Amazon FBA: Guidelines for Starting Your Amazon FBA Business

Ready to ditch the corporate life and sell Amazon FBA (Fulfillment by Amazon)? Not sure how to get started?

Or maybe you’re already selling Amazon FBM (Fulfillment by Merchant) and looking to make the switch …

If you’re interested in FBA vs. FBM each program has its pros and cons. But ultimately, FBA provides an unmatched, hands-off selling experience with the ability to scale. For these reasons, many sellers prefer FBA to FBM.

FBA is a method of fulfilling products by having Amazon store, pick, pack and ship your inventory. Through FBA, Amazon even handles returns. Although there are additional fees, setup, and tax obligations, FBA makes it easy to quickly start and scale your business.  lot of the content in this blog can also be found from our How To Sell series! Check out the video if you’d like to get started on your Seller Journey:

Why Would I Want to Sell Through Amazon’s FBA Program?

  1. You don’t have to store boxes of inventory at your house. One major benefit to selling FBA is that Amazon handles a good portion of the selling process, namely the most time-consuming portions. Although you still have to set up an Amazon Seller account (we’ll talk more about how to do this later), choose a product to sell, list the product, and have the inventory sent to an Amazon Fulfillment Center, Amazon takes care of the rest of the process with FBA. So when a customer orders your product, Amazon handles the fulfillment logistics of picking, packing, and shipping. In their words, “You sell it, we ship it.”
  2. Once your products are ready to sell and in stock at Amazon’s warehouses, they are automatically eligible for Prime 2-day shipping. Although it is possible to be a Prime seller through FBM, you must meet extensive criteria to be eligible. And with an estimated 112 million Amazon Prime members, or about 62% of U.S. households subscribed to Prime in 2019, you can’t afford NOT to have Prime shipping. Numbers like that are hard to ignore when it comes to the sales potential that Prime provides.

What are the Different Methods of Selling on Amazon FBA?

Now that we’ve established which program you should sell through (FBA), let’s talk about methods of selling, or where to get inventory. There are many options, all of which appeal to different kinds of people. Some are more hands-on, while others allow for higher earning potential. Three of the most common methods include Retail Arbitrage, Wholesale, and Private Label.

  • Retail Arbitrage – This is a process of finding discounted products in retail stores (such as Walmart, Target or Kohls) and reselling them on Amazon. To make it profitable, the items need to be bought at a significant discount and sold at a higher price on Amazon. You can sell other branded products using this method and it is often a lower risk option, since you can check before purchasing the items if you will be able to make a profit or not. You can also search liquidation stores or online sites for pallets of returned items that can be resold.
  • Wholesale – To sell wholesale, a more unique method, you must find a manufacturer (local or abroad) and convince them to allow you to sell on their behalf. The smartest way to do this is to create an official business or LLC, acquire a wholesale license, then reach out to manufacturers/wholesalers to discuss a contract for selling their items. Getting the business to agree to providing you exclusive selling rights can lower your competition as well.
  • Private Label – Private Label selling involves working with a manufacturer to produce items and add your own brand name and logo to the products. As long as there is no patent on the product model, you can legally sell under this method and even work with manufacturers to create product modifications or additions to make your brand’s product stand out. Many private label sellers use Alibaba.com to connect with manufacturers, get samples, purchase inventory and more.

How Do I Get Started with FBA?

There are two account options when selling on Amazon: Individual and Professional. With Individual Selling Plans, you pay $0.99 per item every time a product is purchased. For those sellers making fewer than 40 sales per month, this may be more cost effective than paying the $39.99 Professional Plan subscription fee. These fees are on top of other FBA fees, which we’ll get into more later.

If you haven’t already created a Seller account, you will need to set one up. If you already have an account as an FBM seller, you can easily switch over to FBA inside your Seller Central account.

For retail arbitrage sellers selling FBA, you will need to add the product to your inventory in Seller Central and follow the steps to create labels for your items, which can be printed at home. Once you have printed labels, you can package different items in one large box to be shipped to an Amazon fulfillment center and print a shipping label for that box as well.

Keep in mind that you will need to pay for these shipping costs out of pocket, plus any materials needed for shipping (labels, boxes, tape, scale, etc.). Additionally, Amazon may require you to send inventory to multiple fulfillment centers depending on their inventory levels, which could increase your shipping costs.

Amazon does not require sellers to sticker products at the SKU level as long as you have a manufacturer barcode for the product. But other sellers with the same product (that are also “stickerless”) could get mixed in with your inventory in an Amazon warehouse and could be picked up and shipped to a customer instead of your stock. If their product is used, lower quality or even counterfeit, you could receive poor reviews, a higher return rate or even be suspended by Amazon for counterfeit sales (even if the product is not actually your inventory).

If you choose to sell Private Label or Wholesale, you’ll want to find a good product to source as well as a trustworthy manufacturer. Check out our podcast about finding a good manufacturer to make sure you make a smart partnership as well as our podcast about sourcing the right product to make a sourcing decision that meets your goals.

You can choose to label items yourself (following the method mentioned for Retail Arbitrage) as long as each unit has a scannable barcode or you can pay to have Amazon prep and label each item for an additional per-item fee. Fees can be as low as $.70 per item to as much as $2.20 per item.

When your shipment is ready to be sent to Amazon, make sure you have an organized shipping plan that includes easy tracking so you can ensure your inventory makes it to the desired fulfillment center. To learn more about carriers who partner with Amazon to deliver shipment to their warehouses, visit their page featuring Partner Carrier options.

Once Amazon has your inventory and your listing(s) is live, Amazon will handle the delivery of purchased items to customers as well as customer service throughout the process. Sellers just need to ensure their item is always in stock and ready for customers to buy. Check out our blog on inventory best practices to make sure you never get behind or run out of stock.  

What are the Fees for Selling through Amazon FBA?

Because your inventory is stored, packed and shipped by Amazon when you sell FBA, there are additional fees associated versus FBM. Earlier in 2018, Amazon restructured their FBA fees into two fee structures:

  • Fulfillment Fees
  • Inventory Fees

Fulfillment Fees are per unit, based on the size and weight of each item and include the complete picking, packing, shipping and handling, customer service and return process for each item.

Monthly Inventory Fees are assessed per cubic foot based on the total size of your items. Inventory fees increase for Q4, so it’s important to calculate your costs for each quarter. Below is a breakdown of Amazon’s FBA fees. Make sure to double check your math with an FBA Calculator for help determining your costs before you source.

Other potential fees sellers could incur include long-term storage fees (if items in your inventory have sat in a fulfillment center for 6 months or more) and additional storage fees if you choose to participate in Amazon’s Multi-Channel Fulfillment Program (more on this later).

Things to Keep in Mind as You Start Your Amazon FBA Business

  • Tax Obligations

Although there was once a time when online sellers could get away with not paying sales tax, those days have come and gone. In June of 2018, the United States Supreme Court ruled in favor of South Dakota in South Dakota vs. Wayfair, Inc. Now, one-by-one, states are starting to enact economic nexus legislation.

Because the decision is new at the time of writing this post, it will take some time for the effects to play out. We encourage sellers to keep an eye on internet sales tax by state, and stay informed on the latest news in Amazon sales tax. Sellers should connect with a tax consultant versed in online sales tax regulations to avoid slip ups or potential mishaps in their FBA businesses.

  • Multi-Channel Fulfillment

Did you know that you can fulfill orders from sales channels outside of Amazon.com through the Amazon FBA Multi-Channel Fulfillment Program? Rather than having multiple different inventory locations and shipping methods for your different online sales sites, store all of your inventory in Amazon’s warehouses and let them pick, pack, ship and handle your items to customers, whether the sale is through Amazon.com or elsewhere. There are additional fees associated with the fulfillment process for multi-channel orders, but you can skip the headache of storing, packing and shipping your items and let Amazon do the heavy lifting.

  • Buy Box

If you are selling retail arbitrage or wholesale, the Buy Box is going to be very important to you. The Buy Box is the box on the right hand side of a listing page with the price, seller and shipping information as well as the “add to cart” button. If there are multiple sellers on a listing, they will be listed below the seller who has “won” the Buy Box. Since the majority of buyers purchase from the seller who has “won” the Buy Box, winning is critical to increasing sales. Although there are several factors considered to “win” the Buy Box, fulfillment method is a crucial component. And FBA sellers are significantly more likely to secure the Buy Box over other sellers.  

  • Reviews

If Amazon is handling the customer service for your product under FBA, you shouldn’t have to worry about reviews right? Wrong! Reviews are a huge driver of sales, so whether you’re selling wholesale, retail arbitrage or private label, bad reviews and a low star rating can tank your sales rate. And, with the ability to filter by star rating, too many bad reviews could effectively leave you out of a user’s search results.

For private label sellers, positive product reviews are key to buyer trust in your product quality. If your product is similar to several others in the market, a better star rating could guarantee your product is chosen over your competitor’s. For wholesale and retail arbitrage, positive seller reviews are extremely important to establishing trust in your brand’s quality. Buyers want to hear from their peers if they can trust purchases coming from your seller account or if they should be concerned with used or damaged goods.

There’s been a lot of talk around reviews and Amazon cracking down on review fraud, so making sure you don’t violate Amazon’s Terms of Service for reviews is vital to avoiding suspension. Check out our video about Amazon’s recent “review crackdown”:

Final Thoughts: Learn from Failure

Look, it’s no secret – Amazon FBA can be a confusing and difficult platform to navigate. You’re bound to make some mistakes. What’s important is that you learn from your mistakes and minimize missteps in the future. Following our Amazon FBA guidelines is a good start, but to be truly successful, sellers should keep seeking out new information and staying up to date on changes.

There’s an old quote that states: “Complacency is the enemy of progress.”

Getting complacent or lazy at any stage of your FBA business journey is a recipe for disaster as it requires constant maintenance and upkeep to stay on top. By working hard and arming yourself with up-to-date information, you’ll have the tools you need to achieve Amazon FBA success.

How to Make Money Selling on Amazon: 5 Tips for New Sellers

Wondering how to make money selling on Amazon? It’s the the million-dollar question! After all, you’re probably not starting to sell just for the fun of it. You want to see a profit in order to make the venture worth your time, energy, and investment.

The best part about selling on Amazon is that virtually anyone can do it. You don’t have to be an expert in business or branding to get started. By now you’ve heard countless Amazon seller success stories, things like, “I’m making upwards of $50,000 a month”, or “I turned a $600 investment into $60,000.”

Many of these successful accounts are coming from people with no previous selling experience. Whether you’re trying to turn your side hustle into a full-time business or just looking to supplement your income, there truly is serious money to be made selling on Amazon.

Despite the growing competition, it’s not too late to start selling! That being said, there is also no guarantee that you’ll make a killing. So what is there? A great opportunity. And it’s one you shouldn’t pass up if you’re prepared to put in the work.

Like any other business venture, there is risk involved. But the rewards can be huge, even life changing. After working with over 8,000 brands to run more than 35,000 launches, Viral Launch knows exactly what it takes to succeed on Amazon.

Based on our data and experience, we’ve put together 5 tips every new seller needs to know and understand in order to cash in on the opportunity at hand. For even more tips, take a look at our video series on How to Sell on Amazon. Get started with the first video below, and follow these 5 tips to get going with your Amazon Journey!

Tip #1: Understand How Amazon Works

We know joining the world’s largest eCommerce storefront can be intimidating, especially for beginners. But if you want to know how to make money selling on Amazon, you have to understand how to sell on Amazon in the first place.

Many third-party sellers list products on the platform and sell them for a profit. Some buy these products directly from a manufacturer, while others buy up products at retail stores for a discount. Every Amazon sellers looks for market demand and then offers a product to compete for shopper purchases.

In order for people to find the products that they list on the platform, sellers use SEO tactics to improve their products’ search ranking. Most sellers use keyword placement, sponsored ads, and targeted sales to boost their search ranking on the site. For shipping, many sellers use Amazon’s FBA program to ship their product. It guarantees 2-day delivery to shoppers, and provides a competitive advantage over other products.

Familiarize yourself with its policies and learn the steps to get started and all fees associated with selling before even making your first move. Did you know there’s also taxes to be dealt with? Do your research, don’t just jump in as it’s very easy to make an expensive mistake.

Learn the ins and outs of the Amazon platform or you’re going to be operating at a disadvantage right from the start. Understand how the process works and the different types of selling and fulfillment options available to you — will you be doing self fulfillment or Fulfillment by Amazon? Use all resources available to you to learn as much as you can.

Tip #2: Find the Right Product

There may be hundreds of millions of products for sale on Amazon, but how many are actually making any money? Choose products that will move, not just sit stagnant and end up costing you money. Consider the following before you choose a product to sell on Amazon:

  • Knowledge of the Niche: While you may be tempted to pick some new-age electronic device or an Amazon bestseller, stop to take into account your familiarity with the product and its intended buying pool. If you don’t know anything at all about it, do you really want to be tying your potential profit to it?
  • The Market: It’s simple supply and demand, really. Will there be enough interested buyers to make selling the product worthwhile? Although this can be hard to judge at times, more obscure items usually don’t move enough to result in a healthy profit. For sustained profitability, explore markets that are always strong, like sports & outdoors, baby items, tools, or office supplies. Make sure there’s enough volume to meet your desired income goals.
  • Fads: Keep in touch with trends to see what the latest-and-greatest item is and capitalize on it, just like Brock Johnson did with solar eclipse glasses back in the summer of 2017. Fidget spinners are another great example of a fad that went viral and made some sellers a lot of money. But remember, fads die off just as quickly as they came up, so timing and inventory management are crucial. For those that ordered way too many fidget spinners and engaged in price wars with Chinese competitors, the result wasn’t so lucrative.
  • Competition: Check out similar products on Amazon and see who your competitors are. Competing against national brands typically isn’t advisable as brand recognition and loyalty still rings true even on Amazon. Chances are you aren’t going to outsell a big, nationally recognized brand. This isn’t always the case, but the risk is very high.

Your initial manual research will eliminate many products, but there’s still going to be a huge product pool to choose from. How do you keep narrowing it down?

Amazon Product Finders

Automated product finders are beneficial to use because not only do they streamline the process, they also give you great product insights. These research tools allow you to see competitor prices, monthly sales and more. Get everything you need to make informed selling decisions and find profitable products much faster.

The Viral Launch Product Discovery tool can help you find a multitude of high-potential products that meet your unique wants and needs. After inputting criteria like your desired monthly sales, selling price, review count, and monthly revenue, it provides you with a comprehensive list of products, keywords, brands and categories that match your search parameters. See your sales potential before you even get started!

Learn more about what Product Discovery can do and find profitable Amazon products.

For beginners, it’s best to start small with one or two products and maximize your profit potential by adding more as you go and gain steam. Selling on Amazon is a cash game, as money is often tied up in inventory. Don’t spread yourself too thin.

It’s also important to:

  • Take advantage of the holidays, Cyber Monday and Prime Day specifically
  • Check Amazon FBA’s list of categories and products requiring approval to be sure your product isn’t restricted or requiring additional fees, performance checks or qualifications
  • Find the right (i.e. reliable) supplier
  • Differentiate your product whenever possible — while keeping a competitive price — in a crowded market

Amazon is an eCommerce giant that continues to grow in size and popularity, as evidenced by the numbers in its 2017 Annual Report. Online shoppers aren’t going anywhere anytime soon — there is a huge marketplace of buyers available, and that means ample opportunities for sales.

Set yourself up to succeed by analyzing the market and determining all barriers to entry. Selecting the right product for you helps minimize risk and eliminate pain points before they end up hurting your bottom line.

Tip #3: Have a Solid Business Plan

As you continue to discover how to make money selling on Amazon, it’s beneficial to establish your own business goals right from the start. Is this a side hustle or a full-time venture into online retail? Your business plan will make your profit margin that much more important.

Similarly, are you going to be a one-hit wonder, or are you in this for the long haul? Since you’re likely going to sell multiple items once you get the selling bug, be sure your business is scalable so you can grow with the market and not be left behind.

Knowing why you’re selling and what you want to accomplish will likely change your approach. Take a good hard look at your plan and be sure all business partners are on the same page right from the start.

Understanding your selling model is equally important. There are several different approaches, all with their own fans and critics.

Popular Amazon Selling Methods

Some of the most popular ways to sell on Amazon are:

  • Retail Arbitrage: Purchase a product for a low price at a discounted rate from a retail store, boutique or wholesaler and resell it for a higher price
  • Wholesale: Buy items directly from the manufacturer and resell under the manufacturer’s brand
  • Private Label: Purchase products directly from the manufacturer and sell them under your own brand
  • Merch By Amazon: Apply for the program to be able to upload a design and sell your product like you would on Etsy 

You’ll also want to dig deeper into the pros and cons of FBA vs. FBM. With FBA, you’ll qualify for Amazon Prime shipping, be able to win the Buy Box more often, and not have to worry about fulfilling your own orders.

On the other hand, you’re held responsible for paying FBA fees, and it can be more difficult to track your inventory. With FBM, you’re directly in control over your inventory but held responsible for its delivery. Determine your method to simplify the selling process and focus on developing a successful and scalable business model.  

Tip #4: Optimize Your Listing

When new sellers are figuring out how to make money selling on Amazon, many often believe it’s only the product that matters. But in fact, there’s so much more in play here.

Since online shopping takes away the physical experiences, like touch, smell and ability to pull something right up to your face for closer inspection, your listing copy and photos need to display and describe the product in great detail to bridge the gap.

Both are extremely important for selling success and are key ways to hit your desired sales targets. After all, you only get paid when someone buys something! And that makes listing optimization and using the right Amazon keywords crucial.

Professional Listing Optimization

Professional copywriting and photography services help new and experienced sellers alike. Putting your listing copy and photos in the hands of experts like those at Viral Launch not only minimizes the work for you, it ensures your listing will be optimized in a way that maximizes your ranking and purchasing potential.  

Viral Launch also offers seller software like Keyword Research, a data driven Amazon keyword tool that determines relevant, high-ranking keywords for your product and category.

See the most relevant high-volume keywords for your product and find the low-hanging fruit with high-opportunity keywords that your competitors aren’t targeting in their listings. The better you position your product with high-ranking keywords, the more you’ll boost your visibility. In the crowded Amazon marketplace, visibility is everything.

Tip #5: Increase Your Product Ranking

Even if you find a great product and optimize your listing, you still aren’t going to get sales unless you can rank. High-ranking products are the ones appearing on Page 1, and that’s what Amazon shoppers are looking at. In fact, this 2017 buyer behavior study indicated that 70% of Amazon customers don’t move past the first page of search results! 

We covered how crucial using relevant, high-volume keywords is for your rank ability, but reviews also matter, although their future is a bit murky at the moment. Positive reviews make it more likely people will purchase, and sales have been shown to benefit ranking.

If Lady Luck is on your side, everything might naturally go your way. But chances are you’re going to have to work at improving your ranking, and there are things you can do to gain a competitive edge.

Giveaways

Targeted giveaways – called launches here at Viral Launch – are done to project your listing to Page 1 for a major keyword, with the end goal of increasing your organic sales.

We usually recommend running a giveaway for 7-10 days. This allows Amazon to recognize the sales but still limits the number of items being given away.

PPC

Pay Per Click, or PPC, is a type of sponsored ad. Set a daily budget and bid on a click price to have Amazon post your listing as an ad for targeted keywords. You won’t pay anything unless the ad is clicked on by a shopper, but note that someone can click on your ad and still end up not purchasing.

Once your ranking improves, an optimized listing and good reviews can help you maintain it.

Recap

Perhaps the main lesson in learning how to make money selling on Amazon is you have to do your research and give this venture your full attention, at least at first. 

New Amazon sellers have a lot of decisions to make and work to do. Take the time to consider the following and make the best choice for your business:

  • Selling Plan: Individual or Professional
  • Product: Conduct market and keyword research to make the best choice for you
  • Fulfillment: Determine how in depth you want to be involved in order fulfillment
  • Price Point: What will optimize your sales velocity
  • Listing: Make your listing be seen by the most shoppers possible

Don’t expect to be an expert right away. Use the many resources and software available to you to make smart business decisions. Decide before your first launch if selling will be a side hobby or the primary source of your income.

Once you get going, even if your listing is ranking well, there’s no guarantee it’ll stay that way. Continually check up on the competition and research the market to determine what buyers want. Staying profitable may include adjusting your price point or even making changes to your physical product.

Here at Viral Launch, we encourage you to never settle and keep striving for greatness. This can be in your everyday life or your entrepreneurial pursuits. For more on how to sell and make money on Amazon, subscribe to our blog, podcast, or YouTube channel.

Amazon FBA for Beginners: 6 Steps to Start Your FBA Journey

In this Amazon FBA for Beginners guide, we’ll walk you through how to sell on Amazon and give you six tips for success.

Wouldn’t it be nice to generate a little extra income? Selling online has afforded many hardworking and driven people more financial freedom and in some cases, completely changed their lives.

In a recent study, it was estimated that 40 percent of worldwide internet users bought products or goods online several times a month. And that number continues to grow daily.

This has led many people to ask themselves: How can I capitalize on this e-commerce explosion?

One of the largest players in the space is e-commerce giant Amazon — a multi-billion-dollar company that has established themselves as the leading online retailer. But Amazon is more than just a store. It’s also a marketplace where regular people – just like you and me – can become successful internet entrepreneurs and make passive income.

What is Amazon FBA ?

One of the most popular options for selling on Amazon is as a third-party seller through their Fulfillment by Amazon program, or FBA.

Whether you’re a college student, a retiree, or somewhere in between, you can become an internet entrepreneur through Amazon FBA. In fact, more than half of the total sales on Amazon come from third-party sellers.

Amazon FBA is a popular option because many of the logistics of operating a physical business are handled by Amazon. This allows sellers to minimize their effort and maximize their time and (most importantly) profits.

Benefits of Amazon FBA for Beginners

For the sake of this Amazon FBA for Beginners guide, we’re discussing how to sell on Amazon through the Fulfillment by Amazon program. There are other options (such as FBM) … but those are blogs for another time.

Like we covered briefly in the beginning of this blog, FBA means you send your products to Amazon and they store, pack, and ship your product to your customers. While there are, of course, additional fees with this strategy, there are also some serious benefits:

  • Prime perks: All FBA products are eligible for Prime, which is a huge advantage for FBA sellers. An astounding 63 percent of Amazon shoppers are Prime members! In fact in 2018, it’s estimated that Prime shoppers will drive more than $117 billion in spending. Selling through FBA means your products will be eligible for Prime free two-day shipping.
  • More trust: Amazon has done a great job instilling trust in their business model and practices, which helps you as an FBA seller. When people see a product is Fulfilled by Amazon, they know it will arrive in good condition and on time (and if not, Amazon takes care of it).
  • Hands-off: Scale your side-hustle into a full-time income. FBA gives you the ability to quickly scale without the difficult logistics of handling inventory and shipping out orders.

All these benefits, plus more, contribute to why FBA is a popular strategy for selling on Amazon that leads to incredible sales potential! Just keep in mind, as an FBA seller, you will have to get your products properly prepared for Amazon’s warehouse. That means printing barcodes on products, packaging items per Amazon’s requirements and shipping them into their warehouses.  

So now you’re ready to begin your FBA journey. But where do you start? Here are 6 steps for starting your online business and making your first sale.

 

  1. Find Product Ideas

Now that you know a little bit about Amazon’s FBA program, it’s time to sign up as an Amazon seller. You can choose an Individual or a Professional Selling Plan. If you’re hoping to sell more than 40 products per month, you’ll want a Professional Selling Plan. 

The next step is finding product ideas, and this is a really important step. One of the most popular ways to sell on Amazon is through Private Label. Private Label is when you choose a product, find a manufacturer, and then package and sell those products under your own brand.

Choosing the right product to private label and sell on Amazon is crucial for your success, and the process can be difficult and sometimes stressful. There are a whole host of factors to consider, like marketplace viability, popularity, price and profit margins. If you source a random product, you are essentially gambling on its success.

You want to ensure the highest probability of success by understanding the market’s potential. For this reason, getting as much information as you can during your Amazon product research phase is essential.

So, you might be asking: “Where do I start?” Your first move should be to use product finding software that can help you determine the right market to enter.  

This type of software will provide you with a personalized list of potential product ideas that align with your goals, so that you can quickly and easily understand which products will make you money and which ones will take your money.  

Our favorite product finder is Product Discovery, which allows you to find individual products that meet your criteria, find keyword markets full of potential, discover successful brands to emulate, or search subcategories to find that next up and coming product. There are even advanced filters for the adventurous. This allows you to customize your research process and feel confident that you’re seeing personalized results. But if you’re new to this, don’t feel overwhelmed. Pick a few filters that make sense to you, such as Category, Price, Sales, and Reviews, and filter through results to see what catches your eye.

Once you’ve performed your search, you’ll be presented with loads of useful data to help you find potential product ideas. Take a glance below at this example search.

By using a product finder, you’re given all the data and insights you need to find a list of potential products ideas and start your Amazon journey off right.

Want to learn more about Product Discovery? Check out this quick intro tutorial:

  1. Validate Your Product

As you might have realized by now, research plays a huge role in whether or not your journey is headed towards success. After gathering a list of potential product ideas, it’s time to dig deeper and validate your product.

One of the best ways to research each of your potential products and ensure yourself the highest probability of success is by using a market research tool. These types of tools help you to eliminate guesswork so you can avoid products that will lose you money.

Market Intelligence, a seller favorite, lets you verify demand for your product by looking at estimated sales numbers, keyword search volume, trends, and market conditions. You can also take a look at how top competitors have performed in the past and are performing now, as well as allowing you to look at potential barriers to entry like reviews, big brands, and high initial investment.

With all this information at hand, you should be able to identify a market full of products that, on average, have healthy revenue numbers and low reviews so it’s easy for you to enter in and compete. It’s also a good idea to look for markets that seem to be relatively stable, rather than chasing trends. While trend categories can be hugely profitable for those that get in quickly, the safer play is to look for markets with long term stability.

For evidence of the risk of trends, look no further than the fidget spinner. As you can see, there was a huge surge in sales, more sellers hopped on, price wars started, and when the trend dried up, many were left with inventory that was impossible to get rid of.

During this research stage you’ll also want to begin thinking about developing a business plan, setting actionable goals and determining how much time, energy, and investment you really want to put into this business.

Keep in mind, during these early stages, you may need more capital than you anticipate. You’ll need to pay for your product, shipping, listing, marketing, and eventually scaling. To get an idea for how much money you could make (and how much you may spend), use an Amazon FBA calculator.

  1. Find a Manufacturer and Place Your Order

This next step is another big one. Once you’ve sifted through products and validated your market, it’s time to actually get your product produced and ordered. After in-depth research, we recommend developing a list of at least 3-5 products with margins that align with your goals.

Next, you’ll want to look into manufacturing channels. One of the most popular sourcing options for Private Label sellers is Alibaba.

Alibaba connects you with overseas manufacturers, allowing you to buy your selected products in bulk. Again, doing your research is imperative for picking a legitimate manufacturer to work with.

Alibaba has 3 quality assurance methods that can help you choose what manufacturers to work with:

  • Trade Assurance: This is a free service that helps to create trust between buyers and suppliers. This will protect your money in the case of a dispute with the supplier over issues like product quality or shipment.  
  • Gold Supplier: This allows you to determine which suppliers have received a verification through Alibaba that proves they are a registered legal business. However, this doesn’t mean every supplier with this verification will be 100% reliable, but it does help to lend more legitimacy.
  • Assessed Supplier: Suppliers with this status means they have passed a verification process with an independent inspection status.

Especially for new sellers, we recommend contacting suppliers who satisfy each of those quality assurance checks.

Once you’ve identified a group of suppliers you’re interested in working with, it’s time to make contact and start inquiring about product samples. When working with manufacturers, you’ll want to take note of their response times, clarity, communication, price, timeframe and reputation.

One of the biggest tips we can give you is to think about cultural differences when starting a dialogue with these suppliers. For instance, if you’re working with manufacturers in China, they place a huge emphasis on building relationships. So with that in mind, you’ll want to let them know you’re interested in building a long-lasting business relationship. You’ll also want to make sure to develop a personal relationship and be extremely courteous.

When talking with a manufacturer as a first-time seller, present yourself as a knowledgable business owner looking to quickly ramp up your production and sales. If you portray yourself as inexperienced, you might not get the best possible price from a manufacturer.

A good starting point for a first time seller would be to reach out to 10 or more suppliers, get samples from 3 and then buy a few of your top competitors’ products from Amazon to compare your sample and their product.

To save yourself time, you can create an email template for first contacts that hit on all your major questions. Some things you’ll want to ask are:

  1. Time it takes to receive initial product samples
  2. Time it takes to manufacture the product
  3. What payment methods they accept (like PayPal) for full orders
  4. Cost of shipping the product per unit to your location
  5. Type of packaging that is used

Once you’ve collected and reviewed the samples, it’s time to choose the supplier to move forward with and place your first full order. During this phase you’ll want to determine package options from the supplier and obtain a Universal Product Code through a GS1 Company Prefix.

The next big step is figuring out how much to order. We usually recommend a first-time seller orders enough product for at least a 2-month run of inventory. To get a rough estimate of how much inventory you need, you can use an Amazon sales estimator showing historical trends. 

In terms of shipping inventory from overseas, many newer Amazon sellers will use a freight forwarder. Flexport is a popular option among sellers as they handle all shipping logistics for you for one price, including pick up logistics, sea freight, customs, and more. Using a freight forwarder may be a bit pricier, but many sellers consider the cost worth it for peace of mind in the unfamiliar territory of shipping by sea and importing into the United States.

  1. Create an Optimized Listing

Ok … so you’ve got your first product. Now it’s time to list your product on Amazon and make your first sale. As an example, let’s say you’ve decided to sell a first aid kit. Do you snap a picture with your smartphone, throw up a title that says, “First aid kit” and magically start selling? Not exactly.

The goal of an effective product listing is two-fold. You want to accurately depict your product while simultaneously incorporating important keywords to increase the number of people that see and purchase your product.

Think of it this way. You could write a beautiful, eloquent and accurate title, bullets and description of your first aid kit that truly explains why someone should buy it. But, if you don’t include the keywords people are using when searching for that product, you’re not going to be found. So all that great copy would be wasted.

Conversely, you could do in-depth keyword research and find 50 great keywords, throw them haphazardly into a listing and create a nonsensical mess. While you might pull in searches, chances are if someone can’t understand what your product is or does, or it isn’t accurately described, no one is going to actually buy it.

That means you need to find the happy medium of correctly incorporating keywords and accurately describing your product.

Luckily, there are tools available to help you find the exact keywords you should be including in your listing. You want to ensure that your keyword tool is using accurate Amazon-only data.

One of the most important metrics when deciding what keywords to use is search volume, or how many people are actually looking for that product every month. It’s clearly important to find high volume keywords, but there a few other things to keep in mind. You also want to target high-opportunity keywords that competitors aren’t using. And, you want to make sure that the keywords you choose are relevant to your product. If you end up ranking for a keyword that isn’t relevant, you won’t get sales.

Clearly, there is a lot of data here to keep track of. How do you make sure you’ve included all the keywords in the most vital areas your listing? One of our favorite tools that simplifies the listing creation process is called Listing Builder. This feature is included in Viral Launch’s Keyword Research, a tool that allows you to easily gather a comprehensive list of keywords and write your copy on the fly. This feature helps you keep track of what keywords you’ve used and what you still need to incorporate. Once you’re finished writing, you can then take your copy right into your listing for maximum indexation and conversions.  

If you’re not comfortable choosing where to put which keywords and writing sales-inducing copy, we recommend paying for a listing optimization serviceListing optimization services connect you with a team of professionally-trained Amazon copywriters who will write optimized content created for maximum visibility and conversions.

Now that you’ve got the written side of an effective listing down, it’s time to talk about photos. Product photos are an extremely important element of your Amazon listing. Browsing on Amazon, you’ll see some product photos that are of questionable quality at best. You want to refrain from using stock images, relying heavily on photoshop and using largely text-based images. And while you might think your iPhone photo of your product will suffice, you’ll be surprised what a professional Amazon photographer can do for your brand perception, clicks, and sales.

Garnering reviews are also another massively important piece of an effective listing. Recently, there’s been a lot of turmoil surrounding the topic of Amazon reviews. This is just one example of why it’s always important to stay up-to-date on changes to Amazon’s practices.

In short, think of reviews on Amazon as a sort of currency. It shouldn’t come as much of a surprise that, in general, products with better reviews are set up for better sales. However, getting reviews can be difficult, and you want to make sure you follow Amazon’s guidelines or you could face penalties.

One of the best (and Amazon-friendly) ways to generate reviews is through an email follow up campaign, which is used to ask for feedback and encourage reviews on customer purchases. Check out this video full of tips to generate more reviews:

Just remember, Amazon has taken a hard stance against review manipulation, so at this point, it’s better to take a conservative approach to gathering reviews to avoid the risk of suspension or being banned from selling completely.

  1. Increase Visibility

So your product is in Amazon’s warehouses ready to ship, and you’ve got an optimized listing for a great product. Have you done all that you can do to drive traffic and increase sales? Not even close! You still have plenty of options for driving traffic to your listing.

One of the most popular – and effective – ways is through what’s called a PPC or Pay-Per-Click campaign. In short, PPC marketing is essentially “sponsored content” that you’ve likely seen when browsing Google, Amazon or any other search engine. What you do is pay a small amount of money to the search engine you want to advertise on for each click that your product gets. PPC can be a great way to get initial traction and place your product in front of even more people.

Another great way to get your product visibility on Amazon is through promotional giveaways, or what we call Launches.

It shouldn’t come as a surprise; ranking on Amazon is extremely important. The higher up a product ranks on Amazon, the more eyes there are on the listing, which equates to more sales opportunities. Most shoppers don’t make it past the first couple of pages  – if that – when shopping for a product on Amazon. That’s why page one positions for major keywords are so coveted.

Many sellers use promotions as a way to boost sales and drive more traffic to their listing by providing deep discounts on their product for a period of time. If you’re interested in launching your product this way, check out our 9 common mistakes to avoid.

Another popular way sellers use to increase a product’s visibility is by bringing in traffic from outside sources, such as running ads on Facebook, Google or other platforms that direct buyers to their Amazon listing page.

  1. Manage Inventory

Managing inventory is a crucial step to maintaining a successful Amazon product. If you don’t properly manage and track your inventory, you will find yourself out of stock and low on cash. Not to mention, being out of stock for too long can significantly hurt your rank, which can have devastating effects on sales in the long run. 

When managing inventory as a seller, there are two important factors to consider – how long it takes for you to get a shipment from a manufacturer and how many units you sell per month, on average.

For instance, if you get your inventory 60 days (or two months) after placing an order from your overseas manufacturer and you’re selling 1,000 units per month, you’ll need to make sure you order at least 2,000 units. That would give you two months (or your lead time) worth of inventory. And if you have the cash, ordering a bit more will give you some cushion in the case of delays or an increase in sales.

Like with any business model dealing with physical products, selling on Amazon FBA Private Label means a lot of cash will be tied up in inventory. That’s why managing inventory correctly is so important. If you don’t, you run the risk of going out of stock without enough cash on-hand for a reorder when you need to.

I’ve Conquered Amazon FBA for Beginners – What’s Next?

So now you’ve got your Amazon business up and running. Maybe you’ve just made your first sale or things are going great and you’ve already had to restock.

But as profits rise, so does that entrepreneurial spirit. This might lead to asking … what’s next? You have a few options. One is to add another product to sell in the same or a completely different category.

Or, you might just want to stay with your first product and build profits for some supplementary income. Whatever you choose, make sure it’s what’s best for you and your goals. That’s the best part of being your own boss, isn’t it?

At its core, Amazon is an ecosystem that’s constantly changing. That means you have to stay up to date on Amazon’s Terms of Service and best practices. But luckily, there’s no shortage of information about how to sell on Amazon for beginners or for experienced veterans.

Here at Viral Launch we want to be your go-to source for the most accurate and recent Amazon information. That’s why we recommend you subscribe to our blog! Are you more of a visual person? Not to worry, check out our Youtube channel. If you’re looking for a great podcast to listen to during your commute or while traveling, we suggest listening to our podcast Follow the Data.

You’ve got all of the tools to be successful at your fingertips. Now it’s up to you! We’ll leave you with one final thought about what you need to be successful in the form of a quote from Madam C.J. Walker:

“I had to make my own living and my own opportunity! But I made it! Don’t sit down and wait for the opportunities to come. Get up and make them!”

Has the Amazon Review Policy Changed?

Is Amazon removing reviews? The Amazon FBA landscape is changing FAST. Far faster than we’ve ever seen. And I wouldn’t bet on it slowing down anytime soon. It’s those brands that are willing to embrace change, adapt, and play by the new rules that will always come out on top.
 
 
 
 
 

Possibly the hottest topic for sellers—and the area that is seeing the wildest changes right now—the Amazon review policy. We’ve identified six major review changes over the last couple of months. Some of them have had devastating effects on brands.

Without any formal statement or direction from Amazon on policy or structural changes, we in the seller communities are (classically) left in the dark wondering what’s going on. Some of us are asking what we’ve done wrong, and all of us asking ourselves what’s the best way to move forward.

As always, the Amazon seller forums and Facebook groups are running wild with speculation and questions as to what’s going on with the latest review changes, and few truly have a grasp on the magnitude of some of these changes.

If you’re at all familiar with Viral Launch, you know we are a data-driven company. And you know that we love to answer questions and solve problems with vast amounts of data (I mean how else? 😉 )!

To find out what is happening with reviews, we used the advanced data aggregation of our product and market research tools, Market Intelligence and Product Discovery. These product trackers gather historical and real-time data on well over 100,000,000 Amazon products. So we were able to uncover some jaw-dropping stats. You’ve got to see!

Change 1 of 6: Amazon Removing Reviews or The Great Amazon Review Abduction of 2018

Some of you have likely heard of or experienced a brand or product where Amazon was removing reviews over the last month or two. You—like everyone else—were probably asking yourself questions like, “How widespread is this?” and “Have other sellers lost as many reviews as me?”

We had the same questions. So our engineers started crunching the numbers. And here’s a glimpse of just how widespread Amazon’s latest review removal was. We should note that we are still working through the data to try to make it as clean as possible. There are a lot of moving parts when it comes to reviews, including changes and discrepancies in variations. 

For each top-level category in the Amazon US market, we looked at the top 10,000 best selling ASINs with at least 90 days of history. From that set of products, we looked at how many of the listings lost reviews, which listings lost the most reviews, and how many reviews the category lost as a whole.

Here’s a summary of the report showing just how huge and far-reaching this review abduction is:

Reviews Removed between May 1 and May 31

Top 5 Categories with Highest Number of Reviews Removed from May 1 – May 31:

Cell Phones & Accessories: 324,423 reviews removed!

Health & Household:   305,777

Grocery & Gourmet Food: 204,553

Beauty & Personal Care: 193,242

Tools & Home Improvement: 177,375

Top 5 Products Hit With Review Removal:

Etekcity Digital Scale (B073W64CY8): 13,999

Pansonite VR Glasses (B07516YQ59): 10,202

       Bark Solution Dog Collar Training System (B01HSH194S):  6,690

Fox Print Princess Castle Play Tent (B0120XRWLE): 1,710

Amazon Basics Stainless Steel Kitchen Scale (B06X9NQ8GX): 1,472

Top 5 Most Affected Categories by Percent of Listings Affected:

Cell Phones & Accessories: 21.08% of the top 10,000 listings had reviews removed

Camera & Photo: 19.43%

Video Games: 19.05%

Health & Household: 17.66%

Sports & Outdoors: 17.39%

Download the full guide by entering your email in the form below!

The category that lost the most reviews was Cell Phones & Accessories with 2,108 of the top 10,000 listings losing 324,423 reviews. That’s the total number of reviews that we saw Amazon removing between May 1st and 31st. When accounting for the reviews that sellers regained (organically and otherwise), the category still came out with a net loss of 185,302 reviews.

The single listing that lost the most reviews in the Cell Phones & Accessories category was this Pansonite 3D VR Glasses. The listing lost 10,202 reviews taking them down from 10,339 reviews to just 65 reviews at its lowest!

The category that was hit second hardest was Health & Household with 1,766 of the top 10,000 listings losing 305,777 reviews. Accounting for reviews gained and re-gained, the net loss for the category was 177,324 reviews. Of the 10,000 Heath & Household listings we analyzed, the single listing that lost the most reviews was this Etekcity Digital Scale (B073W64CY8) which lost 13,999 reviews. 

You can see the spikes and drops in their review count using Market Intelligence. It’s crazy to look at the review graphs for some of these listings that lost a ton of reviews. You can see where Amazon removed the majority of their reviews and that they quickly got them back. Then Amazon removed them again, and the seller recovered the reviews again. This Etekcity Scale is an excellent example!

These graphs show you just how crazy things are right now. You can see these sellers fighting for the life of their listings. Losing that many reviews changes a product’s star rating, drastically affects the product’s perceived popularity, probably forfeits Best Seller and Amazon’s Choice badges, and just, in general, destroys a listing’s credibility, which we know affects sales.  

Change 2 of 6: Reviews Being Blocked

*The specifics of this section seem to currently be in a state of change, so depending on when you are reading this, it is possible that changes may have come about. Some of the tests were limited in scope as we wanted to leave reviews in an ethical fashion. The concepts and context are what’s most important.

From our perspective, this was the scariest change of the six we’re listing here.

To summarize, Amazon seemed to have put proverbial speed limits in place when it comes to review acquisition velocity. For the month of May and into June, it seemed as though the Amazon review policy was limiting the number of reviews a product could obtain in a day. If you exceeded the threshold/speed limit, the product would be punished with a review block for some period of time ranging 3 to 7 days.

Two very interesting facts from this finding:

1) unverified and verified reviews were treated separately

2) the review limit was a static number.

Let me explain.

After a bit of testing and observing, we noticed that receiving 3 unverified reviews in a day would cause Amazon to block the ASIN from receiving any additional unverified reviews. Similarly, after receiving 6-8 verified reviews in a day, Amazon would block the ASIN from receiving any additional verified reviews. And customers would see some form of this message:

PRO TIP: Unverified reviews are reviews in which the reviewer has not purchased the product on Amazon, or has purchased with a heavy discounted code

From what we could tell, the first time a review block was initiated, the product was put on a 7-day review block (for both verified and unverified reviews). We believe that during this time Amazon conducted an audit, combing through the account to try to develop an understanding of the authenticity of the reviews. We believe Amazon would look at things such as the content of the seller’s email follow-up sequence, the referral path of the reviewer, etc. If everything checked out, the product’s review block would be lifted (meaning it was again eligible to receive reviews), and if things did not check out, the account was suspended.

But passing the initial suspension did not mean you were completely in the clear! The majority of products that continued to exceed the Amazon imposed speed limit would have the review block reinstated. If a product reached the limit of 3 unverified reviews in a day, it would be blocked from receiving any additional unverified reviews. But it could still receive verified reviews. Similarly, if 6-8 verified reviews were left in a day, then the ASIN would be blocked from receiving additional verified reviews. These blocks seemed to last for 1-3 days at a time. We saw several listings cycle through this process multiple times.

For our clients with products selling 1,000+ units per day, receiving 6-10 reviews in a day is not uncommon. It was quite surprising that Amazon would choose to use a static number versus a percentage of sales. And it creates a very frustrating experience for sellers.

This review blockage was not exclusive to ASINs offered by third-parties. Many of Amazon’s own high-volume products had review blocks in place at one point or another.

At the time of this posting, here is a high volume product (#3 best seller in Beauty & Personal Care category) that currently has a block in place for unverified reviews. When you click on the star rating, you will see a pop-up stating that your review cannot be accepted at this time.

While review blocks are still happening, from what we’ve observed, as of mid-June, there have been far fewer than in May. We don’t yet have the answers as to why. Perhaps Amazon has adjusted the speed limit to a percentage of sales rather than a static number. Maybe they decided that one account review analysis was enough. Only time will tell.

We are grateful to Amazon for stepping up their game in terms of monitoring and enforcing the rules when it comes to reviews. A lot of the existing rules harm the ToS-abiding sellers while bad actors gain a competitive advantage by cheating the system. We really hope that, at the least, this is an indication of Amazon beefing up security and enforcement of their inauthentic review policies and programmatic monitoring.

Why this change was so scary.

This Amazon review policy change challenged some of the fundamental dynamics of being a third-party seller on Amazon. The very reason our customers have been able to build successful million-dollar businesses (and sometimes tens of millions of dollars) is they are able to develop competitive advantages in their market. Those advantages range from the ability to drive keyword ranking in organic search results, drive better conversion rates through product photography and better listing copy, having a better product and so many others.

A seller’s ability to drive quality reviews faster than their competitors is an important advantage in a savvy seller’s tool belt. Being able to drive reviews faster than your competition allows you to enter an existing market with 0 reviews, strategically drive reviews to catch up with competitors that may have hundreds or thousands, and achieve maximum sales potential. If you and your competitors were restricted to driving no more than 10 reviews per day, it would be impossible to catch up to existing players and obtain a relatively competitive number of reviews in a market, which could severely inhibit your ability to ever drive meaningful sales volume in that market. If this change came to fruition, it would not be as impactful if Amazon made the systemic review change we anticipate them to make, which we talk about in a podcast episode here.  

The opportunity for success as an FBA seller exists in the competitive advantages. Any erosion of opportunity for competitive advantage will make it more difficult for new products and new sellers in existing markets. We firmly believe that the high degree of competition on Amazon has been key to Amazon’s success as well as our clients’ success, so any potential infringement on that is intimidating.

Change 3 of 6: Reviews Split By Variation

The way that reviews are being attributed to variations seems to also be apart of the Amazon review policy change. It used to be that if you had a listing with variations a, b, and c, the reviews for each of those variations would be aggregated for a total review count and star rating that applied to each variation on the listing. So the total number of reviews for the each ASIN would be the same. That means if someone bought your purple flashlight and left a review, that review would apply to the red variation, the black variation, and the green variation.

Not so in the new world of the Amazon review policy! Amazon is slowly making a switch in the way that it handles reviews on listings with variations. Instead of applying a review for a variation to the whole listing, if someone leaves a review for, say, that purple flashlight, it will only show up on the purple flashlight variation.

So as a shopper is clicking through the product variations, the star rating and the review count under the title will change. That means if no one has leaves a review for your green flashlight yet, it will show up as having no stars and zero reviews!

Here are a few examples:

This Amazon review policy change in the way that Amazon is handling reviews for variations also means that if someone does finally leave a review for your green flashlight and it’s a 1-star, your rating for that variation is going to be really low. Even if you have a 5-star rating for the other variations. This is potentially bad news for sellers. It means that every variation you have is going to have to be top quality. And your strategy for providing stellar customer support and preventing bad reviews has to be good. 

Change 4 of 6: Seller Feedback Lost to a New Rolling 12 Month System

Have you ever jumped in your car to go somewhere and realized that you don’t have your cell phone with you? You run back inside and spend the next 15 minutes tearing your house apart trying to find it? Yeah. This is nothing like that.

This is like realizing you don’t have your cell phone, and running back inside to look for it except now your house is gone. And so is your cell phone, which you left on the kitchen counter by the way.

Seller feedback is being moved into a rolling 12 month system. This new system is especially significant for Retail Arbitrage, Online Arbitrage, and Wholesale people. Seller rating is a big part of what allows RA, OA, and Wholesale sellers to win over customers.

You know how when a shopper clicks on New (10) from $5.90  they are taken to a page with all the offerings on that listing. And each of those offerings is being sold by a seller with a rating. Well now instead of seeing that seller’s overall rating, Amazon is showing customers a rating from “over the past 12 months.”

So if you got four 1-star reviews in the last 12 months, those hold a lot more weight than they used to. Let’s say you used to have 2,000 seller reviews and 5 of them were 1-star reviews. That probably wasn’t pulling down your overall rating too much.

But now that Amazon is only looking at that last 12 months, it’s only looking at the last 500 reviews that you got. And four of those 1-star reviews happened during that time. Now you’re feeling those 1-star reviews in your rating.

But this change is not happening across the board. We’ve only seen certain seller accounts where the change has been implemented. So if you haven’t been affected yet, consider yourself lucky. This inconsistent introduction of a new system could end up being totally unfair to those sellers who have been pushed in already and whose star ratings may look less favorable than their competitors who are still part of the lifetime review system.

Under the rule of the new 12-month rolling reviews, consistency is the name of the game. You have to deliver an awesome customer experience with every single product on every single order if you want to be among the top-rated sellers on the platform.

Change 5 of 6: “The Great Amazon Reviewer Purge”

Amazon is getting rid of thousands of top reviewer accounts. After Amazon banned incentivized reviews in October of 2016, top reviewers started being kicked off the platform if Amazon suspected that they were not complying with the changes.

Amazon has been purging their Top 10,000 reviewers, banning them from the platform. In the subreddit The Great Amazon Purge, you can track how many reviewers have been removed so far. The subreddit has actually been tracking the number of removed Top 10,000 reviewers since February of 2016.

At the time of this posting, 4892 of the Top 10,000 reviewers have been removed.

Change 6 of 6: Suspension Changes And Account Bans

While the majority of Amazon sellers cite their number one fear as having their privileges revoked from selling on Amazon, we have very rarely seen this actually happen in the private label world (and for context, it was one seller of the 10,000+ we’ve worked with and was due to continued review manipulation).  An Amazon account suspension is incredibly scary and can be devastating to monthly financials too. From our limited experience, intuitively, we’d guess the average account suspension lasts no more than a week (would love some data on this if anyone wants to share!). From our sources, there is a new rule for suspensions due to review manipulation, and it comes in at whopping 21 day minimum suspension! That is tough!

From what we know, if there is an additional review manipulation infraction, the seller account will be BANNED. The kiss of death.  Unfortunately, we’ve seen this happen to two major accounts and I imagine many others (we did not dig into the data around account suspensions/bans, we’ve merely heard of these instances through the grapevine). Unfortunately, we do not have any specific information around the why behind these accounts being shut-down by Amazon.

How To Move Forward With the Amazon Review Policy Changes

The problem with any definitive suggestions in moving forward on Amazon, especially when it comes to reviews, is that we are not 100% confident in where the line of appropriate behavior versus non-ToS compliant behavior falls. If all of our questions could be answered, or the ToS was completely comprehensive, then as a company, we’d feel much more confident in providing a “best review strategy”.

The short answer is that right now, we suggest being conservative in your review acquisition strategy. This is especially our advice if your account has been suspended due to review manipulation. Over the next few months, we’ll start to develop a better conceptual understanding of what the Amazon review policy and what’s acceptable vs unacceptable.

Some account managers for our largest clients have even made the suggestions to stop sending all email follow-ups that mention the words review, feedback, etc. We are not saying that well-worded email follow-up sequences will lead to suspension, we just want to provide you with as much information as possible so you can make the decision about what activities to leverage in your review acquisition strategy.

It should go without saying that as a company, our suggestion is to abide by Amazon’s TOS when it comes to obtaining reviews. Knowing exactly what is and is not within TOS is another question. We still see many sellers participating in review groups (predominantly those in Facebook groups), and we cannot encourage you enough to stop this. We have strong evidence that a number of these groups have had the brands participating in these groups suspended. For those that are unfamiliar, there are secret Facebook groups in which a buyer offers to purchase a product at full price and leave a review, and the seller reimburses the buyer through a payment provider such as PayPal.

As our understanding of what is/is not acceptable in terms of review acquisition strategies, we will be sure to post updates. Reviews are a critical component of Amazon success and can be a major competitive advantage. We want to make sure that you are best equipped to avoid unintended suspensions and gain a competitive advantage with the most powerful, yet TOS compliant, review strategies available.

For more Viral Launch, data-driven insights. Subscribe to the blog. We’ll notify you whenever we have a piece of big, impactful information, like this, so you can stay on the cutting edge of Amazon seller success.

Selling on Amazon vs eBay: Which Is Better?

Online Shopping is seeing year after year growth.  In fact, Retail e-commerce sales worldwide are forecast to nearly double between 2016 and 2020.  If you’ve thought about selling online, now is the time to ride the e-commerce wave to boost revenue.  But which online marketplace should you invest your time, resources, and products?  Should you diversify or go all in on one?  While there are several online marketplace options to sell, we’ll specifically be comparing selling on Amazon vs eBay in this post.

AMAZON SELLERS VS. EBAY SELLERS

In this year’s letter to shareholders, Amazon announced that, “Over 300,000 U.S.-based SMBs started selling on Amazon in 2017.” That’s a lot of new sellers on the platform, and that doesn’t even capture the individuals sellers and larger brands who are all rushing to list their product in Amazon’s ecommerce catalog.

Amazon Sellers

Amazon’s brand awareness as the go-to online store with lightning fast deliveries and excellent customer service draws shoppers like a giant consumer magnet. And that makes it very appealing for sellers. So appealing that many sellers on the platform do not sell their product anywhere else. But with more and more sellers jumping on the platform, competition has increased. And that means customer expectations have increased too.

It’s not enough to ship a product from your garage and have it arrive a week after purchase. Customers want their orders at their doorstep tomorrow. And they want that product to be quality. If it’s not, one bad review can knock down your rating and potentially your conversion rate and your ranking.

Overall, what this more competitive landscape means for the type of sellers on Amazon’s platform is that they are becoming more and more higher-caliber. They are becoming more and more competitive. Those who succeed and win a good ranking position know how the platform works, and they know how to succeed.

eBay Sellers

eBay sellers on the other hand span a wider range. Unlike Amazon, there are not large brand names on the platform. But there is a wide spread of seller types from large, competitive sellers with some brand recognition to the online-yard-sale individuals who are selling single items they are trying to get rid of.

While Amazon sellers battle the high expectations of customers on the Amazon platform, eBay sellers battle quite the opposite: the idea that all items on eBay are used or second-hand. This is probably one of the reasons that eBay sellers list their products on multiple marketplaces. eBay attracts a different kind of customer too, which lends it to certain products more than others.

AMAZON CUSTOMERS VS. EBAY CUSTOMERS

In the selling on Amazon vs eBay discussion, both have unique customer bases that set them apart and make them more or less favorable to certain products. Before you decide where to list your product, you’ll want to make sure that there is good demand for it with the customers on the platform.

Amazon Customers

Amazon is the most popular online store in the United States, according to Statista. It has by far the largest market share for ecommerce. So who are these Amazon customers? Compared to customers on other ecommerce platforms, they are generally more educated and more well-off than the average American. Here are the four most distinguishing traits of Amazon customers:

  1. Younger. According to Digital Commerce 360, over 50% of Amazon shoppers are under the age of 45. Prime customers tend to be even younger than the average Amazon shopper, with 18 – 34 being the most Prime-heavy age group.
  2. Higher Income. Amazon customers are predominantly male and tend to have higher incomes. Amazon captures 90% of the 50 – 100K income shoppers, and 89% of the 100K+ shoppers. And even for shoppers with an income under 50K, Amazon still captures 73% of the market.
  3. Bigger Spenders. Prime members are especially keen on Amazon’s free 2-day shipping and tend to buy more than non-Prime members. And with Prime membership in 64% of US households, that means Amazon customers are spending more on the platform than ever before.
  4. Trust the Amazon brand. Amazon customers trust the Amazon brand for quality products, timely delivery, and excellent customer service if anything does go wrong with an order. Amazon customers are also sometimes unaware that they are even purchasing from a seller at all. Thinking rather that they are purchasing “an Amazon product.”

Overall Amazon has captured most US shoppers, especially those under 45 years old, making over 50K. And since their customers do tend to be wealthier, they come with higher customer expectations. This is especially true of Prime members, Amazon’s biggest shoppers. The Amazon brand is one that customers deeply trust and masks the marketplace experience for customers by providing them with fast shipping and incredible customer service.

eBay Customers

eBay, though not as popular as Amazon, continues to be a big player in ecommerce. According to Statista, “In the first quarter of 2018, eBay reached 171 million active users.” And though smaller than Amazon’s customer base, 171 million is still undeniably significant. Here are the four most distinguishing traits of eBay customers:

  1. Older. eBay customers tend to be older than Amazon customers, with 61% over the age of 45. Like Amazon, they tend to be mostly male.
  2. Medium income. While an exact income range for eBay customers is hard to pin down, it seems to generally be lower than the average income for Amazon customers.
  3. Deal hunters. eBay customers also tend to come in with the expectation that they will pay less for the item they are looking for. While Amazon used to be a lot more competitive on price, customers, especially Prime customers, seem to be willing to pay more for the convenience of 2 day shipping and a wide-reaching catalog.
  4. Less trust in eBay brand. eBay customers do not trust in the eBay brand name in the way that Amazon customers trust the Amazon brand name. Rather, they trust the brand of the seller they are purchasing from. The expectations for customers satisfaction are put on the seller rather than on eBay as the platform.

Overall, eBay is still a significant size market that is more popular with older shoppers, especially those over 45. Since their customers tend to be of average means, they are more motivated to find the best price and pay less for the item they are looking for.  eBay customers are much more aware of eBay as a marketplace than Amazon sellers and trust the brands of the sellers they purchase from rather than eBay’s brand.

AMAZON PRODUCTS VS. EBAY PRODUCTS

The types of products that customers buy on Amazon and on eBay are different. Each platform has its own strengths and draws shoppers for those specialties. It’s important to know these comparisons when weighing up selling on Amazon vs eBay.  

Amazon Products

Amazon’s catalog has 562 million products in its catalog with Clothing, Shoes & Jewelry being the biggest category by far. Amazon’s top selling categories are:

  • Consumer electronics
  • Home and kitchen
  • Publishing
  • Sports and outdoors

eBay Products

eBay’s catalog has well over 1 billion live listings. According to the site, some of its best selling products include:

  • Electronics
  • Fashion
  • Video games
  • Collectibles

While both sites sell electronics and fashion items, Amazon sells far more books than eBay. Amazon also sells more Sports and Outdoor equipment whereas eBay sells more collectible items. Shoppers looking for unique, vintage, or antique items will look to a platform like eBay. And shoppers looking for books, outdoor equipment, and items that they need to arrive quickly will look to Amazon.

AMAZON FEES VS. EBAY FEES

As we look at fees in the selling on Amazon vs eBay comparison, the associated fees are a crucial factor.  We’ve written a fuller blog focused on Amazon seller fees, but we’ll give an overview of both here.

Amazon Fees

Amazon fees vary depending on how the item is sold. There are two main ways to sell a product: as an individual or as a professional. An individual is anyone selling less than 40 items a month. Think college students selling their used textbooks. Professional sellers are those looking to supplement or replace their income, including retail arbitrage sellers, online arbitrage sellers, wholesale sellers, and private label sellers.

Individual Seller

  • Per-item fees
  • Referral fees
  • Closing fees

Referral fees depend on product category but are typically 15% with a minimum fee of $1.00. See the full list of referral fees by category here. Closing fees are $1.80 per item sold and apply only to media items such as books, DVDs, music, software & computer/video games, videos, and video game consoles.

Professional Seller

  • Professional account subscription
  • Referral fees
  • Closing fees
  • Shipping fees (if applicable)

A professional seller account is $39.99/month and replaces the per-item fee charged to individual sellers. Referral fees depend on product category but are typically 15% with a minimum fee of $1.00. See the full list of referral fees by category here. Closing fees are $1.80 per item sold and apply only to media items such as books, DVDs, music, software & computer/video games, videos, and video game consoles. Some professional sellers use Amazon’s fulfillment program (Amazon FBA) to store, pack, and ship their products to customers. FBA has its own fees, which you can see here.

eBay Fees

eBay fees are seemingly less complicated than Amazon fees. But eBay is set up for individual sellers with individual items more than it is set up for sellers with multiple skus (stock keeping unit) and multiple items for each sku. There are two main fees that eBay charges sellers:

  • Insertion or listing fees
  • Final value fee

The insertion fee works a little differently depending on how you are selling your products. If you are selling individual products auction-style, eBay gives you 50 free listings per month with a $0.35 insertion fee after your 50th item.

If you are listing a product with a fixed price and hundreds or thousands of items in stock, eBay will charge you an insertion/listing fee up front and every 30 days until all items sell out or you or eBay closes the listing.

The amount you pay for this insertion fee is calculated based on what eBay calls the total start price of the listing. The total start price is the sale price of the product multiplied by the number of items available for sale. So if you’re selling a $15 t-shirt and have 1,000 on the listing, the insertion fee will be based on a start price of $15,000.00.

The other main fee that eBay charges is a final value fee. The final value fee is a percent of the final amount the buyer pays, including shipping and handling but not tax. Final value fees are typically about 10% with a cap of $750.00. So if a customer purchases all 1,000 of your $15 t-shirts, your final value fee would be capped at $750.00 rather than being the full $1,500.00.

eBay also charges a few additional fees:

  • Listing upgrades
  • Select category fees

Sellers have the option to pay small fees for listing upgrades like bold font, subtitles, international site visibility, dual category inclusion, Gallery Plus, and Listing Designer. These fees depend on the price of the item and the duration of the upgrade. See all options here.

eBay also charges additional fees for items sold in certain categories, including motor vehiclesreal estate, and select business and industrial items.

Who Should Sell on eBay

Because eBay is a smaller marketplace, it is a great way to get your feet wet with e-commerce. You can start selling on eBay with a lot less money, and drop shipping is a viable option. Customer expectations on eBay are lower, and eBay as a platform is more lenient when it comes to requirements for listing your product and customer satisfaction.

Who Should Sell on Amazon

Because Amazon is a bigger marketplace, it is more competitive. That means the cost to compete is higher but also that the reward for success is higher too. There are thousands of product markets that see healthy sales every month where competition is still low. And if you are lucky enough to find one of these markets, the rewards for performing well on Amazon are greater than they will ever be on eBay.

If you have a smaller budget and are thinking of drop shipping, Amazon is probably not the place for you. With high customer expectation, Amazon has strict requirements for their sellers. If you find yourself with too many unhappy customers and late orders, you could be off the platform.

But if you have a bit more of a budget to work with and are looking to sell a large volume of products to a large audience (especially if you are looking to utilize Amazon’s FBA program), selling on Amazon is the way to go.

Recap

Selling online is a huge opportunity for business entrepreneurs.  As you research selling on Amazon vs eBay, you’ll want to know the buyer demographics, marketplace strengths, fee comparisons, and the seller options available to you.

  • Amazon buyers have generally higher income and are younger while the average eBay buyer is older and looking for a bargain.
  • eBay is more lenient with a lower barrier of entry while Amazon is more competitive but with a higher potential for sales
  • eBay has fewer fees than Amazon and will generally be more profitable but requires you to be more hands on with the whole process.
  • Amazon buyers expect higher quality and faster shipping while eBay buyers sometimes assume the products are second hand or less quality.

 

Best Practices: Inventory Planning for the New Year

As the calendar year comes to a close and holiday sales start to slow down, sellers should be ramping up for 2018, whether that’s ordering more inventory or sourcing a new product for your brand.

So when’s the best time to order for early 2018 selling? Immediately. If you haven’t already, getting those orders in as soon as possible is critical to having enough inventory to last you through early spring.

Why the rush? Three words: Chinese. New. Year.

The Chinese New Year is serious business, workers get at least 7 days off and factories close for up to a month. Yep, you heard that right, most factories will be closed for an entire month, beginning as early as two weeks before the New Year (which lands on February 16th this year) and lasting through the remainder of February.

Want to order samples for a potential new 2018 product offering? Now’s the time to order those too. Waiting until after the New Year means samples won’t arrive until mid to late March.

If you choose to move forward with the product, you’re looking at sometime in June before you’re FBA ready with stock available. That’s months of unproductive capital and less time to get the product ranking and selling before next year’s Q4.

 

Before Chinese New Year

Every factory does not follow the same closing schedule, but a good rule of thumb is to order inventory (for new or existing products) at least 45 days before Chinese New Year, although closer to 60 would be a safer bet. If you have a product that takes longer to manufacture, the earlier you place your order, the better. Because many factories will close before the holiday, waiting until a week before the 16th to order will leave you empty-handed.

You don’t just want to factor in the time it will take to manufacture your goods either. You should also consider how long it will take to be shipped, and know that cargo companies also close down for a period around Chinese New Year.

Although many Chinese cargo and shipping companies do not close until 3-4 days before the holiday, you’ll want to make sure your merchandise is ready to ship at least a couple weeks before this in case any issues arise. You do not want your goods to be stuck at port over the long holiday, most likely leaving you without the inventory you need and with a nice holding fee from the cargo company.

If you do get your order in and shipped before Chinese New Year, make sure to also run a thorough quality check over the items. As the rush to get orders completed before the holiday presses down on manufacturers, quality control may be more difficult to manage on their end. While it’s always smart to quality check, this time of year is especially important and could save you loads of customer service headaches later.

 

After Chinese New Year

The schedule for factories returning to work after the holiday varies as well. Most manufacturers will be back to handling administrative tasks within 5-10 days after Chinese New Year. That means they will answer your email, but they may not be back in the full swing of production.

Once production starts up again, work is likely to be slow and loads of orders will be backlogged. Don’t expect a timely turnaround or consistent communication, as being gone for that long causes delays and backups. Some manufacturers raise prices after Chinese New Year as well, so don’t be surprised if your costs increase when they return to work.

Not only will manufacturers be backlogged around this time (late February-early March), Amazon likely will as well. Loads of orders will flood into fulfillment centers after the holiday, causing backlog and delays.

 

Source and Order Now

If you’re looking to order fresh inventory for existing products, contact your manufacturer immediately to place your order. And, keep in mind you may want to order more than usual to maintain stock during the Chinese New Year.

Looking for a brand new product to source with your Q4 earnings? Want to kick 2018 off right? Check out our game-changing product finder, Product Discovery, and find your next great product in mere minutes.

You no longer have days or weeks to look through Amazon or check local stores for product ideas. If you’re looking for new merchandise to add to your brand’s arsenal and want it by early next year, you need to source now and place your order before you miss the window.

In a matter of hours, sellers are finding highly profitable product ideas using Product Discovery, drastically trimming down the sourcing process and putting sellers on the fast track to profitability. Taking your time could mean the loss of a couple months worth of sales, so don’t wait, check out Product Discovery today.

 

 

 

How to Calculate Your Amazon FBA Fees and Projected Revenue

You have a product in mind that you want to sell on Amazon, and you’re feeling good about possibly sourcing it. Until a nagging question arises: How much money can I actually make on this thing? What will my FBA fees be?

Then more questions.

What are the fees Amazon is going to charge me for selling in their marketplace? What about for storing my product in their distribution facilities, for order picking, packing, shipping, and delivery?

Making money on Amazon suddenly looks and feels pretty expensive.

Don’t panic; don’t give up your dream. There is a way you can easily find how much profit you can make on any product, minus fees and expenses. You can even see the amount of money you need to spend in product sourcing to be successful. Get the lay of your financial land with Viral Launch’s Amazon FBA Calculator.

 

Count The Cost

Viral Launch’s Amazon FBA Calculator calculates how much profit you can make, factoring in Amazon FBA fees and expenses to list your product. It helps you see how much you could make on a given product, accounting for Amazon fees and the cost of inventory month by month.

But how much money am I going to have to lay out upfront? When am I going to make money?

While other calculators can’t or won’t show you upfront cost, the Viral Launch FBA Revenue Calculator does so you can see your total initial outlay alongside your total profitability. You’ll see clearly how much cash it will take to source that product you think you want to sell and how much you will make on that run of inventory.

Our calculator offers a more realistic picture of what it will take to bring your product to market. It eliminates the guesswork, smooths the process and, perhaps most importantly, removes the fear of financial failure.

We’ll take you through how the Amazon Revenue Calculator works in a bit. But first we need to figure out exactly what costs are incurred. Known as FBA Fees, these variable expenditures pay for all of the Amazon order handling, pick and pack, shipping, weight handling, and inventory storage in Amazon’s warehouses.

FBA Fulfillment Fee: This charge rolls Order Handling, Pick and Pack, and Weight Handling fees into one tidy sum.

Monthly Inventory Storage Fee: As the name suggests, this is what you pay for Amazon to put a warehouse roof over your inventory.

 

Calculate FBA Fees and Projected Revenue

Now, back to the your item sourcing. Say you might want to source an ornate glass teapot.

Plug in the product URL or ASIN of the product you would like to emulate.

 

Click Calculate on the FBA calculator, watch the magic happen.

 

 

The FBA calculator shows the current retail price, ASIN, product weight and dimensions, followed by Profit Per Unit. This is what you’re grossing after the Referral Fee and Amazon fees have been lopped off.

From there the FBA calculator takes you into the nitty gritty – your product’s Upfront Cost, ongoing Monthly Expense, expected Monthly Profit, and Total Profitability on your current run of inventory. You can even adjust product dimensions and hit the Advanced Settings to get the complete picture. Everything from your Landed Unit Cost folding in your manufacturing charge, Diligence Costs that cover inspection, duty and sourcing agent fees. All of your product incidentals like photography, package design, and more.

Click the plus signs in the adjacent fields to see the same product at different desired price points and profits. Add similar products to compare. Then decide whether you want to take the next step with this product or plug in a different one.

 

 

Calculate, Then Research

Once you’ve counted FBA fees, extra costs and projected profits with the Amazon FBA calculator, follow up with Market Intelligence, our Amazon product research tool. Research trends, price trends, and more to see how competitive the market you’re about to wade into really is. Is it even a good market?

Use the FBA Fee Calculator inside the Market Intelligence tool as your one-stop hub for fast, informative selling preparation. If you are needing more assistance in organizing your accounts and reports, check out Osome to handle accounting, file taxes and reports, and help open a business account online for e‑commerce sellers and other entrepreneurs. 

Check out our Amazon Fee Calculator today!

 

Try the FBA Calculator

Preparing for Amazon Q4: Webinar Replay and Complete Guide

Ready or not, Amazon Q4 is right around the corner! It’s the most wonderful time of the year, and with the right FBA preparation, you can dominate this holiday season.

To stand out from the crowd and beat the competition, you must do everything well. We hosted a webinar and put together a complete Q4 guide that will walk you through how to maximize Amazon’s incredible sales potential.

 

Amazon Q4 Webinar Replay

Casey Gauss, our CEO, and Cameron Yoder, an Amazon Seller Coach, set out to discuss all things Amazon Q4. Watch the webinar replay below to learn:

  • Important Amazon dates and deadlines
  • How to increase clicks and conversions during Q4
  • How to prepare for mobile shoppers this holiday season
  • How to predict this holiday’s sales based upon last year’s trends
  • How and when to get on page 1 for maximum visibility and sales
  • And more…

 

 

Download Your Complete Q4 Guide

This ebook will walk you through every aspect of Q4 preparation. From inventory planning to optimizing your listing for mobile, to making sure your product is showing up in search, we’ve got you covered!

Your Complete Q4 guide includes:

  • Notable dates for your calendar
  • How to maximize your sales this holiday season
  • Inventory management tips
  • Amazon Q4 fun facts
  • Handy checklists to evaluate your preparedness
  • And more…

 

DOWNLOAD YOUR Q4 GUIDE

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Win a Viral Launch Q4 Success Kit

Want to win a free prize and enhance your Amazon listing at the same time? Enter to win a Q4 Amazon Prep Kit and put your product on the path to success just in time for the holidays! Every participant receives a launch discount coupon, and the top 3 winners get major prize packages worth over $3000 combined.

1 lucky winner receives the grand prize:

  • Product Photography Conversion Master Package ($797)
  • 1 Free Listing Optimization ($497)
  • 1 Free Launch ($400)
  • 1 Free Review Booster ($347)
  • 1 Free Month of Market Intelligence ($20)
  • 1 on 1 Strategy Consultation with a Viral Launch coach

3rd and 2nd place winners receive runner-up prizes!

Entering is easy: simply submit your email and share the contest on social media. Good luck!

Enter to Win!

 

Are Sales Down on Amazon? See Daily Sales Trends

Are sales down on Amazon?

You’ve likely seen, or even posted, this question in a seller Facebook group. It’s all over the place!

You’re having a slow day and are wondering whether others in your category, or others in any category, are experiencing a slow day too.

Maybe Amazon made an algorithm change. Maybe it’s just a slow selling day… or week for your category. Maybe sales are down across the board. Maybe it’s a function of your product/listing.

With a post on Facebook, you may find that some of your fellow sellers are experiencing slow days too. But, how reliable is that poll of 10-20 sellers? What if you could see how sales are actually trending today based upon real-time data? What if you could definitively know that sales are above, at, or below average?

 

Amazon Daily Sales Trends

Viral Launch is happy to provide data powered by Market Intelligence, our Amazon product research tool. For main categories such as Beauty & Personal Care, Health & Household, Sports & Outdoors, and many more, you can compare the sales trends today to a baseline 30-day average.

With Daily Sales Trends, you will understand your product’s performance in the context of your category and Amazon as a whole. And now, as you’re wondering, “Are sales down on Amazon?” you’ll know exactly where to look.

 

Are Sales Down on Amazon Today?

See for yourself how sales are trending today compared to average. Viral Launch provides fresh stats every hour and interactive graphs to compare today’s sales to a 30-day baseline average. Here are some of the stats included (with an example from 2017’s Prime Day).

Sales Trend by Percent

You can see the percentage change in today’s sales compared the average of last month’s sales. View this metric for different top-level categories or for Amazon as a whole.

Sales Trend Throughout the Day

Here you’ll see today’s sales as a percentage of baseline sales throughout the day. Below, you’ll see that on Prime Day 2017, sales at 12:00pm were already at 326% of the typical daily sales for the Pet Supplies category.

Sales definitely weren’t “down” on Prime Day!

Hour by Hour Sales Analysis

This graph will break down the percentage of average daily sales by hour. Below, you’ll see that Prime Day sales at 12:00pm were 22.9% of the average baseline daily sales, whereas it’s typically 5.6% at that time.

Conclusion

With Viral Launch’s Daily Sales Trends, you can confidently answer the question “Are sales down on Amazon today?”

No more guess work. No more comparing to a few fellow sellers on Facebook.

Only cold. hard. facts. And here at Viral Launch, data is our best friend.

Blog post: Are Sales Down on Amazon? See Daily Sales Trends

Related: How to Use (Free) Split Testing Software to Increase Amazon Sales

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