Five Tips to Deal with a Successful Amazon Launch
If you’re thinking about starting an online business, selling on Amazon is one of the best strategies. It’s accessible for novices and highly profitable, mainly because of Amazon’s success. With a market cap of over $1 trillion, Amazon is a leading eCommerce marketplace. Almost half of the world’s online purchases are made on their website. If you’re going to sell online, then Amazon is the place to be. In this article, we take a look at the top 5 tips to help you start a profitable Amazon eCommerce store.
If you’re thinking about starting an online business, selling on Amazon is one of the best strategies. It’s accessible for novices and highly profitable, mainly because of Amazon’s success.
With a market cap of over $1 trillion, Amazon is a leading eCommerce marketplace. Almost half of the world’s online purchases are made on their website. If you’re going to sell online, then Amazon is the place to be. In this article, we take a look at the top 5 tips to help you start a profitable Amazon eCommerce store.
1. Determine the business model
You can either opt for Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). In the FBA model, you’ll have to pay Amazon to store your products and ship them out to customers. Amazon will also manage returns and customer service on your behalf. On the other hand, in the FBM model, you’ll have to store and ship your own products while also managing returns and customer service.
If you choose to use the FBA model, keep in mind that FBA outbound fee rates will increase by an average of $0.22 from January 2023. Moreover, the storage fees will increase by around 10%.
According to a survey, around 92% of Amazon sellers use the FBA model, 43% use FBM, and 34% of sellers use both FBA and FBM.
You should use FBM if:
- You want more control over your customers
- You already have logistics in place
- You’re capable of handling returns and managing customer service
- Your inventory turns over slowly
You should use FBA if:
- You want Amazon to handle your customer service and returns processing
- Your inventory turns over quickly
- You do not have logistics in place
- You’re not in a position to fulfill your own products
2. Find the right product
According to a survey, 35% of eCommerce business owners think a startup fails because there’s little to no market for its products. Therefore, choosing a product carefully is important, as it can make or break your business.
To find profitable products, you need to conduct thorough research. This includes checking trends on Google and other marketplaces, looking at the best seller ranks on Amazon, and using product research tools to analyze demand and competition levels. It’s also important to sell in a niche that you’re familiar with.
It’s also important to monitor social media trends as well to outline hidden gem products based on consumers, especially for younger generations. You also need to adapt to the current state of economy in terms of the pricing and the niche of the product.
3. Source your products
Once you’ve identified what you’ll sell and to whom, the next critical step is to find the right source for your products. Good products will help your new eCommerce business thrive. You should not only choose the right product, but also find the right source for your products. Here’s how you can source your products:
- Reselling existing products – It can be cost-efficient and relatively easy to start. You’ll need to find the right vendor, order your products, and ship them to your business (or to the Amazon warehouse when using FBA).
- Creating your own products – This method will give you the most control over quality and design, but it may be hard to scale up, need more capital, and involve risk.
- Working with a manufacturer to create your products – This approach will give you higher growth potential. Still, it can be challenging to find the right manufacturer, work with them to develop prototypes to your specifications, and ultimately make your first order.
4. Make the product retail ready
Once you have the product, make sure that your listing is set up correctly on Amazon. Inaccurate or missing information will negatively impact your conversions, customer satisfaction, and return rate. You can make your product retail-ready by:
- Optimizing your product listing and adding high-quality images and videos
- Pricing your product competitively
- Adding customer reviews that show the genuineness of your brand and your product
- Improving your product ranking by delivering exceptional customer service and maintaining stock
5. Invest in advertising
Around 37% of eCommerce store owners believe that poor online marketing is the biggest reason behind the failure of an online business. After all, what’s the point of having great products when nobody knows about them?
Once you’ve created a product listing on Amazon, it’s time to market your store. Running marketing and promotional campaigns will help you reach a broader audience. Some of the ways you can advertise your products on Amazon are:
- Sponsored Products ads – These ads show up within Amazon product listing pages and can improve the visibility of new products.
- Sponsored Brands ads - Available to registered brand owners, these ads show your headline, logo, and up to three products at the top of a product search results page.
- Lightning Deals and Coupons – These time-sensitive promotions help drive sales and boost your brand awareness.
Along with Amazon advertising, leverage other marketing strategies like social media ads, influencer marketing, and content marketing.
Launch Your Profitable Amazon Store Today
It takes a lot of effort to launch a successful Amazon store, even for seasoned sellers. Therefore, it’s best to work with a partner like AWM that knows the ins and outs of the Amazon marketplace.
We offer industry-leading 3PL operations to help you become a successful seller on the biggest online retail marketplace. We provide personalized consultation and scaling strategy to launch and autopilot your own 7-figure eCommerce store. Get in touch to learn more about our Amazon automation services.