Like anything, selling successfully online is a matter of trial and error and can take a magnitude of failures until you learn the little tricks and have the ‘penny drop’ moment.
Amazon is notorious for not being the easiest code to crack, with its hidden rules and very competitive nature.
We have learnt the hard way (often multiple times) before gaining an understanding of some of the inner-circle tricks with Amazon, and want to share some of what we have learnt with you.
- Choose your products wisely
It can sometimes be a mind field when choosing and deciding on the right products to sell on Amazon.
Be aware that some brands have agreements in place where they are the only sellers allowed. You could find a great supplier of wholesale branded stock, purchase it only to be refused the opportunity to list it (in this instance remember that there are other platforms where you can see your products).
Side note here – it’s always worth checking with the brand if you can sell the product in other markets (Amazon UK/US or Canada). The brand might be signed into an agreement for 1 market but not all of them.
- Best Seller Ranking (BSR)
Whilst doing your research for what products to sell you want to pay close attention to the ever-changing BSR.
This gives an indication of how well the product is selling in as close to real-time as possible.
Rule of thumb – look for products with a ranking of 50,000 or less! (the lower the number the higher the sales).
- Avoid products sold directly by Amazon
One of the features on Amazon is the ‘Buy Box’. This is incredibly valuable and is the end goal of all resellers on Amazon. By having your product listed on the Buy Box, when someone clicks ‘Add to Cart’ that product will be ultimately sold.
There might be 15 sellers of the same product, but very few consumers will ever purchase a product by clicking the hyperlink to see additional sellers and searching for another seller that way. On average around 80% of desktop sales come from the buy box, and this % is even higher on mobile devices.
Amazon has a complicated algorithm that determines which seller will be in the buy box. Think of it as Amazon trying to choose the best supplier to ensure the buyer gets the best buying experience. A number of factors play into this algorithm including customer reviews, number of reviews and overall stock level.
If Amazon is directly selling a product, our advice is to stay clear at all costs! They are in a position to very aggressively compete on price. They are even able to sell at a loss for short periods to weed out the competition. Remember they are here to make as much money as possible and have no problems with being extremely competitive.
- The product I have sourced is being sold by the same distributor on Amazon
At this point you want to review your wholesale vendor. They may just be a reseller selling their stock wholesale and retail. This means they buy their stock from either the manufacturer or another distributor higher up the supply chain.
Some companies can get away with doing this as only big businesses, with VAT no. and X turnover can get the license to buy direct and in wholesale. Thus, appealing to resellers, as a small to medium reseller can’t reach the wholesalers partnership requirements.
Some brands sell their products themselves directly via Amazon. This is a growing trend, but if they are a sizable company they will not use Amazon as their main sales platform, as there are more lucrative supply chain contracts with distributors and retailers that retain reliable quarterly mass orders. This will coincide with their production forecast (business plan to sell more even at wholesale is more profitable to sell some at retail). They may list a few new products to boost product rating and product/brand awareness but that doesn’t them that their other products are being sold by them on Amazon.
You can look at reselling the stock in different areas as the brand by selling on a different countries Amazon, as FBA doesn’t charge extra to some surrounding countries. Say if you bought from an American brand, they may be selling on Amazon US but the UK Amazon may be free for the taking.
- Look at Amazon in other countries
Your product may be selling better in other countries like the UK, US or Canada. There may be less competition from other markets and ultimately better profit margins.
A wholesaler for Amazon products is Fratsy. They buy direct from the manufacturers and only sell in wholesale. Because Fratsy tailors their products for Amazon resellers, all the stock is of Amazon best sellers. They also offer group-buying which provides the products at large discounts.
If you are starting out as a reseller, buying wholesale toys and wholesale gifts to resell can prompt success as this is a fast-selling category on Amazon FBA.