Amazon Seller Best Practices & Costly Misconceptions
Written by: Ryan Flannagan

Before you start selling on Amazon, it’s best to be as prepared as possible. No one opens a store and starts selling their products without research and fully understanding Amazon’s Selling Policy. Don’t let that deter you from the process, though. Understanding these Amazon Seller Best Practices will help you avoid possible mistakes and costly misconceptions, and help you improve your business overall.

Amazon Seller Best Practices

Before starting, it’s a good idea to make sure you fully understand Amazon’s Selling Policies. All sellers are expected to adhere to the following policies when listing products on Amazon. Seller offenses and prohibited content can result in suspension of your Amazon account.

Once you have complied to this policy, it is best to build out your strategy next.

Your Strategy

  • Planning for your Amazon Strategy. Plan ahead and stay organized. Planning and organizing are vital best practices for Amazon sellers because there’s so much to think about every day. If you’re just starting out, this could mean organizing your inventory into the most logical categories on Amazon. It could also mean planning your sourcing process and organizing your supplier network. If you’ve been selling for a while, it could mean planning logistics for shipping and inventory replenishment.
  • Researching your Amazon Strategy. Like many sellers, you may have thought you could handle every aspect of running your Amazon store. If you’re like the majority, you hit a wall after a while and realize you need help. This is okay, though – there are several ways to make this process easier and more efficient. Several ways include:
    • Reverse engineer your sales based on keyword search volume
    • Find out the sales velocity needed to reach the first page for search terms

 

Know Your Unit Economics

Selling in any sense is a numbers games. Without truly calculating and analyzing your prices, costs, sales figures, and profits, you risk overspending or underspending.

That can seem like a lot to manage all at once, it is actually best to know the following first:

  • Your base product cost
  • Inbound fulfillment cost (how much it costs to get your product from factory to fulfillment warehouse)
  • Cost of outbound fulfillment (either with Fulfillment By Amazon [FBA] or self-fulfilled)
  • Amazon’s 15% referral fee based on your sales price

From this, you need to know:

  • Gross Margin in Gross $ Terms
  • ROI: Sale Price / What You Paid (not including post-sale fees)
  • Gross Margin %

 

Focus on the Fundamentals

Once you have a strong strategy and you know your unit economics, it’s time to focus on the Amazon Seller Best Practices of selling. They are straightforward but important to properly start and manage your Amazon store.

Optimize your listing for conversions:
  • Take photos that really sell your product. Product images are very important for catching a shopper’s attention and creating that good first impression. While following Amazon’s policy, make sure your images are optimal size and high-quality.
  • Write compelling and beneficial copy. Try to focus on writing for humans, not robots. Don’t get caught up too much in the algorithm, especially because you are trying to sell for real shoppers. Still, include your primary keywords, but also add unique value and benefits. Make your copy highly relevant to your target audience.
  • Create enticing offers and add-ons that help you stand out. Give a strong reason why shoppers should choose your product over competitors. Try to make readers feel like they NEED your product. Choose narrative over technical. This is where you can fully explain how and why your product will improve their lives.
  • Garner superior reviews and user-generated content. 

    Reviews offer credibility, trust, and social proof that’s crucial for driving sales. If you have more positive reviews than similar products it can drastically increase click-through and conversion rates. To get more reviews, one strategy is to use an autoresponder system and connect with your recent shoppers. You can encourage them to leave a review for your product and capture any negative reviews before they may make it to your product listing.

 

Maximize your indexing potential for search terms:
  • Perform keyword research & listing SEO. Create a list of meaningful keywords that will make sense to direct to your product listing. All your keywords should be entered in the backend of your product page. You don’t need to use punctuation (including commas), repeated words, singular or plural words – Amazon already has this covered.

 

Make the most of Amazon’s PPC Campaign builder:
  • Optimize your PPC strategy for the short-term. Amazon Pay-Per-Click can be used to quickly boost sales, increasing keyword and sales rankings. If you’re struggling to rank your primary keywords, consider creating a “rank boosting” campaign. When you achieve a high ranking, you’ll have much greater exposure. Once the PPC campaign is switched off, you will need to achieve enough organic sales to hold your new position.

 

Amazon Costly Misconceptions

Before you start selling on Amazon, it’s important to know what you’re getting into. There are numerous myths that have popped up and need to be addressed and dismissed. Here are some costly misconceptions that you should think twice about before believing.

 

You need to invent new products. 

  • False. Companies that private label the products of manufacturers do just as well on Amazon as direct-manufacturers (and in many cases, even better because they know marketing better).

 

Amazon is just like any other website. 

  • False. Rather than thinking Amazon is just like any other selling website, think of it as this: Amazon is the Facebook and Google of online shopping. By those standards, it’s #1 by a mile. Despite other selling options out there, it’s the only e-commerce distribution channel that has integrated the paid traffic (advertising) and organic traffic (SEO/ranking) worlds into one ecosystem. This is both great for sellers and, of course, very profitable for Amazon.

 

You can’t win these days. There are already too many sellers. 

  • False. There is always a place for people who can market and sell in a more efficient way on Amazon. First, Amazon is going to keep growing, meaning there will always be a new supply of customers. New and improved products are always needed. If you can find a less expensive or better way to make something, there is a huge potential for profits. Second, certain fads will come and go. One simple way to make money on Amazon is to sell when a fad, like a fidget spinner, gets hot. Cultural events also make new products possible. For example, during the 2016 election, many Amazon sellers made a killing selling politically related items.
  • Just to reiterate, you can always do something better. Source product more profitably, manage your cash flow, and/or your supply chain more efficiently, market better. There are many different ways to maintain a competitive advantage.

 

You’ll be immediately successful. 

  • False. Unfortunately, like a lot of things in life, Amazon can be difficult and it requires work. But, if you make sure you have a plan, project your budget, and revise where you need to, you will start and manage your Amazon store just fine. You must be prepared to invest time and effort for your store to be successful.

 

Only low prices generate sales. 

  • False. Focus on less competitive niches with more favorable unit economics vs.the categories where you compete on pricing. Stay away from under $20 products unless you can build a system geared for high-turnover.

 

Success requires a huge number of reviews. 

  • False. Roughly 5 to 10 reviews should be fine for your product listing, but the majority of the success should come from your optimization and built trust. Make sure you include the following:
    • Videos of product in use
    • High-quality, professional photos
    • Outside trust (use Facebook, Google and influencers to help)
    • Positive reviews and how you as a company handle and reply to these reviews
    • User-generated content
    • Enhanced Brand Content
    • Q&A and how you respond
    • Customer Service
    • A professional looking listing

 

Now that you know the Amazon Seller Best Practices and which costly myths, tricks, and misconceptions to avoid, you will be able to dominate in the Amazon Seller world and outperform all of your competition.

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