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4 Amazon Selling Strategies That Work
Published at Jul 20, 2016.

The right Amazon selling strategies can take a brand-new business above and beyond the competition. Use these four methods to earn more and become eligible for the coveted Buy Box:

1. Use a Loss Leader

Amazon Selling Strategies Inspired by Razors and Razor Blades

Loss leaders are products sold at a loss (perhaps below cost, or perhaps just below acceptable margins). This popular retail strategy works especially well on Amazon.

You might think of this as the razors and razor blades strategy. For those who don’t know, most shaving supply companies sell the razors at a loss, but sell new blades for those razors at a hefty markup. Customers gladly buy the overpriced razor blades later, since they’re still cheaper than buying new razors. Bam—profit!

But how does this work for an Amazon seller?

A. Building Up a Seller Rating

It’s virtually impossible to sell anything until you have a high Amazon seller rating. Selling at a loss can help you get those first sales you need to establish yourself as a reliable and trustworthy seller.

B. Building Up Item Reviews

Loss leaders can help establish a new product or brand that has no Amazon reviews yet. In particular, self-publishers using Kindle Direct Publishing often do quite well by using Free Book Promotions to garner attention before actually selling the book.

Just keep in mind that this strategy may lead people to think the product isn’t worth the price you plan to charge later. Don’t use it when you’re trying to differentiate something based on quality or luxury.

C. Getting Buyers to Your Seller Profile

Buyers who are interested in one of your products may like the other things you have to sell. You therefore want to get them to your profile, where they’ll see the rest of your selection.

Offering something for a loss can lead people to your profile for two main reasons:

  1. They may click on the listing after seeing your low price. Then, even if they don’t want to buy that particular item, they may want to see if you have similar products they want more.
  2. They may buy the item and then check your store for compatible accessories or other related items.

How to Find an Amazon Seller Profile from a Listing

Above: A visitor can find your seller profile by clicking the link on a listing. The top link goes to the manufacturer’s storefront; the lower one goes to the profile of the seller who’s won the Buy Box.

Below: This manufacturer’s storefront is designed to sell more to buyers interested in any one of their products.

Manufacturer’s Storefront on Amazon

Note that this only works if you can turn a profit once you get people to your seller profile. For example, if you sell a computer at a loss, make sure you sell related mice, mouse pads, keyboards, flash drives, laptop cases, and so on for hefty profits.

This mainly works for niche sellers. Sellers who offer a wide variety of unrelated products will have a tougher time succeeding with it.

2. Use Data-Driven Pricing

Too many sellers rely on instinct and opinion when setting prices. This often results in prices that are too high to sell or lower than they could be for optimal profits.

With prices on Amazon changing millions of times per day, it can be impossible for humans to crunch the numbers fast enough to set the ideal price. Using intelligent Amazon repricing software that makes automatic decisions based on big data can skyrocket your sales and profits.

3. Stick to High-Quality Products

High-Quality Product

Obviously, somebody has to sell cheaper products, and it’s often especially tempting to do so when using loss leaders. However, sticking to high-quality products usually gets much better results.

The reason for this? Customers are more likely to be satisfied with their purchases. That means fewer return requests and negative reviews.

Keeping return requests down will lower your losses and leave you with more time to focus on selling. And with a high Amazon seller rating, you’re much more likely to make sales. Say goodbye to loss leaders!

It’s also worth noting that Amazon’s customers aren’t particularly stingy. eBay is the home of serious bargain hunters; the average Amazon buyer cares much more about the quality of their experience and the product.

4. Prioritize Customer Service to Win the Buy Box

The Buy Box is Amazon’s Holy Grail and the end goal of most successful Amazon selling strategies. It’s commonly said that 90% of all Amazon sales are made through the Buy Box, and sellers who have won the Buy Box can often sell at prices 20% higher than their competitors. It’s as big a deal as having your website ranked #1 on Google.

Amazon uses an enormous variety of metrics for determining who can win the Buy Box and never gives out exact numbers. But most boil down to this: treat your customers as well as possible.

Major factors include having a low order defect rate, providing 24/7 customer service, and shipping quickly. You can handle these the easy way or the hard way.

The Easy Way

FBA

Use Fulfillment by Amazon. They take care of the customer service, so you automatically meet the 24/7 customer service requirement. Your products also become eligible for Prime and get shipped promptly by Amazon, so all of the shipping-related requirements are taken care of.

However, you do have to deal with all of the related FBA fees. You’ll have more control over your own pricing and can often make better profits by handling your own fulfillment. But that means you’ll have to reach the Buy Box . . .

The Hard Way

Aiming at Business Targets

If you want control over all your expenses and still want to win the Buy Box, you need world-class customer service.

You can’t help customers 24/7 on your own, so the first step is creating a customer service department that works in shifts to answer customers around the clock. Hiring contractors in the US / Canada, the UK / Ireland, and Australia / New Zealand can help you cover the clock without having to worry so much about paying for night shifts.

You’ll also want to make sure your employees can answer your customers as efficiently as possible. Integrating Amazon with a CRM such as Desk or Zendesk will make it easier both for your customer service team to answer customers quickly and for you to manage your team. Doing this will also allow your team to answer customer support requests from eBay and your own website from a single screen, rather than forcing them to log in and out of different services.

Of course, all this infrastructure won’t win you the Buy Box if your team doesn’t know what great customer service means. Make sure everyone is devoted to making the customer as happy as possible.

Finally, you’ll want to offer the most competitive shipping possible since your products will likely not be eligible for Prime. (There is such a thing as seller-fulfilled Prime, but you only get invited to the program if you have a truly exceptional shipping record.) Do some research and see if any advanced ecommerce shipping solutions can give you the edge you need.

Summary

By using these four Amazon selling strategies to attract new customers and make them happy, you’ll set yourself on a course for the Buy Box. Price intelligently, serve your customers well, and take every opportunity to streamline your organization, and soon you’ll see your Amazon profits on the rise.

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