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According to Jungle Scout 2023 Amazon seller state The report – an annual study of how Amazon Marketplace sellers are performing – found 89% of sellers say they are profitable on the platform. Despite all this economic uncertainty and rising inflation, a total of 37% reported an increase in profits during 2022.
Amazon is clearly contributing to many brands’ profitabilityAnd with approx 40% of US eCommerce market share, according to Statista, is hard to ignore as a sales and marketing avenue. Today, the question for brands should not be whether to sell on Amazon Marketplace how To grow their business on Amazon.
Related: 7 Things to Consider Before Becoming a Seller on Amazon
Are there any Amazon Marketplace strategy elements that guarantee success?
One of the first things for brands to consider is deciding whether to use Amazon’s invitation-only Seller Central Platform (known as 1P) or Seller Central Platform (known as 3P).
3P offers greater control and granular reporting, allowing marketers to see the real-time impact of their promotions and strategies. 3P marketplaces respond more agilely to ever-evolving consumer behavior but also require more effort and people power. Companies feel they need staff to manage all the nuances of the platform.
There are other considerations as well. As Amazon focuses on profitability, more and more 1P sellers Check for chargebacks and other fees. At the same time, there is Amazon Breaking its 1P ties with distributors In Europe, encourage them to sign up for 3P platforms. In 1P, the selling price is controlled by Amazon; 3P sellers control their own prices (again, more work but more control).
However, once the basic decisions are made, you can start building your brand presence on the platform.
Button-up supply chains are critical. Simply keeping products in stock can be a significant driver of success on Amazon. If sales velocity slows down, the search algorithm will penalize you, and unless you’re a household brand it may take some time to regain that momentum.
Successful sellers also tend to be mindful of Amazon’s policies and algorithms. To do business on Amazon Marketplace The marketer’s game To a certain extent. Amazon’s algorithm prioritizes conversion rate; Understanding the nuances of upselling is critical to being able to quickly adapt and reallocate resources and make more strategies that work.
Great strategists don’t just ship their inventory to Amazon and expect the platform’s market dominance to do the rest. They actively prioritize their Amazon Marketplace strategy.
Related: Want to increase your Amazon sales fast? Here are 3 top tips from an Amazon consultant.
How can brands implement these Amazon Marketplace strategies?
If brands understand how the platform works, they can start using Amazon Marketplace as a revenue driver and a way to reach new customers. Here are some ways sellers can put strategy elements into action to grow their businesses on Amazon:
1. Plan for excess inventory
Amazon Marketplace requires a ready store Inventory To meet the expectations of users. Brands need to better understand their supply chain and plan for excess inventory sold through Amazon while balancing sufficient inventory for their other retail channels. As an Amazon Marketplace seller, you’re responsible for making sure you’re stocking up.
There are many benefits Has good inventory management. Most notably, it’s good for your brand’s finances. When you have a good handle on your inventory, you can make accurate forecasts to meet customer demand. You will have enough supplies, and as a result, your cash flow will improve.
2. Read reviews and reports
Amazon is a great source for unbiased reviews. Reading them can help you understand what consumers do, while follow-up A/B test messaging can show you what converts best. The better you convert, the more sales you will make and the more the algorithm will prioritize your products. Amazon Marketplace also gives its sellers a deep understanding of what customers are searching for and buying; Use the available data — it’s right there.
Keeping up with reviews can be difficult, but this is where creativity comes in. As the use of AI becomes more common, businesses should be wondering how they can strategically leverage it. One way to use it is to have AI digest your reviews and summarize them into “top five positives and top five negatives”. With this strategy, the content literally writes itself.
Related: 4 Things to Know About Online Reviews (And Why You Can’t Afford to Ignore Them)
3. Write to your customers
Despite the common misconception that Amazon is not the place to communicate your brand voice, Amazon is a great platform to communicate with customers. Great content is one way to differentiate your pages. Just remember to “Amazon-ify” your text. Content that works on your direct-to-consumer or social media accounts might not fly on Amazon right away, but it can with a few tweaks. Write with conversions and algorithms in mind and make sure you’re using your words to brand-build.
When writing a product description on Amazon, you must Optimize it with SEO keywords. Amazon’s goal is to connect the user with the product they need almost instantly, and it accomplishes this with its algorithm. By using the right SEO keywords, you can ensure that your product comes up when customers search.
4. Consider the entire funnel
As Amazon becomes more full-funnel in its approach to advertising, it becomes more important for brands to understand all touchpoints along the customer journey. In fact, according to Jungle Scout 2022, 63% of consumers go directly to Amazon when searching for a product. Amazon Advertising Report. However, it can take several weeks between customers entering a category and making a final decision on their purchase. Successful sellers stay engaged with their customers and use early indicators to drive data-driven decisions about where to invest their budget.
Related: How to increase your product sales on Amazon today
If you want to know how to grow your business on Amazon, first consider what made the marketplace such an organization. Why does the platform hold so much market share? And why are its sellers becoming more profitable despite the tough economic environment? Because Amazon Marketplace runs on principles of data and digital marketing. By closely observing and using customer behavior to make choices, Amazon sellers can refine and improve their strategies without investing large sums of money in risky moves.