5 Keys to Successful Sales on Amazon
The Author: Egor Romanov, Amazon sales expert, owner of 14 brands sold on Amazon and amazing-cash.ru
For successful Amazon sales you need to take into account a lot of nuances and you need to professionally understand a huge number of business processes such as analytics, advertising, product positioning etc. Today I would like to share 5 principles to successful sales on Amazon.
- Focus on analytics when choosing a product.
Choosing a product is the basis of Amazon business. Without the right product you will lose money. For product analytics I can recommend the Helium10 program. The basics to consider when selecting item are:
- price of goods
Do not sell the product for less than $15 because most of your revenue will go to Amazon fee. The most convenient price category for starting a business on Amazon is $25-40 because there is an opportunity to invest good money in advertising and earn at the same time.
- market assessment
Evaluate the number of competitors and do not choose the product from the category in which Amazon sells. Don’t choose niches where top competitors have too many reviews. It is desirable that in the future you have the opportunity to catch up with competitors in terms of reviews for at least 1 year of successful sales. And be sure to study reviews to find out weaknesses and strengths of your competitors’ products.
- product dimensions
Think about the size and weight of the product and choose the smallest size and weight of the product, so as not to overpay the Amazon fee.
Calculate how you will promote the product and what your advertising costs will be. You can choose the perfect product in a promising niche, but if you don’t know how to promote it and don’t understand how Amazon’s algorithms work, you won’t succeed.
- product category
Don’t choose a product in a category where the return rate is high. For example, if you sell clothing, it is natural that it often does not suit your customers, and you will get a refund, for which you will pay a commission. Also, don’t sell a fragile product that may break during delivery.
- stable demand
Choose a niche with stable demand, and launch only the product that can be successfully sold for several years. Also, don’t sell seasonal items that you’ll only buy for some holidays, for example, and the rest of the year you’ll just pay to store the items in Amazon warehouses.
It is worth remembering that even if you chose a product based on analytics, and your product meets all the requirements of a promising product, even then there is no 100% guarantee that it will sell well. But without analytics, the probability of failure is 100%.
- Be aware of the risks.
In any business, you should always be aware of the risks. Despite the analytics, anything can happen to your product on Amazon. You should always have an extra budget in case of unexpected expenses. For example, we recently launched sales of a new product. After the first successful sales, Amazon moved us to a different category in terms of product size, and we had to pay other sales commissions and operate at a loss. This happened to some of our competitors, but not all of them. We could not solve the problem with the support service and we had to repackage the product. Calculate all the financial risks and don’t expect that your product will immediately start making a profit.
- Sell only quality goods.
Many newcomers to Amazon try to save as much as possible, and order the cheapest product in China. In this case, you fall on a huge number of refunds, for which you will have to pay large fees to Amazon. Your job, as a seller, is to minimize refunds. It is advisable that the return rate for your item be no more than 3%. To sell a quality product, you need to find a reliable supplier in China, but you need to be prepared for what quality of goods you have to pay. And I can also recommend always hiring people who will check your goods in China before shipping to make sure that your shipment does not contain defective goods. It’s better to overpay for a check than to pay Amazon fees for refunds and destruction of your defective item.
- Do optimization.
Many start-up sellers on Amazon expect the result to come immediately. You need to choose a quality product, and it will immediately begin to buy. In fact, this is not the case. As with any other business, Amazon takes time to promote your product, and it will take you an average of 3-6 months to optimize sales. It’s also important to understand that you can have a high profit when selling your product if you optimize your costs. Only in the process you will be able to understand how to make optimal logistics for your product, how to work with the “prep center “, what packaging to make the most optimal, how to make minimum advertising costs. And of course, you will start getting a good price from the supplier only after several orders. Don’t expect the result to come quickly. You will start earning when your product is optimized.
- Legal nuances.
When you start selling on Amazon, be sure to pay attention to the legal nuances. Determine what documents you will need to sell your chosen item, and assess your strength as to whether you will be able to get these documents or not. Check to see if there are any patents for your product, because if you buy a product that has a patent, you will either be blocked and you will lose all of your product, or you will have to give all of your profits to the patent owner. Over time, when you are already optimizing your sales, you will focus on protecting your business. Register the brand of your product, patent the product.
Selling goods on Amazon is a great option for internet business, and from the outside it may seem like a very simple business, but in fact, to successfully trade on Amazon you have to understand a huge number of nuances, and adapt to the rules of Amazon, which may change.