Selling on Amazon
If you’re an online retailer, you’re already familiar with the selling power of Amazon. The marketplace giant represents 40% of all online retail sales in the US, and its influential position continues to expand. In fact, 54% of active consumers in the US now say they begin their product searches on Amazon.
But success for brands and retailers isn’t guaranteed. In addition to being proactive and up-to-date with Amazon’s ever-evolving trends and requirements, you must also take steps to ensure your products and brand stay one step ahead of the ever-increasing number of sellers competing for consumer eyeballs and attention.
In this eBook, we’ll share some of the most important strategies that online retailers and manufacturing brands should employ on the ever-growing, ever-popular Amazon marketplace.
Strategy for Amazon Seller Growth
For brands and retailers that want to succeed on Amazon, simply listing your products on the site is not nearly enough.
As you strategise your approach to Amazon — and e-commerce as a whole — a growth flywheel can be an effective, high-level way to structure your thinking. Working through the flywheel can surface important questions, such as:
Where are my strengths? Where are my weaknesses? My opportunities? Am I investing enough in this part of the flywheel? Do I have all the pieces in place to keep growing my business?
There are five essential components that make up a holistic strategy for Amazon growth:
- Connect your products to Amazon effectively
- Market your Amazon listings to drive awareness and sales
- Sell your products by converting browsers into buyers at the moment it matters
- Fulfil your customer’s expectations with fast, efficient delivery
- Optimise your Amazon strategies to constantly improve results
Developing an Assortment Strategy for Amazon
Which products are you going to list on Amazon? All of them? A select few? What makes the most sense? These decisions will be largely informed by what kind of sales relationship you establish with Amazon.
When you’re assessing your product assortment, consider things like:
- Popular vs. low volume
- New vs. old
- Seasonality vs. evergreen
- Trendy vs. end of life (EOL)
- Full price vs. discount
Lastly, look at your catalogue and try to determine if there are any products you can bundle together to create separate SKUs. This strategy often creates value in the eyes of a consumer and increases average order value (AOV).
Creating variations can also be an interesting strategy that places multiple sizes or colours of a product onto a single landing page. It helps drive more traffic to one listing, as searches for all the child products drive consumers to a single listing page. And the more sales you make on that one listing page, the more relevant it becomes for the algorithm and the higher in the search algorithm your products will show.
Choose the Best Amazon Business Model for You
Amazon is both a retailer and a marketplace. As a retailer, Amazon purchases inventory in bulk and resells it at a profit, via a wholesale model. And as a marketplace, Amazon lets sellers list items on its site and takes a commission on sales.
Brands can choose between having a first-party (1P) relationship, where they sell products to Amazon via Vendor Central, or a third-party (3P) relationship, where they sell products directly to consumers via Seller Central.
Both of these models have their advantages and disadvantages, and it’s up to each brand to decide which is right for their business (if Amazon gives them a choice).
In a 1P arrangement, for example, a brand is responsible for advertising, promotions, and shipping products to Amazon, while Amazon controls the pricing and inventory. In a 3P arrangement, the brand controls advertising, pricing, inventory and any fulfilment or logistics (unless they choose FBA).
All options are on the table, though, and some brands leverage a hybrid model of both arrangements in parallel. One example of how that could work would be a brand selling most products through Vendor Central and leveraging Seller Central to push many of their older, end-of-life, lower-margin products.
Best Practices for Selling on Amazon
When getting started on Amazon, the key is to get compelling product information in front of purchase-ready consumers — without causing channel conflict. From preparing retailer networks to ensuring data feeds are accurate, all brands should address several essential elements from the start:
- Register your brand — If you’re the brand owner, register it immediately in the Amazon Brand Registry. It will help reduce any complications, protect your products from unauthorised sellers, and open up other programs for you like Sponsored Brands and Stores.
- Address your retailer network — Communication is key, and managing the expectations of every retailer who sells your products is important, especially if you have other retailers selling your products on Amazon. You don’t want to get into pricing wars with your own sellers and ultimately hurt your brand.
- Meet data feed requirements and resolve listing errors — Use a trusted integration solution to ensure you’re up and running smoothly and all your products are live, where they should be.
Many potential problems can be mitigated early by centralising your approach to Amazon. You may have a team for content, a separate team for procurement, for advertising and fulfilment. But if they aren’t communicating in a central place with visibility into each other’s actions and a holistic view of your Amazon operations, there will inevitably be problems as you scale.
Register Your Brand on Amazon
Before you begin to list and promote products, it’s important to protect your brand by enrolling in brand verification and registration programs. This critical first step will give you greater control over your brand’s product listings and help ensure consumers receive accurate information about your products when they’re shopping on marketplaces. For example, enrolling in the Amazon Brand Registry Program enables you to easily find and report suspected violations — and to have inaccurate content from unauthorised resellers removed. Similarly, the eBay Verified Rights Owner Program allows owners of intellectual property rights to report eBay listings that may infringe on them.
Reduce Amazon Listing Errors
The majority of consumers begin their buying journeys on Amazon. And whether you sell on a single Amazon marketplace or in multiple countries, whether you sell as a vendor or a retailer, reaching those consumers all starts by connecting your product data to Amazon and configuring it to meet Amazon’s listing requirements.
The unique data structure of each marketplace can lead to listing errors, which is a common issue that all brands will need to address. Listing errors can cause products to appear incorrectly, or prevent them from showing up at all, which in turn leads to a poor consumer experience and loss of marketplace sales. Make sure your Amazon connections are error-free by ensuring your product data is clean, organised and in line with Amazon’s standards.
When building your product titles, for example, here are several specific requirements:
- Titles must follow the recommended length of your product category characters
- Titles should not include promotional phrases like “great deal” or “get while supplies last.”
- Titles should not contain characters for decoration
Obviously, you should also avoid restricted products and categories when sending product data. And lastly, most categories require that you use a Global Trade Identification Number (GTIN), such as a UPC, ISBN, or EAN, as a product identifier when creating new product pages or matching to existing pages in the catalogue.
Optimise Amazon Advertising Listings
Before consumers can buy your products, they have to find them in the Amazon search results. Deliberate, detailed and accurate product data can help ensure that happens.
When writing your product listings, put yourself in the minds of consumers. What are they looking for, and how are they going to search for it? Several best practices can help in identifying the ideal mix of keyword combinations:
- Research. Start by doing a search for a similar product to see what listings come up high in the rankings, and to find words you may not be using already.
- Make your product titles descriptive. Use only highly relevant, accurate keywords that help describe your brand, product name, key features, colours, sizes and quantity.
- Don’t focus on repeating title keywords in your description, as Amazon already factors those into search results.
- Only use terms that describe your specific product. Amazon doesn’t permit third-party brands or trademarks as search terms.
- Use hidden keywords, where appropriate. The optional hidden key field is an opportunity to use synonyms, acronyms, abbreviations and other alternatives that consumers may be using to find your products.
Not only do over half (54%) of US consumers begin their product searches on Amazon when they set out to “buy” a product, a growing number (41%) also begin their search on Amazon when their intent is simply to “research.” Accurate information builds trust, and the more trust you can build during their consideration phase, the greater your chances of success.
A+ Content and Stores for Registered Brands
If you’re a registered brand on Amazon, Amazon A+ Content provides a fantastic opportunity to let you present your brand and your products the way you want.
Free and unlimited for both vendors and sellers, Amazon A+ Content is one of the most effective ways to increase traffic and sales — and to cross-promote your other products — by giving you the ability to display:
- High definition videos
- Enhanced images
- Comparison charts
- Robust FAQs
- And more
In addition to A+ Content, Amazon’s Stores help you expand coverage across the marketplace and exercise more control over the consumer journey, potentially:
- Driving customer acquisition and engagement
- Boosting organic ranking
- Increasing cart size and volume of sales
- Generating better return on ad spend for your Sponsored Brand Campaigns
Learn more about how to build a successful Amazon Store in the ChannelAdvisor Resource Library.
How to Reach the Amazon Buy Box
You already know how important the Buy Box is on Amazon. And with only one Buy Box available per item, you’ll find yourself competing with a number of other retailers all trying to win it. The Buy Box is located on a product’s page — where a consumer starts the purchase process — and is highly visible.
To win the Buy Box, you must meet Amazon’s criteria in a number of areas. Although Amazon closely protects the exact formula for calculating the Buy Box, it takes into consideration:
- A competitive price
- A positive customer feedback metric
- Fast and efficient delivery
- Volume of inventory
- Low refund and return rates
Though it generally takes some time for a new seller to build up a sales history that will win them the Buy Box, focusing on these aspects is good for business regardless of the marketplace. They’ll not only help to increase your sales but will also contribute to your customers’ overall satisfaction.
Keep Your Prices Competitive
When listing a product on Amazon, you’ll often be competing against hundreds of other sellers offering the same item. One of the best ways to stand out from the crowd and stay ahead of the competition is to constantly offer competitive prices.
However, you still need to retain a sufficient rate of return — and use safeguards to ensure you don’t inadvertently breach policies elsewhere by failing to lower your product prices across sales channels.
One way to manage the effectiveness of your repricing is through an automated repricer. The ideal solution will allow you to set parameters around pricing values while preventing the potential for undercutting retailer listings. To understand how to implement repricing tools on a practical level, it’s first important to recognise the different types of repricers:
A marketplace repricer (e.g. Amazon repricer) helps sellers win sales at the highest possible price, by continually monitoring the listing and evaluating the quality of the competition to arrive at the optimal price.
A velocity repricer changes pricing to competitive levels across your various marketplaces based on the total quantity sold for products, allowing sellers to take action to move stale inventory or to maximise profit on fast-selling products.
Repricers help sellers win the Buy Box and best offer positions. They also increase competitiveness and visibility of your products among bargain-savvy consumers.
Overall, for brands, automated repricers prevent product erosion and help catch MAP pricing violations before they start a ripple effect. In addition, they provide maximum profits while also helping your business react to real-time demand and move product.
Choose the Right Amazon Fulfilment Option
Two options offer access to the golden shelves of Amazon Prime: Fulfilment by Amazon (FBA) and Seller Fulfilled Prime (SFP).
While both allow you to sell on Amazon Prime, each includes a unique set of features.
Fulfilment by Amazon, as the name suggests, means your orders are completely fulfilled by Amazon. You send a portion of your inventory to Amazon’s fulfilment centres, where it’s stored until a customer decides to buy it. Amazon then picks, packs and ships the items directly to consumers for you. FBA also manages customer support and returns, and keeps your inventory secure and insured against possible losses or damages.
With Seller Fulfilled Prime, fulfilment is in your hands. Customers will purchase through Amazon Prime as usual, but your company ships the items directly with no intervention from Amazon. You use the Amazon Prime brand name and shipping rules, but it’s up to you to pick, pack and ship to Prime members. Keep in mind that you’re also responsible for returns, which are automatically authorised by Amazon.
FBA and SFP offer different advantages and disadvantages, so it’s important to vet the two options carefully against your business needs and goals.
The shipping option is Merchant Fulfilled Network (MFN), which is Amazon’s terminology for what others call Fulfilled by Merchant (or FBM). It’s the non-Prime version of Seller Fulfilled Prime, where sellers list products on Amazon, but manage all storage, shipping, and customer support independently.