If you’re selling on Amazon, you know what it can do for your business. Many Amazon sellers can see resounding success with little strategic direction or automation behind their sales strategy. It’s a safe bet that by simply listing your products on Amazon, you’ll see sales.
That being said, it’s often the case Amazon sellers leave a lot of money on the table. In my years of representing sellers in third party marketplaces, I’ve found the evolution of sales strategy goes something like this:
Company begins offering their products in third party marketplaces (e.g., Amazon, Jet, etc.) and sees additional sales. Generally efforts begin manually, with products being listed one by one, until the company has comprehensive coverage of their product catalog online.
Company plateaus in realizing increased revenues as they have full representation of their catalog online. Recognizing the importance of the buy box (aka, the Add to Cart button) Amazon repricing software may be sought out or internally developed, but tends to be implemented so the company is the low price leader on their product offerings without dropping below a profitable threshold, also known as the price floor.
Fulfillment by Amazon
Savvy sellers recognize the bias Amazon shows toward FBA merchants and begins offering their products through a blend the Amazon fulfillment network and internal fulfillment. Minor to moderate revenue and profit gains are realized.
This is where the majority of merchants stall. In rare cases, the strategies below are implemented for revenue growth that rivals initial launch:
Advanced Repricing (aka Buy Box Optimization)
Sellers employ a more sophisticated repricing strategy focused on buy box optimization. As seller accounts age and positive feedback accrues, sellers can attain (and maintain) the buy box on their product listings without necessarily having the lowest price. Employing this strategy mitigates the downward spiral of price wars to meet or beat other merchants, thereby allowing for more profit per sale.
A majority of Amazon sellers — including some powerhouse multi-million dollar businesses — list their products through a single product listing (ASIN) due to the desire for simplicity or lack of awareness. While it’s viable to run an incredibly successful business this way, money is being left on the table. While it varies by vertical, a multitude of ASINs frequently exist representing the same product, often at different prices. Sellers that manage a large number of listings can easily see their revenues (and profits) skyrocket by associating with ALL relevant ASINs that match their inventory.
After ensuring comprehensive coverage, pricing strategy is managed by ASIN rather than by product. Each ASIN is priced independently to attain the buy box. If you’ve been listing a blue widget for $20 in a single listing, and 10 other listings exist spanning $20–50, it’s illogical to price them all at $20. Each listing should be priced so that the buy box is attained, but no more.
Client performance, post-implementation, representing growth from $69 to $252k monthly in sales and a 3220% increase in orders.