How to Sell on Amazon
One of the biggest parts of Amazon’s success is its marketplace for third-party retailers to sell products via Amazon’s platform. Many Amazon sellers are independent small business owners who have built successful small businesses by utilizing the big reach and big scale of Amazon to connect with buyers all over the world. According to Statista, Amazon’s third-party sellers generated roughly $23 billion in revenue in 2016, which is up $16 billion from the previous year. So, how can you capitalize on revenue of that volume? In this in-depth Amazon selling guide, we’ll cover:
- General selling tips
- How to sell your products faster and easier
- Selling products during the holidays
- Advanced selling tips
General Selling Tips
When most think of selling on Amazon, what comes to mind is big businesses selling products by the thousands being shipped from fulfillment centers worldwide. Yes, it can be overwhelming. However, Amazon can also be a fantastic platform for small business owners who are just beginning to dabble in online sales.
The opportunities for selling on Amazon are growing, and with the right strategies, there are big opportunities for those that venture into sales on this dynamic e-commerce site. Here are eight guidelines for successful Amazon sellers to get you started.
- Start small.
If you ever explored what it takes to develop your own e-commerce website, you know that it can be both technically complex and expensive. When you’re just starting out, tackling a project like this isn’t always a good idea. You also have products to source, marketing strategies to develop and customers to provide service to. However, building your own e-commerce website doesn’t mean you’ll automatically get online traffic.
With Amazon, you get to leverage the benefits of working with one of the top online sites on the Internet. This means being able to take advantage of their advanced site and their traffic. The good news is that you can start selling on Amazon with just one product. From there, you can slowly build an online business and grow it as big as you envision.
- Think about what people want and what others can’t offer.
This seems simple enough, but interestingly, many sellers on Amazon make the mistake of selling products that dozens of others are selling too. This is a recipe for disaster. Amazon creates one page for each product available on its site. This means that all sellers that sell the same products are lumped into the same page. If you are selling a product that 50 other sellers are also selling, you’re going to have a hard time differentiating yourself (unless you’re willing to be the one with the lowest price, including shipping costs).
Amazon sellers are all competing for the top spot – called the “Buy Box” – on a product page. The seller with the best price and history gets this coveted spot, which is an automatic sale when someone clicks on “Add to Cart.” All other sellers get listed off to the side of the page or even on a secondary page, where you don’t want to be.
Don’t want to be the lowest price seller? Then you need to either make your own unique product or resell something unique that someone else makes. The goal is to minimize your competition on the Amazon product page. Many Amazon sales experts will tell you that you will typically have more luck by avoiding media-related products like DVDs, music and books. Other than that, the product possibilities are practically endless.
- Consider how to ship your products.
Packing and shipping your products is fairly straightforward when it’s just a few each day. But what happens when the volume of your sales increases, and you now have dozens of orders on a daily basis? Yes, this does happen (and especially around the holidays when you might be dealing with hundreds of orders per day). This challenge can turn into a real business headache when you also factor in returns, undeliverable shipments and tight deadlines.
This is where Fulfillment by Amazon (FBA) comes in very handy. Fulfillment by Amazon means:
- You will ship product in bulk to one of Amazon’s warehouses.
- Amazon will ship customers’ orders for you.
- Amazon manages customer service and returns.
- In some cases, Amazon customers will be able to take advantage of free shipping on your items.
The advantages of FBA for Amazon sellers are vast. Here are a few of the reasons why:
- Orders can be packed and shipped 24/7.
- You won’t have to deal with returns so that you can stay focused on other aspects of your business
- Your customers will prefer the fast and free shipping.
- The Amazon Fulfillment Center can also be used to ship out orders from eBay or even your own website.
- You won’t have to invest in hiring staff to help with shipping.
- Your business won’t be limited by your ability to ship out products.
- Support your Amazon sales through content.
Small business Amazon sellers can amp up the success of their businesses by utilizing the same content marketing strategies that large-scale enterprises do. You can spread the word about your online business through social media channels like Facebook, Twitter, Google+ and YouTube. It’s easy to reach out to your Facebook community and share with them a product you’re selling on Amazon by providing a link to the product page. Tweeting information about your presence on Amazon can increase views, and product videos with interesting content may be shared or even go viral.
Many Amazon sellers promote their products by publishing content on blogs – both their own and by guest blogging. Writing details about your products, discussing interesting facts about your small business or even sharing helpful tips for others within your industry can help spread the word about what you’re selling. For in-depth tips on creating a killer content marketing strategy, check out our Research chapter in our five chapter online marketing guide.
- Jumpstart sales with ads.
There is nothing streamlined about sluggish sales. Amazon, fortunately, offers an advertising program that is similar to Google AdWords to help you target specific types of customers. Using this program can help you leverage Amazon’s high traffic volume and can help you ultimately streamline your Amazon business.
- Sort your inventory and have items grouped with packaging materials.
When you’re selling on Amazon or other ecommerce sites like Etsy and eBay, you can quickly lose track of what you’re selling, where and what has already been sold. You don’t want to risk losing an item you’ve sold. To streamline your Amazon business, it can be very helpful to separate items listed on Amazon and to place them in a designated area along with their packaging material. By doing so, you can simply pack, affix a label and ship as soon as you sell an item.
- Have funds ready when you need them.
Streamlining your Amazon business requires being prepared for the expected and unexpected. When you need money to hire help during the busy season or you need to purchase a piece of equipment, you may need a quick source of cash. Obtaining a bank loan can take weeks or longer. Instead, using a source of business funding through online lenders for a more streamlined solution.
- Get photos and descriptions prepared ahead of time.
Instead of waiting to write descriptions and take photos of the products when you list them on Amazon, do so as soon as they become inventory regardless of when you’ll be listing them. This way, you’ll have them ready to go when you are ready to sell them. Keeping comprehensive records of descriptions and images of your products can also save you substantial time. The best sellers on Amazon are those who have created organized systems for managing all of the aspects of their marketing which includes product descriptions and photos.
How to Sell Faster and Easier
Whether you’re relatively new to selling on Amazon or you’re an established business ready to get more out of your ecommerce operations, there are a lot of helpful resources that can make your life easier. The great thing about selling on Amazon is that it’s possible to connect with niche markets and worldwide buyers for almost any retail item, and there are powerful tools and Amazon experts that can help you figure out how to adjust your pricing, manage your inventory and implement a sales strategy for maximum results.
Here are six tools that Amazon retailers should consider investing in.
- Fulfillment by Amazon (FBA)
This isn’t the first time we’ve mentioned FBA in this guide (and it won’t be the last). FBA is an awesome tool for Amazon retailers because it makes it possible for sellers to use Amazon to serve as their outsourced warehouse, fulfillment and shipping function.
For small business owners, especially if you don’t have a brick-and-mortar retail location, there are significant benefits of FBA:
- Expanded customer reach
- Inventory storage
- Pay-as-you-go pricing
- Products are eligible for Amazon Prime’s popular free two-day shipping
- Amazon tutorials and webinars
Amazon offers several free tutorials, how-to guides and webinars to give you a guided tour of some of the various products and services available to Amazon sellers. These webinars are very helpful because they explain (with audio and visual information) how to fully understand the concepts and features of things like FBA and Amazon Product Ads.
Even if you’re not an expert in web development, logistics or inventory management, Amazon gives you intuitive tools to help you get more buyers to look at your products and help deliver efficient shipping and fulfillment once a customer places an order.
- FBA Revenue Calculator
If you’re trying to decide whether to ship products via FBA or a different fulfillment/shipping option, you can use this free online tool, the FBA Revenue Calculator, to figure out which option is most cost-effective.
- Amazon Services Seller Forums
The Amazon Services Seller Forums provide Amazon Sellers with resources, tutorials, help for new sellers and specific how-to advice on how to sell more products more efficiently. Recent topics have included questions such as what to do if a customer asks for a return before the item has been shipped, what to do when some other seller is hijacking your product images and how to get cheap shipping rates.
Vendio is a multichannel ecommerce platform that makes it easier to list and sell products on Amazon and other sites such as eBay. Vendio has a few special features such as an automatic fulfillment and inventory tracking tool for eBay and Amazon. For example, if you sell one item on eBay and one item on Amazon, it will keep track of your total inventory. That way, you never accidentally book an order for something that is out of stock. Vendio also has an app that makes it possible to sell products directly from your Facebook page. Vendio offers a free trial and a variety of monthly subscriptions starting at $49.95 per month, with pricing depending on the total number of stock keeping units (SKUs) sold at your store.
ScanPower offers several key pricing and inventory management tools for Amazon sellers, including:
- ScanPower List: one-touch FBA inventory processing that lets you create a new listing simply by scanning an item
- ScanPower Mobile: a mobile scanning tool for iPhone, iPad and Android that allows you to scan barcodes to see live pricing data for every item in the Amazon catalog
- ScanPower Scout: the same tool as ScanPower mobile but available on desktop; save purchased items for later listings, see all competition and see sales history
- ScanPower Evaluate: a tool that shows you the competitive landscape for specific products on Amazon, helping you make better-informed decisions about which new inventory to purchase
- ScanPower Boxt: creates box-level content lists easily and scans and packs shipment items while printing 2D barcodes for the box
- ScanPower Report: sales reporting and accounting solution that comes with full inventory management and expense tracking (including fees, taxes and shipping)
If you’re new to selling on Amazon, it might seem a bit overwhelming and complex. But with the help of some of these easy and cost-effective resources for Amazon sellers, you can follow in the footsteps of many other small retailers and find a way to make money by selling on Amazon.
Selling Products during the Holidays
Holidays can make up to 90 percent of annual revenue for retail businesses, according to Teikametrics.
To have a successful holiday season, you need to get ready for early sales promotions, adjust your inventory to make sure you have enough of your top-selling items and prepare your pricing strategy for optimum sales momentum at each stage of the holiday shopping season. Here are eight tips to help you make the most revenue during the holidays.
- Don’t bet too heavily on Black Friday.
Even though Black Friday (and its online counterpart, Cyber Monday) get a lot of media attention, the truth is that more consumers are starting their holiday shopping season even earlier. Teikametrics recommends increasing your inventory levels to 50 percent higher than October. Make sure it’s in place by November 10. If your inventory is higher earlier in the shopping season, you won’t miss out on early sales.
- Be meticulous with your listings.
Many Amazon marketplace retailers get listings suppressed by Amazon due to minor errors such as incomplete product descriptions, missing images or incorrect categorization. Here are some tips to help your listings:
- Highlight the product being used
- Show photos of the product packaging
- Include photos that show the product’s size
- Show the product from different angles
- Follow the specific product’s title formula
- Use bullet-point content
- Focus on your product’s description
- Stop selling your low-performing products.
One important aspect of running a successful small business, especially for Amazon marketplace retailers, is deciding which products to stop selling. In addition to being proactive about choosing products that you’re passionate about selling and that offer a good chance of success, it’s also crucial that you learn how to prune out the bad products.
Stop losing time, money and energy on products that have high rates of returns or that tend to get bad customer reviews. Not only will this help you make bigger profits and improve your efficiency, but it will also help you maintain your Featured Merchant status, which keeps you eligible for Amazon’s coveted Buy Box (where 90 percent of Amazon sales occur). Even if your lower-performing products are still profitable, it’s not worth the risk of damaging your account’s overall credibility.
- Don’t overprice (too much).
Sometimes overpricing can be a good strategy for selling on Amazon – especially if you have a highly in-demand product. But mostly, if you price your products more than 10-15 percent higher than the list price, you’ll lose eligibility for that product to be included in the Buy Box. If your product is no longer available from the manufacturer, and you can prove it to Amazon Seller Support, you can get the “list price” removed from your listing, which means you can price your product at whatever level the market will bear.
- Unload stale inventory.
One of the challenges of running an Amazon marketplace retail business is when you have inventory that won’t sell. Stale inventory that sits too long creates cost and cash flow problems for your business. Fortunately, the holiday shopping season can be a surprisingly good time to unload slow-selling products because people aren’t just shopping for themselves; they’re also shopping for gifts for other people! This means that even if you have clothes in colors or styles that are a bit extreme or items that are a bit odd or unusual, you might find a buyer who wants to give a quirky present or who needs a White Elephant gift.
- Prepare for lower profit margins.
The holiday sales season offers the promise of significantly higher sales volumes, but it’s also more competitive. During the holiday seasons, a lot of retailers are trying to unload stale inventory or offer products that they wouldn’t normally sell, hoping to cash in on the holiday sales bonanza. This means that you should be prepared to accept lower profit margins on each item sold.
However, the massive influx of sales volume should hopefully more than make up for any small decrease in average profit margin. According to stats from Teikametrics, sales volume of discretionary items on Amazon increases 2 times in November and 3 times in December (compared with October sales). The sales volume increases are even higher for toys.
- Sign up for Fulfillment by Amazon.
Like we mentioned above, FBA is a service for Amazon sellers that lets Amazon fulfill your customer’s purchase orders. With FBA, Amazon stores, picks, packs, ships and provides customer service for the products you sell. With FBA, your products are eligible for Amazon Prime’s free two-day shipping, which tends to be a faster, more dependable shipping option than most independent retailers can provide. Amazon now has more than 90 million Prime customers, and there are roughly 100,000 sellers with $100,000 or more in sales this year (10 percent of those sellers make $1 million or more a year).
But if you do sign up for FBA, keep in mind that you need to allow longer lead times for product fulfillment. During November and December, it might take 4-5 days for products to be received in FBA (compared to the usual time of 1-2 days).
For more information on how to use Fulfillment by Amazon to maximize your Amazon retail business, check out Amazon’s “Grow with FBA” blog. Amazon can help you with advertising, update you on the latest tools and tips to help increase sales, lower FBA fees, manage inventory and more.
- Lower prices at the right time.
Lowering your prices is a good strategy for selling on Amazon because it gives you a chance to clear out as much inventory as possible before it’s too late. In 2017, Amazon’s largest sales day was Cyber Monday, which saw more than 140 million products ordered from small businesses globally. Consider lowering your prices after Thanksgiving for Black Friday, Cyber Monday and Christmas sales.
Advanced Selling Tips
While this guide shares tips mostly for beginner Amazon sellers, we also wanted to cover tips for advanced Amazon sellers. If you’ve been in the Amazon game for a while now and are in need of some extra help, check out these three advanced selling tips.
- Find hidden keywords in the marketplace.
Sponsored product campaigns can be tricky. It’s important to bid on the right keywords so sales will increase and avoid the wrong ones and lose money. While you probably already know how to find existing keywords to bid on, you should also find new keywords. Here’s how:
- Get into your customer’s mind. Go beyond the general thought process for specifics. “Women’s sweaters” is very broad, but “women’s cashmere warm blue sweater” can help you reach a more niche audience.
- Analyze the keywords and keyword phrases your listing already has. Include unique phrasing, features and benefits in your listing to source new keywords. “Blue comfortable sweater” is broad, but “This blue cashmere sweater can give you the comfort and warmth you need during the cold, winter days. It’s great for any occasion and can be worn with a casual or business attire” is better.
- Look at your competition. While this is known to any level of seller, the way you look at your competition can separate you from a beginner seller to an advanced one. It’s more than just looking at their ads, products and listings. You should also conduct a competitive keyword analysis to see how well they’re doing.
- Use both manual and automatic targeting campaigns. Manual campaigns are more keyword-driven while automatic are content-driven. Automatic campaigns show you new keywords, revealing hidden ones that can convert traffic into sales and may even be cheaper to bid on than broader, more obvious keywords. Consider overbidding in automatic while scaling back in manual and run an automatic campaign once a week to get enough data.
- Conduct a social platform analysis.
If you don’t have a social media strategy yet, it’s time to get one. Or if you’re just posting photos and generic captions on your platforms, it’s time to rethink your strategy. A social platform analysis helps you understand which channels your audience is on and what they like seeing.
- Dive into tools like Google Analytics and Facebook Insights to see where your targeted audience is spending their time online. Create demographics for your targeted audience, but more importantly, create psychographics as well. Psychographics dig deeper into how your audience thinks, feels, behaves and spends money, which allows you to better target their needs. There are two ways to obtain psychographics:
- Survey existing clients to see how they use your products, what motivates them, what their goals are and more. Offer them a free product or discount for taking your survey.
- Use web analytics to see what’s motivated people to click or purchase in the past.
- Here’s an example of a combination of demographics and psychographics:
- Lucy is a 24-year-old single woman living in Atlanta, Georgia. She lives with a roommate and has a dog who loves to play and cuddle. Lucy enjoys reading science fiction novels, watching comedies, biking on spring and summer days and visiting museums from time-to-time. Her annual income is $45,000. She’s concerned with health, so she regularly takes yoga and kickboxing classes. She tends to favor quality over quantity and finds fulfillment in her career. She lives on a budget, but once a month, she treats herself to something nice.
- Analyze your return on investment (ROI) on any existing strategy campaigns to see if you can find any unique opportunity ideas from campaigns. Go beyond finding if they’re helping or harming your sales. Come up with campaigns no one else is doing.
- Hire a marketing campaign manager (if you don’t have the experience). This takes most of the burden off of you and into the hands of someone more experienced.
- Keep up with FBA’s ever-growing resources and tools.
If you use FBA, make sure you’re updated on the latest tools and resources made available to Amazon sellers. Some high-quality tools include:
- Inventory Performance Index (IPI): The IPI aggregates data from your sales, inventory and costs to measure how efficiently you manage your inventory. You can also see customized suggestions to increase your in-stock rate, excess inventory recommendations to reduce storage fees and carrying costs and stranded inventory actions to ensure your products are available to buy. With the IPI, the higher your score, the better your store’s performance.
- SKU performance: SKU can help you see your product’s sales and trends over time, see how often you’ve won the Buy Box within 30 days, dig more deeply into your competitors’ prices, give you ideas on restocking inventory and allows you to take a variety of actions directly from the page to manage each SKU performance.
- Amazon’s global fulfillment network: As an advanced Amazon seller, you might be seeing some great success in the U.S. Now it’s time to think globally. FBA works the same in other regions (like its European and Japanese marketplaces, for example). When you store your products in any Amazon fulfillment center in Europe, Amazon’s European Fulfillment network fulfills your product sales in over five European marketplaces. If you’re already selling in Europe, use the Pan-European FBA program, which manages your inventory across Europe to meet demand while giving your products Prime eligibility.
- Getting reinstated if you’ve been suspended.
If your Amazon account has been suspended, look into tools to help you get reinstated. Our top two recommendations:
- Sellercare LLC: Provides consulting and reinstatement services to Amazon sellers, and manages hundreds of sellers, including some of the top Amazon sellers worldwide. They’ve assisted thousands of sellers with account reinstatement and specialize in Amazon practices, guidelines, policies and suspensions.They can work with you on a daily basis to assist with Amazon account notations, suspensions and business practice optimization.
- Amazon Appeal Letter: Amazon Appeal Letter helps you write your appeal letter for reinstatement. While you can technically do this on your own, you only have one chance. Amazon’s appeal language can be difficult to understand, so it may be wise to turn to the experts.
To streamline your Amazon business and increase your sales, focus on understanding systems, policies and procedures. Then, set up your own ways of managing your online business. With this approach, you’ll save yourself time and money – something that every online business owner can use more of.