To make selling with Amazon worthwhile, a seller must know ways and means to increase sales and profits to a maximum. Just to give you a nub of the recipe, here are the 6 ingredients to maximize profits.
1. High Margin Products
High-margin products are those specific goods that give you higher yield because of their ability to command higher markups (at least 100%). Find the right items to sell through product research and price exploration. Check out top-selling products on marketplaces like Amazon, Shopify, and eBay. You can streamline the search process if you are using price tracking tools like Keepa, Camelizer, Unicorn Smasher, and Amzpecty (which checks both price and quantity). Then, contact suppliers or manufacturers for the material cost. Just to give you an idea, some of the product categories that provide high margins include children’s apparel, toys, and jewelry.
2. The Amazon Buy Box
Selling on Amazon can be tough. In order to maximize profits, a seller should earn high revenues through greater exposure and market visibility. The Amazon Buy Box (the box that contains the “Add to Cart” button) is where 80+% of Amazon purchases take place, making it every seller’s heyday. A vendor must get a Buy Box placement to maximize sales. One easy way to get prioritized in the Buy Box is to become a Fulfillment by Amazon (FBA) seller. Though being an FBA seller is not all sunshine and rainbows (e.g. high FBA fees, inventory count discrepancies, etc.), obviously it is the fastest route to win the Buy Box. Other schemes to beat the Buy Box include competitive pricing, keeping the right stock quantity level, and building a good seller reputation through excellent customer service, fast delivery, defect-free products, and outstanding order fulfillment.
3. Competition’s Quantity and Price Information
Whether you are targeting the Buy Box or simply benchmarking your rivals, looking into your competition’s quantities and prices will help you estimate how much you need to offer to be in the top spot. There is a way to check all your competitors’ on-hand quantities and prices effortlessly – using one tracking tool called Amzpecty. Running out of stock will affect your sales momentum and eventually deprive you of the opportunity to be in the Buy Box and boost sales. Monitoring both your competitors’ quantities and prices will also guide you in deciding the best price range that gives you the optimum profits.
4. Supply Shortage
With the help of a quantity tracker such as Amzpecty, a seller can maximize profits by tracking the product’s overall quantity in stock and daily quantity sold on Amazon. The seller can easily spot a stockout ahead. When other sellers’ offers are out of stock, the market will experience a supply shortage that results in a product price increase. With proper demand forecasting and safety stock keeping, this situation does not only hand over the Buy Box crown to the remaining seller but also gives the latter the chance to rake in the money. The price can either be manually or automatically adjusted with a repricing tool to move it to the ceiling, making the seller harvest optimum profits.
5. Product Cost
A seller can gain more profits either by raising the markup or lowering the product cost or doing both. Reducing the costs tied up to the product provides not only high earnings but also a competitive advantage against other sellers. There are different ways a seller can bring down the cost of goods. For example, a seller can negotiate with suppliers for a discounted price through bulk buying. A seller can also cut down direct costs by implementing improvements in operations such as employee training for multitasking (e.g. picking, inspecting, packing, and shipping skills rolled into one) or adding a system for automation to make order fulfillment more efficient. The seller should also weigh the costs associated with FBA (Fulfillment by Amazon) against the fees and opportunity loss involved in FBM (Fulfillment by Merchant) arrangement. Remember, the less the cost, the higher the profits.
6. Bundled Products
Product bundling is selling more than one type of product at once, usually at a discounted price. Bundling is both a pricing strategy and a competitive tactic for sellers because it gets them a chance to own the Buy Box, at the same time lower their costs. A bundle’s ASIN is unique, making it difficult for competitors to track and compete with your listing. On the front, a product bundle provides value to shoppers as it is usually cheaper than the individual prices of products combined. Behind the scene, the seller reaps huge profits attributed to shipping fee savings, shorter fulfillment processes, and disposal of slow-moving items. On Amazon, bundled products may be listed in all categories except Books, Music, Video, DVD, and Video Games.
In the end, it takes courage and shrewdness to become a successful Amazon seller. Having the right product, with the right quantity and price, at the proper place and time, can spell out success for an Amazon seller.