Fulfilled by Amazon (FBA) program was launched by Amazon in 2006. It is used by millions of sellers globally. And many of those sellers rake in more than a million dollar a month in sales. Even by very conservative estimates, if profits are anywhere between 10-25%, that’s a cool $100-250K per month.
If that has made you to sit up and take note, let me tell you something else. More than 95% Americans prefer to shop online. And as you must know, Amazon is the new Google for product search and there are millions of dollars to be made annually. However, to get a share of the pie you must know the top secrets of these FBA sellers, which we are going to discuss in this post.
#1. Use FBA
Using FBA has to be the most important strategy that you can adopt as an Amazon seller. Using Amazon To store and ship your product frees up more than 50% of your time. Because managing inventory and shipping products take lots of time and energy. This extra time at hand enables you to concentrate on other aspect of your business like researching for new products, providing high quality customer care, keeping an eye on the competitors and so on.
Also, when you do not have to manage the infrastructure associated with selling goods you can give up a product easily if it is not performing well and try out new products.
#2. Invest Profits Back into the Business
When you start making good profit do not sit back on your laurels and enjoy your earning. It is time to invest your profits back into the business for diversifying, increasing your inventory levels, getting hold of new process automation products, sourcing cheaper products at the same quality levels, putting strategies into place for higher sales, etc.
#3. Selling the Right Products
Choosing and selling the right product is the key to having high volume of sales and better profit margins because on Amazon it’s not just sales that matter but volume of sales. Top FBA sellers keep searching for the right products that they can add to their collection of offerings. Here are some tips for selling the right products:
Choose the product strategically
Successful FBA sellers choose their products strategically. They do not go for any product that catches their fancy or that is obviously the best seller. They take care of many different data points regarding the product before they come to a final decision. Here are some pointers for you to consider while choosing a product to sell:
• Try to avoid selling products that are directly sold by Amazon
• Find products that can be easily bundled with your existing products
• Try to add more categories in your portfolio of products
• Go for products that do not have either very high or very low product sale but competition is easier
You should use some automatic tools to look into past price history of the product. Stay away from products that have had a highly fluctuating prices. It simply means that price wars have taken place for that product. You will be better off not throwing your hat into the ring too.
Sell Exhaustible Products
Who do you think will make more money in the long run? Someone selling high cost items like TV, refrigerator, furniture, etc. or someone selling fast moving goods like grocery items, trash bags, mops, stationery items, etc. Basically, idea is to sell products that people need to replenish very frequently. That will ensure repeat customers because people will need the product again and again. Of course in this scenario providing an excellent customer service and taking care of their queries play a very important role in getting repeat customers.
Eliminate Low-Performing Products
Top FBA sellers always track the performance of their products so that they may eliminate the low performing ones. This should be especially used when you are just starting out. Initially you may not have done your research properly or you might have sold the products at a higher price, or your product is simply not moving. Whatever the reason, in this scenario don’t hesitate to stop selling that product. In case you’re wondering what you would do with the inventory, hold a product clearance sale and get rid of all your inventory.
As it is, if your product is not moving fast enough, Amazon charges you more for using its warehouse for a long time. Eliminating low performing products is going to be a Win-Win situation for you in every way.
#4. Sell Quality Items
Top sellers are there for the long haul and do not plan to shut down anytime soon. With the long-term prospects in mind they always sell high quality items. These are some of the advantages that you can be leveraging by selling high quality products:
• You have better chances of repeat sales
• High quality items have fewer chances of customer complaints
• You have the better chance of getting great reviews
• You will get more preference to satisfied customers
All these factors help you in increasing your sales further. If you sell low quality items you will have to deal with lots of unsatisfied customers and would likely see a drop in sales.
#5. Keep Looking for More Opportunities
If you want to become a top seller on Amazon you should not be happy with what you have achieved. Even if you are making good amount in sales. Top sellers are always looking for more selling opportunities. They invest lots of their time and money in researching for products that are in high demand and will be easy to source and sell. You will never become top seller if you have only a few items in your portfolio. You need to keep expanding them, possibly in newer categories to increase your sales.
#6. Customer Service
In these times of cut throat competition, customer is not just the king but God. Top FBA sellers understand this and try to provide high quality customer service. They do this by answering customer messages or emails within 24 hours, solving all the queries posted by customers, offering replacements in case of bad products, etc. If you take good care of your customers you are sure to get good feedback, which is very essential to raise your organic search ranking as well as put in the good seller list of Amazon.
#7. Build Your Profit Margins
You can become a top seller only when you maximize your profits. Even without the cost of handling inventory and shipping products (remember, you are an FBA seller!!), you have many expenses to consider. You must know your cost of selling each product and then price them accordingly.
The first step is to know everything that goes into your cost price, like:
• Amazon fees
• Sourcing costs
• Manpower, if you employ people
• Inventory costs
Knowing all the factors that make up your cost price should enable you to fix a base price, below which you cannot sell your product if you want to make profits. Once you have your base price you must research competitor prices to decide the mark up that you can afford to put on your product without turning away customers.
It’s not that once you have fixed the selling price it will remain constant. You need to keep tweaking it according to the season, demand, competitive pricing, etc. Remember, if there is no margin there is no point in selling the product. You are here to make profits not just to sell.
Since pricing is such an important part of your Amazon FBA selling strategy, it is advisable to use a repricing tool so that you may hit the right price is time and eventually win the buy box.
#8. Find Your Unique Selling Point
If you think you can become a top seller by selling best-selling products, you are grossly mistaken. What you should actually try to do is find an item that is in high demand but you want unique selling point so that you have something to offer.
It is pretty logically if you think about it. Why should someone purchase a product from a new seller if they are getting the same product from an established seller, who most probably has some amazing reviews as well.
You need to find your own unique selling point that will make you stand apart from your competitors and interest your customers. There can be two ways of offering something unique:
• You can modify an existing product, uniquely modify it, give it your own name and sell.
• You can find a product that complements your existing products and bundle them together to create a unique offering.
#9. Use Amazon Tools and Features Fully
You must get well acquainted with your Seller Central interface if you want to become a top seller. It offers plethora of tools and reports that you should master and use.
Top sellers always know the vital metrics associated with their products and you must do the same if you want to get into their league. Amazon reports can help you drive sales of your own product while pinpointing a few more hot selling items that you could add to your portfolio as well. Download the reports and start studying them so that you know how to use them.
You can create coupon codes to drive more sales through Amazon promotion program. The coupon has its own product page with a URL, and you can share it outside of Amazon to drive external sales.
You should use Amazon advertising to make the product stand out in the organic search page as well as many other areas like related searches, related products etc. You will pay for the advertising but if it helps you in driving sales then the money is well worth spending
You need to do a cost benefit analysis of how much you are paying for Amazon advertising and how much sale you are getting through it. However, research says that if you select the product and type of advertising you want to do for it judiciously you will be able to drive sales through Amazon advertising.
Holiday selling season
Drive your sales and become a top seller you must make maximum utilisation of the holidays selling season
If you have the right mix of products and advertise them correctly you should be able to see up to 5 times of your normal sale during the holiday season
The first step in making the sale is to have the right amount of inventory and you can have the right amount of inventory only if you can forecast the sales you are likely to make. Depending upon your normal movement on the inventory, keep an eye on the levels because you do not want to run out of products in the middle of the same period and lose on precious holiday selling season. Amazon has sale period many times during the year. Depending upon the products that is you are selling, you must identify other peak periods and stock up on inventory accordingly. A good example is seasonal products. If you have products that are required during the summer season, then that would be your peak period and you must be prepared for it
#10. Automate Your Processes
Top sellers are always looking for newer data points to drive sales. Some of the data that you should look for includes:
• Products that people often search
• Pricing history of competitor products
• Getting leads on popular products on their own websites
• Researching for new products
There are a variety of tools available that can help you in doing this:
• Productspypro helps you to research new products to sell on amazon FBA.
• Merchantwords enables you to get a list of keywords that people are searching for on Amazon
• Lead Pages is the most popular tool together leads from your own website so that you know which customers to market your products
• Jungle Scout is a nifty little tool that helps you in making product research for new products easier