulfillment, rather than the seller.

Such products in FBA are eligible for Amazon Prime / Amazon Super Saver Shipping, two programs that have consistently been found to improve most sellers’ customer conversion rates.

While a seller may have world-class fulfillment capabilities of its own, this FBA advantage is granted as part of Amazon’s efforts to ensure the highest quality, consistent shopping experience for Amazon customers.

When a seller on Amazon gets orders, it does not own the customer relationship.

Each sale is viewed as a one-time transaction, and sellers aren’t allowed to market or re-market to these customers after the sale.

So while sellers may have sophisticated CRM capabilities for their non-Amazon channels, almost all of that skill and technology is irrelevant for customers generated through the Amazon marketplace.

It’s your responsibility to secure distribution.

Amazon makes clear that it is exclusively the responsibility of the brand to secure its distribution. Namely, Amazon will rarely get involved in helping brands to remove unauthorized resellers, thereby implicitly encouraging anyone to sell any product on Amazon, as long as it is a legitimate product where no harm is inflicted on the Amazon customer.

Every seller on Amazon is required to answer customer inquiries within 24 hours.

This requirement applies to any day of the year. And Amazon holds every seller to the highest industry standards regarding shipping times, confirmation emails, order cancellation rates and a slew of other criteria.

For many businesses new to Amazon, these standards may well be beyond what they can handle, and hence the Amazon marketplace may be too much for them to handle.

With these conditions in place, let’s discuss how different sorts of businesses are likely to do on the Amazon marketplace.

How Different Business Models Work on Amazon

The Reseller: No Exclusive Sourcing Relationships

Unless a reseller with no exclusive sourcing relationships has a significant pricing advantage, it’s not likely that this type of seller will be able to get any more than its fair share of sales from Amazon.

In other words, if this type of seller is competing against nine other resellers, this individual seller isn’t likely to get more than 10% of the sales –– unless it’s willing to undercut everyone else on price.

A race to the bottom on price eventually lowers margins to an unsustainable level, making it pointless to be selling on Amazon.

For the general retail business considering offering some of its products on Amazon, this channel is likely to be only a secondary channel if all of your catalog is readily available to any number of other retailers.

As an Amazon reseller, it’s critical for you to have paperwork that shows a clear provenance of where you sourced your product.

While some gray market sellers may do well on Amazon, once Amazon’s Seller Performance team challenges them – asking them to provide paperwork showing where the product came from – the seller may not be able to address a claim of selling counterfeit or inauthentic product.

And, even for sellers with solid paperwork from manufacturers or authorized distributors, Amazon may still give the seller a hard time if too many customer complaints come in about the legitimacy of the product.

The Reseller: Exclusive Sourcing Relationships

If the seller has negotiated exclusive sourcing relationships from specific brands with decent control of their distribution, preventing any number of unauthorized or gray-market sellers from also selling on Amazon, then this seller is likely to do well as it doesn’t have to compete with other sellers for the “buy box.”

While the principle of an exclusive sourcing relationship makes a lot of sense for sellers, few brands understand the dynamics of the Amazon marketplace well enough to be willing to limit who can sell on Amazon.

This lack of understanding can potentially result in less product sold to retailers in the short-term.

Such sellers typically have to agree to represent the brands well on Amazon, by way of improving listing content, ensuring MAP/MSRP prices are in place, and keeping inventory levels adequately stocked for the Amazon customer demand.

With the advent of the FBA program, it is becoming easier for brands to go direct-to-consumer with their own seller accounts on Amazon, cutting out resellers altogether.

For brands that are willing to handle some day-to-day operational responsibilities (or outsource these responsibilities to agencies), they can make retail margins selling direct-to-consumers on Amazon, rather than securing only wholesale margins selling to retailers/resellers that will, in turn, sell on Amazon.

The Seller of Oversized or Hazmat Products

While Amazon does allow sellers to offer oversized and hazmat products to Amazon customers, the cost or FBA restrictions may be such that it doesn’t make financial sense for such companies to sell on Amazon.

If you are such a company, we encourage you to do extensive research on Amazon before signing up to be an Amazon seller.

The Private Label Seller

In the past five years, there has been a huge increase in the number of sellers on Amazon that are building their own brands (often through inexpensive overseas sourcing, e.g., Alibaba).

Combing Amazon product reviews and sales rank data of national brands, these sellers identify product or price gaps that they believe they can fill with their own, newly-developed private label brands.

Typically, these sellers can enjoy 3-6 months of decent sales before their products do well enough to be identified by other private label sellers to target for their own private label versions.

If the private label seller becomes effective at evolving its catalog quickly and capitalizing in the short-term on its newly launched products, such a seller can do reasonably well on Amazon.

The National Brand

If a brand has created decent customer awareness, chances are some share of 300 million Amazon customers have already been looking for the brand on Amazon.

Unable to find it, they move on to a competitor brand.

For such a national brand, it makes a lot of sense to be evaluating Amazon as an incremental sales channel.

If the brand launches a seller account, using high-quality content in its listings coupled with some advertising budget to drive awareness of its presence on Amazon, such a brand can build its Amazon business into a decent channel.

Yes, there may be some cannibalization from its other channels, but we have found that the vast majority of sales on Amazon are incremental, given just how many Amazon customers there are, and how few of them are likely to have shopped on the brand’s own website.

For brands that have a regional awareness, it will take more time to build up a business on Amazon, but the underlying distribution control is most critical to the brand being able to sell its product on Amazon, without plenty of other resellers competing for the same sale.

If a brand is successful with the Amazon channel, then the benefits of incremental sales at retail margins should produce solid financial results for the brand.

Final Word

Any brand of any size on Amazon must recognize that it will earn certain rights on Amazon if the brand has a registered trademark, GS1-sourced UPC codes, and branding on both the packaging and physical product.

For many brands new to Amazon, they are surprised to see that Amazon will not always respect the brand’s efforts to legitimize itself as a brand unless it has secured these aforementioned product and legal characteristics.

Also, the day-to-day operations of running an Amazon seller business must be properly addressed, given how high the performance standards are to which Amazon holds its sellers.

In subsequent chapters, we’ll cover how to meet these requirements and put operational processes in place.

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47 Essential Selling on Amazon Tips to Grow Sales and Win Market Share https://www.bigcommerce.com/blog/amazon-selling-tips/ https://www.bigcommerce.com/blog/amazon-selling-tips/#respond Wed, 13 Dec 2017 13:00:34 +0000 https://www.bigcommerce.com/blog/?p=17720 Fifty-five percent of all online product searches begin on Amazon. Last year, the retail giant surpassed $107 billion in total…]]>

Fifty-five percent of all online product searches begin on Amazon.

Last year, the retail giant surpassed $107 billion in total sales.

That is over $12,000,000 in sales every hour on average.

Amazon Prime alone boasts over 54 million members and counting.

If Prime were a country, it would have 8,000,000 more people than Spain and be the 27th most populous in the world.

Those are just Amazon Prime members.

These mind-blowing stats are indicative of an undeniable fact: Amazon isn’t going anywhere.

Many online sellers fear that Amazon is going to cut into their profit margins and inhibit  — or outright squash — growth.

And let’s be honest: depending on your business model, those fears can be justified.

But Amazon’s dominance offers an upside that is proving lucrative for savvy ecommerce pros who have figured out how to make Amazon work for, not against them.

Amazon’s control of market and mindshare isn’t a closed ecosystem.

They make it quite possible to leverage their advantages for your own business. You simply have to know how to play the game.

That’s why we rounded up these 47 experts who know how to win on Amazon and have been doing so for years.

Expedite your learning on selling on Amazon by tapping into their expertise below.

Take This Book With You

This full guide (all +17 chapters and +50 experts and their insights) is more than 35,000 words. That’s a lot to read on a screen.

So don’t! Download the guide below to print it out, take it with you, and start selling more on Amazon.

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Get more reviews (and then more after that!)

David Tendrich, CEO & Co-Founder, Reliable PSD

Get. More. Reviews. I don’t care how many you have. Get more.

People buy the product on Amazon that has the most positive reviews.

When we’re scared about making a decision, our brain falls back to certain factors and uses that limited information to make a decision. That first factor we fall back on is social proof.

We look around at everyone else and see what they think is a good idea. If a product has 10x more reviews than other products – we literally have to resist our biology to buy a different one that has less reviews and therefore more risk.

So get reviews. Give away as many of your product as you have to in exchange for fair and honest reviews.

Kaleigh Moore, Freelance Writer

Build up positive reviews –– and incentivize customer ratings if you have to.

These are so important and can make or break a sale, not to mention the impact they have on ranking within the platform.

David Feng, Co-Founder and Head of Product, Reamaze

Amazon is a reviews-driven ecosystem.

It’s vitally important to solicit for reviews effectively and reward customers post-purchase for contributing.

Brands should also invest in SEO optimization, especially for Amazon, as it’s a highly competitive environment for pricing, descriptions, reviews and alternative products.

Finally, you need to understand Amazon’s pricing structure and adjust your pricing with it.

For example, offering a significant discount from time to time or running a daily deal can get you enough brand exposure and attract repeat buyers. That, combined with great reviews and optimized SEO, can make for a winning strategy.

Sweta Patel, Director of Demand Generation, Cognoa

Nothing is more effective than reviews on other platforms.

When we were selling mobile device products on Amazon we created an ubiquitous effect by promoting our reviews on all of our other channels.

These channels include:

  • Facebook
  • Twitter
  • Touch of Modern
  • Ebay
  • Other publications through the display network.

Annie Cushing, Founder, Annielytics

Engage with reviewers in a helpful, non-defensive manner.

Reviews play a significant role in ranking on Amazon.

Jordan Brannon, President and COO, Coalition Technologies

There are a million review generation tips out there. Most of them will work at some level.

Beyond that, really consider promoting Amazon through marketing channels typically reserved for your own website.

Amazon listings can be SEO’d. They can be advertised using PPC. They can be promoted via email and social. Also make sure you’re planning ways to segment Amazon sales away from other sales channels to avoid creating your own competition.

Emil Kristensen, co-founder & CMO, Sleeknote

The most important thing on Amazon is ratings.

Make sure to have an automated process for gathering ratings from your customers. The Amazon algorithm that determines search rankings is highly influenced by product ratings, which is why ratings should be of high priority for your brand.

Another way is to think of your Amazon product site as an SEO site. This means you should include relevant keywords in your copy but be careful of keyword stuffing because search engines penalize this.

Catalin Zorzini, Founder, Ecommerce-Platforms.com

Selling more on Amazon all depends on how many quality reviews you receive.

The sales are obviously going to figure in to how often your product shows up in search results as well.

The only problem is that telling you to get more reviews and sales doesn’t really help much. However, you’ll notice that many reviews come in because of free products being given away.

You have the ability to locate some of the more influential reviewers on Amazon, then you can give them 99% discounts in exchange for a review. The cool part is that many of the people that complete these reviews are willing to write quite a bit about the product, so other customers receive better information.

Brett Curry, CEO, OMG Commerce

Get reviews! Quality and quantity are necessary.

It’s also better to have a few not-so-great reviews mixed in as long as your overall rating is strong. It makes your listing look real.

If all you have is a few 5-star reviews, customers will assume it was you or your mom who reviewed your product.

Several studies show that products with more reviews outperform products with fewer reviews, even if the product with fewer reviews has a slightly higher average rating.

More reviews = more confidence.

Jacob Firuta, Content Manager, LiveChat

Reviews from past customers give you the credibility you wouldn’t otherwise get.

It’s an extra portion of word-of-mouth that boosts your offer. It’s in your best interest to get as many of them as possible.

Have a customer that’s raving about a particular product? Ask them to provide a review. Happy customers won’t mind and it can significantly increase the number of reviews you get.

Dennis Yu, CTO, BlitzMetrics

You can go with paid options, of course…

But nothing beats working toward getting tons of legitimate 5-star reviews.

Justin Mares, Founder, FOMO

Focus on reviews.

Positive reviews drive higher conversion rates and drive rankings. Email your customers after they purchase asking for Amazon reviews and watch your rankings go up!

Optimize your Amazon product page for Amazon SEO

Ryan Bemiller, Founder, Shopping Signals

Understand that reviews and SEO play a large part in getting your product listings in front of more people.

Amazon is a search engine as much as it is a marketplace.

People search for products on Amazon.

And Amazon has ranking factors to help it determine which products to show, in which order, when someone performs a search.

So do some research on Amazon’s SEO factors.

Things like title, subtitle, description, questions and answers, and even pictures all factor in on how a product will rank.

Pay attention to keywords that people will use to find your products, and look at what keywords your competitors are using.

Reviews also play a big part in your ranking on Amazon.

The frequency and overall number of reviews you get will help Amazon determine your rank.

Be careful not to break Amazon’s terms of service with respect to soliciting reviews, but do try to solicit reviews. You’ll need them. Especially early on when you’re trying to get some traction for a new product.

Bill Widmer, Ecommerce SEO & Content Marketing Consultant

Write long, detailed product descriptions. At least 1,000 words.

Not just fluff, either – add LSI keywords. Again, keyword research is CRITICAL here.

Josh Mendelsohn, VP Marketing, Privy

Product content is the key to success.

Following their best practices around descriptions, categories, titles, and A+ content will help you dominate search results.

Ross Simmonds, Founder, Foundation Marketing

Invest in quality product shots.

While it’s always important to understand the value of optimizing for search rankings and getting positive reviews –– first impressions matter on Amazon.

The number of new entrants into every category is through the roof.

If you want to stand out, it’s time to invest in not only building your own brand to help support an increased amount of search, but also time to invest in high-quality visuals to give a quality first impression.  

James Thomson, Partner, Buy Box Experts

Optimize your listings with proper images and content.

Those will help customers make better decisions….only then should you be spending any money on advertising.

Otherwise, you are spending money to drive traffic to poor listings…yikes!

Chris Van Dusen, CEO, Parcon Media

Use Amazon’s Keyword Tool to optimize your copy around long-tail keywords that are less competitive.

Sell more through Amazon on your own site by using the Pay With Amazon button. Consumers trust Amazon more than you and they have their credit card details already stored for easy checkout.

Jason Dea, Director of Product Marketing, Intelex

Try as best as you can to focus on your customer experience and conversion rates.

Although you’re limited in what you can do on Amazon, anything you can do to optimize your marketplace listings for conversion will catch the eye of the Amazon search algorithms.

Kevin Rizer, Host, Private Label Podcast

Optimize your listing!

Proper title, bullet points, description and great images can drastically improve your sales.

Danna Crawford, Owner, PowerSellingMom.com

Include quality, accurate, detailed descriptions.

Buyers appreciate more than just the “pre-filled” descriptions of items.

Erik Qualman, #1 Best Selling Author, Equalman.com

The key to success on Amazon is optimizing for their search algorithm.

Also, influence buyers by having good ratings and reviews around your product.

There are many ways to accomplish this, but one critical thing to do is to comment/reply to all your current reviews.

Think BIGGER than Amazon to drive more sales on Amazon

Daniel Wallock, Marketing Strategist, Wallock Media

Don’t just be an Amazon brand.

I mean that just because you’re selling on Amazon doesn’t mean that you can’t promote the products with content, influencer campaigns, and get your products featured in the press.

If your looking to increase sales on Amazon, I would look away from paid advertising and instead look at using inbound marketing tactics to bring traffic to your products.

You can drive hundreds of visitors per day to your Amazon store or product pages just by creating a strong presence on niche forum sites, Facebook groups and other social media channels.

Larry Kim, Founder, Wordstream

Diversify!

They’re not the most vendor-friendly platform and make changes from time to time that aren’t in the best interests of sellers.

Not saying Amazon isn’t a big deal, just suggesting that Amazon should be just one pillar of four or more major channels including Facebook Ads and Google Ads –– and, of course, your own direct web storefront.

Drew Sanocki, Private Equity Operating Partner, Empire Growth Group

For direct-to-consumer players, think of Amazon as customer acquisition.

Choose some small AOV top sellers and make sure you put them on Amazon.

Encourage follow-on purchases through your own site in order to capture more customer data, up-and cross-sell, and increase overall LTV.

Ned Nadima, Growth Manager, Rare.io

Master the art of branding.

Whenever customers search for products on Amazon, the search engine displays many similar products. Understanding how to position your brand properly will help you stand out.

This includes product pictures, pricing, product description, reviews, etc. In order to accomplish the feat, you must nail your target market. Deeply understand your target market and you will succeed.

Rieva Lesonsky, CEO, GrowBiz Media/SmallBizDaily.com

Amazon also allows you to sell your service on Amazon.

When people buy products, your service can be offered as an add-on and everything is handled through Amazon.

This is something I know from personal experience. We bought a ceiling fan and at the same time I bought the installation from a local small company.

Payment was handled through Amazon and then the company called me to set up an appointment.

Don’t compete on price! Unless you have a tool for it.

Rupert Cross, Digital Director, 5874

Don’t compete on price – it’s a race to the bottom and it’s easy to become a busy fool.

Instead, focus on improving your rating by responding to all of the messages that matter, as this a sure-fire way to ensure customers value you as a seller and choose you over somebody else. Sync your stock to avoid overselling.

Michael Ugino, Co-founder, Sellbrite

The #1 rule of retail economics will always be that you make your money on the buy.

Thus, driving additional sales, even at less than your target price, will allow you to ultimately buy more and lower your sourcing costs.

The best way to drive additional sales on Amazon is by using a repricing tool (with price floor limits of course) to constantly fight for, and win, the buy box.

Are you ready to sell on Amazon? Better know the basics.

Donald Pettit, Sales & Partners Manager, SalesWarp

If you’re looking to expand sales on Amazon, do it carefully.

Make sure you have the bandwidth and necessary resources to take on additional orders.

For example, an inventory management system can help prevent overselling items, and order management systems can help ensure timely deliveries.

Stock-outs and late deliveries can result in poor customer reviews, or a suspended Amazon account.

Additionally, try partnering with other brands and use Amazon as a laboratory for new offerings. For example, an apparel retailer partnering with smaller universities to offer branded products on Amazon that customers couldn’t find elsewhere.

Jason Boyce, Co-founder & CEO, Dazadi

The Amazon channel should have its own team and its own procedures within your organization.

With roughly half of the online market share in the USA, you just can’t succeed on Amazon unless you have a dedicated team with dedicated time and expertise on this channel.

There is so much to unpack here that it would take a book to share everything, but focusing on the best-sellers on the Amazon product categories pages can help you know if your items are priced well enough to gain sales and profits.  

Andy Eastes, Founder and CEO, SKUVault

Focus on decreasing inventory errors like mis-picks, mis-ships, and out-of-stocks.

Order & inventory accuracy, as well as fewer customer mishaps, are both highly determining factors for winning the Buy Box and gaining access to the Prime Merchant-Fulfilled program.

David Potts, Founder and CEO, SalesWarp

Amazon rewards sellers who can ship quickly and accurately.

Our clients are, often, best of breed in their segments. They provide fast fulfillment and avoid oversells or cancellations, and as a result, Amazon rewards them with prime seller advantages.

Market on Amazon the Amazon way (FBA, Buy Box + More)

Eric Carlson, Co-Founder, 10X Factory

If you have a lead on your list that hasn’t bought from you ever and is older than 60 days old, DO THIS.

  1. Send them a promotion for Amazon
  2. Sync them with a Facebook custom audience
  3. Then, send clicks to your products on Amazon

This is a WARM audience, but an audience that might not trust your website enough to buy from but likely will trust Amazon.

Brian Nolan, Co-founder & CEO, Sellbrite

Sponsored Products are a great way to drive additional traffic to your Amazon listings.

You can significantly level the playing field in terms of visibility against long-established competitors.

Bill Bailey, CEO, Nodal Ninja

FBA – Fulfilled by Amazon.

Amazon sells 24/7 and setting up a FBA account on products you know will sell well will certainly increase your sales.

FBA comes at a higher cost so a little Googling prior to doing this is best advise.

Having an Amazon store as well will help to keep abreast of the competition, which most likely is already selling on Amazon.

Aaron Houghton, Co-Founder and CEO, BoostSuite

Use paid search promotions inside Amazon.

And use your brand name and best performing keywords from Google Adwords.

Harrison Dromgoole, Content Creator, Ordoro

Focus on the buy box.

Unless you’re selling truly unique products, you’re likely competing with other sellers to be the merchant behind the “Add to Cart” button.

There are two big ways to get in Amazon’s favor — and, Amazon being Amazon, they center around shipping.

Utilize Fulfillment By Amazon, their fulfillment service, to store and ship orders, and if you’re a quick-shipping, high-volume e-retailer, try to qualify for their Seller Fulfilled Prime program, which guarantees access to lucrative Prime customers.

Aaron Agius, Managing Director, Louder Online

Give Amazon’s suggested PPC campaigns a try.

I’ve seen a number of clients test them compared to the campaigns they built themselves based on tons of keyword data, metrics, etc., and still have Amazon’s auto-generated campaigns produce a higher ROI. If it works for your brand, that’s time you can spend elsewhere.

Daniel Townsend, Managing Director, Plum Tree Group

With more than 2 million sellers worldwide selling on Amazon, gaining the necessary visibility to succeed can be difficult.

However, all hope isn’t lost. Amazon’s latest release, headline search ads, may help new and experienced sellers by putting their products front and center in Amazon search results.

Headline search ads are pay-per-click ads that help sellers target customers based on specific search terms.

Once campaign parameters are set (keywords, bid amount and daily budget), headline search ads appear at the top of search results – a powerful opportunity to outrank similar products (aka healthy competition), drive shoppers to your listings and increase sales.

Jan Lastuvka, CEO & Co-Founder, MonkeyData

Sell with Fulfillment by Amazon (FBA).

Not only does this reduce work in handling orders, FBA products will appear in Prime-filtered searches.

Also, products which are Prime eligible have higher conversion rates than those that do not. On top of this, having FBA products will allow you to tag on to the success that Amazon has built with its brand and align your business to their reputation.

William Harris, Ecommerce Consultant, Elumynt

Amazon has a lot of similarities to Google Shopping – they are keyword and price driven.

If you’re doing well on Google Shopping, export the list of keywords and see what you’re doing the best at – then use that to bid on those keywords on Amazon to get some initial traffic flowing through and see if those keywords are going to work on Amazon as well.

Go Unique or Fail

Brita Turbyfill, Gray Loon

Unique products.

If you sell a variety of products, that may or may not be unique from your competition, focus on selling the more unique products on Amazon and building up your product reviews.

Once you have several products that have a lot of positive feedback, then even if you have other products that your competitors have, you may build more of a loyal following based on those few unique products.

Peter Attia, Founder, Dicey Goblin

The biggest tip I have for Amazon is try to tack on an extra item with your listing.

Normally if you’re selling an item on Amazon, other sellers can be on that same listing. That means you’re not guaranteed to get the sale for that item, especially if you’re not the lowest price.

We skirted around this by selling board games with a simple extra dice bag or expansion for the game. This allowed us to have our own unique listing that would still show up for the main product in Amazon search.

This gave us more flexibility with the price, because we weren’t trying to compete with other sellers for the same item. Plus, every purchase that came through that listing went straight to us.

Kunle Campbell, Founder, 2X Ecommerce

Endeavor to own your brand and listings on Amazon.

Competing with other retailers (including Amazon) on price is almost always certainly a race to the bottom.

A single product listing with 10 sellers means that sellers can only really differentiate themselves by price alone.

This is a dangerous position to be in as a retailer and in business. You may eventually sell at your desired target price, but this may mean making a trade off in keeping stock longer with reduced inventory turnover.

In Australia? The clock is ticking!

Sammy Gibson, Director, Neon Poodle

We need to do it!

Amazon has only just arrived in Australia and at the moment we don’t have a presence and we are potentially missing out on many orders and expansion.

This will be our main focus in the coming months.

The Short & Sweet of It

Raheem Sardar, Founder & CEO, RewardCamp

Use these tactics.

Sellers are able to successfully charge higher prices for the same product using the following tactics on Amazon:

  1. Brand your product
  2. Register your brand with Amazon
  3. Use high-quality images and videos
  4. Use your branding on product images, packaging, description, title, etc., so that it stands out from the competition
  5. Get lots of reviews

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The Amazon Seller's Solution Provider Directory

Want to increase marketplace sales with help from the best Amazon professionals in the world?Read our Amazon Seller’s Solution Provider Directory, to connect with experts who can optimize your Amazon listings.

Do you have any selling on Amazon tips and tricks? Let us know and leave them in the comments section below!

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