Velocity Sellers Blog
How do you really know when your Amazon business is doing well? Is it in the sales? Is it in the product ranking? Is it when you’re content looks great?
Running a successful Amazon business is all about an integrative approach. If one thing is off, then the scale isn’t balanced. You may see success but it won’t return the bottom line results you want. Take a look at how we approach Amazon and what you need to keep your eye on the prize.
Content is still king. When your listings look great and read well, you’re almost golden. Each category can require a different tact when writing so it’s important to keep that in mind when taking this on. Maybe you sell in Consumer Electronics and people require a more factual approach. You might think that a clothing brand would want some pizzazz in the writing but what data do you have to support this? We know what works. We also know how to test content, when consumer data is limited, and track that content to see how well it’s working.
Cost Analysis; know your margins. Sales could be off the rails but if your costs are too high you won’t be retaining any cash. Are sales important? Absolutely. Knowing how much Amazon is charging you to sell the item is equally important. Don’t forget about fulfillment fees if you’re using Fulfillment By Amazon. We often recommend you do due to increased visibility. Advertising cost? A must. Did you factor in that promotion you ran last week? It’s all important to know. Knowing when to focus on growth and when to focus on profitability is key to cost analysis.
Visibility is the lock. But what is the key? There are actually a fews keys to open this lock. Advertising gets your product in front of an audience. Promotions, such as Coupons and Lightning Deals, lower the barrier to purchase for consumers. Prime offers target a very active audience of customers that want their products and want them now! A well written listing can solidify the success of all these factors. Once you’ve opened the door, we encourage you to get a wide and large net to capture all of the sales.
Tracking your progress. There are lots of systems out there that can help you track your KPIs but you have to know what to track first. Amazon’s reporting can leave something to be desired. There are a few key metrics in there though that are incredibly helpful. Here’s the essentials: Conversion Rate, Impressions, Product Rank, Review Rating, Keyword Indexing, and Search Ranking. Seem like a lot? It is. But it’s all data you need to know in order to determine if you’re making headway on Amazon or you’re just wasting your time. More often than not, you’re just not making the changes you need to make because you don’t have the data you need.
Optimize everything. Once you’ve collected some data, what do you do with it? Use it! Advertising provides you with a wealth of real customer data that you can then tie back into your listings. You can also create new advertising campaigns focused on these customer revelations. When you notice that people are visiting your listing but aren’t purchasing what does that mean? How do you make the appropriate changes? Use data and use it often.
Conclusion. There are a lot of things that need to be accomplished in order to really tackle Amazon with purpose and results in mind. It takes a team to truly get results. It also takes time. Don’t put up a listing and expect it start flying off the figurative shelves. It takes work paired with constant observations and optimizations. Take it from us, we’ve built a few businesses on Amazon. Maybe yours is next. What do you say?
The world of Amazon is constantly changing and in order to maximize your potential on this marketplace giant as a seller, you have to be in the know. We know it can be frustrating, but we’re here to help!
In the past year we’ve seen Amazon decrease the search terms field on the back end of listings from 5,000 characters to 250 characters, open up incredible features such as Headline Search Ads to Seller Central users, and launch the new Stores page, which allows brands to showcase their products and brand story all on one beautifully designed page.
As the Amazon branch of your business, Velocity Sellers is going to let you in on all the recently released changes, as well as what to expect in the future.
Vendor Central Terms Negotiations
In March, Vendor Central users saw the release of new terms, to which many noticed a big hike in percentage on Amazon’s side. Many Vendors are still in the process of negotiating these terms. Some have been successful in bringing these fees down and others are still waiting to hear back from Amazon, despite a proposed deadline of March 31st.
The most important thing we’ve seen occur is Vendors staying true to themselves by focusing on profitability, as well as providing evidence to Vendor Account Managers why the suggested increases aren’t feasible.In some cases, moving to Seller Central may be the best option. While this process can be time consuming, we ultimately believe that you have to do what’s best for your business. If that means relocating to Seller Central from Vendor Central, then we support you. We’re here to make that transition easier and quicker.
FBA Fee Hikes and How You are Affected
The Small and Light pricing system has changed it’s charging model. Originally charging a flat rate for Order Handling and then a per oz. price of $0.09/oz, Amazon has now changed the Order Handling fee to be based around sale price of the item, with items over $5.00 and under $15.00 seeing $1.00 charge, an increased Pick & Pack fee of $0.75 per unit, and a per oz. price of $0.11/oz up to 15 oz. More information can be found here.
Monthly inventory storage fees have increased $0.05/cubic ft., Long Term Storage Fees will be assessed monthly instead of semi-annually with a minimum charge of $0.50/unit per month for any items over 365 days in storage, and the Inventory Performance Index is now going to play an important role in inventory storage limits. All these changes are active as of April 1, 2018. For more information, take a look at Amazon’s release information here.
The Crackdown of Seller-Customer Communication
Everyone seemed to be put on edge regarding news of Amazon trying to limit the number of communications between Sellers and Customers to 1 message only!
After some more digging happened, we found out that it was more of a check on Seller’s current compliance with the existing policy Amazon had in place. The essence of this check is to make sure the language being used by Sellers is appropriate and within Amazon’s guidelines. No requesting of reviews with the placement of conditions or incentives are allowed.
If there is one thing we’ve seen hurt businesses in the long run it’s being short-sighted and looking for short term gain, while being outside of Amazon’s TOS. This will almost always come back to bite you.
So check your third party review emails and make sure your language is clear, concise, and following Amazon’s guidelines.
What Else is New?
Since Amazon is constantly improving and updating their processes, expect to see more changes in the future.
Utilization of Store Pages will be increasing. This will help with brand awareness on Amazon. It will also help brands stay competitive in their space while increasing market share. If we haven’t spoken about Store Pages with you, expect us to be reaching out to regarding this soon.
We’re keeping our ears to the ground and will continue to keep you abreast of all changes as we hear about them. Here’s to a successful 2018!
If you’d like to hear our opinion on how to deal with these changes, contact us.
Most brand owners see 3rd party sellers on Amazon as more of a threat than an opportunity. Unlike most brick and mortar retailers that typically through a tightly managed supply chain network to acquire branded products, anyone with an American bank account and a business entity can start selling in most product categories on the largest eCommerce website in the United States in less than thirty minutes.
The bad and the ugly of 3rd party sellers on Amazon
Third party sellers on Amazon often have a bad reputation on the brand side. The loudest complaints about them from brands tend to be that they are sources of:
- MAP price violation
- Product description confusion or poor quality product descriptions
- Shipping incorrect products to customers
- Trademark misuse in product descriptions
- Product repackaging or relabeling
- Unauthorized product bundling
- Selling used, damaged, or expired products as new
- Mislabeling products in the Amazon catalog
As the problems caused by third party sellers run amuck can be so severe, the perception on the brand side of eCommerce often misses the major benefits of working proactively with third party sellers who are good actors.
The benefits good 3rd party sellers can give brands
Third party sellers who obey the law and respect their contracts can bear a lot of the costs of reaching customers on Amazon:
- They pay for their own Pay Per Click (PPC) advertising on Amazon
- They absorb the costs of sales, discounts, and Lightning Deals
- They handle customer service even when using Fulfillment by Amazon (FBA) on the shipping experience
- They can create and edit product listings on Amazon under most conditions
- They can work to build product reviews on your brand’s products on Amazon both actively (by doing a good j0b with customer service) and passively (just by moving more units of your products to Amazon shoppers)
- They can ensure product availability even during shortages at other retailers or if there is a lag in production or shipment
- They pay all of Amazon’s fees (reaching 30% of the purchase price or more in some cases)
- Their sales increase the rankings of your product in Amazon’s search and best seller ranking systems (which in turn makes for greater brand visibility)
As you can see, third party sellers can do a ton of grunt work for your brand and absorb a lot of the costs and risks of running a retail business. Unlike focusing on growing sales on your own website, you don’t have to pay those third party sellers anything. The cost of making a sale on Amazon is also significantly lower than on almost any other website across a variety of categories because it is the most popular online retailer by a massive margin.
According to eMarketer, Amazon made up 43.5% of all online sales in the US in 2017. The closest website, eBay, made up just 6.8% of all online sales. Apple is the only brand in America with a website that makes over 0.5% of all US sales online. Unless your name is Tim Cook or you work for him, your brand will probably able to connect with more customers on Amazon.com than on your own website.
Taking control of your brand content on Amazon
The largest challenge facing many brands as it relates to Amazon is related to product catalog content. By default, Amazon allows anyone to create listings on Amazon and to put whatever they want in those listings. Once a listing has been created, it can be nearly impossible to attribute that creation to any particular person particularly if there are multiple sellers on the listing.
The most straightforward way for brands to get ahead of a massive problem in how their products are portrayed on Amazon is to enroll in the Amazon Brand Registry program and to proactively manage their content on Amazon for all products that they sell and have sold in the past.
What the Brand Registry program does is that it makes sure that trademark owners can secure the primary right to edit brand content related to their products and to prevent sellers from editing content related to those products. While this alone does not prevent people from selling a product on Amazon and does not prevent people from creating new listings under your brand, it does ensure that only your brand or sellers that you authorize can actually control the content for the existing listings.
If you need help enrolling in brand registry or managing your product catalog content on Amazon, be sure to send us a quick e-mail.
Getting third party sellers on your side
One of the most effective ways to get third party sellers on your side is to just send them an e-mail through their seller profile and scheduling a meeting. Often times, the first reaction of a brand’s representatives upon noticing that their products are for sale on Amazon is to call a lawyer and to send a threatening letter.
In many cases, you’ll discover that many third party sellers – particularly the ones who sell in volume – are already buying your product through authorized channels. In situations in which your brand has very restricted distribution limited to a small selection of retailers that don’t include Amazon, your approach will obviously need to be different, but for most brands that don’t follow that strategy, just getting information about how the third party seller acquires your products will tell you what the next best step is going to be.
Surveying third party sellers on Amazon and picking out some of them to get under contract so that you know how they’re buying products will get you most of the way to where your brand probably wants to be on Amazon. If your brand is managing the content and the third party sellers are maintaining good product quality, Amazon becomes more a source of opportunity than of problems for your brand.
Fighting counterfeiting on Amazon
Addressing counterfeiting on Amazon can be a serious and ongoing challenge for brands of all sizes and levels of sophistication. The full scope of what needs to be done to fight counterfeiting will be addressed in a future article.
Often times, counterfeit reports will come in from customers through product reviews and seller feedback reports. In some cases, Amazon itself will notify you of such reports, but in most cases the company is not proactive in how it polices sellers of counterfeits. In some cases, co-mingled inventory on Amazon can also mix counterfeits from criminals in with the products being sold by Amazon.com itself or by legitimate third party sellers who have enabled the comingled inventory option.
The process of dealing with an individual counterfeiter is to conduct a test purchase from that seller and then to send a detailed report to the IP infringement reporting page on Amazon.com.
Persistent counterfeiting from a range of sellers requires a more tailored approach and effectively preventing it requires a direct intervention from Amazon itself. Certain brands have been able to prevent third party sellers from selling products on their listing owing to counterfeiting concerns, but there is no repeatable system or fixed set of standards that a brand must meet in order to qualify for this special program at the time of this writing.
Selling on Amazon yourself
The most direct option for dealing with third party sellers on Amazon is to become one yourself. There are a couple primary ways to sell on Amazon: either selling products to Amazon.com itself as a vendor through Vendor Central or acting as a third party seller yourself through Seller Central.
As the brand, there’s a good chance that you will be able to beat every other competitor on price. There are also some advantages to focusing on certain elements of your catalog as a third party seller while allowing other sellers to absorb costs of selling on Amazon while you reap the benefits.
At Velocity Sellers, we specialize in working with brands that want to sell to customers on Amazon. Drop us a note today to set up your free consultation.
Amazon suffers from one significant problem that affects many of the 1P Vendor Central Vendors we work with. Amazon’s inventory projections system is entirely based on algorithms and has no human influence. Amazon’s system bases its orders on recent sales velocity and overall demand of an item. But this brings up a major question. How does Amazon know how much to order of a new product?
The answer is they don’t. And so we have deemed the New Amazon Product Paradox. New Orders are generated based on existing demand but there is no existing demand because there are no items to order.
This is where understanding the Amazon system and taking things into your own hands can establish a new product on Amazon. This is where having a Seller Central store comes into play. Launching a product on Seller Central relies entirely on your own initiative.
What Seller Central allows you to do right from the beginning:
Upload your new product listing
Send in your inventory to FBA (Fulfilment by Amazon)
Advertise your products at your own discretion
Set any retail price
Once you have established your product through Seller Central, Amazon Vendor Central should start to generate orders with that product. At that point you have the option to stick with Seller Central or move to Vendor Central. This decision would be based on the relationship with your Vendor Manager, your comparative profitability, risk of financial threshold issues on AMS, and your other business goals.
With one of our clients, a textile company, they had introduced a new product that was not generating any orders on Vendor Central. We were able to establish 4 variations on the same Parent ASIN, generate a profitable advertising campaign, and eventually Vendor Central ordered the product.
We get a lot of questions about the difference between Vendor Central and Seller Central. We created this guide to help.
- You are the retailer: Amazon provides logistics and access to customers
- Potentially increased margins
- Different fee structure.
- 15% Referral fee (of retail)
- FBA fees or Drop Ship fees
- Payment from Amazon every 14 days
- Use official FBA calculator to determine approximate profitability
- More control over pricing
- You set the retail price.
- The only uncontrollable factor here is if other 3rd party sellers start undercutting your price.
- Complete control over inventory management
- You manage your own projections and shipments
- There are no PO’s
- Improved sales and marketing data
- Includes details about product page traffic and conversion rates
- Access to more customer and purchase data
- Access to data such as conversion rates, impressions and Buy Box %
- Better advertising data in some cases
- Access to customer emails and shipping addresses from order reports
- Cannot use for direct marketing but can be used on Facebook Lookalike Audiences for retargeting
- More control over customer experience with the brand
- Directly manage customer service by e-mail using Amazon’s platform
- Review follow-up campaigns
- Provide support and request honest reviews from customers with automated follow-up emails to customers
- Ability to use Merchant Fulfilled as method for fulfillment
- Allows you to list your products and directly fulfill from your warehouses
- Does not give you Amazon prime which does negatively affect performance
- Avoids FBA fee
- Potential for approval for Seller Fulfilled Prime (Prime shipping without using the Amazon warehouse network
- Program where you are able to be seller fulfilled but have the prime badge
- After trial period
- Selling Wholesale to Amazon
- You negotiate rates and terms with Amazon
- Net 60 or Net 90 payment terms
- PO’s are automated by Amazon’s ordering algorithm
- There are no guarantees of a PO from Amazon for certain products
- These are based on past performance
- Access to Amazon Vine
- Giveaway program that exchanges free products to customers in exchange for reviews.
- Access to AMS and additional ad features
- Ostensibly better advertising rates
- From our personal experience we have seen better pricing from Amazon on PPC bids on Vendor Central
- Ostensibly better advertising rates
- No control over retail price
- Amazon decides on the retail price and there is no way to control it as the brand owner.
- Buy Box competitive advantage
- Amazon manages the retail pricing for you. This means that
- Fee advantages for certain product types
- Advanced Retail Analytics for superior competitive intelligence when you spend extra
- Vendor Premium Services includes an Amazon-facing account executive
Amazon customers care about reviews A LOT.
The difference between 3.5 stars and 4.5 stars could be a difference of 80% in your sales.
We see too many sellers and vendors ignore their reviews. That’s why it is important to….
What Amazon DOESN’T officially state is that there are other criteria to remove reviews. Here are…
– Non product-review rant
– Does not meet 75 words minimum
– Competitor Feedback
– Price objection
– Demonstrably false statement
These policies give you a lot more wiggle room for removing negative reviews.
Don’t forget to provide as much documentation as you can to support your claim.
Sending a ticket into seller support doesn’t hurt, but this is the usual response: “The team that owns this feature is outside of Seller Support and does not use the case system. So your case will appear closed in Seller Central… results of investigations are not shared”
Email firstname.lastname@example.org and specify the location of the content and the reason you believe it violates Customer Review Creation Guidelines.
Don’t forget to check out Amazon’s Review Policies and see how to remove negative reviews.
Amazon has done the impossible: they have created The Everything Store.
If you’re looking to buy something for yourself there’s a good chance that Amazon will have plenty of options to choose from, there will be customer feedback to help decide and that you can get this product in 1-2 days.
But what does that mean for you, the Amazon seller or vendor?
It means that customers are coming to Amazon to buy.
When you create an ecommerce website and optimize for Google search, you are competing with an entire internet’s worth of information: sites that are about information and content, not just sites to buy products. On Amazon, the customer comes to search and find the product they want to purchase. That is why the conversion rate is much higher on Amazon than a standalone website.
This brings to the forefront one of the most important elements of an Amazon listing…
Your keywords are the words and phrases in your content that let people to find your site via search engines. Therefore. keywords are the heart and soul of your Amazon listing. They must both express your product’s value and relevance as well as optimize for search. The proper terms being implemented can prevent a customer from completely missing your listing.
You are selling a yoga mat on Amazon. Of course you are using the keyword “yoga mat” but have you considered that there are over a million searches a month for the keyword “fitness mat”? If you add that keyword to your listing, you are opening yourself up to a whole new customer base.
Make sure that you pay attention to the title, bulletpoints, description and search terms (in the backend.) All of these place its is important to include keywords and there is no need to repeat the keywords in multiple places.
There are other factors that are important for SEO on Amazon which I will cover in upcoming posts. If you have any questions, feel free to email me at email@example.com
You know the saying: “Life happens when you’re making other plans.” Well that’s how I feel about businesses online. While many retailers, wholesalers, distributors, and basically any type of online merchant contemplate whether or not to pay attention to or even build out their website, something has been evolving and crystallizing over the past 5 years. The dominance of the online marketplace.
Wikipedia explains “An online marketplace (or online e-commerce marketplace) is a type of e-commerce site where product or service information is provided by multiple third parties, whereas transactions are processed by the marketplace operator. Online marketplaces are the primary type of multichannel e-commerce and can be described as a “simple and convenient portal” to streamline the production process.”
Amazon of course is the USA’s biggest marketplace in terms of sheer numbers. 2.6 Billion visits a month. Ebay has recently altered their business model towards representing themselves as a marketplace. Walmart.com, Sears, Jet, and Newegg are other marketplaces have committed to this business model.
So if I were starting an e-commerce business today or even if I was in the e-commerce business today, I would question the investment it would take to build and market a full e-commerce website.
How many ad dollars, Google Adwords clicks, how much patience and money to make my SEO work and how much faith do I have in social media to attract visitors to my site and then hope they buy?
What if I focused on the marketplaces where I have a built in audience, built in traffic, and where people are actively searching for products to buy?
I don’t need to be casting a wide web, so to speak, at least initially, I could be attracting buyers to my products through their search habits on existing marketplaces.
So do you need an e-commerce website? I would ask myself questions such as:
- How important is branding?
- Do I have deep enough pockets?
- Do I have a way to attract traffic to my site that is cost effective?
- Will my site provide me the real estate to get my message across in a way that a marketplace can’t?
To answer the question, I would always recommend at least having a one-page website that represents your brand… but development of a simple site is different than developing a full e-commerce website.
Marketplaces can be tough when it comes to keeping up MAP pricing and the fees can be high and you are beholden to the whims of the marketplace, so it’s not a panacea.
But it is a place of opportunity with tremendous upside.