A few points surfaced over and over during the conference this year. Some facts were no surprise to sellers who have sold on the Amazon platform for years. However, a few radically different approaches to selling, especially if you’ve sold mainly on other platforms may enlighten those who are just approaching Amazon as a third party merchant.
One fact I heard repeated over and over at the conference was how the Amazon buyers choose which item they purchase. Shoppers make their purchase decision based on price 85% of the time. Coming in second is seller reputation or feedback.
This is a radically different approach for sellers used to other platforms. Often it is the emphasis is on buyer ‘experience’ or how you can position yourself apart from you competition that makes the purchase decision. On Amazon the real bottom line is price — you must offer your product at the least expensive prices to float to the top on the Amazon buy pages. This makes automation extremely important — as a third party merchant you can’t spend time nurturing the customer relationship (that’s Amazon’s job), and in many cases you must average your margin. In other words, you can’t sell every product at your ideal markup. Some inventory will sell for more, but others for a smaller margin. The idea when selling on Amazon is the overall profit at the end of the day.
Positioning your seller ID at the top of the buy page and as the lowest price is a challenge. Here are a few conference takeaways to consider:
- Automation — use inventory, listing and shipping automation tools to minimize order processing times. Free up as much time as possible to use for product sourcing and bringing new products online.
- Do not manage your items SKU by SKU — many eBay sellers are used to romancing the buyers by adding additional information about the product. On Amazon buyers only want to know that they’ll get the cheapest price, shipped to them quickly in the stated condition. Use one cut and paste blurb in the inventory condition field to save listing time.
- Consider using Amazon FBA to keep the cost to the buyer lower. When you use FBA it will allow your buyers to use Prime or combined purchases to receive free shipping.
- Be aggressive when negotiating with your suppliers. Buy in as large a quantity as possible for the best price breaks.
Retailing on Amazon is about offering the least expensive price possible. That combined with the free shipping incentives are the driving engine for the continued growth of the site. Figure out how to offer your products at the best price and you’ll be a successful third party merchant on the site.