In this overview article, you will read about the five steps for integrating the right Amazon strategy according to Brandsom. This article discusses:
- Introduction to selling on Amazon
- 1. The best Amazon strategy
- 2. The best integrators for Amazon
- 3. Fulfilment by Amazon (FBA) - What are the options?
- 4. How do you optimize your brand's content?
- 5. How do I ensure that I get the most traffic to my product page?
- Selling on Amazon checklist
Introduction to selling on Amazon
In recent years, Amazon has been putting itself on the map in the Netherlands. More and more Dutch people are finding their way to Amazon.nl. The low price, convenience and quantity of products ensure that more and more people shop at Amazon. The expectation that Amazon will be successful in the Netherlands as well, is a prediction based on the figures of the American Amazon.com. These statistics show the following:
- Amazon.com attracts over 213 million U.S. visitors per month.
- More than 2.5 million third-party sellers offer their products on the platform.
- In the last quarter of 2019, third-party sellers accounted for 53 percent of the total number of sales through Amazon. Amazon's revenue model is to charge the sellers commission on each product sold. Take into account around 13 percent.
- Over 85 percent of third-party sellers were profitable by 2020. Amazon's statistics show that third-party sellers make between $25,000 and $810,000 in profit by selling on Amazon. Therefore, sellers are also willing to remit commission to the platform.
- Amazon.com is popular with American millennials and teenagers. The generations that grew up with the Internet love to shop at Amazon.
As an external partner, it is appealing to sell through Amazon. You benefit from a large reach and high number of visitors. If you score high in Amazon's feed, Amazon can be a lucrative sales channel in addition to your own web shop. In this article you will read how you can achieve success selling on Amazon. Through the use of our five pillars we'll explain the most notable elements. A good Amazon strategy will ensure that profitability will outweigh costs on Amazon.
1 The best Amazon strategy for your brand
Selling on Amazon can be very profitable for you as an (online) retailer. After all, the platform has an enormous reach. However, the competition on Amazon is very strong. To successfully sell on Amazon, you must have a good Amazon strategy. Below we discuss four strategies that you as a seller can use.
Amazon's Buy Box plays a big role in all of these strategies. The Buy Box is the 'shopping cart area' on the product page. Here the visitor can add the product directly to his or her shopping cart. When several sellers offer exactly the same product, only one of these sellers gets a spot in the 'Buy Box'. Other sellers are also listed, but this requires the consumer to scroll down, which he or she usually does not do. As many as 80 to 90 percent of the visitors shop the seller's product listed in the Buy Box.
If you're the owner of a brand and your product doesn't get sold by any other sellers, than it's not necessary to get involved with the battle for the buy box.
As a seller, you have a chance to win this spot by determining the right pricing strategy for your brand or products. There are three different pricing strategies you can use as a seller.
Strategy 1: Always the lowest price
When multiple sellers are selling the exact same product, the seller with the lowest price usually gets the Buy Box. Therefore, the first strategy involves constantly revising your prices. This is so far the most widely used strategy to win over the competition. You can of course check the prices in Amazon's shopping feed yourself and manually adjust your prices accordingly, but this is a lot of work. For this reason, there are so-called "repricing tools", such as TradeByte, ChannelEngine and Repricer Express. These are software tools that automatically adjust the price to the lowest amount at that moment.
Keep in mind that just adjusting prices is not a long-term solution. There are a number of other factors that will determine your success on Amazon. To determine whether you get the Buy Box, the platform looks not only at your price, but also at the delivery time around your products, your reviews and how you handle customer inquiries.
To optimize these factors you can use the following tips:
- Ship your orders as soon as possible.
- Aim for as few cancellations and returns as possible. You can do this by making your products highly visible through photos and by providing extensive product descriptions.
- The products sold via Fulfilment By Amazon have the shortest delivery time. As a result, they almost always end up in the Buy Box.
- Good reviews make your products rise in ranking and ultimately send you to the Buy Box.
Strategy 2: Stable prices combined with great offers
If you continuously lower your prices, you do not build trust with consumers. Moreover, you want to apply the same prices on Amazon as you do in your own web shop. Otherwise, it is not attractive for customers to buy from your own web shop, which is probably more profitable for your brand.
Continuously lowering your prices can be unwise, simply because a low price can make the consumer feel that your product is not worth anything. In the third strategy, you keep your prices stable and target customers who are happy to pay for value or exclusivity. Betting on sustainability can also be part of this Amazon strategy.
Of course, as a seller, you may make exceptions. Lowering prices is appealing when launching a new product or around campaigns for the holidays or Black Friday. Furthermore, as a seller you can offer a discount when a customer buys from you in bulk. Do you follow this strategy? Then it is advisable to keep the price stable to maintain customer confidence and keep your own margins high. This may make you less likely to end up in Amazon's Buy Box, but the margin on your products will remain high and therefore you will still be profitable as an online retailer.
Strategy 3: Value-based pricing
Pricing on Amazon based on the value of a product is a great fit for Private Label sellers. By focusing on value, consumers are willing to buy your products (again), give reviews and recommend you to friends and family. The following tips make you valuable as a seller:
- Use storytelling to create a connection between the customer and your brand. Specify what your mission is with the sale of the products as a brand or entrepreneur. This way you create customer goodwill.
- Send thank you notes to the people who bought your product.
- Be transparent about the origin and production method of the items you sell.
- Do thorough market research on prices and your target group. Learn to understand them and empathize with what they like.
Note: The right pricing strategy alone will not get you to the top of Amazon. Try to match your competition with other Unique Selling Points. Among other things, keep your inventory up to date so you don't interrupt your seller streak. Delivering quickly will also keep your customers happy. This in turn ensures good reviews and returning customers. Whether you win the Buy Box with this strategy depends on the prices you charge. By purchasing your products at a low price and providing a lot of value to the customer, you can win the Buy Box and still keep sufficient margin on your products.
Do you want to know more about the best Amazon strategy? Click the arrow below and get in touch with one of our specialists.
2 The best integrators for Amazon
Integrators are software systems for marketplaces. By using these tools, you control the backend of several marketplaces with just one or few actions. Want to know more about them? Check out the extensive information on the page about integrators. Below we briefly discuss three of them: Vendiro, Productflow en Channable.
ChannelAdvisor is a useful integrator when you're selling on Amazon and features the following benefits:
- With ChannelAdvisor it is possible to automate the pricing of products and the logistical process.
- There are extensive opportunities to customize your content within ChannelAdvisor
- There are several ways to manage your inventory and distribution centers
Productflow is mainly concerned with setting up content. The advantages of Productflow include:
- The extensive possibilities for creating and importing products and content.
- Suggestions for content: Productflow adopts the suggestions of the marketplaces. This saves you a lot of time and energy.
- Order management: the unique warehouse management module makes sending out orders easy for sellers.
- With Productflow you can manage the changes in content. Incorrect changes can also be undone quickly.
Vendiro is a good integrator if you want to compete in the field of pricing. As a software system, Vendiro offers you the following options:
- Advanced pricing capabilities.
- Vendiro automatically processes orders and returns for sellers.
- Offers an extensive amount of reporting possibility's.
ChannelEngine as a tool is known for being easy to use. Its advantages are:
- The clear interface: this is how you can easily work on your online visibility.
- Pricing can be automated and centrally controlled.
- ChannelEngine provides extensive mapping capabilities to customize content.
- The tool is flexible to integrate with all your systems.
For several reasons, an integrator is definitely recommended if you sell your products across multiple platforms.
3 Fulfillment By Amazon (FBA) ㅡ What are the options?
As an online retailer, Amazon has a very advanced logistics network. As a selling partner, you can also benefit from this. This is called Fulfilment By Amazon, or FBA. You send your inventory to Amazon and they take care of the logistics process. Within FBA you as a seller have 3 different options.
1. European Fulfilment Network (EFN)
If you are just starting to sell on Amazon and you sell your products in only one country, it is good to use the European Fulfilment Network (EFN). With this option you store your inventory in the country where you also sell your products. This makes your stock management easier. But beware: if you do sell products in a country where you don't have any supply, you pay cross-border fees.
2. Multi-Country Inventory (MCI)
If you want to expand in other sales areas, then the Multi-Country Inventory (MCI) option fits your strategy better. You store your products strategically in different countries throughout Europe. This makes it easier to also sell in those countries, because you don't have to pay any customs charges. You do have to declare VAT and pay taxes in the countries in which you operate as a seller. Are you selling outside one of the countries where your products are stored? In that case, you still have to pay cross border fees.
3. Pan-European FBA
The most comprehensive fulfillment option at Amazon is Pan European FBA. If you want to conquer all of Europe with your products, this is the right choice for you. You store your products in all six European countries with an Amazon warehouse, namely: Germany, France, Spain, Italy, Poland and the Czech Republic. You send your stock to the nearest warehouse and Amazon distributes your products throughout Europe. With this option you also have to file a VAT return and pay taxes in all six countries. However, with this option you no longer pay cross-border fees if you ship within those 6 countries.
4 How do you optimize your brand's content?
If you as a brand optimize your content well, your chance to be found organically in the shopping feed on Amazon will increase. Below are the tools that will get you started.
A title is the first thing the visitor sees when they find your product in the shopping feed. It is important that you include search terms in the title as this will increase the findability of your products. You also need to be sharp on the wording of the title. After all, customers do not spend much time reading titles. It is therefore important that a title is scannable.
Above all, make sure the title is appealing to read. This is how you lure customers to a product page. Once the visitor is there and your content is on point, you are more likely to get conversions out of your visitors. Follow these tips to formulate an appealing title:
- In the title, briefly provide a description of the product.
- Use a maximum of 200 characters.
- Do not use commercial statements, such as "free shipping" or "100% quality guarantee".
Bullets or bullet points are a list of different features or benefits of a product. The idea behind bullet point enumeration is to convince a customer to buy your product. In addition, Amazon indexes your first 500 characters of bullet points. It is important to include your keywords in the bullet points as this increases your findability.
The number of bullets and the length of the sentences are also important. If a visitor has to make an extra click to read all the bullets, there are too many benefits listed. Prevent the customer from having to take that extra step. The ideal total number of points is five. Further, note the following when listing:
- Start every bullet with a capital letter.
- Keep a consistent order for all of your brand's products.
- Summarize the most important information from the product description.
- Leave out discounts and pricing information.
- Make sure the first three bullets contain keywords (often already 500 characters)
The best way to build your product descriptions of course depends on your product or brand. Take a look at competitors who are already doing well to draw inspiration for your own product descriptions.
Potential customers search for the products they want to buy by entering search terms in Amazon's search function. Linking the right search terms to your product will make it easier for you to be found organically and will help boost sales. In addition to organic findability (free findability), it is also possible to advertise on the right search terms.
There are two types of search terms, generic and specific. The first type of search term describes the product in a general sense (what is it, what is it made of, where does it come from, etc.). The specific search term describes brand- or product-specific information. Ideally, a general search term should have a maximum of 100 characters and a specific search term should have a maximum of 150 characters. Also note the following when choosing search terms:
- Use synonyms.
- Use abbreviations.
- Using the brand name is not necessary.
- Put spaces between words.
- Avoid filler words.
- Avoid claims like "the best" or "the cheapest".
- Find the most relevant search terms for your product.
Not only the texts are important. Images also help attract customers and increase the conversion rate of your products on Amazon. In fact, to use the Amazon Seller Central as a seller, it is a requirement to add at least one product image. The main image should represent the product against a white background and should fill the entire frame. This image will be displayed in the search results and should therefore clearly represent the product.
Furthermore, in addition to the main image, it is recommended to add 5 more images and a video. It is important that the images are clear, informative and appealing. These additional images should show the product in use, or in a certain environment, from different angles or with different features highlighted.
Amazon describes its requirements for images extensively on its own website. Be sure to read these if you are serious about selling on Amazon and therefore want to get all your content right.
In addition to the standard product description, sellers have the option of adding A+ content to your detail page. This allows you, as a brand owner, to show even more extensively what your brand/product has to offer by using detailed descriptions, photos, videos and comparison tables.
According to Amazon, good A+ content can increase conversions by 5 percent!
5 How do I ensure that I get the most traffic to my product page?
There are a number of ways to generate extra traffic to your products. Among other things you can do this by:
- Sponsored searches (Sponsored products): this is an advertising centered around a brand or product. You can bid on keywords where you want customers to find you. Create optimal content to inform and inspire the visitor. A buying box or meta tag that is also well constructed, makes the consumer want to click on your ad. This ultimately leads to higher conversion.
- Branded content: collaborate with bloggers or influencers to reach internet users outside of Amazon.
Want to know more about Amazon sponsored products? Our Amazon seller metrics blog explains how to handle the data from your campaigns on Amazon.
Our Amazon consultants have a lot of experience with setting up, tracking and analyzing sponsored products (Amazon advertising) campaigns. Click on the arrow below and fill out the form below to determine the best advertising strategy for your brand!
Checklist selling on Amazon
The description above can be overwhelming if you are not already familiar with selling on Amazon. Therefore, the following is a brief summary of what you need to do to successfully sell on Amazon: