How Your E-Commerce Business Can Thrive On Amazon

For startups with products, moving into the ecommerce world is an important step in fulfilling their entrepreneurial vision. The question of where you should sell your product often lands on some of the bigger ecommerce marketplaces. Amazon ended last year with nearly $136 billion in sales, continuing to solidify their domination of the online marketplace. Many sellers say that success on Amazon is like a snowball, your posts need to start gaining traction before you can enjoy a slice of those billions of profits.

Ecommerce startups are in luck; there were twice as many products sold from third-party vendors as there was last year. There are hundreds of thousands of products listed on Amazon; therefore marketing your product so it stands out from the rest is essential. 44% of web shoppers go directly to Amazon to make product searches, so if your product isn’t listed, you’re missing out on potential sales.

There are two main ways you can sell on Amazon, either as an FBA (fulfilled by Amazon) or a MF (merchant fulfilled) seller. MF sellers are more akin to the old eBay model, where sellers received notifications that their products had been ordered and it was up to them to ship and distribute the products to their clients through the site.

 

 

The biggest benefit of being an FBA seller is that Amazon does all of the legwork for you when it comes to fulfillment. That means no long lines at the post office every week trying to ship your products, figuring out postage rates, or packaging your products for shipping. As an FBA seller, you list your product with Amazon, and send your product to Amazon’s warehouse, where they’ll be stored until a buyer makes the purchase. From there, Amazon unpacks, stores, and ships your products for you. Another benefit of being an FBA seller is that your products are Amazon Prime eligible.

Amazon Prime is Amazon’s customer loyalty membership for buyers. Customers pay $100 a year to receive free two-day shipping on eligible purchases and discounted products. Amazon’s algorithm prioritizes Prime eligible purchases, so selling as an FBA will make your product more visible to more people. Prime members also spend twice the amount non-Prime customers do when they come to Amazon.

If you’re like 97% of the businesses in the world, you have some sort of social media presence, and use it to market yourself. Marketing to your social media followers that you’re now selling on Amazon can help drive traffic to your listings, which in turn promotes them to other customers who might not yet have heard of your product. More than 72% of Amazon’s customers worldwide shopped on their mobile devices, so it’s easy for your followers and anyone else who sees your posts to go directly to Amazon and purchase your product after seeing your social media posts. Now that Instagram allows purchases to be made through the social media platform, ecommerce products that have strong visual posts can really benefit from this option.

Promoting your Amazon listing drives sales. The first step to promoting your Amazon listings is to do a competitive analysis and take a look at how other similar brands are faring on Amazon. Read customer reviews, and take a look at how their products are priced (especially if the price varies from their webstore). If you see that their product is out of stock, this is a great time to jump in and make sure that your products are listed as in stock on Amazon, especially since the Amazon algorithm promotes similar products from other sellers when the product a customer is looking for is out of stock.

Pricing your ecommerce products can be tricky, especially when there’s such a competitive marketplace for other sellers to directly compete with you. Keep in mind that your selling agreement with Amazon includes a pricing parity clause. This means that you contractually cannot list your product for a lower price on any other sales channel than it is on Amazon. If pricing your product seems difficult, Amazon also has an automated pricing tool that helps sellers to figure out a competitive price for their product on the site.

Boosting Product Sales

You can also boost your product sales by running sponsored product ads through Amazon’s ad platform. They have a pay per click model that promotes your products during search results. Since your startup’s social media marketing budget is likely growing, consider investing some money into Amazon ads, and run analytics to see whether the ads increase your revenue after a few months.

As with any marketing strategy, there’s an element of trial and error associated with new ads, but successful ads on Amazon are targeted with keywords that match your product descriptions to the keywords that a consumer is searching for. You can also strategically use Amazon ads on other channels to drive external traffic, linking from your website or social media accounts.

Importance of Reviews

Optimize your product listing by using keywords that match with your target consumer bases’ searches and write compelling copy. Reviews should be encouraged, and you’ll need to respond quickly to any reviews left from less than thrilled customers. Consider opting in to the Early Reviewer Program if you have new products that you want to drive some traffic on.

Amazon randomly selects customers who leave reviews, and provides them with a small reward, such as an Amazon gift card, to leave unbiased reviews on new products. There’s no guarantee that the reviewer will leave a positive review, but this can be a good way to get your foot into the marketplace door.

While selling on Amazon can certainly be lucrative, it’s also wise to continue selling your product on another channel. In fact, 77% of Amazon sellers say that they sell the same product on multiple channels, the most popular being eBay and their own websites. So while Amazon continues to dominate the ecommerce marketplace, it makes economic sense to sell the same products on multiple channels to reach broader audience bases.

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Cassidy Welter
Staff Writer: Cassidy Welter is a Chicago based researcher at a consulting firm specializing in nonprofits. When she's not working, she's reading anything she can get her hands on, debating politics, watching the Pittsburgh Penguins and eating her way across the city's food scene. See more from Cassidy on Twitter at @CassidyWelter.

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Staff Writer: Cassidy Welter is a Chicago based researcher at a consulting firm specializing in nonprofits. When she's not working, she's reading anything she can get her hands on, debating politics, watching the Pittsburgh Penguins and eating her way across the city's food scene. See more from Cassidy on Twitter at @CassidyWelter.

Comments

  • What you said about the importance of reviews is 100% true! I weigh my decision HEAVILY on the reviews – mostly looking at the ratio of good to bad and how many stars they have.

    Also, I can NOT emphasize the importance of compelling copy that BOTH answers all of my questions in advance AND speaks to my language. It’s rare that I find copy that is fun, relaxed, and informative.

    I didn’t know that you could post on Amazon and EBay and your personal website. I don’t know why I thought there was some kind of “exclusivity” or it might confuse the consumer. That’s something that I will definitely remember in the future.

    Gigi Rodgers March 15, 2017 3:51 am Reply

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