By Alasdair McLean, Teikametrics
The e-Commerce landscape is constantly evolving — and Amazon is leading the charge. Approximately 44% of all consumers now begin their buying journeys on Amazon, and today, the company has 180 fulfillment centers in the U.S. — a significant jump from 60 centers in 2015. With 27 U.S. cities offering Amazon Prime, 77.5 million people living in the proximity of same-day delivery options and delivery time in London now clocking in at one hour, Amazon’s success is poised to grow — and competition between sellers will only become more cutthroat.
Although retailers report that their total sales grow by 50% when they begin selling on Amazon, FBA (Fulfillment by Amazon) sellers need to constantly analyze and adjust strategies to account for new competitors, system updates, terms of service updates, holidays and more. Data analysis helps sellers gain a major advantage by tracking fulfillment types, competitive prices, conversion rates, customer reviews and each item’s relevancy. As the holiday season approaches and sales begin to skyrocket, below are three tips to help sellers understand how to grow their Amazon businesses and make money during this busy time.
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1. Never get comfortable.
As a seller on Amazon, the moment you become complacent in your store’s activity might well be the moment you start losing customers. Sellers should constantly explore Amazon’s new features and distribution options; test elements such as product descriptions, photos, customer outreach and offerings; and use both mistakes and victories as an opportunity to learn lessons and grow as a business.
2. Before you scale get your “Unit Economics” Right.
Even when the items in your catalog are connected by a common theme, every product faces its own set of competitors, customer dynamics, market prices and more. Make sure you understand individual profitability of each marginal unit of inventory before you hit the accelerator pedal. Once you get a clear picture of your unit economics at a SKU level, you can analyze each product to gauge its profitability and secrets to success — or failure. With this information in mind, you can eliminate unprofitable merchandise and champion techniques, products and sales tactics that perform well. Meanwhile, comparing such behavior between products in your inventory and among your competitors’ stores can help uncover industry trends, direct the path for your company’s future activity and outline new business opportunities for the future.
3. Make SEO your No. 1 goal.
Sellers need to keep abreast of everything from beta programs to new Amazon features and algorithm shifts. However, amidst the priorities, sales, customer relationships and everything else that makes up a seller’s daily activity, no element is more valuable in the long run than SEO.
SEO on Amazon is much different than Google. Rather than defining success by outbound or inbound traffic, Amazon structures its algorithms to connect customers with products that result in high conversion rates. Although there’s no blueprint for Amazon’s A9 algorithm, a few tricks of the trade can help sellers improve their search rankings.
• Amazon’s five key SEO factors: FBA items consistently rank higher in search results than items fulfilled by merchants (FBM). In addition to fulfillment type, Amazon categorizes search results by competitive price point, product category accuracy, review quality and quantity, and above all, high conversion rates.
• On-page and off-page optimization: Amazon analyzes front-end information like images, product titles, descriptions, prices and reviews, plus back-end data, such as additional product details. Be sure both are clear, accurate, rich in keywords and written without a trace of spam.
• Keywords: To optimize every listing for Amazon search, one goal is critical: write for real customers. Complete all product categories, including accurate descriptions of the item’s target audience, subject matter and intended use. However, avoid repeating or stuffing keywords — such activity will only negate the entry’s SEO value.
Amazon’s Prime customers spend an average of 250% more than non-Prime customers. To reach this coveted market, sellers should always aim to know the platform’s ins and outs, analyze all available data and learn the search algorithm’s habits — even as they rapidly change.
As the founder and CEO of Teikametrics, Alasdair McLean-Foreman is responsible for the company’s overall business strategy and technology growth. Prior to Teikametrics, McLean-Foreman founded a high-end sporting goods e-Commerce company, becoming one of Amazon’s first third-party retailers in the sporting goods category in 2003. McLean-Foreman earned a Bachelor of Arts in Economics at Harvard University where he served as the captain of the track and field team.
