How to Sell on Amazon Successfully for Beginners

Amazon is one of the fastest-growing sales channels for retailers-sellers across the world. Globally, there are a large number of independent sellers registered on Amazon highlighting the reputation, success, and logistical and marketing capabilities of the company. So, this blog is not about the pre-considerations of selling on Amazon. This blog is also not about how to start selling on Amazon; specifically for that, there is a registration process laid out by Amazon and other intricacies of it could be covered in another blog. This blog discusses some of the important principles and practices for achieving better sales on Amazon and becoming a better seller on Amazon. Although the emphasis is to help new sellers find answers to how to sell on Amazon for beginners, the fundamentals discussed here apply to beginners as well as existing sellers on Amazon who seek to improve their sales.

Focus on Product Quality

Whether you are selling on Amazon, any other online marketplace platform, or via your own distribution channel (store or eCommerce) it does not change the fundamental requirement of maintaining the required and expected levels of quality of the products and services offered by your business. Just because you are selling via Amazon does not mean that the brand name of ‘Amazon’ will cover up for your leniencies on quality performance. Amazon has stringent QA and QC systems in place. Also, customers post their user reviews on quality and other grounds. So, it is highly recommended that proper in-house QA and QC measures are deployed by businesses when receiving goods and before the same are dispatched further in the supply chain. Moreover, customers can reject products on quality grounds and then such orders are generally replaced or refunded which is not commercially ideal for businesses. It affects product ratings, seller rankings, and product visibility.

But after you do your bit in quality performance, how does Amazon ensure that your buyers get genuine and original products? Amazon has a measure called Amazon’s Transparency Program that aims at drawing the line between fake and original products. After enrolling products into this program, a transparency code is allotted for every product of registered brands. These codes are scanned for authenticity at the time of shipping. On the other side of the application, customers can check for the same.

Improve Product Visibility

Just like visibility on search engine results is important for businesses, the visibility of products on Amazon search results holds similar significance. The higher a product appears on Amazon search results, the better the chances of that product getting sold. Of course, there are other factors at play here like the number of reviews and buyer ratings.  

By careful application of Amazon SEO tools and tactics, businesses can improve their ranking and product visibility on Amazon.

-> Advertising: Advertising or Sponsored Ads is an inorganic or paid route for quickly standing out in a crowd of brands on Amazon and coming easily to the notice of customers. Sponsored Ads show up at the top of search results. It enhances the chances of exploration and conversion. However, the scope of Sponsored Ads is not restricted to products alone. It also extends to cover brand visibility and sponsored displays. The reach of these ads is not confined to Amazon alone.

-> Search Optimization (Product Title): Search Optimisation or SEO is an organic approach to perform better on search results i.e. to appear higher on the search result pages. The better and more updated the SEO practices are, the higher the chances of appearing ahead on SERPs. SEO is based on the words customers use to search for products and services. Because of their key significance in SERP performance, these words are called ‘keywords’. For example, someone selling yoga mats will use the word ‘yoga mat’ in the product title. But it may not be a competitive one. A competitor using keywords like ‘waterproof yoga mats’ or ‘yoga mats for men/women’ stands a much better chance of appearing higher on search results. We are saying this because the needs of customers have become more specific and they know there are plenty of variants of products available on online marketplaces.

The character limit for product titles is currently two hundred. Within this limit and using the most of it, the effort should be to best reflect and align the needs of customers and the features of the product. This is where keywords are inserted.

-> Listing Optimization (Product Page): The product page is the place where all the information pertaining to a product is maintained. It covers product details, product variants, product description pictures and videos, statutory information, customer reviews and ratings, price and payment options, etc. The overall quality of a product page has a bearing on visibility. For example, it is unlikely that product pages with poor or insufficient details will perform better on search results. On the contrary, product pages that have images and videos help customers better gauge products. This is a winning step that facilitates customers to complete their buying decisions.

Keep a Tab on Customer Reviews

Admit it or not, as customers, we do get influenced by the reviews and ratings shown on product pages. The effect of customer reviews can be so acute that if you read a few negative reviews, you may drop the idea of buying from that brand or even postpone your buying decision altogether. Positive ratings and reviews have the opposite effect. The number of reviews also plays a role here. For example, a product with a rating of 5 but only 10 raters will be edged out by a product with a lesser rating (say 4) but with 100 raters. Nowadays, customers also consider the rating of the sellers. To benefit customers, products with good ratings and reviews are far more likely to appear ahead on search results. Sellers on Amazon need to keep a tab on these reviews and ratings with the objective of improving their offerings.

Become an Amazon Prime Seller (FBA)

Amazon Prime offers multiple benefits to subscribing customers like free and faster deliveries, cashback, discounts on third-party services, access to video and music streaming, gaming, etc. A majority of customers are routine subscribers of Amazon Prime.

By becoming an Amazon Prime seller, businesses get unlimited access to one or two-day delivery benefits. The Prime Badge granted to sellers serves as a confidence booster to customers in their purchasing decisions. Because customers tend to prefer Prime products and sellers, having a Prime membership helps businesses perform better on visibility. Prime sellers are also granted a head-start of a day or few hours during festive sales seasons.

Becoming a prime seller is not a complicated process. Sellers have to sign up for Fulfilment By Amazon (FBA) and store their inventory in one of the Amazon Fulfilment Centres. One of the important reasons for this is that Amazon provides early delivery to its Prime customers for which it needs to align its inventory positioning with its logistical capabilities.

Ensure Stock Availability

Maintaining stock levels is important to fulfil orders and that is a universal truth. But while selling on Amazon, sellers need to also bear in mind that products with low stock levels might not show up higher on search results. This necessitates that sellers maintain robust in-house inventory management and procurement systems and keep a tab on their Seller Central account to facilitate making timely and accurate decisions on stock replenishment. Even a deviation of a day could cost sellers multiple sales opportunities.

Decisions on Costing and Pricing

Like in any other business, while selling on Amazon too sellers must have a pricing strategy for their offerings. Pricing strategies are an outcome of multiple considerations. Here is a list of a few standard pricing strategies:

·         Penetration Pricing

·         Skimming Pricing

·         Bundle Pricing

·         Psychological Pricing

·         High-Low Pricing

·         Competitive Pricing

·         Cost-Plus Pricing

·         Dynamic Pricing

·         Captive-Product Pricing

·         Geographical Pricing

·         Economy Pricing

·         Freemium Pricing

Ideally, the cost of a product covers every expense made to sell it or make it available for sale. The calculations for arriving at the per unit cost of a product can be quite intricate. The standard costing heads are:

·         Direct Materials

·         Direct Labour

·         Direct Expenses (Other than Direct Labour and Direct Material)

·         Factory Overheads

·         Marketing and Other Overheads

So far, this is your cost. Now, let us see the costing impact of selling on Amazon.

The fee structure on Amazon is based on the fulfilment option selected by a seller which are:

·         FBA (Fulfilment by Amazon) - Entire fulfilment process handled by Amazon

·         Easy Ship - Storing and packing by sellers, Delivery by Amazon

·         Self-Ship - Entire fulfilment process handled by sellers

The different types of fees applied by Amazon are:

·      Referral fees/Sell on Amazon fees

·      Closing Fees

·      Fees for shipping and delivery

·      Fees based on program/service

If you are a seller on Amazon, you must be acquainted with Amazon Buy Box and Automated Pricing Tool. Buy Box is nothing but a display feature where the ‘buy now’ and ‘add to cart’ options are shown on product pages. The catch here is the seller with the lowest price wins the Buy Box and gets this display feature on their product page. This means the customers will see the Buy Box on this seller’s product page and it is easier for them to directly add that product to their carts or move straight to complete the buying process. The benefit of having a Buy Box is better understood when you don’t have one.

Now, how can sellers compete to win the Buy Box? For this, Amazon provides a way called Automate Pricing Tool. This tool automatically updates and reflects prices based on price changes made by competitors.

Other recommended actions for appropriate pricing are ongoing market research on trends and patterns, competitor pricing analysis, temporary adjustments, and active participation during festive sales.

Other recommended actions for appropriate pricing are ongoing market research on trends and patterns, competitor pricing analysis, temporary adjustments, and active participation during festive sales.

Disclaimer: The objective of this blog is to provide a general idea on the topic. For official, detailed, specific and updated information on selling on Amazon, please refer to the country-specific official website of Amazon.

About YRC

Your Retail Coach (YRC) is a retail and eCommerce consulting firm with 11+ years in business and a scaling global presence. We have helped 500+ clients spanning over 20+ verticals. Our services include SOPs, Market Research, Business Model Validation, Franchise Consulting, and Process Automation. Our projects are managed by experienced retail and eCommerce consultants.

FAQs

How to improve product visibility on Amazon?

Here are three standard solutions to improve product visibility on Amazon.

Sponsored Ads: Sponsored Ads or Advertising is a paid route for standing out in search results to easily catch the attention of customers. These promoted products appear in the topmost sections of search results. Such appearances increase the chances of page visits, exploration, and conversion.

Sponsored Ads are not confined to product promotion alone. It also envelopes sponsored displays and brand visibility features. The reach of these ads goes beyond the parameters of Amazon.

Search Optimization (Product Title): Search Optimisation or SEO is an organic approach for achieving higher positions on product search result pages. The better the SEO practices are, the higher the possibility of performing better on the search result pages. The essence is similar to how SEO practices are used for better SERP performance (Search Engines). For example, someone trying to find an answer to how to sell a book on Amazon or how to sell things on Amazon will use these exact keywords on search engines and websites that contain these keywords (and other SEO practices followed) will rank higher on the SERPs.

SEO is based on the words used by customers to find products and services (or information). For example, ‘yoga mat’ is a good product title but it may not be an effective or competitive one. However, adding the features to this keyword could prove to be more effective (‘waterproof yoga mats’).  

Listing Optimization (Product Page): The overall quality of a product page has implications on the visibility factor. For example, product pages with insufficient or broken details are unlikely to perform better on search results. On the contrary, product pages that have, in addition to the basics, enhanced elements like images and videos help customers better understand the products that provide a thrust to their buying decisions.

Disclaimer: For official, detailed, specific and updated information on selling on Amazon, please refer to the country-specific official website of Amazon.

What is the fee structure for sellers on Amazon? What types of fees are applied by Amazon? How much does it cost (expenses) to sell on Amazon? How to sell on Amazon and make (profits) money?

In addition to the cost of a product, the following considerations are useful for sellers on Amazon in shaping their pricing-related decisions.

The fee structure on Amazon is based on the fulfilment option selected by a seller which are:

·         FBA (Fulfilment by Amazon) - Entire fulfilment process handled by Amazon

·         Easy Ship - Storing and packing by sellers, Delivery by Amazon

·         Self-Ship - Entire fulfilment process handled by sellers

The different types of fees applied by Amazon are:

·      Referral fees/Sell on Amazon fees

·      Closing Fees

·      Fees for shipping and delivery

·      Fees based on program/service

As far as profitability is concerned, the fundamentals are the same as in any other business. At the end of the day, the positive margin left after all the costs have been covered (including Amazon’s fees) is profit. The difficult aspects here are being right with marketing and making accurate financial and commercial projections.