Every seller on Amazon wants to make more profit. But how should you go about doing this?
It’s not easy, but there are several strategies you can employ to increase your chances of making not only more sales but maximizing your profits.
In this guide, we take a closer look at the main strategies you can use to take your Amazon profits to the next level.
- Making more profit on Amazon is a constant challenge, but there are several strategies you can use.
- These include choosing the right product at the start, having a good repricing strategy in place, using Amazon advertising, expanding your business to other countries, and more.
- Focus on several or all of the strategies in this guide to consistently increase your Amazon profits.
Choose the Right Product
The first thing to do before anything else is to choose the right product to sell on Amazon. Clearly, you’re not going to succeed on Amazon if you pick the wrong one.
Get this decision wrong, and you could end up spending many months and a lot of money on a product that isn’t making enough sales.
Make the right decision, however, and you know that all your hard work going into boosting your sales is going to pay off.
It’s a big decision, so how should you choose the right product? There are a few key things to consider.
Explore the Best Sellers
See what’s hot in the store by checking out the latest Amazon bestsellers. Don’t focus so much on the latest trend, because this could die down in a few months. Instead, use the bestsellers to get ideas and inspiration.
Don’t Choose a Seasonal Product
Avoid choosing a seasonal product as your first product to sell on Amazon. Otherwise, you’ll only make sales at a certain time of year.
Instead, try to find something that sells all year round. This isn’t a rule, and you may find the perfect seasonal product, but it’s probably best to start with a non-seasonal product first.
Don’t Choose Something Too Expensive
Aim to find a product that’s not too expensive—but not too cheap either. Ideally, it should be somewhere in the middle.
A product with a good profit margin will make things easier for you because you won’t have to sell as many to make a larger profit. Around $100 dollars or so is a good amount to aim for.
Don’t limit yourself to this, because some cheaper items may do incredibly well. But it’s a good starting point.
Choose Something You Know
Explore a product category related to something that you already have experience with. A hobby, for example, where you know the lingo, what customers want, and what they don’t like.
This can make the work a lot easier for you. Again, you don’t have to sell something you know a lot about already, but it can make things easier.
Research the Competition
You don’t want to be competing against huge competitors. These larger third-party sellers have bigger marketing budgets, more brand awareness, more reviews, and smaller profit margins.
Ideally, you want to find products that are popular but where the sellers clearly have work to do. They may not have many product reviews, for example, or their listings may be badly optimized.
Spend Time Finding the Right Product
To be a successful Amazon seller, you need to choose the right product to sell in the first place. But finding the right product can be a challenge. If it was easy, everyone would be enjoying success on Amazon.
You may find that you go through a few products before you hit a winner, but keep these tips in mind to improve your chances of finding the right product at the start.
It will have a big impact on your Amazon success.
Ditch Bad Products
Just as choosing the right products is essential, ditching the products that aren’t working out is important too.
When you start selling on Amazon, you may find that some products are simply not worth the time and effort. To boost your Amazon profits, you’ll want to get rid of these items.
Keep a close eye on your sales stats and your profits in the Amazon Seller app. You may make lots of sales but low profits on some items, and you may spend a large amount on marketing some products, which may still end up with poor sales.
Don’t hang onto a product without a good reason. Get rid of your losers and focus on your winners. Spend more on advertising them, marketing, optimizing, and so on.
Try out new products using the tips outlined above and using what you learn from your more successful products. The more winners you find, the better your profits will be.
Have a Good Repricing Strategy
Boosting your profits on Amazon means taking on your competition. This is a platform where 10 other Amazon sellers may all be selling the exact same product as you.
You need to make sure customers find and choose your product instead. This is one of the biggest challenges, and a lot of it comes down to price.
What is Repricing?
Repricing is the act of changing the price of your product listings. That’s essentially it. You might do this for several reasons, but the most common is to lower your price to make your product more competitive.
Use Price to Win the Buy Box
This is because price plays a big role in who wins the Buy Box. Whoever holds the Buy Box will make the most sales because nearly all the sales are made when you hold this coveted position.
The Buy Box algorithm uses several factors to determine which product listing wins it. It changes all the time, so it’s not enough to win the Buy Box and then forget about it.
One of the main factors is price. A lower price will often help you to win because Amazon wants its customers to find the best value online.
You can easily change the price of your product listing yourself. If your main competitors drop their prices, you can go into your listing’s settings and lower yours even more.
But, as you can imagine, this isn’t a realistic option.
You would have to keep a close eye on all of your main competitors and react as soon as you spot them changing their prices. It would take up half your time, which you could be spending on other tasks.
As such, most sellers will use automated repricing tools.
Automate Your Repricing
Tools like Repricer make the whole process a lot easier by automating it.
You can simply set up your rules, including how low and high you want the prices to go so you don’t go below a minimum price. Then you let the repricing tool get to work.
Repricer will monitor all the competing products and will be aware of when they change their prices immediately. Then it will change the price of your product according to the strategy you have decided upon.
Work on Repricing Strategies
This will normally be to lower the price of your product to make it more competitive, win the Buy Box, and make more sales and profits.
However, this isn’t always the case.
You can also set up a repricing strategy whereby you increase the price of your product once you have won the Buy Box.
It does this by making incremental price increases to make more profits while you have the Buy Box. A core feature within Repricer, the Buy Box Optimizer, allows you to take advantage of this highly coveted position to maximize your profit potential so that you’re not leaving money on the table.
You may also set it up to increase the price of your product when your competitor runs out of stock. You could still win the Buy Box with a higher price, increasing profits further.
As you can see, using automated repricing software is one of the best ways to increase profits on Amazon.
Optimize Your Listings
One of the best ways to boost your profits on Amazon is to optimize your listings.
When shoppers visit Amazon, they will most likely go to the search bar and type in what they’re looking for by using a combination of keywords.
Amazon uses its A10 algorithm to determine which products most closely match what the customer is looking for.
Just like the Google algorithm, it takes several factors into account when determining which product listings show up in the top spots and are, therefore, more likely to get more clicks.
One of these factors is the listing and how optimized it is, and there are a few ways to optimize your listing.
Make sure you use the right keywords in the right places. You can use third-party keyword tools or your own research to come up with a list of the most important keywords.
Then you need to use them in the most important places, including the title, key product features, product description, and the backend keywords section.
You only need to use each keyword once anywhere for it to be counted, but the most important keywords should go in the title and bullet points.
Make sure you use all the images you can. Make them clear and consider investing in professional photos.
Show the product from all angles, and add a lifestyle image or two showing the product being used.
Provide all the necessary information the customer needs including the size, weight, how it’s used, and more.
Use the questions customers ask and the reviews they leave to include information that’s important to them in your product listing.
Make the copy compelling. You need to persuade customers, so don’t just list a string of features. Suggest how they can use the product to make their lives better.
Stick to the Guidelines
Follow Amazon’s guidelines when optimizing your listing. For example, don’t go beyond the permitted character limits, don’t use subjective information in the title, and make sure images and copy do not break any of Amazon’s rules.
Let Your Listing do the Work
Your listing isn’t the only thing that matters, as you can see from the rest of the points in this guide. But it plays a big role.
Get it right, make it optimized, and let it work for you selling your product, and it will help you with your rankings when people search for your product.
By optimizing your listing, you won’t suddenly get into the top spot. But it will help give your visibility a boost and lead to more sales.
Having your product show up high in the search results is going to be great for your profits by boosting visibility.
But it’s not the only way to increase the visibility of your products and get them in front of more interested shoppers—you can also explore Amazon advertising.
Amazon PPC advertisements are where you pay for your ad to appear and then pay when a shopper clicks on the ad and visits your product listing.
While there are several advertising options available, some of them are more suitable for larger companies with bigger marketing budgets, like audio ads. But some of them are ideal even if you’re just starting out.
The best place to start out is with Sponsored Products. With these, you don’t need to be in the Brand Registry. It’s quick and easy to get started. Just go to your Amazon Seller Central account, find the “Advertising” tab, and go to “Campaign Manager” to get started.
Simply choose the product you want to advertise, then you can then set up an automatic-targeting campaign. With this, Amazon picks out the best keywords and manages the bidding for you.
You don’t need a large budget. Aim for about $10 per day to start with and see how it goes.
Your ads will appear in the search results near the top to increase visibility. You then pay when someone clicks on one of your ads and hopefully converts into a sale. If your listing has been optimized, this is more likely to happen.
You can also choose to run a manual campaign where you have full control over the keywords and bidding. This can be a good idea once you have some experience of using the platform and you have gathered some data to use to help you decide which are the most profitable keywords.
You can then continue to optimize your campaigns over time and generate more sales for less cost.
Other Advertising Options
If you want, you can enroll in Brand Registry and explore other options available like Sponsored Brands.
These show up in the search results and on product pages. They don’t just feature one product but a selection of products along with a headline and logo, making them good for branding.
You can send shoppers to one of the products you’re advertising or directly to your Amazon Store.
Or you may want to experiment with Sponsored Display ads. These ads are targeted on behaviors and interests, and they’re shown to people who have already shown an interest in related categories.
They also show up on other websites so you can reach customers outside of the Amazon marketplace.
Invest in Marketing
Amazon advertising is usually the first type of marketing technique most sellers turn to, but don’t assume it’s the only option. There are lots of options to market your products elsewhere online.
Marketing can seem like an additional expense you’re unwilling to spend, especially when you’re just starting out.
But the truth is, a good marketing strategy can help you boost sales and generate more profits, and it should be seen as essential.
Following are some of the options available, and you may want to focus on all of them or pick out one to get started.
Create a presence on social media platforms like Facebook and Instagram, then start marketing your Amazon products or store:
- Highlight new products you’re introducing
- Features and benefits of your products
- Special offers and promotions you’re running
- Show videos of people using your products
- Showcase customer reviews
- Build a following in your niche
- Join groups related to your product niche
People are highly active on social media, and you’re certain to connect with many of your potential targets.
You can also advertise on social media. Run Facebook ads, for example, to precisely target your potential customers and direct them back to your Amazon listings.
If you have your own eCommerce store, you could collect email addresses from visitors by promising them a discount on their first order or giving them a useful free download.
Then market your products to them. Use the same ideas outlined above in the social media section, like running special offers and providing useful tips.
Sending regular emails can help to build a relationship with your customers and potential customers to increase trust.
You might want to create your own YouTube channel promoting your products. You could then attract viewers who are interested in products in your niche.
Don’t just talk about your products. Provide useful or humorous videos about your subject area, generate followers and shares, and send people back to your Amazon store.
Don’t assume that marketing is an unnecessary expense. It can play a huge role in growing your Amazon FBA business, getting more sales, and increasing profits. Try a few techniques and see which types of marketing work best for you.
Expand Your Business
There’s another option that might be available to you if you want to increase sales and profits: expand to more markets.
Amazon is a truly international company. You may be selling on the USA marketplace, but have you considered looking beyond these shores?
Amazon actually makes this quite easy to do with its FBA Export program. You can sign up and sell products in different markets. Just send your stock to the Amazon fulfillment center and it will take care of shipping.
Or you might want to try Amazon Global Selling. Use this to list products on other sites in Europe and elsewhere. Then ship your products to Amazon fulfillment centers in the country you’re selling in and Amazon will handle all the shipping from there.
By selling your products in different countries, you can get them in front of many more potential customers. It will take a bit of work to start doing this and determine whether your products have potential, but it can be a great way to grow your business.
Focus on Getting More Reviews
We’ve already looked at how trust is important when selling online. People visiting your product listings don’t know anything about you as a seller. An optimized listing is one way to increase trust and encourage them to buy.
But perhaps the most important trust factor of all is the number of positive reviews you have.
Reviews are a powerful form of social proof. This means potential customers can get reassurance from other buyers, rather than relying on what the seller tells them.
You may tell them that your products are amazing, but that’s what all sellers say. If your customers also say your products are amazing, this is going to be a lot more powerful and persuasive.
Reviews play a key role in helping to convince shoppers to become buyers, so it’s worth putting some effort into getting more of them.
One of the best ways to get more reviews is to ask for them. Many customers may be happy to leave a review. But with all the other things going on in their lives, they forget.
You can give them a gentle reminder to encourage them to leave a review.
Amazon lets you do this in your Amazon seller account. You can request a review after someone makes an order to give them a nudge.
Not everyone will leave a review, but you might be able to get a few more customers to share their thoughts.
It can be very time-consuming if you make a lot of sales. There is the option to set your reviews on automation with the use of a third-party platform such as FeedbackExpress. But if you’re just starting out, it’s something to consider.
Another good option if you have just started selling a product and want to get your first reviews is the Vine program.
You send out up to 30 products for free to people registered in the program and they guarantee a review.
It will be an honest review, so it won’t always be five stars. If you have confidence in your product, you may want to try it out.
You can then quickly get your first 30 reviews. This can help you get started, boost your visibility in Amazon, and get more customers.
Provide a Top Service
At the end of the day, the best way to get reviews is to provide a great product and a great service.
People are more likely to leave a positive review if they love the product, it arrives on time and in great condition, and you answer their questions in a friendly and professional way.
This can take time, but keep focusing on providing a great service and the number of positive reviews you get will start to increase.
Provide Excellent Customer Service
Providing amazing customer service is perhaps the most important thing of all if you want to increase your profits over time.
Go above and beyond with your customer service. Surprise customers by responding to their questions quickly, being friendly and professional at all times, and sorting out any problems they experience.
People are naturally wary when they buy online. They don’t know anything about you, whether you’re trustworthy or whether you’re scamming them.
Make the decision easy for them. People love to buy from sellers who provide a great service, and it gives them a lot more confidence.
Use the question and answer section to showcase your customer service. People will read your answers, so make them as helpful as possible, and always be professional and courteous.
Also, make sure you act quickly when you receive a complaint and always take it seriously.
Doing this consistently can make a big difference. It can lead to more positive reviews, help you grow your business, and boost your profits.
Grow Your Profits on Amazon
Amazon is one of the best places to sell online, but it’s also tough, especially if you’re just starting out.
Building your brand and getting your products more visibility is hard work. But there are many ways to increase sales and your profit margins.
Those outlined above are a few of the most important, so try to focus on all of these areas.
But even if you can’t work on them all, make sure you put a lot of work into choosing the right products, then optimize your listings and get a repricing strategy in place.
These will all help you to grow your Amazon business quickly, so you can increase your profits over the coming months and years.