Ryan Moran joins the 21st session of Smart Brand Marketing with your host Tom Libelt.
Amazon is now the biggest online marketplace on earth.
In this episode you will learn how to source, promote and sell products on this gigantic platform.
We also address income reports as I find them to be a gimmick.
Keeping Your Business As Competitive as Possible in Amazon
It’s no secret that Amazon is one of the biggest marketplaces to do business in online. It’s also not a secret that becoming successful here is going to require you to operate on a fairly different playbook since, well, it’s as different a platform as it is competitive.
It goes without saying that you should not venture into Amazon without some sort of strategy in mind. Don’t worry, though. Amazon is not going to ask you to have a Masters in Business Administration to be successful in their platform. All it takes for you is to get three things right: sourcing, promotions, and sales.
Sourcing Products Right
Regardless of the business model you have in mind for you Amazon business, it’s going to be apparent that you will have to get your raw materials (or products, to that extent) from somewhere. The best thing about Amazon is that there is no shortage of suppliers there to get your materials/products from. The only problem to tackle is how and, well, here are a few sourcing methods that you can use for your business.
- 1. Arbitrage
The best way to summarize this strategy is through the phrase “get everything cheap”. Liquidation is a common occurrence in any big box store as they have to push their existing inventory of products to make way for new ones. And the best way to clear everything for these stores is to sell them at ridiculously low prices.
Arbitrage is best for those who want to sell a lot without having to pay for their products a lot. Of course, this requires timing on your part as clearance sales are not exactly a weekly thing in almost every store out there.
Online, the strategy will require you to look for an e-retailer that wants to clear out their inventory. This will take time, obviously, but there are tools out there that can help you identify which sites are offering their products at discounted prices and for how long.
- 2. Drop Shipping
One of the neater features with Amazon is that you can actually act as a middleman between a supplier and a buyer, without having to handle the product at all. This is what Drop Shipping is and it can help save up on inventory costs in Amazon.
However, this is not exactly the safest sourcing strategy out there for two reasons:
- a. Since you are not handling the product, you cannot give your buyer any assurance of sorts as to the quality of whatever you are offering. You can’t even verify if your products are the genuine article (or a cheap knockoff masquerading as one). As such, you can’t tell if your customer’s needs are met or not until the product is shipped to them.
- b. You have no control over the availability of stocks. Some products might go out of stock and a customer might have preordered for it, leading to issues between you and your buyer. Careful monitoring of available stocks and informing your customers of such might alleviate this problem but it does not remove the fact that you have absolutely zero control over when things are going to be available again.
- 3. Wholesale
If you want a strategy that is scalable (it automatically adjusts to meet the needs of your expanding business), then wholesale is your best option. How it works is simple: you find a source and then buy from them in bulk. You then do this again and again until the supplier starts to get a bit more lenient until they allow you to negotiate better deals with them.
It’s not exactly the cheapest sourcing strategy out there but the goal here is to establish a relationship with your sources to the point that they trust you enough to give you better deals for their products due to being a loyal customer.
Going wholesale is also ideal only if you have a fast turnout rate for your inventory. Basically, you should only buy in bulk when your business’s inventory gets depleted quickly. After all, it makes no sense to buy more if you’re selling less.
- 4. Yourself
If you really want full control over your products, the best route you could take is to become your own source. Being a seller/manufacturer does have its perks such as the ability to cut down on middleman costs as well as an in-depth knowledge to the products which should result in you selling your products more confidently.
However, this has its downsides. For starters, you should now consider manufacturing costs which will include product, packaging, and storage. Also, there is the fact that you don’t remove suppliers altogether as you also have to source your raw materials for your products.
How Do I Promote My Products?
Sourcing and creating your products right is just the first part. Now, you have to generate interest for your products by introducing them to Amazon’s marketplace. Visibility is what makes or breaks businesses here and, as such, you should make your products as visible through possible. Here’s how:
- 1. Now What (or Who) You’re Up AgainstJust like nobody sane travels to a new place without trying to learn about that place first, you should also try to understand what a marketplace Amazon is. The best way to do this is to study the businesses that offer the same products and services or you and ones that have been successful in Amazon. Things like what you can do to stand out and how to adapt to changes can be discovered if you take the time to study the history of successful Amazon businesses.
Aside from your competitors, you should also monitor the behavior of customers there. Believe it or not, customers are often honest with their feelings when it comes to buying things from the Internet. Read customer reviews and testimonials and even take note of what other products people are buying when they purchase a product that is similar to what you offer. This might give you an idea as to how you can make your offering
- 2. The Price is (And Should Be) Right
Amazon actually has a complex pricing system compared to other marketplaces. If you are not careful, you will find out that your pricing will not be competitive in this platform in just a few weeks. What the best pricing is will be different from seller to seller but your goal should always be this: Win the Buy Box.
The Buy Box is basically this box on the right side where people can click into and start the buying the process. It’s your goal as the seller to prompt those people to click on that Buy Box when they see your offers. Amazon offers a number of pricing options that can automatically adjust your prices to meet current demands while also taking into consideration your own preferences such as the price you paid to acquire your stocks. Also, keep in mind that there is a different pricing system used for vendors compared to professional sellers.
- 3. Mind Your Product Listing
A product listing can benefit you in two ways. First, it makes everything easier for your buyer as every product you have can be located in just one place which minimizes frustration. Next, it entices them to buy more for a more comprehensive experience for your buyer if they want to purchase a certain product for you.
This is why you should make your product listing as attractive as possible. Start with the visuals including the titles and the pictures that you use. Next, improve your pitch for the sellers in a way that they get everything that they need to know about your products in 3 sentences or less.
Lastly, pay attention to how you describe each of your products. Make it short and sweet, informing the buyer of what they can expect from the product without having them go through your life’s story. It would also help if you don’t stuff too many keywords here as recent algorithm updates in search engines don’t find that to be rank-worthy content.
- 4. Encourage Reviews
Here’s a secret: People actually believe you less than they will compared to another customer. A satisfied customer, as such, can do a lot of convincing to drive more customers to your page while an unsatisfied one, on the other hand, will drive a lot of potential buyers away from you.
Although it is true that customer reviews are a double-edged sword, it is still best that you allow your buyers to rate and review your products and services. However, keep in mind that Amazon has introduced changes in recent years when it comes to reviews, the biggest among them banning reviews for products that have marked down or were discounted to even the playing field for everyone. After all, how can you expect a customer to provide an unbiased review if they get their products at a fraction of the original price?
Selling Your Products
Now comes the actual part where you have to convince your customers to purchase something from you. Selling is actually easy in Amazon. All you have to remember, though, are a few tips such as:
- Follow the Rules
This one should be easy enough. You’re not going to last long in Amazon if you are always on the lookout for ways to cut corners or exploit flaws in Amazon’s system. The trick here is to constantly update your information regarding the site’s policies as they can change at a moment’s notice. Also, Amazon tends to be not as lenient to erring sellers, even if the mistake was an honest one.
The point is to always follow the rules as few infractions on your accounts will result in fewer problems for your account in the future.
- Make Service a Top Priority
You might be surprised as to how much the proper services and treatment can affect customer retention for your business in the long run. However this should not be a surprise for you, however, as any person, whether offline or online, would go to places where they are treated well and their needs attended to.
Customer service online usually means answering queries quickly and addressing issues to the best of your abilities. It will also include the level of professionalism you have when it comes to interacting with potential buyers.
- Manage Your Inventory Properly
There is nothing worse online than selling an item that you don’t have available stocks for. There are countless instances out there of buyers getting bad reviews all because they are offering products to their sellers even if said products are not available in their inventory. If you get reported for more than once due to this, in fact, your account can get suspended.
As such, before you offer something online, make sure it’s still available in your inventory. Always monitor the availability of your stocks and, fortunately for you, Amazon does have tools that allow you to track how many stocks you have left and how quickly they are selling. This way, you can avoid overselling your products and avoid being penalized for it.
There’s no doubt that being competitive in Amazon is demanding and the marketplace can get confusing at times. However, if you spend the time to actually optimize your offerings while taking full advantage of what Amazon offers for you to help improve on your services, your business should be in a better shape to keep up with the competition.
As such, it’s best that you drop any notion that you can win in Amazon through shortcuts, exploits, and other so-called hacks because a.) they don’t exist and b.) even if they do, they won’t be effective for long.
Instead, your focus should be on providing something that your customers are looking for: quality products offered through an optimized service and non-intrusive interfaces.
Have you tried selling your products in Amazon? What other strategies have you used to make your business competitive there? Let us know in the comments below!
THANK YOU FOR LISTENING!
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