You want to expand your Amazon business in 2018, but you aren’t sure how. If you want to see huge business growth this year, it’s time for a new year appraisal of your objectives.
Whether you’re a new seller or you’ve been selling for years, Q1 is a great opportunity to reevaluate your business strategy. How does each part of your business work together? Where do you need to pay more attention? Which areas can you expand further for the greatest development?
Below you’ll find the 7 strategies to consider when evaluating your 2018 Amazon business strategy.
1. The Transactions Strategy
How many raw sales am I making?
If you’re not selling, you have no business. Without a sheer volume of sales, no other metrics matter. Ultimately, sales lead to reviews, profits, and a better seller ranking on Amazon.
First, look at your view rate. How many people are seeing your product listings? This can help you determine whether or not you’re showing up in search engines and attracting potential customers.
Take a look at your conversion rate. How many people are coming to your page versus how many people are actually purchasing? This will help you determine how successful your product listing copy and images are; is your listing selling?
A good conversion rate on Amazon is about 15%. This is about 3 to 5 times higher than other eCommerce sites because Amazon traffic is generally already in a purchasing mindset.
Focusing on the transactions strategy usually means increasing your views and conversion on your product listing:
- Am I offering products that people want to buy?
- Is my product listing optimized for Amazon’s search algorithm?
- Is my product listing optimized for converting customers?
Talk to Seller’s Choice about how to build Amazon optimization that will increase quality transactions.
2. The Return Strategy
What is my rate of returns?
Your return rate will help you understand the quality of your product and the quality of your marketing.
A high return rate might mean that your products are low quality or defective. This will often be revealed through feedback from your clients. If you think this may be the case, request product samples from your manufacturer and implement frequent quality inspections. Your product is the basis of your brand, so it needs to be high quality.
Moreover, a high return rate might mean that your product listings are misleading. In this case, people receive an item that is good quality, but it doesn’t meet their expectations based on the product listing. For example, it might be listed as “new quality” when it’s slightly used. Or it could come out dark blue when you advertised it as light teal. Even one misleading bullet point could lead to returns and unsatisfied customers.
Furthermore, a high return rate might indicate that you aren’t marketing to your ideal target audience. Customers might purchase your product but it ends up not fitting in with their lifestyle.
Consider where your returns are coming from and why in order to improve your seller ranking and lower your lost revenue. Ask your customers directly: why did you return this?
3. The Review Strategy
What do my reviews look like?
Are your customers generally happy with their purchase? Are you getting positive or negative reviews? Are you getting no reviews at all? Why?
You want everyone to be a promoter. You don’t want detractors (negative reviews) or even passive reviews. You want people who love your product and customer service so much that they tell their friends—and thus do a portion of your marketing for you.
Take each individual’s feedback into account. What are they saying about your business with regards to quality, customer service, returns, and branding?
Remember that reviews are crucial to winning the Buy Box. Amazon’s algorithm rewards a high volume of positive reviews over a high volume of negative reviews or a low volume of positive reviews. This means that reviews influence your visibility.
Moreover, reviews boost your conversion rate. Reviews are social proof that attract and convert more purchasers.
Thus, together, positive reviews and strong word of mouth can help increase your transactions (transactional strategy). In addition, feedback is one of the strongest ways to understand your business and where you need to focus moving forward.
4. The Ranking Strategy
How am I ranking?
You want to be the top-ranking product in your category. This improves visibility and ensures your listing is getting in front of potential customers.
Ranking comes from keyword optimization, number of sales, reviews, and seller rank. Thus, if you boost your transaction and review strategies, your rank should improve in tandem.
You should be consistently checking in with your rank on a weekly basis. If you start to lose your spot on the search algorithms, you’ll see your other metrics fall in tandem.
5. The Marketing Strategy
Is my marketing driving traffic and sales?
Marketing is the best way to grow your business. Marketing is the backbone to all of your strategies: it will get you more transactions, it can lower your returns, it can get you better reviews, and it can improve your ranking.
While this includes organic marketing through product listing optimization, this strategy should also be focused on paid marketing. Are you giving out coupons and discounts? Are you doing deals of the day? Are you running sponsored and pay-per-click ads?
Are you marketing on your website, social media, and other platforms? Are those other platforms driving people to purchase?
Marketing is your key to expansive growth in every aspect of your business.
6. The Margins Strategy
Where am I spending the most money?
Profits should be at the heart of your business. Growing your business means improving your profit margins. While transactions and sales are important, you also want to look at those costs that are cutting into your margins. You could have a million transactions and still have low revenue due to your margins.
- What is your overhead?
- What are your shipping costs?
- Are you ordering your MOQ at a fair price?
- Are you wasting resources shipping and packing yourself? Or are your paying for Fulfillment By Amazon?
- How often are you running sales and discounts?
Look at where your costs are coming from. Where can you cut costs?
Keep in mind that outsourcing can cut into your margins, but it’s the strongest way to grow your brand effectively. Learn more about outsourcing here.
7. The Competition Strategy
What do other sellers think of my brand?
You want to impress your customers… but you also want to impress your competitors. The way that your competitors view you can help you understand how successful you are within your industry or category. Do they see you as a threat? Are they envious of you? Or are they not even sure who you are?
But you can’t really ask your competitors and expect an honest response.
However, you can get this same sort of feedback and professional advice from Seller’s Choice. We run a comprehensive summary of your brand and product listings to determine how your brand looks, ranks, and markets.
Contact us for a free consultation about your brand. We will evaluate these 7 strategies for you to ensure 2018 is your most productive and profitable year on Amazon to date.