Have you seen the Bloomberg article? It’s called “Got a Hot Seller on Amazon? Prepare for E-Tailer to Make One Too.”
My 40-word summary:
Amazon’s got lots of data on what sells and what doesn’t. They use the data to make their own products, mostly under the “Amazon Basics” label (est. 2009). The label has 3000+ items and a hand in everything: tech, clothing, home, kitchen, etc.
Here is the article, for reference.
They cite the example of Rain Design’s laptop stand. It was doing well, then AmazonBasics made a cheaper one without infringing on the patent, and took some market share.
Off the bat:
First off, are you even at risk of AmazonBasics sweeping your market?
Yes, if your product has 2 or more of these traits…
- a crowded consumer-facing category (electronics, home, kitchen, baby, fitness, to name a few)
- sells for $20 or less (average price among the top 100 AmazonBasics products =$19.52)
- generic (if you and your competitors products all look alike, Amazon can undercut you and it’s game over)
- a physical product (as opposed to an app, book, or service)
Here are 6 things you can do now to avoid the squeeze…
Amazon Basics has historically not copied unique bundle offers. So, by creating a bundle/kit/set you can keep your edge. They cost too much to produce and it’s not, well, basic.
(2) Luxury positioning.
More to the point, it’s not “Amazon Deluxe”… it’s “Amazon Basics”. It will deliver mass-market, $20-ish products. They price low to get sales, but also to force third-party vendors to price competitively, for the benefit of Amazon shoppers. But here’s your immunization: if your product attracts a customer who prefers to spend $200, $500, $1000 for quality, you’ll be safer than the seller with the generic mass-market version.
Expand your product line to include untapped areas of Amazon: B2B, Industrial & Scientific, senior care, or adult. Can your product be modified to serve businesses? Could you sell to interior designers, office decorators, and restaurants? Talk to your supplier and see what they’ve got.
(4) ‘Little guy’ positioning.
Are you the founder? Is your product made-in-America? Can you provide personalized customer service? AmazonBasics can’t use these selling points, but you can.
If you created your own product, a provisional patent application from the United States Patent and Trademark Office will give you 12 months of temporary protection in the USA for just $130 (it’s the “patent pending” status). So for the next 12 months, you can decide whether it’s a viable idea and then complete the whole patent. Or not. Though I wouldn’t depend on IP, since there are always ways to design around patents. Disclaimer: this isn’t legal advice; consult a licensed attorney before taking action to protect your intellectual property.
Don’t rely on Amazon as your sole source of income.
Yes, optimize your Amazon listings.
Yes, get reviews with a service like HonestFew.
Yes, rank your products and get more sales.
But after that, branch out.
Once your Amazon store makes reasonable sales ($20,000/month in revenue, for example), invest in other channels: your own e-commerce website with ads and social media driving traffic to it; retail distribution; and other third-party online retailers.
If you’re going to put all your eggs in 1 basket, you should own the basket. Amazon owns this basket, and they’ll crack you for omelettes when it’s convenient.
To sum up, get immune to AmazonBasics with:
(2) Luxury positioning.
(3) B2B products.
(4) ‘Little guy’ positioning.
(5) Provisional patents.
All problems can be reduced to technicalities. And technicalities are fixable.
Not making the sales you want? There’s a technical reason.
We show you how to increase sales on Amazon with these 5 Amazon selling scenarios and what to do in each case to get more sales on Amazon. It’s time to troubleshoot!
Before we begin, find your data.
Go to Amazon Seller Central and click Reports > Business Reports > Sales & Traffic. That’s where the following 5 screenshots are from (and thank you to the client who let us use their HonestFew results for this piece!).
Scenario 1: “Crickets”
> Problem: no visibility, no clickthroughs, no sales, and no repeat sales. The Amazon abyss.
> Solution: jumpstart your product sales and reviews. You need to show Amazon that people buy your product, so Amazon can confidently include you in customer search results. Every time you get a sale, Amazon remembers, and shows your product a little higher the next time. The traditional way to get out of the “Crickets” stage is to do a promotional launch: selling your product at a discount in exchange for reviews. That’s HonestFew’s specialty, so you can outsource this step to us and we’ll do the work for you.
Scenario 2: “Mime” (seen, but not heard)
> Problem: visibility, but no clickthroughs, no sales, no repeat sales.
> Solution: you’ve your initial sales and reviews, and you have achieved some page rank (for example, your product sits on page 2 for “baby teether”). It’s appearing in search results, but customers aren’t clicking on it. So, simply make your product more attractive in search results. Improve these 3 things:
Scenario 3: “No Cigar”
> Problem: Visibility, clickthroughs, but no sales, and no repeat sales.
> Solution: fix your conversion rate with listing optimization. Sessions are up (which means people are searching, clicking on your thing, but not buying). Find your current conversion rate (Amazon calls it “Order Item Session Percentage”) through this sequence:
Seller Central: Reports > Business Reports > Sales & Traffic > Order Item Session Percentage. The Amazon average is 10%, so go for that (i.e. 10% of customers who visit your listing buy it).
If they’re on your listing but not buying, it’s an optimization issue.
Your title, bullets, description, photography, or review count aren’t convincing enough to close the sale. Luckily, HonestFew created an in-depth guide and 20-minute video to help you optimize everything. Or, send your listing to our team of writers and we’ll craft a high-converting machine for you.
Scenario 4: “One-offs”
> Problem: visibility, clickthroughs, sales, but no repeat sales.
> Solution: improve customer LTV. You can't build a sustainable business without repeat purchases. If people aren’t buying for a second time, there’s a reason. Boost customer lifetime value by using automated customer service software for Seller Central, collecting emails using packaging inserts, and seguing from email to social media. Also consider cross-selling your items among different listings. More on that in a future piece.
Scenario 5: “Scale it!”
> Problem: Visibility, clickthroughs, sales, and repeat sales. No problems, really. It’s time to scale what you’re doing.
> Solution: to scale, simply add more (closely related!) products to your store. Buy Amazon PPC ads for more keywords. Improve your customer service. You’re on your way!
Thanks for checking out this piece, and I’ll see you in the next one.
If you think you’re doing everything right and you’re still not making any sales, it could be one of these special cases:
2. Another seller has a copy of your product and has taken over the buy box.
3. Your price is too low and it’s become an Add-on item (which means if people want to buy it, they need an order totaling over $25). If it’s priced below $9.99, it’s generally an add-on. Always price above $10.
4. Is it priced too high and deters customers. There’s a free Google Chrome extension called Tracktor that allows you to see the historical pricing of your competition.
5. It’s been suppressed by Amazon. Contact Amazon Seller Support to see what you need to fix. Often times, it’s a technicality.
6. You’re selling in a category that isn’t publicly visible, such as adult products. This won’t result in no sales at all, just less traffic.
The short answer:
With an asterisk. Here's the deal.
If you're importing from China, you're in trouble in 2016. Why?
That doesn't sound good, so hear this:
The market is impartial.
You import from China and sell on Amazon. Your supplier sells the same product for $5 less and wins the sale. The market chooses the most value every time. $5 less is more value.
Here's the silver lining, though.
The market chooses the most value every time. Not necessarily the cheapest.
Never compete on price. It's futile. Rearranging deck chairs on the Titanic. The question is: how do you provide more value than a factory? If a factory sells the exact same item for $5 less, what can convince people to buy from you?
Take a few minutes and strategize with me. Here's how to sell on Amazon FBA in the next 24 to 36 months.
Wait, why are you telling me this?
This isn't a "scare" story.
It's a "do-something-about-it-before-it's-too-late" story.
I know what works, and I feel an obligation to share it. HonestFew serves hundreds of Amazon sellers, some with $300k+ in monthly revenue. These FBA titans are winning in a changing market, and we've identified the patterns. Here's a quick video introduction to HonestFew, for those who are serious about competing.
Follow* (there's that asterisk) these 3 steps so you can win too.
And by the way, this isn't a "pick 1" scenario. All 3 are top line revenue drivers, the 20% of activities that drives 80% of results.
Step 1: BE EXPENSIVE, BUT EARN IT.
Knee-jerk reaction: factories sell low, so I need to sell low too.
Take a premium position because...
But not everyone deserves to price high. You can only price high if...
Let's tackle quality first.
If your product is head and shoulders above the others, price high and win. Quality pays for itself.
These companies aren't the cheapest, but they're still winning. They win because they provide the most value through attention to quality.
Take care of your customer, and they'll take care of you. Quality is king. "How do I make a quality product?" you ask, taking out your notepad and pen.
I have 16 gifts for you.
Here are 16 aspects of quality from the Whole Foods and Disneys of the world. The goal of this exercise is twofold: (1) to find new marketing points (good things about your product you don't talk about) and (2) to find weak points so you can fix them and charge more money.
Grab your product right now (if you don't have it, imagine it), and ask yourself all 16 questions with brutal honesty.
"Is my product..."
"... aesthetically pleasing?"
"... reliable over time?"
"... free of defects and bugs?"
"... easy to maintain?"
"... versatile (works cross-platform; in different scenarios)?"
"... fault tolerant?"
"... standards compliant?"
"... law compliant?"
Would you rather uncover the flaws by yourself right now, or wait until you get that public, permanent 1-star review?
You're cheating yourself if you skip this list because quality = positive reviews. Positive reviews = conversions. Conversions = sales.
With noticeably better quality, a factory selling the basic, ubiquitous model can't touch you. By the way, "quality" isn't about adding an e-book, lifetime guarantee, or bundle. Screw add-ons; make your main offering better. When was the last time Apple tried to sell you a phone by adding an e-book? Never. They just make good phones.
Everyone knows it's true, but they don't want to invest in product development. Ironically, a lack of investment leads to a lack of profit.
But quality isn't enough.
A quality product needs presentation to match. A quality product with bad presentation might still win, but it'll be harder. Building a brand is the 2nd of these 3 steps.
Step 2: BRAND
When I say "branding", what do you think of?
Nike, McDonald's, and Starbucks?
It's a vague term, so let me clarify.
Branding is like online dating.
Branding uses words, images, and experiences to make people fall in love with you.
Let's make a dating profile.
Writing is branding. Are you naturally funny? Sarcastic? Serious? Nonchalant? Playful? Driven? Choose a tone that's native to you. Deploy it in the bullets and description (more on how to write great copy in HonestFew's optimization guide). Example: I aim to make quality (there's that word again), insightful, long-form business content. How am I doing? Leave a comment.
Pictures are branding. Dating photos depict you in different settings and imply a benefit to the viewer (e.g. a photo of you at a lavish restaurant says "I have money and good taste"; a photo with a dog says "I'm caring"; a photo with a cat says "I'm a sociopath"). Similarly, white-backdrop-only product photos is like a dating profile of only passport photos. It's sterile, and doesn't imply a benefit to the viewer.
Messages are branding. How fast do you reply? Is the grammar and spelling correct? Is the content generic or personal? Take 30 minutes to infuse personality into your CS emails, like this one from CDBaby (this was reblogged thousands of times, winning $1000's in free publicity). Customer service templates have leverage: write it once, send it forever. So, take time to improve your email templates.
Physical presence is branding. The "date" starts when your product lands on their doorstep. They see it, feel it, and touch it for the first time. Super-tactical: when sourcing, make sure your margins allow for robust product packaging (check out our full guide on sourcing). For example, "Beats by Dr Dre" headphones sell for $300+. That's a premium price. And they upped the "1st date" factor with heavy metal components in the headphones (weight and metal boost perceived value) and big, glossy packaging. Be Beats. Apple bought them for $3b for a reason!
To finish our dating metaphor, a serious "relationship" starts with repeat purchases.
Understand: you can't build a business on 1st-time-buyers only. If people aren't reordering, fix it!
Repeat sales are oxygen, and I'm about to show you how to breathe.
Step 3: BOOST CUSTOMER LIFETIME VALUE
Why are repeat sales so great?
Because they're easier to make than first-time sales, cost less to acquire, and stabilize sales.
For example, you buy an Amazon PPC keyword for $5/click and win the sale (that's a high CPC in an aggressive market). You spend $5.
+ $20 in revenue
- $5 ad spend
- $5 product cost
- $3 Amazon referral fee (15% of $20)
- $3.02 Amazon FBA pick and pack fees
= $3.98 in profit
But, if you can reliably get this customer to buy again, your profit becomes $8.98 per unit (no more ad spend: they're already yours!). The customer's lifetime value (LTV) = $12.96 (their 1st order + their 2nd order). And if the buy a third time, their LTV is $21.94. Get it?
Here are 3 simple ways to boost your LTV:
(1) AUTOMATE AMAZON CUSTOMER SERVICE.
Install software like Salesbacker or Feedback Genius to send automated Amazon customer service emails. These programs connect to your Seller Central account, you write email templates, and that's it. Set it and forget it.
(2) PACKAGING INSERTS.
Print a card that goes inside your product packaging. If you followed my advice in Step 1 and charged more, you margins will allow for a nice card. On this card, prominently display a URL to a landing page that collects customer email addresses. Pitch it as a product registry (i.e. "register your product on our website to receive 60-day protection") or a VIP club (i.e. "sign up for exclusive deals on upcoming products"). Either way, you begin a relationship that boosts LTV. Manage your growing list with software like MailChimp.
(3) SEGUE EMAIL TO SOCIAL.
In your emails to customers acquired through packaging inserts, direct them to your social media pages. Use Snapchat for the 13-25 demo, Instagram (we have a guide on how to get your first 1000 followers) for the 19-40 demo, and Facebook for the 30-65 demo to engage directly. Leave comments, reply 1-to-1, like photos, respond to DM's.
In conclusion, factories will always win on price.
So don't compete there. Instead:
And when it's time to bring in the big guns, call HonestFew. We specialize in boosting sales and reviews for Amazon businesses. We hope you enjoyed our article on how to sell on Amazon FBA.
Our article and video on optimization did so well that I wanted to share an example Amazon listing.
So with permission, here's an optimization we did for a client (with the brand name removed, of course).
I'll go section by section and explain my decisions.
Silicone Baking Mat Set of 3 by [BRAND] - Non Stick, Anti Slip, Heat Resistant - Pan and Oven Sheet Liner Bakeware Tool for Cookies, Macaron, Pastry - Replaces Parchment Paper and Tin Foil
Note: lead with the main keyword. When starting out, don't put your brand name first (especially if it doesn't contain keywords). Make it read like a sentence. Different categories have different length restrictions, so adjust accordingly.
☆ A HEALTHIER FAMILY. These silicone baking mats are non stick, non slip, and heat resistant bakeware. They replace sprays, oils, and grease that add fat and chemicals to cooking.
☆ PAYS FOR ITSELF. Invest in these mats once, and you’ll avoid the trips to the store to buy aluminum and tin foil, parchment paper, and cooking spray. You can reuse the mat 2000+ times, saving you money on 63 cooking spray cans, or 3,879 sheets of parchment paper.
☆ SAVES YOU TIME. Watch cookies, cakes, pastry, cheese, and more peel right off the pan! No more struggling, and perfect presentation.
☆ YOU GET MORE. It's not just another mat. It's a bakeware set of 3, so you’ll be prepared for any situation. There’s a 8" square for the microwave and toaster oven, 8”x11” for the every day, and 11”x16” for big dinner and company. Your kitchen, but better.
☆ LOVE THEM OR GET EVERY CENT BACK. With 150+ reviews, these mats are proven. If these mats don't make baking better, we'll refund your order.
Note: capitalize the main benefit, so the reader gets the point in seconds. Appeal to raw human wants like family, love, money, happy relationships, being better than other people. List a benefit first, then a feature. Use math (e.g. this 1 sheet replaces 3,879 sheets of parchment paper) to persuade.
I focused on biologically-driven benefits when selling the product.
Here’s what [BRAND] silicone baking mats can do for you:
<p><b>☆ HEALTHIER FAMILY</b>
Our mats replace sprays and oils that add fat and chemicals to food. Doctors link oils to cholesterol, high blood pressure, and heart attacks. Get a non-stick surface without oil which means health and happiness for loved ones. </p>
<p><b>☆ PAYS FOR ITSELF</b> You can use each mat 2000+ times. You get 3 mats, so 6000+ uses. That’s 189 cans of cooking spray, or 11,637 sheets of parchment paper. Your savings? $1243.35. That’s what you would have spent. Invest now to avoid constant trips to the store. </p>
<p><b>☆ SAVE TIME</b> Make any pan non-stick. Cookies, chocolate, pastries, and cheese peel right off the pan! It makes cooking fun again, and it’s so easy even the kids can help. No more struggling with food stuck to the pan. </p>
<p><b>☆ MORE VALUE</b> Most companies only make large, rectangular mats. Our mat set has a standard 11” x 16” for big baking. We prepare you for anything with an 8” x 11” mat, and a mini 8” mat for microwaving. </p>
<p><b>☆ TESTED, PROVEN</b> Made of high-grade silicone that’s FDA/LFGB approved, BPA-free. The surface is non-stick and withstands temperatures of -40°F/-40°C - 450°F/230°C. Freezer, microwave, oven— you bet! </p>
<p><b>☆ NO DIRTY DISHES</b> If this were a regular pan, you’d need to scrub it with soaps. With our mats, wipe it down, rinse, and air dry. Flavors and odors bounce right off. </p> <p>
<b>☆ MONEY-BACK GUARANTEE</b> Every set is backed by the [BRAND] guarantee: love our mats or get every penny back, no questions asked. Consider this a risk-free purchase.</p>
<p> If you'd like to upgrade your daily baking, hit the Add to Cart button! It's backed with the [BRAND] money-back guarantee </p>
Note: this is an expanded version of the bullet points, and includes HTML tags to visually break each benefit into a bite-sized point.
Of course, you can do it all yourself. But if you value your time and want dependable quality, outsource it to HonestFew's team of writers. Turnaround time is 7 days, and it costs $299: https://honestfew.com/product/amazon-listing-optimization-package/