How to Sell on Amazon

The formula constantly changes.  By the time you read this, our philosophy for sales success on one of the largest market place sites may be obsolete, however, simply put, basic economics can help you master this important channel.

Just like any other retail shop or web store, product doesn’t just sell itself.  By being listed on Amazon, you are providing it as a convenience for any customer interested in your product. Do your marketing, get your customers, then give them the option to get it on Amazon since you know they are shopping there anyway.

One of the biggest keys to success is understanding Amazon’s algorithm.  Now, I don’t claim to fully understand the ins and outs, however, from a basic point of view, the more clicks, views, orders and reviews your product or store gets, the more sales you’ll have on Amazon.  The rich get richer.

So, how do you work within these systems?

Don’t try to do it yourself.  You’ll spend thousands of dollars and won’t see an ROI for a while.  Ride the coattails of the fellas that have been tripping the algorithm for years.  Amazon 3rd party resellers are certified experts. Most have their own proprietary software to increase sales and internal teams to build pages for optimization.   WARNING! Not every Amazon 3rd party reseller is good.  Check their reviews, ratings and store page catalog.  Also, don’t try to load yourself up with a ton of 3rd party resellers.  Amazon can only sell a certain amount of units, so if your product is moving along at 100 units per day, you will only move 100 whether you have 1 or 10 resellers.  Get commitments from trusted resellers to grow your brand. At Pinnacle, we have our own qualifying items on which Amazon resellers we will use.

Next, you have to prevent product from falling into the hands of the wrong reseller.  Jimmy has been buying preworkout from on promo and turns around and hocks it on Amazon below MAP.  He’s satisfied with making 30 cents a bottle because he has no overhead working from his mom’s basement. Use the Amazon revenue calculator to figure out where you need to price items to prevent a MAP violator from popping up.  FBA Revenue Calculator

Assume everyone (distributors, retailers, webstores, international customers, direct consumers) and I mean everyone is selling on Amazon. Monitor your deals and your sales people.  If there is price integrity on Amazon, Ebay, etc, odds are even the most basic deal to your brick and mortar partner will be enough for them to buy, unless they plan to sell it on Amazon.

Lastly, control your inventory.  Sure, popping a massive PO for a ton of units always makes us happy….but is it to a trusted reseller?  Good resellers only order a responsible amount of inventory (maybe 6-8 weeks worth). If someone goes crazy on inventory, the likelihood of them marking it below MAP and blowing it out is much greater.  Learn how to read product velocity reports and only plug slightly above the working product demand to keep pricing stable.

These are just a few tips.  Having a great amazon store with quality content is the basics, but if you follow the guide above, you can have continued success with Amazon.