Practical Ecommerce

5 Tips for Increasing Amazon Sales by 50 Percent

The Amazon marketplace gives online retailers big and small the opportunity to sell to millions of potential customers, significantly increase sales, and acquire loyal shoppers.

Competition on Amazon can be fierce. By some estimates, Amazon receives nearly 90 million unique visitors each month. Those visitors collectively spend more than $80,000 a minute all day, every day. And, according to Amazon, new marketplace sellers often see a 50-percent increase in overall revenue, when they sell on Amazon in earnest.

As with any retail channel, there are things that sellers can do to improve their chance of success. What follows are five tips aimed at helping online retailers sell more on Amazon.

1. Be Ready to Compete on Price

On the Amazon marketplace the key differentiator separating one merchant from another is price. This is a fact of doing business on Amazon, and is not necessarily an obstacle to profitability. Rather price competition should inform which products a retailer chooses to promote in the marketplace. Only list products with a sufficient margin to be competitively priced on Amazon and still offer a reasonable rate of return given inventory, order handling, and overhead expenses.

It is also a good idea to remember that selling on Amazon is a form of advertising. Promoting a product on Amazon does not, as an example, require a merchant to buy pay-per-click ads.

Imagine that a retailer is selling “Widget X” on its site for $10.00. That retailer is also buying PPC ads on Google and Bing at a cost of about 10 cents per click. On average, 5 percent of the PPC clickthroughs convert, meaning that PPC advertising costs the retailer about $2.00 per sale. After the PPC advertising, therefore, the retailer is really getting $8.00 for each “Widget X.”

Now imagine that this same retailer offers “Widget X” on Amazon for $9.25. There are no advertising expenses, and in a worst case, the retailer must pay a 99-cent listing fee. Thus the seller makes at least $8.26 for selling “Widget X,” and could be making much more if it has more sales volume.

2. Get a Pro Merchant Subscription

Amazon charges “Individual” sellers a flat 99-cents per transaction, but retailers with a Pro Merchant subscription don’t pay any per-transaction fees. Instead, Pro Merchant sellers pay $39.99 per month to list products on Amazon.

An Amazon Pro Merchant retailer with 100 monthly transactions would pay an average of 40-cents per transaction, while a retailer with 1,000 monthly transactions, which is not at all unreasonable, pays about 4 cents per transaction.

Amazon Pro Merchant subscribers also get four additional benefits.

  • Upload in bulk. Pro Merchant subscribers can list items in bulk, meaning that rather than listing and maintain items one at a time, sellers can post their entire catalog to Amazon using spreadsheet templates or application programing interfaces — APIs.

  • Enhanced reporting. Pro Merchant subscribers get better reporting options, which may make it easier to manage Amazon sales.

  • More selling options. Pro Merchant subscribers may offer much higher value items, while “Individual” sellers have pricing limits.

  • Unique items. Pro Merchant subscribers may add new, unique listings to the Amazon marketplace.

3. Add Unique Listings

The Amazon marketplace has a significant number of products available for sale, but it does not have everything.

Online retailers that have niche or unique products, and that have a Pro Merchant subscription, may add those products to the marketplace. These newly listed products have no competition on Amazon, so that sellers can offer the items at a relatively high margin.

4. Automate Listings

As mentioned above, Pro Merchant subscribers may list products in bulk via an API. This is a feature that successful marketplace sellers should use.

In the best case, use the API to integrate selling on Amazon directly into an ecommerce platform so that the platform automatically updates inventory levels and product descriptions on Amazon. Likewise, Amazon orders should appear in the ecommerce platform’s regular order processing workflow, so that sellers need do nothing extra or different to process Amazon orders and care for Amazon customers.

For many of the best ecommerce platforms, there are ready-made modules or extensions that make automating Amazon listings easy.

5. Market to Your Amazon Customers

When a retailer makes a sale on the Amazon Marketplace, the shopper is an Amazon customer. But that retailer has an excellent opportunity to market to that customer, and, perhaps, earn long-term sales.

The best technique for converting a shopper may be to offer a discount on the customer’s next purchase. As an example, if the shopper just bought a “Widget X” for $9.25 on Amazon, send a post card with a coupon for their next “Widget X” for $9.00. Or send a postcard a coupon for some “Widget X” accessory at 20 percent off.

Armando Roggio
Armando Roggio
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Comments ( 18 )

  1. nvrcantell March 20, 2013 Reply

    Enjoyed reading your article except the 5th point. Amazon’s terms of service prohibit including coupons, marketing info, etc in your shipment. Even as large as they are, they’ll test this. If they catch you, they terminate you. That’s definitely not worth it.

    You’re also not allowed to contact the customer except for issues regarding their order.

    Dave

  2. Robert Flournoy March 20, 2013 Reply

    Good article. Could you clarify how you market to your previous Amazon seller central customers?

    Isn’t it against Amazon’s TOS?

    "In general, you may contact buyers (Amazon.com customers) only to complete orders or to respond to customer service inquiries. You may not contact buyers for marketing or promotional purposes (including via e-mail, physical mail, telephone, or otherwise)."

  3. Elizabeth Ball March 21, 2013 Reply

    For those merchants who use the Fulfil by Amazon, will they include your catalog etc with the customer’s purchase for shipping?

    • Regina H February 4, 2014 Reply

      No they will not include any type of additional materials that can possibly steer one of their (Amazon’) customers away from Amazon to your own site, store, social media, etc.

  4. ricardodacosta March 21, 2013 Reply

    Would you recommend to start off with PPC ads or product listings for someone starting on Amazon?

  5. Armando Roggio March 21, 2013 Reply

    Dave, if you don’t mind point me to that. I was unaware. We have the coupon on the bottom of our packing slip, which is, perhaps, why it has worked.
    A.

  6. Armando Roggio March 21, 2013 Reply

    Robert,

    As I just mentioned to Dave above, I may have been unaware. My packing slip includes the coupon.

    Separately, let’s not forget that you have the customer’s name and address, which does make it possible to send direct mail.

  7. Armando Roggio March 21, 2013 Reply

    Elizabeth, you should still have the customer’s address, so you can send a postcard with the offer.

  8. Richard Stubbings March 22, 2013 Reply

    Whilst your article offers some good advice on selling on Amazon, I have to disagree with the headline. Not all the points will increase your Amazon sales. Further you have not covered other points that will also improve sales. I would also like to know where you got the 50% number from.

    The single best thing you can do to improve sales is become a pro merchant and thus become eligible to win the buy now box.

    The next things you need to do is establish excellent customer service. This includes good stock control (so you do not run out of stock and let customers down); fast despatch of orders; prompt replies to any customer questions; and always putting the customer first.

    Your marketing suggestion is like playing with dynamite. It would take only a couple of customers to complain to Amazon and you could end up getting suspended or even banned. The Amazon terms are 100% clear on this.

  9. Jonathan Tombes March 22, 2013 Reply

    Email can be an efficient and legit way to connect, if you stay within Amazon guidelines. (Richard is correct.) So check with a buyer 7-10 days after fulfillment, see if order went well and then request feedback. That can grow sales, too.

  10. Ty Hurd March 24, 2013 Reply

    The main thing that isn’t mentioned here is FBA. Fulfillment by Amazon. You send your inventory into Amazon and they ship to customers as orders come in, they handle returns, etc. This is the #1 thing you can do to increase sales (without paying for external advertising). If you sell on Amazon and aren’t familiar look it up in seller central. Yes there are associated fulfillment fees (my best selling item is a $9.99 OTG cable and the FBA fees for it are $2.42/pc, it cost roughly $12 to send 1000pcs to Amazon’s fulfillment centers – varies a bit depending on which center the inventory is going to). Having Amazon do the fulfillment on this item has increased it’s sales 10 fold, easy. Google "OTG cable" and we’re #1 because of the cable’s success on Amazon. Google loves Amazon…

    I agree on 1, but be sure you don’t always undercut your competition. Often matching their price is the best option. Remember; if all the sellers of an item constantly undercut each other the next thing you know your margins are shot, now no one is making money. I’d rather win the buy box 20% of the time and make $7 a unit vs winning it 100% of the time and only see a $.50 return (eg $140 a month profit vs $50 for an item that sells 100 units per month. This is just an example but you get my drift. Also, less inventory to replenish and send to Amazon.)

    Regarding point 3; CREATE YOUR OWN BRAND! If you’re selling generic or unique type products, have them packaged in your own unique packaging and then create a listing for them. TRADEMARK this brand name ($350 to do this this on your own, +$170ish if you use a service). You’ll need a UPC code for it and you can get them for less than a buck if you buy 100 or more, or $9.95 for one. Do a google search). Now only you can sell the item under this listing and this removes any potential of competition on the listing. May take awhile to build this listing but with a little work it is WELL worth it.

    As other commenters have mentioned, be VERY careful marketing to your Amazon customers outside of the Amazon marketplace. Not likely a huge issue if you’re doing fulfillment yourself, but I would be sure to put any collateral/marketing material INSIDE the item’s packaging if you’re doing FBA. NEVER try to direct the customers to buy outside of Amazon. It’s against their TOS and they’ll close your account in the blink of an eye for this.

    And lastly, I highly agree with Jonathan Tombes above. Emailing your customers via seller central is a great way to build your ratings and that will lead to better sales in the long run. Just be sure to only request "feedback", not "positive feedback". This is against their terms TOS as well.

    And just FY, currently my seller rating is in the top 4% of all rated sellers (this is customer performance, not volume though) and I grossed $500k last year. Just want to share what I’ve spent years learning…

    Good luck to everyone!

    • Alberto Ortiz February 7, 2014 Reply

      Hi Ty,

      I’ve ben reading your post and answers, and Im glad I found them. I have been reseraching about selling on amazon for a couple of weeks, and don’t quite seem to find how people make it profitable to sell items that sell for under $10, specialy on FBA. I don’t know if I am missing something about FBA rates, could you please help me out on basic math about you USB cables. I want to cell Led light bulbs, which is my mane business down in Venezuela (South America) were I am curently living.

      Best Regards,


      Alberto Ortiz Keme

      Cel.: +58 414 236 9983
      Work: + 1 305 454 5329
      Skype: alberto.ortiz.keme
      Email: albertoortizkeme@gmail.com

    • sid August 27, 2014 Reply

      I am buying products that have good reviews from the brands themselves and selling on my own. I am not getting that many sales. I am not sure what to do? The margins are very low and its hard to compete. Sometimes when I do my cost calculations, I wonder how some people are selling it so low. What do you advise I do to sell brands and make a decent margin and more sales.

  11. Phil Martin March 25, 2013 Reply

    Hi Ty,

    Just starting out with FBA and your post was awesome – so much helpful information. I am thinking about creating my own brand and those tips are invaluable.

    I have a couple of questions for you if you don’t mind. How can I get my FBA shipping costs as low as yours (i.e. $12 for 1,000 pieces)? I know my products will be different size and weight but I want to get my FBA shipping costs as low as possible. Do you source from the US or China?

    Any help would be greatly appreciated. Thanks.

    • Ty Hurd December 17, 2013 Reply

      Hi Phil, I know it’s months after my original comment but I didn’t notice your reply until I happened across this post again just now.

      I source from China and most of my product are USB cables and some clothing items. All come in branded packaging and the clothing has branded tags. It’s called white labeling and doesn’t cost much more than buying generic, but now you have a protectable brand. This is also a good reason to make sure your supplier has great QC, you’re building a brand now…

      To address Brian below; as long as you own the TM and your product comes in your trade dress (packaging) you can protect it on Amazon. Amazon doesn’t make it easy though; you’ll need to do test purchases, take pictures to confirm whatever they’re selling doesn’t come in your packaging and then mail (yup, snail-mail) all the evidence into Amazon for review. They will pull the other seller but it can take time and be very frustrating.

      My advice is to just email the other seller, let them know they’re infringing on your TM and Amazon policy and usually they’ll remove the listing voluntarily.

      If the other seller is selling their item under your TM and branded listing and using FBA, if you can afford it, just buy out their stock and then return it to Amazon as not as described (i.e. you purchased the item that is supposed to be your brand and you received generic goods). Amazon allows this (in fact they insist you make a test purchase, might as well get them off your listing before other follow suit).

      Hope this helps! Cheers!

  12. Brian July 13, 2013 Reply

    Hi,
    One thing I wanted to add to this conversation. If you Trademark a term and use it in a listing on Amazon, you must also have a customized product that uses the Trademarked name. Once you add a listing on Amazon you lose all rights to the name (on Amazon). What I mean is that if another seller lists the same product using your trademark, Amazon will not do anything about it unless you can prove to them that the other seller is selling a different product. If it is the same (same box, same item, etc) then there is nothing you can do.

  13. Mickey Mixon February 12, 2014 Reply

    This is great.

  14. Leo Gauthier III March 5, 2014 Reply

    “only a monthly $39.99 subscription fee, referral fees and variable closing fees”
    I sell only one product on Amazon, it appears to me to become a pro seller is more than just the $39.99 a month. Am I missing something? I have thought of becoming a pro seller, what’s the benefit if your only selling one item?

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