Recent data shared by Statista shows the rapid and tremendous growth within the Amazon marketplace.
In 2016, Amazon generated $22.99 billion in revenue just from third-party sellers. This is an increase from $16.09 billion in 2015. Likewise, looking at the chart above, just over half of the paid units sold on Amazon were from third-party sellers. Compare that to just a few years ago when it was just 40% in 2013 (and just 26% in 2007).
There’s certainly money to be made, but the rapid growth brings competition. As of 2015, there wereover 2 million active sellers. You need to take a strategic approach to selling on Amazon in order to stand out. There may be millions of sellers, but only a fraction of them are successful and earningover 100k annually.
Here’s how you can rise to the top as a 3rd party seller on Amazon’s marketplace:
Treat Amazon like a search engine.
You want to know what’s driving all that growth for Amazon? It’s just as much a search engine as it is a marketplace. A lot of people go straight to Amazon when they want to research products, find solutions, compare prices, find alternatives and replacements, etc.
Success on Amazon comes from making sure your products can easily be found. Search optimization best practices ensure that your products will pop in places like Google and Bing, as well as show up for the right search queries within the marketplace.
Optimize things like:
Listing titles and product names
Answers to customer questions
Responses to customer reviews
The easiest way to optimize your products is to think about how your ideal customer would search for your product. What drives the search? Would they customize the search to find a specific form of the product?
For example, rather than searching for “micro USB cable,” they might search instead for “Android quick charge micro usb cable”
See how the number of results changes dramatically with a slight change in the search query. Here’s one for “usb cable.”
And here’s a slightly more targeted query for “micro usb cable.”
Aim to optimize your listings for those specific“long tail” search queries. The purchase intent is higher with specific queries, and you’ll naturally be optimizing for the base keywords in doing so, such as “Android usb cable” or “quick charge usb.”
You don’t have to stuff those keyword variations into your product page. Just make sure you accurately list the details and available options for your product in your description as well as the product title (as long as it fits naturally)
Sell more with FBA.
FBA or “Fulfillment by Amazon” is a service offered by Amazon to hold your inventory and ship directly to the consumer when they make a purchase. You pay a small fee for the convenience of faster, hands-free fulfillment.
Another bonus to this approach is that your products will start appearing in Prime-filtered searches because FBA products are eligible for Amazon Prime’s free shipping benefit.
Free shipping is a huge draw for customers, and Prime eligible orders have consistently higher conversion rates than products with shipping fees.
Aim for the Buy Box.
If you sell the same product as a number of other merchants, Amazon will lump all the sellers together under the same product listing. One seller in the group is going to get the buy box.
The buy box is that space at the top of the product page where customers add the item to the cart with a simple click. Alternatively, the customer can click to check the prices and shipping fees, as well as the ratings of all the other sellers offering the same product, and choose to buy from someone else.
Most customers simply purchase with a click from the buy box.
The owner of the buy box can change often, based on Amazon’s algorithm and a number of factors it uses to rank sellers of a specific product, like your seller rating.
While there’s no specific approach to guarantee owning the buy box, here are some of the key factors you need to keep in mind to win the buy box:
The best price on the product
Fulfillment and shipping times
Positive customer reviews
Owning that buy box is key to serious revenue on Amazon, and many of the following tips also work to benefit winning and hanging on to that buy box.
Build the best customer experience.
Product reviews and your overall seller rating are a big part of successful growth on Amazon. Reviews from a positive experience build consumer confidence and influence the purchasing decision of others. Some 92% of consumers trust peer reviews over brand advertising when making purchase decisions.
Think beyond product happiness and getting customer reviews, though.
If you focus on creating a stunning experience to delight your customers, then you can find a number of ways to improve your operations.
Vastly improving shipping and fulfillment times
Improving customer communication
Providing better information and details on product pages
Faster answers to customer queries
Improved social visibility and social engagement for prospective and current customers
Amazon rewards sellers who ship quickly and accurately, as well those with top seller ratings and reviews. Those are key components to grabbing up and hanging on to the buy box.
Follow up with your customers.
The customer experience should never end when a sale is made. That first part is mainly the shopping experience.
You can build a great relationship with the customer after the sale by committing a little extra time, starting with following up with customers after an order is placed to provide additional info and value.
Other ways to follow up and build that customer relationship include:
Reach out to customers after orders are received to check up on them and ensure they’re happy.
Ask if there’s anything else you can help them with.
Encourage them to leave feedback on their experience and the product.
Respond to ALL reviews after they’re left and individually thank them for taking the time.
Customers will remember how you treated them and made them feel. They’ll be more likely to return and far more likely to talk you up to others.
Word of mouth is a powerful thing—67% of consumers say they’re more likely to purchase a product after a friend or family member recommended it.
Don’t ignore Amazon’s suggested PPC campaigns.
Optimized pay-per-click (PPC) campaigns are a great way to get your product in front of customers searching through Amazon. Do it right, and you can grab one of the top sponsored placements in product search results.
Amazon puts sponsored ads at the top of product results, at the bottom, and at the right side of desktop search. For mobile, sponsored results can show at the top and bottom of search results.
Even if you’re a PPC wizard with consistently great conversions on your ads, you should still experiment with Amazon’s suggested PPC campaigns.
Amazon is so successful because it’s sitting on stockpiles of consumer data, logging their search and purchase behaviors, clicks, interests, and browsing habits.
Don’t immediately assume you can build a better campaign.Test out the suggested campaigns from Amazon. There’s a good chance they’ll perform better than your own and, from there, you can work on creating variations to improve conversions.
Don’t compete on price alone.
Winning the buy box is a major part of competing and succeeding on Amazon, but it shouldn’t be your only focus.
If all you do is drive your price down to win and hold the buy box, then you’re competing in a race to the bottom. Note this listing for a Samsung tablet.
There’s a huge pricing gap. If you don’t want to cut your profit margins, you need to get creative.
One of the best ways to stand out is to highlight and push the value of your products when writing your descriptions.
Forrisk-averse customers, stating the features isn’t enough. You need to show them the value in the purchase so they can see how the product will benefit them—specifically, how the product will solve their problem.
Make your product description seductive with benefit statements. Write it for your ideal customer with one simple point in mind:
“How is this product going to make my customer’s life easier and more pleasurable and enrich their day-to-day?”
Create a visual magnet in your listings.
Product content plays a crucial role in conversions. For eCommerce, much of that emphasis is on product photos.
In a SurveyMonkey study, it was found that 88% of customers said product content plays a major role in their purchase, and 94% of customers will abandon a purchase if there isn’t enough info to make an informed purchase.
Price is a big motivator, but it’s not the only influence for making a purchase.
Think about how you shop in the store.
When you see a product that catches your interest, you’re likely to pick it up, turn it over, examine it, and check the details while considering the purchase.
Customers can’t do that online. They’re limited to the product photos. If you want to capture that sale, you need to create the best visual experience so the customer isn’t left wondering about any detail.
Include high-quality, professional photos of your products.
Show photos for all of your product variations if applicable.
Take quality photos from all angles—top, bottom, and all sides.
Include images that show people using the product.
Likewise, make sure you have plenty of images. You can never really have too many, but you can have too few. According to Salsify, 66% of consumers say they want to see at least 3 images of a product before they make a purchase decision.
If you’re coming up short on images or want to refresh what you have, turn to your customers. A call for user-generated content can net you pictures featuring your customers happily using your products.
That can spike consumer trust when they’re browsing for just the right product.
If you can, get videos from your customers to include in product pages—or shoot your own engaging videos, which is all the better.
Make your listings unique.
If you’ve listed some highly competitive products with a number of merchants fighting for the buy box, there’s a simple and effective way to make your listing stand out.
Bundle in something else with your product.
It doesn’t need to expensive, but it does need to add value on top of the original purchase.
Anything you can do to improve or add to the listing will separate your product from the same listing other merchants are stuck under.
For example: Add a custom dice bag to a board game.
This gives you a completely unique listing, where you’ll automatically have the buy box, and you won’t have to sweat a competitor jumping since you’ve got a unique add-on. Just try to make it something they wouldn’t be able to replicate (or beat).
Amazon is a fantastic selling channel and, with the tips above, you can easily set yourself apart from competitors to gain a dominant listing.
Just remember that Amazon doesn’t have to be your only selling channel. For the greatest market share, build a multi-channel eCommerce strategy that lets you own your sales funnel while also integrating with Amazon to gain the benefits of its brand reach and consumer trust.
Do you have any tips for accelerating growth and success on Amazon?
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Ronald Dod is the Chief Marketing Officer and Co-founder of Visiture, an end-to-end eCommerce marketing agency focused on helping online merchants acquire more customers through the use of search engines, social media platforms, marketplaces, and their online storefronts. His passion is helping leading brands use data to make more effective decisions in order to drive new traffic and conversions.
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