AMAZON & FBA
Authored an Amazon Selling Strategy for an internal sales team. Efforts helped create a 97% increase in daily revenue on one SKU, resulting in an immediate increase of $20,000 in the first month.
Below are some short excerpts to illustrate certain aspects of the strategy. The information shown in this except keeps within public domaine, while certain information has been blocked to respect the Client’s information and privacy.
The Strategy Excerpts
AMAZON & FBA SELLING STRATEGY
Selling on Amazon can be somewhat expensive, sometimes complicated yet usually very profitable. When Trim Healthy Mama (THM) decided to start selling their products on Amazon they wanted a step-by-step guide for internal staff to have on hand while they learned the new system.
Topics covered in the strategy included an overview of the Amazon Algorithm (9), Fulfillment by Amazon (FBA), Reviews & Feedback, Sales Strategy, Inventory Health and Pay Per Click (PPC) Marketing Campaigns to Drive Traffic.
Understanding what drives Amazon as a company can help third-party sellers understand why Amazon’s algorithm was created, how it works and how to make it work for you. This strategy was created with the sole purpose of feeding the Amazon algorithm to generate sales.
REVIEWS & FEEDBACK
A major reason for Amazon’s popularity has been the company’s focus on delivering a highly reliable shopping experience for customers. Amazon’s feedback/review scoring system has been one way of ensuring that third party merchants meet customer expectations. Because of this, product reviews are a major factor in driving search results as well as enhancing the overall conversion rate for each product.
SALES & SALES RANK
The actual number of sales for each product will drive the algorithm more than the number of reviews. However, the reviews are the social proof that is needed to convert the sales. In addition, pricing is a huge factor in an overall Amazon selling strategy as well as how many products are available in a particular category. The pricing strategy, review strategy and inventory health strategy was a major factor in determining the overall sales strategy.
Amazon customers don’t like is when products are out of stock. Because of this Amazon has made inventory health a factor that can affect sales rank. Companies that will often run out of stock on Amazon will lose momentum and rank. To make things a bit more complicated, FBA conducts an Inventory Cleanup twice a year. Inventory that has been in Amazon fulfillment centers between six and 12 months are assessed a Long-Term Storage Fee, which can quickly add up. Being on top of inventory quantities for each SKU is imperative in keeping overall FBA fees down, while maintaining high search ranks.
Unlike other online marketplaces, Amazon does not generate demand for sellers. Sponsored products is a way to generate demand for products listed on Amazon. A great tool to use to drive traffic is Amazon Sponsored Ads (PPC). Once a keyword strategy is in place, Amazon PPC ads are easy to set up and do not require a whole lot of maintenance.
The Strategy Results
Trim Healthy Mama (THM)
Baking Blend Re-Launch on Amazon
In order to demonstrate the effectiveness of our theories, tactics and suggestions we have included some public sales data for one of the first products re-launched on Amazon. Please note, we cannot take full credit for the results as we were not the only factor in the overall equation. We developed this strategy to be used as a guide by our clients full time, in house staff. It was their staff who implemented these tactics. In addition, THM started to utilize Amazon’s FBA (Fulfillment by Amazon) which automatically gives their products an automatic boost in the algorithm. With that being said, below are the public sales figures for the first product that was re-launched on Amazon just one month after this strategy was implemented.
Data pull from AMZTracker 3/17/16*
Time period – 2 days
Data pull from AMZTracker 4/20/16*
Time period – 2 weeks
Amazon Sales Rank Increase
from 55,574 to 993 in One Month!
Amazon Total Sales Volumes Increase
33.5 Units Per Day to 79.36 Units Per Day in One Month!
Amazon Total Sales Revenue Increase
$710.07 per day to $1,399.63 per day in One Month!
That’s a 97% increase in daily revenue which equates to an approximate increase of $20,000 in one month. This is just for one SKU!
*Please note, data was not pulled specifically for this comparison, therefore, the controls are different. Please look at per day estimates for a true comparison.