Amazon Cross-Selling & Up selling Algorithm

Dharmesh Patel
4 min readJun 26, 2022

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If you have used any eCommerce platform to purchase items, you may have noticed the various automated tools they use to entice you to increase your order size, from product recommendation to exit to “frequently purchased” widgets in the product list. These are good tools for them to sell.

Why do we need Cross-Selling and Upselling?

We need it because there is a very good chance that an existing customer will buy the same product at about 60–70% and about 5–15% for a new customer. If used effectively, they can increase sales and, therefore, profit. And if it is supported by machine learning to market it, marketing campaigns can greatly improve the business position of the market.

Every business that wants to grow with time has to use the techniques of Cross-Selling and Upselling. Here are some reasons for adopting these practices:

  1. Increase in Profits.
  2. Increase in Customer’s Loyalty to your brand
  3. Increase our Return on Investment

Difference between cross-selling and up-selling

Cross-Selling:

Means selling more products to a customer by guaranteeing them the value they will bring to the item they have already purchased.

e.g. When a customer adds a smartphone to a cart and suggests that the customer purchase a screen guard, back cover, earphone, or any other device that can be sold via a smartphone.

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Up-Selling:

Upselling is a marketing strategy that he uses to persuade customers to buy more expensive items than the customer initially wants.

e.g. If the customer has purchased any Laptop before, recommend to the same customer a Laptop with better memory, processor, battery life, and better features overall.

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Let’s see how machine learning helps amazon in retail sales and grow its products.

Creating a Recommendation Model

Machine learning helps train a recommendation model to promote the right things for its customers based on their previous purchases. This will lead to an increase in sales as the recommendation model is so strong that most users end up buying recommended items. Machine learning algorithms are usually divided into two categories: collaborative filtering and content-based filtering. However, combining both of these approaches is also a popular way of building a recommender system.

Ml for sales Prediction

One of the great things about machine learning is that it never stops learning from new data. This ability allows us to predict our customers’ behavior and future expectations. Based on historical and innovative data, a machine learning model can increase the accuracy of a sales forecast. This is very important and useful if you need to predict how our customers will see new products or services. Strategies to sell and sell more, and reduce the risk of ineffective marketing.
Apart from this, using machine learning and customer prediction statistics, it is possible to identify the most effective sources of customer communication. Also, this can help us improve your marketing strategy and make more profit.

Ml makes the Dynamic Pricing Model

Dynamic Pricing is among the latest techniques for sales. suggesting a continuous shift in product prices, due to demand and real-time delivery. This model allows for better control of the pricing strategy, provides flexibility without reducing product value, and saves budget over time. Also, dynamic prices can be very helpful when we sell more or we sell more of our products.

Customer Churn Analysis

Machine learning comes with the benefit of being able to predict the likelihood that customers will dismiss a service/product. Churn means to stop using the service or products offered by a particular company. It is found that the cost of acquiring new customers is higher than the cost of maintaining existing ones. Therefore, churn analysis will help us to guide potential customers and convince them to continue using the various useful products and rewards we can offer.
Upselling can be done for potential customers to start trading by offering them various benefits of new products such as prizes for customer retention. Optical sales and sales play an important role in Amazon as 30% — 35% of the profits made by Amazon come with the help of this approach.

Conclusion:

Cross-Selling and Upselling are important for all businesses. However, these marketing strategies are not just about making more money. They give real value to customers and build lasting relationships with them.

You can also connect with me on LinkedIn or by emailing me. I’d love to hear from you.

That’s all folks, Have a nice day

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