Improving Your Amazon Sales, Part III: Investing in Amazon

This is the third in a three part series on increasing your sales on Amazon.com. It makes sense to read part one, Quick Wins, and part two, Repackage Yourself, first.

This article focuses on ways to invest in your Amazon presence to drive additional sales. These tactics should be tested thoroughly before rolling out; they don’t work equally effectively across all Amazon sellers. Here’s what I suggest you try:

Advertise on Amazon

In some categories, Amazon still allows Amazon Sponsored Ads. These show up at the bottom of a search result page and drive customers to your product page on Amazon.com. They work very similarly to Google paid search ads. And you pay for them by the click, similar to Google.

This tactic is extremely effective for proprietary product that sells on Amazon, but doesn’t get enough exposure. This can improve the number of people that see your product and increase the number of visits to your Amazon product pages. If they convert to buyers, it’s a huge boost. Amazon won’t show your ad unless you are winning the buy box, so there is some protection from advertising for your competitors.

You do have to be careful not to overspend. You’re already paying Amazon a hefty commission on the sale and this results in more margin going to Amazon. On proprietary product, where you have higher margins, it can be a way to fuel sales. But it doesn’t work well on items that you’re discounting heavily in order to win the buy box.

Get a Lightning Deal

The Amazon Deals Page  is the most visited page on Amazon besides the homepage. Needless to say, it gets millions of shoppers every day. The best (and easiest) way to show up there is to get a Lightning Deal. Lightning Deals move a lot of product. Typically they can sell two weeks worth of goods in two hours. If you make it to the actual deals page, you’ll move two months worth in two hours (roughly).

However, to get a Lightning Deal you have to have enough inventory at Amazon (FBA) to cover their projections and you have to discount at least 20% below the price over the last 30 days and Amazon has to believe it’s a desirable product. Once you pass that hurdle, what is the value in a Lightning Deal?

Well, here’s the theory: Sales Rank means a lot on Amazon. Higher sales rank means you show up higher in search results. You get more merchandising, which means showing up in more emails and on other Amazon.com pages. So theoretically, if you can drive up your Sales Rank, you can lift sales of a product into the future. And the extra merchandising will help hold up those sales.

So, if you have a product that you want to drive, get a Lightning Deal (which lasts 2 hours) and let it drive up your sales rank in order to drive future sales at a (hopefully) higher price and margin. In my experience, this works extremely well for some products and awful for others. It’s something you have to test. In some instances, I also see a halo effect on related products that you sell (they are typically merchandised on the Amazon product detail page). So that’s valuable as well.

This is more of a one-off way to drive a specific product, but it’s worth considering.

Sell Direct to Amazon

Proprietary product is hard on Amazon. The reason is: people don’t really shop on Amazon (or rarely). They buy on Amazon. That means they only visit once they’ve already decided what they need. So if people aren’t searching on Amazon for your product, it can often sit unnoticed without a lot of sales. And proprietary product tends to sit unnoticed.

So consider selling directly to Amazon. If Amazon buys a product and owns it, they have a better reason to merchandise it and move units. In my experience it often drives sales up 3x by selling direct. You do have to give Amazon a wholesale price and to guarantee that you are not selling it cheaper to others. And it needs to be at least 20% below the list price. But you can stop selling to Amazon whenever you see fit and it is a way to move more goods.

The biggest concern here is that Amazon does not adhere (or agree to) MAP policies. So if your product is being discounted virtually anywhere online, Amazon will discount it. They desire to be the lowest price and they generally win that battle. So don’t do it if a discounted price would hurt the rest of your corporate sales too much.

Bonus Idea: Visit Amazon

Buy a plane ticket and go visit your Amazon category reps. This is a fantastic way to improve your Amazon sales and it costs little. I recommend setting up as many meetings as you can with key Amazon employees and talking to them about your business. This keeps your brand front and center in front of them, while also giving you better information about what Amazon wants and needs. It’s a great way to get in on alpha and beta tests as well.

Not enough folks do this. If Amazon is a significant part of your business, you should be talking to them face to face. Take them to dinner. Just hang out some. It’s worth every penny.

Last Thoughts

If I have to leave you with one idea it would be this: Keep Testing. Keep Trying. Keep Learning.

Try new things. See what works and what doesn’t. And move on. Also keep close to Amazon. They are always trying new experiments and usually looking for people to be part of it. There are so many buyers on Amazon.com that almost everyone has a business opportunity on the site. The question is: how can you maximize gross profit dollars?

Good luck!

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