According to BigCommerce, 197 million people around the world use their devices to shop on Amazon. This figure is larger than the entire population of Russia. By the end of 2018, Amazon is an e-commerce mammoth, an online sales leader. This platform is essential to many businesses around the world and a very competitive environment to succeed in. Most Amazon shoppers can have products delivered with 2-day shipping. Companies need to have high standards to succeed on Amazon, and here are the necessary steps to keep up with demand.

Amazon Pricing and Fulfillment Strategies

All businesses wanting to establish themselves on Amazon should have proper pricing and e-commerce fulfillment strategy. These are essential for success on Amazon’s platform and can earn sellers a Buy Box.

A Buy Box provides sellers with “Buy” and “Add to Cart” buttons seen in the top right-hand corner of product pages. Most Amazon sales process through these buttons.

By winning a Buy Box, a business can become a preferred seller since the customer clicks to “Buy” or “Add to Cart” a product sold by them and not their competitor.

Ninety percent of Amazon sales funnel towards preferred sellers who win the Buy Box. These companies get a significant boost in sales which makes the Buy Box a precious real estate. Those who win the Buy Box can also run sponsored product ads.

The algorithm that determines Buy Box winners analyzes a seller’s pricing and fulfillment strategies, which is why these two components are essential to succeed on Amazon.

How to Select an Amazon Pricing Strategy to Succeed on Amazon

There are many factors involved in choosing the right pricing strategy for products and brands. Competition and market position determine what the price of products should be. This applies to all brand owners, manufacturers, exclusive sellers, and retailers.

On Amazon, there is no one-size-fits-all pricing strategy. A significant amount of measuring and testing might be required to settle at the right price.

If a seller prefers manual pricing, they can change the price of their products at any time. If their competitor offers a lower price, the seller can adjust theirs lower as well. There is no pricing automation, and sellers have a higher chance of winning the Buy Box. A seller may manually and physically monitor their competition and continue adjusting prices.

Rule-based pricing, on the other hand, allows sellers to automate their pricing. Amazon monitors the prices of a seller’s competitors and adjusts their product prices accordingly. To have the best chance at winning a Buy Box, a seller can choose to keep their price slightly above or below the lowest marketplace price for their product.

Algorithmic pricing considers variables that affect a seller’s chances of securing a Buy Box. The seller’s prices will fluctuate based on their competition, supply, and demand. Seasonality may also affect prices due to holiday discounts, and algorithmic pricing is taken care of by a third-party outside Amazon.  A good pricing strategy is crucial to succeed on Amazon.

How to Select the Order Fulfillment Strategy to Succeed on Amazon

Amazon’s order fulfillment involves packing, picking, and shopping all orders to customers. Fulfillment is about how the customer is going to receive their items. There are three main fulfillment strategies for Amazon sellers. These are Fulfillment by Amazon (FBA), Seller-Fulfilled Prime (SFP), and Fulfilled by Merchant (FBM).

If a seller chooses Fulfillment by Amazon (FBA), then Amazon will ship and store their products in line with their standards. The seller then gets a coveted Prime Status which will allow them to deliver their products with one or two-day shipping options. However, they will lose control of their brand messaging because their products are shipped in an Amazon-branded box.

Seller-Fulfilled Prime (SFP) means that the seller is responsible for storing and shipping their products. They can still earn Prime Status if they satisfy Amazon’s strict guidelines. This way, the seller does not pay any Fulfillment by Amazon fees. This saving might seem appealing, but meeting Amazon’s standards can be expensive, especially if the seller has a single shipping location in the United States. The seller can then use a third-party fulfillment (3PL) company to control all shipping costs and provide speedy deliveries to retain Seller-Fulfilled Prime shipping.
If the seller’s business chooses the Fulfilled by Merchant (FBM) strategy, they will have to ship and warehouse their products. A third-party fulfillment company can assist with this, which makes it easier. However, the seller will not receive the coveted Prime Status on their page. They will have to determine their own shipping times but have complete control over all their brand messaging without using the smiley Amazon packages.

Learn more about Fulfillment by Amazon (FBA) versus Seller Fulfilled Prime (SFP)

What is my Amazon Product Listing Strategy?

A seller will also need a product listing strategy which is critical for consumers to decide if they want to buy their product or not. A business should optimize their product information to satisfy the Amazon algorithm.

Using relevant keywords in product listings determines how a business’s products appear online. A business should provide a wealth of information while writing their product listing because Amazon favors detailed descriptions. Providing lots of information about a product is essential to convert customers.

Complete all the applicable product feeds without leaving them blank. Enhanced brand content can describe products. Instead of using just texts and images, a seller can add infographics about their products, and how-to-use instructions.

How do I optimize Product Titles to succeed on Amazon?

Businesses should also optimize their product listing titles to appeal to consumers, which is necessary to improve conversions. The right keyword strategy and readability of product titles can propel clickthrough rates. The title should contain essential information, such as product details and the main keyword. However, it should still be short enough for customers to read the title with ease. A title should also contain a product name, brand name, and any other special features to help the product stand out.

How detailed should my product descriptions be?

Amazon Product descriptions should communicate any unique value the product has compared to others. Focus on the best benefits and features of the product to lure customers away from competitors.

If product descriptions and titles are clear, sellers can avoid getting negative reviews and returns from unsatisfied customers. Every product should have a high-quality image that appeals to consumers. Many customers on Amazon click on links with the best photos and videos of the product. Make sure to show different angles of the product so that consumers can envision owning it in real life. A 360-degree view of a product and instructions on how to use it can effectively convert several customers.

What should I know about advertising on Amazon?

Many sellers struggle to succeed on Amazon by not using Amazon ads. Advertising on Amazon can help sellers distinguish themselves from the competition and increase conversions. On average, Amazon’s pay-per-click ads conversion rate is ten percent. In comparison to other advertising platforms, this is exceptionally high. Customers who use Amazon have a strong intent to buy products and paid ads can lure them to specific listings. Using Amazon ads would increase a business’s sales and rank on the platform.

Most shoppers on Amazon buy products listed on the first page. Unless a seller is successfully ranking organically, they should invest in paid ads. Without ranking on page one, most sellers lose nearly half of Amazon’s shoppers.

A seller can get first-mover advantages since advertising on Amazon is not crowded. There are several other businesses on the platform, but only a small percent of them invest in paid ads. Competition for Amazon ads is relatively low, and a seller can benefit significantly from this.
If a seller uses paid ads on Amazon, they should do it correctly and avoid common mistakes. Campaigns should be structured well and use detailed categorization methods to group similar products. One type of ad is not useful on its own. Sellers should diversify their ads past the sponsored paid ads. They can also use product and headline search or display ads.

Businesses can show their ads on competitor pages to undercut them. Having a competitor strategy can prevent them from grabbing customers to avoid diminished sales. Using a competitor’s keywords can help a seller place their products in front of customers who might have been searching for competing listings.

To increase ad visibility, sellers should focus on placement and targeting bid modifiers. Placement bid modifiers allow sellers to bid higher on where their ads show, and targeting modifiers help adjust that bid based on loose or close matches.

Sellers should implement negative keywords to increase the relevancy of where their ad is displayed. If a business is advertising games for PlayStation 4, they should include PlayStation 3 as a negative keyword. This way, their ad would not come up if customers are searching for PlayStation 3 games to save advertising budget and increase conversions.

How do I Leverage Amazon Partners?

Leveraging experienced Amazon partners might cost more money but helps overcome all the above issues to succeed on the platform. Outsourcing marketing strategy to third-party Amazon professionals can free a business’s limited resources.

When new features are released, Amazon does not always announce them, and only partners know this information. They also have access to new product betas before they are available to everybody else. A business can use these betas before the general public rather than managing Amazon ads themselves.

Working with Amazon partners helps overcome major issues with Amazon ads. If a resolution ticket is open to solve problems, a seller will have theirs prioritized by Amazon support. Sellers cannot access advanced reporting. Only partners can obtain reports for forecasts and category performance. Without an Amazon partner, businesses cannot access many of these top features on the platform.

To succeed on Amazon is never guaranteed. It is a cut-throat competitive environment with the most extensive online retail market share. However, following the above steps accurately will help a business get plenty of sales on the platform and improve its e-commerce presence.

If you haven’t begun winning on Amazon, you can sign up here on Amazon’s website.