The Limitation of Conversion Rate on Amazon

Let’s say I sell a product that is more expensive than my competition. It is of better quality than my competitors, the product listing is well written, and my conversion rate is 25%. Should I increase the price to test the limits of my conversion and see if I can make better profit?

This seems like a logical question, right? One logical answer would be to either sit back and enjoy a rather satisfactory conversion rate. Another would be to perhaps try out some split testing and see if that rate begins to fall as the price rises.

Conversion can be a great data point to understand how customers are responding to your listing. If your conversion is really low, it tells you that there is likely something about your offering that is causing shoppers to pass on your product. It could be something as simple as an unattractive photo or word choice on a bullet, or it could be something a little more challenging to resolve, such as a poor review. It could also indicate that shoppers in the category tend to bounce around and explore their options a bit before settling on a product.

While conversion rate can give you some perspective, it doesn’t paint the whole picture. Let’s now return to the original question (because of course, it is a trick question):

What conversion rate doesn’t capture is the number of people actually interacting with your listing. What if I only made four sales in a month? Yes, a 25% conversion rate is great but if only 16 people interacted with my listing, does conversion matter? In this case, I’m probably paying attention to the wrong metric.

If you’re selling a high value item, you might be happy with four sales a month, but this probably isn’t the case. You could have one sale and a 100% conversion rate. In other words, if a product is listed on Amazon, and no one is around to buy it, does it make a sound?

 

What is a Conversion Rate?:

A conversion rate is the number of sales divided by the number of interactions (people clicking on your link). If 16 people click on your listing and 4 of them buy, your conversion rate is 25%. But as we’ve already discussed, while a low conversion rate most commonly means there may be a problem with your listing, a high conversion rate does not always signify a successful product. To access your conversion rate you will want to log into Seller Central, go to Reports, Business Reports, and finally, Sales and Traffic. You will be able to locate it in the “Order Item Session Percentage”.

The Limit of Conversion Data:

The number one problem with spending too much energy analyzing your conversion data is that there could be a much larger limiting factor at play.

You can have a high conversion rate, but if you’re ranking on page 20 for every major keyword, the reason for your conversion rate could be that you’ve got a great offering but almost no one ends up finding it.

Alternatively, and potentially what is occurring in the question asked, maybe you have a great conversion rate and are on page one for some major keywords, but you’re not making many sales. You could have a situation where upon further inspection of your listing, shoppers are inspired to buy, but something is very quickly forcing the majority of shoppers to overlook your product.

For instance, you could have a great product, but it’s priced much higher than the competition. If someone clicks on the listing, they’ll realize that the improved quality is worth the price but most shoppers will skim through it in search of a more affordable option.

 

What should you be asking?:

While conversion rate is not a bad piece of intel to have, at the end of the day, selling on Amazon is all about one thing…THE MONEY. In other words, you must look at your conversion rate from a broader perspective: in the context of your visibility, your sales numbers, and your market share.

A more appropriate question is something like this:

I sell a product that is more expensive than my competition. It is of better quality than my competitors, the product listing is well written, and I’m selling 40 units a day with a healthy profit margin. Should I increase the price to test the limits of my revenue and see if I can make better profit?

With regards to this question, the answer is yes*.

The asterisk is that you shouldn’t just test a higher price, you should test a lower price too.

Let’s say you’re selling the product for $25 with a profit margin of $10 and you’re making 40 sales a day ($400 profit).

Maybe you up the to $26 to press your luck ($11 profit margin) and you still sell 40 units a day ($440 profit).

But what if you drop your price by a dollar to $24 ($9 profit margin) and you end up selling 80 units a day? Now you’re making a profit of $720.

The point is, everyone selling on Amazon has different metrics of what success is, but all of those metrics of success are all based on (you guessed it) the money.

 

The Conclusion on Conversion:

Among Amazon sellers, we frequently see questions and concerns when people get held up by the plethora of data points that they have to comb through at any given time. Whether it’s BSR, or conversion, or how your product is categorized, you need to ask yourself what the data is actually telling you. If that data is not directly correlated to how much money you’re making, it’s probably not worth focusing too much attention on.

Conversion rate can absolutely hint at potential problems or successes with your listing, but it by no means is an absolute sign of a successful product. You could have a 100% conversion rate selling expired meat on the internet. No shopper will even look at your listing, but eventually maybe some sicko buys it. Boom! One interaction/one sale.

The point is: to be effective on Amazon, you need to determine your metric for success, and you need to ask the right questions to achieve success. Use conversion; use BSR, and determine what you can learn from it and what you can’t.

You can make almost no money and have a high conversion rate, or you can make a lot of money with a ton of visibility and a low conversion rate. It’s just about asking the right questions and seeking the right answers.
On a final note, if you are looking for answers and wish split test some elements of your listing, check out Viral Launch’s split testing tool at listing-dojo.com.

How to Sell on Amazon: The 3 Keys to Success

You’ve heard the crazy success stories, like how one ambitious seller made $40k in his first 30 days selling on Amazon. Perhaps you have a mortgage to pay, a family to feed, or student loans to pay off. Or maybe you’re looking to invest in something that will take your income to the next level. Or you might be trying to build a brand you can eventually sell for 7 or 8 figures. Whatever position you’re in, you are wondering how to sell on Amazon.

You’ll find loads of information out there on different podcasts, blog posts, webinars, and tutorial videos. Yet one of the most common issues that arise with sellers is: I don’t know where to start. It’s easy to get lost in all of the information about how to sell on Amazon.

We’re here to break it down into three easy steps. Whether you’re looking at selling retail arbitrage or private-label, how to sell on Amazon can be simplified into three keys to success: start with a great product, set up your listing to rank and convert, and get your product in front of the client.

 

How to Sell on Amazon Key #1: Start with Sourcing a Great Product

What makes a great Amazon product? That’s a loaded question, but thanks for asking. I’m happy to walk you through it.

First, I’ll define a bad Amazon product. Perhaps that’s easier. There are exceptions to these universal truths, but generally speaking…

A bad Amazon product market is one that has:

  • Extremely low sales. You likely don’t want to get into a product market that is averaging monthly sales in the low double digits year-round.
  • A sales/review ratio of 1 or less. You have to have a competitive amount of reviews to sell well among the top sellers because of social proof. Shoppers trust the opinions of other shoppers, and the more (good) opinions you have, the better. With a decent review strategy, a seller could expect to see roughly around 6 reviews for every 100 sales. For a product market seeing 1,000 monthly sales with 1,000 average reviews (a review ratio of 1), it would take over 16,000 sales to reach 1,000 reviews. I’d suggest staying far away from this market. At 1,000 sales/month, that would take around 16 months to achieve. Avoid these types of markets and get into one with an easier barrier to entry. Note: Markets with a ratio of 1 or less may make sense if it is a natural extension of your brand. With that said, generally only the elite sellers with deep pockets are able to make these markets work.
  • No popular search terms on Amazon. In most cases, inventions aren’t great for Amazon. The benefit of selling on Amazon is the ability to jump in front of traffic that is already there. If customers are not already searching for terms most relevant to your product, the likelihood of high volume sales is slim. If no one knows what your brand new product is, or even how to search for it, then Amazon is likely not the platform for you.
  • Extremely low margins. Unless you have the capacity to move an insane amount of inventory, stay away from products where you’ll make less than $1 per sale. This is especially true in markets where there isn’t a ton of demand.

A great product to you may be a not-so-great product for me. It all depends on your goals. For instance, I might think 20 sales/day for a product sounds great, where you might want 40+. I might want to dominate a smaller niche, where you might want to try to compete with big, established sellers in a larger market. To define a good product to sell on Amazon, you must take your expectations and goals into account. However, there are some things that apply to all good Amazon products.

Generally, a good Amazon product market has:

  • Sales that align with your goals. I won’t give hard numbers here, but you’ll just want to ensure that the product you source sees monthly sales that align with your goals. Those numbers will widely vary from seller to seller, and that’s totally ok. To understand what kind of sales you can expect, look at how the market has performed historically, as well as how it’s performing now in context. Does the product sell consistently? Is the market increasing in popularity? Are sales declining? These are all questions to consider when looking to source a product.
  • A high sales/review ratio. This means the product market has more sales than reviews. Reviews are generally the greatest barrier to entry for a market. The lower that barrier compared to sales potential, the better. We generally consider an average market ratio of 3 or more to be desirable. If you can find a ratio of 5-10, then you may have struck a gold mine.
  • Room for improvement. There are many markets on Amazon with subpar listings: novice label and packaging design, amateur photos, sloppy copy, and low review ratings. These are great opportunities to source a high-quality product with an outstanding listing. There’s so much potential to position yourself as the best option on the market.
  • Healthy margins. Of course, you want to make money on each sale. We typically don’t recommend sourcing any product with less than a 30-40% expected profit margin. This leaves room for unexpected costs or price competition in the market.

To determine if a product market is a good fit for you, you’ll want to evaluate the product’s estimated monthly sales, both historical and present, sales/review ratio, average review quantity, average price trend, best selling period, sales pattern, and more. To aid you in your product research, we’ve come out with an extensive tool to show you all the data you need when making sourcing decisions.

Check out Market Intelligence, our Amazon product research tool, to see which product may be a good fit for you.

 

How to Sell on Amazon Key #2: Set Up Your Listing to Rank and Convert

Now you’ve got a great product. You’re off to a good start. But a great product isn’t enough. You could have the best product in the whole world, but if you don’t have an awesome Amazon listing to show it off, you might as well have no product at all. There are two different types of conversion rates: click conversions and on-page conversions. Click conversions refer to how many shoppers click on the listing when they see it in search results. On-page conversions refer to how many people buy your product when they’re on your listing.

In a perfect world, every single time someone saw your listing, they’d purchase the product. In the real world, we want to get as close to that perfect world as possible. There are a couple of key listing elements that you’ll want to master for optimum conversions. Your photos, price, reviews, and copy all play a major role in a shopper’s decision to buy or not buy.

Master your photos.

Product photos are perhaps the most important element of a listing when it comes to both click and on-page conversions. The key to great Amazon photos is having professional photos that tell a story, build an emotional connection with the shopper, and accentuate all the product features. If your photos look unprofessional, rushed, and non-representational of the product, a shopper is not likely to click or purchase. A buyer doesn’t want to feel like they’re getting the product from some amateur in their garage. However, with the same product and aesthetically-pleasing, descriptive photos, a shopper is much more inclined to buy. Good photos communicate high quality. Take a look at the photos below. If the listings are very similar (price, information, reviews, etc.) and photos are the only varying aspect, which product would you choose?

OR

         

Compete with your price.

Price is a very important factor for click through rate. Shoppers are unlikely to click on your listing from the search results page if your price is too high, which will be detrimental to your click conversions. Again, place yourself in the shopper’s shoes. If most iPhone chargers on page one are around the $7.99 mark, it’s unlikely that you’ll click on one that is $15.99. It’s important to make sure that your price is comparable to surrounding listings to achieve the most clicks possible.

Rack up your reviews.

Ever since Amazon’s policy update regarding giving products in exchange for reviews, reviews are harder to come by. But, reviews still remain the #1 factor on Amazon for social proof. Think about it: when you’re shopping on Amazon, and there are two similar products, one with around 10 reviews and one with over 2,000 reviews, which one are you more likely to consider buying?

While the number of reviews isn’t actually an indication of sales or even quality, it helps shoppers to understand that other people have bought the product. They can then be more confident in their decision to buy the product, since many others have bought it and given it a good rating. For this reason, you’ll want to work hard to gather as many reviews as possible right from the start. Here are some tips to getting initial reviews:

  • Implement a killer email follow-up sequence. To make sure that you are capitalizing on every sale and gathering as many reviews as possible, you’ll want to send out follow-up emails asking for reviews and feedback. Keep in mind that tons of Amazon sellers are doing this exact same thing, so keep the copy short and to-the point, making it easy for the reader to find the call-to-action. Typically, we recommend sending an email seeking a review 5 days after delivery, and then another email seeking seller feedback 6 days after delivery. The industry average for reviews is about 1%, which seems a bit low, doesn’t it? Viral Launch’s Review Booster sees about a 5% review return on the email copy, and if you’re interested in receiving further guidance or getting copy for your sequence, check out our Review Booster service.
  • Run sponsored ads. Conversions likely won’t be great with a low quantity of reviews, but sponsored ads are a great way to drive some initial sales. New products typically get more sessions, but few sales may also mean fewer impressions. Basically, sponsored ads can be hit or miss. But, it’s generally worth losing a bit of money up front to drive initial sales.
  • Start with a low price. We suggest listing your product at about break even, or as low as you feel comfortable, to help get initial sales. But, just be careful here to not become an add-on item or start a price war with competitors.
  • Drive external traffic. This can be a more expensive option, but external traffic has the potential to help with gathering initial reviews. Having a customer list can be leveraged for initial sales to drive reviews. Driving external traffic is also a great way to increase keyword ranking, as Amazon rewards those who bring in new customers from outside markets.

Optimize your copy.

Copy is INCREDIBLY important for indexing and keyword ranking, but it also serves to describe your product to a shopper. What exactly is the shopper getting? What makes your product unique? What are its special features? How do you use it, and what can you use it for? These questions all need to be answered through your title, bullet points, and description. If the listing doesn’t fully explain the product, you risk losing out on buyers who want to know exactly what they’re buying. While photos should accurately portray your product, the copy should back it up by explaining what a photo cannot.

With great photos, a good price, a competitive number of reviews, and sales-inducing copy, your listing will be set up to convince a shopper to buy your product. Now, it’s time to get in front of those shoppers!

 

How to Sell on Amazon Key #3: Get Your Product in Front of the Shopper

So you have a great product. You have an awesome listing that’s going to convince a shopper to buy it. Now, you need to become visible. The cool part about Amazon is that you don’t have to find the buyers. They’re already shopping on the site for your product (assuming you followed Key #1!). But now, the buyers have to find you.

This can be done through ranking on page one for the important keywords (or customer search terms) associated with your product. Think about it this way… You need a new charging cable for your phone, so you head to Amazon and type “iPhone charger” into the search bar. You head right to Page 14 of the search results and buy the 7th product from the top. Wrong. You’ll probably look through the first – and maybe the second page. But you likely won’t get any further than that because you find what you’re looking for on page one.

As a seller, it’s important to understand this buyer behavior. The products that rank are the products that sell (so long as they’ve got great listings. Don’t forget Key #2). The largest factor for ranking on Amazon is sales. The goal is to get as many eyes on the listing as possible. You need to drive sales in order to rank for high-volume keywords associated with your product.

From the beginning, you may see a couple organic sales each day, simply by indexing (showing up somewhere) across all related keywords. You can increase these daily sales by running Sponsored Ads. Another great way to kick-start your product’s visibility is to run a promotion. With Viral Launch, you can run a discounted giveaway that will target a specific keyword and increase the product’s rank, putting you in a perfect position to be found by shoppers who are searching for your product. The sales from that promotion will also be funneled through the words in your title, giving each of those keywords a ranking boost (which, again, is why Key #2 was so important. Optimize your title!). For more information on how to launch or where to begin, reach out to one of our dedicated seller coaches who will be happy to assist you.

After a strategic Viral Launch promotion, you’ll be ranking on page one for a main keyword and visible for many other related keywords with thousands and thousands of eyes on your listing. And now, you’ve got a great product, you’ve got a listing that converts, and you’re easily found by shoppers. You’ve just mastered how to sell on Amazon.

 

How to Sell on Amazon: Tangible Next Steps

Now that you’ve got an overview of how to sell on Amazon, it’s time to go for it. You can make excuses because it’s easy to do. Not enough time, not enough resources, not enough information. Or, you can start. And you can do it with the help of industry experts.

1. Set your expectations and goals. How much money are you wanting to spend up front? What are your monthly sales goals? Are you in this for the long run, and do you want to possibly expand to more products in the future? How much time do you want to dedicate to this Amazon business? What is your capacity to run day-to-day operations? Knowing your expectations and goals will be important as you move forward with determining your course.

2. Start your product research. Remember, it’s crucial to start out with a product that is going to set you up for success. Research possible product markets that you may be interested in. Look at the current top sellers; how are they performing now, and how have they performed in the past? Know how many sales you could expect if you were selling among the top sellers; is this range within your sales goals? Check out the market as a whole: is it on the rise or declining? Know the product’s best selling period; is it seasonal or year-round? Look into how difficult the barrier to entry will be for the product market; will you have to gather thousands of reviews to be competitive? Understand what your profit margin will be; will it be within your goal range? For answers to all of these questions and more, check out Viral Launch’s Sourcing Tool. You’ll find the real-time and historical data, trends, and information that you need to research potential product markets…all at your fingertips.

3. Reach out to suppliers. Check out different sourcing sites to find one that you like. If you’re a newbie, look into Alibaba, which is easy to navigate and popular among Amazon sellers. Reach out to potential suppliers through the internal messaging platform on the site to get a feel for the total expected cost, including unit and shipping costs. If you are sourcing on Alibaba, we recommend filtering results to Trade Assurance, Gold Supplier, and Assessed Suppliers only. That way, you know you’re dealing with suppliers who are established and reputable. You can filter for these results by checking the Supplier Types on Alibaba search results. Send them a brief message, showing interest in their product and inquiring about pricing and item information.

4. Connect with a seller coach. Send a message to launches@viral-launch.com to work with an expert Amazon coach free of charge. They’ll communicate how to sell on Amazon by walking you through the next steps in your individual journey, offering tailored assistance, and helping to validate or invalidate your product idea(s). From conception, our seller coaches will help you to source, launch, and dominate on Amazon.

 

Conclusion

Selling on Amazon seems daunting. It’s a leap. But we believe in you. When wondering how to sell on Amazon, it really comes down to sourcing a great product, having a listing that converts, and being easily found by shoppers.

Viral Launch offers software and services for every step of your Amazon journey. We’ve helped launch hundreds of successful Amazon businesses. Not only do we know what we’re talking about, but we’ve got the data and experience to back it up. Our seller coaches would love to help you get started and can answer any upfront questions that you may have about how to sell on Amazon. No more excuses. It’s time to claim your market share of the largest e-commerce platform in the world!

Did you enjoy our post about how to sell on Amazon? We’d love to hear from you. Leave your comments below!

How to sell on Amazon: the 3 Keys to Success

Busting the Myths: Amazon Best Seller Rank (BSR)

Your Amazon Best Seller Rank does not help you drive future organic sales, in the same way that a report card from a previous semester does not impact your grades in a new semester. It is only an indication of the past.”

In an effort to continue expanding our capacity for helping Amazon private label sellers solve their problems, achieve success, and increase profitability, we spend a good amount of time engrossed in a plethora of conversations across the various FBA/Private Label centered Facebook groups. As we’ve mentioned before, this is the true breeding ground for rumors, misinformation and miscommunication. It can get ugly. For young, novice sellers still trying to understand how to navigate the space, listening to rumors can lead to costly mistakes and sometimes even financial ruin (literally). We’ve seen it plenty of times. It’s terrible, unfortunately, and becoming more and more common!

As a company that cares deeply for people and enjoys watching/helping people succeed, rumors/misinformation are extremely frustrating. This is especially true when we see “gurus” or service providers profiting off the misinformation. So, in our effort to help sellers succeed, we’re doing our best to clear up miscommunications and rumors so you have all the information necessary to make informed intelligent businesses decisions to help you prosper!

Now to the subject matter.

The Amazon private labelling world has an obsession with the Amazon Best Seller Rank (BSR). Everyday we have sellers emailing in, wanting us to help them improve their BSR or help them to reach a specific BSR threshold. We see the same in the Facebook groups. It is completely unnecessary and is founded on misunderstanding. We explain how..

Myths Around Best Seller Ranking / BSR:

  • Best Seller Ranking (BSR) helps keyword ranking.
  • Best Seller Rank impacts sales.
  • “I need to improve my BSR”
  • Reviews are taken into account when calculating BSR
  • Keyword ranking impacts BSR
  • Listing price at the time of sale impacts BSR

What We See/Hear Sellers Saying About BSR in Facebook groups:

  • “My BSR increased, but why haven’t my organic sales?”
  • “How can I improve my BSR?”
  • “My BSR is better than my competitors, but they are outranking me. Why?”

How Is Your Listing’s BSR Calculated?

An ASIN’s Best Seller Ranking is calculated solely based on the number of units sold over a given period of time. That is it.

Your BSR is not directly related to your listing’s keyword ranking, price, quantity of reviews, or any other metric.

Sales estimation tools like Jungle Scout operate on this same premise. By looking solely at a product’s BSR in specific categories, they are able to estimate that product’s monthly sales volume with a decent degree of accuracy.

For example, if listing A sells more than listing B, listing A will have a lower/better BSR. It’s as simple and rudimentary as that.

When describing Best Seller Ranking, I often use an analogy of a report card. BSR is like a report card showing how many units you sold compared to others in the same category. Just like a report card, your BSR is a representation of past activity. Your BSR does not help you drive future organic sales, in the same way that a report card from a previous semester does not impact your grades in a new semester. It is only an indication of the past.

Debunking the Myths of Amazon Best Seller Rank

Myth: Best Seller Ranking (BSR) helps keyword ranking.

Our Amazon product launches have uncovered the most contradictory evidence to the BSR assumptions. When running a promotion with a poorly optimized listing, we see a great spike in BSR (ex. #28,400 to #1,600), but see little to no movement in keyword ranking.

Example:

This is the Jungle Scout data from the search “dog toys”.

As you can see, the two listings in the red box have higher Best Seller Ranks than the listings in the blue box. If BSR had a direct effect on rankings, we would expect to see a more uniform increase in BSR scrolling down the search results. Many searches will show similar results.

There are many factors being taken into account when it comes to keyword ranking and sales. It is especially difficult to properly attribute the cause of keyword ranking between increases and BSR and sales simply because BSR increases from sales.

Myth: Best Seller Rank impacts future sales.

Referring back to data we’ve obtained from our product launches, we’ve observed plenty of instances in which promotion increases a listing’s Best Seller Ranking significantly but does not lead to an increase in organic sales for a variety of reasons. This particular listing was not optimized for rankings (targeted keyword(s) were not in their title), which is why we suggest working with one of our Amazon seller coaches. There is a lot that goes into improving a product’s sales on Amazon, which is why we continually preach the importance of doing everything extremely well. Cutting corners leads to lost money!

Myth: Reviews are taken into account when calculating BSR

This is definitely false. The cause of this misconception again falls to misattribution. Reviews generally have a significant impact on sales (click conversion). Typically, listings on page 1 with more reviews drive more sales, which means their Best Seller Rank will improve.

This is the Jungle Scout data from the search “iphone 7 plus case”. (Update: we have since released Market Intelligence, the best Amazon product research tool in the galaxy, with sales trends, the most accurate sales estimates, and a star-rating validation).

As you can see, the listings within the red boxes have far fewer reviews than the listing in the blue box, however, their BSR is significantly better/lower.

Here is an example of a listing with over 1,000 reviews at a star rating of ~4.5 with a Best Seller Ranking of over 10,000.

If BSR was impacted directly by a listing’s review rating and/or quantity, we would expect different figures.  

Myth: Best Seller Rank is affected by a product’s price at the time of sale.

There are a few key indicators to this myth being false.  We can’t rely solely on Jungle Scout data for reference as we don’t know if their sales estimation algorithm is taking price into account or not. Simply looking through the search results at varying BSRs and comparing the current selling price is not sufficient as we don’t know how many units are actually being sold. The question is, “Does the price at the time of sale have weight on calculating the BSR,” not “Does your current price have impact on your current BSR?” If that were the case, raising your price would result in an instant improvement in Best Seller Ranking, which we obviously know is not the case.

Route 1: Looking at the BSR of similar ranking products with varying price points.

These are the search results for the keyword “coasters”. As you can see, the second listing is 25% more expensive, yet has a higher BSR. The listing priced at $12.95 has a lower Best Seller Ranking than the $18.99, $15.99, and $14.99 options. Again this is not concrete proof but one example.

Route 2: Looking at actual sales data.

We mange a good number of listings by now. Going through a number of those product’s sales and BSR history within the same category, we are able to see that regardless of price, the products fell within the same BSR range when sales were similar. If you have just a couple of products in the same category that sell fairly similar volumes, it is pretty easy to see for yourself.

How Can You Use BSR To Improve Your Sales?

Should you try to increase your BSR?

When we see this question, it is generally in reference to using promotional services to increase BSR, in which case the answer is no. Increasing your Best Seller Rank through promotional sales serves no direct purpose apart from pushing to obtain a best seller badge, which happens to be against Amazon’s TOS.

Since Viral Launch has been in business, we’ve seen plenty of sellers get excited about an improvement in BSR driven by giveaways. From our perspective it’s a no brainer. Of course the BSR improves. If sales are the sole factor in calculating your Best Seller Ranking, and you drove additional sales, whether at full price or at a discount, then of course the BSR is going to improve. And like we mentioned, that improvement in Best Seller Ranking will have no direct impact on future sales.

For example, (keyword ranking aside) if you gave a massive volume of units to help you reach a BSR of #2 in all of Health & Beauty, you would see no improvement in organic sales as a direct result. Customers do not find products to purchase by sifting through the browse trees, they purchase products after running a search, selecting an item, and then making a purchase.

Essentially, if you give units away at a loss with the intention of improving your Best Seller Ranking, you are wasting money. That is not a strategic move.

How BSR Can Help You Make Smart Business Decisions.

Using the Best Seller Rank metric is fantastic for estimating product’s monthly sales. Even though current tools are not incredibly accurate, they are far better than pure guesses and can be extremely helpful when putting together launch strategies, optimizing your listing, and validating sourcing ideas. From our perspective, this is the only real use for this over-hyped vanity metric.

Should You Be Paying Attention to Your Product’s BSR

Largely, no. If you are using BSR as a sales estimator for your own products, then you should look at your actual sales volume as shown in your Seller Central dashboard as those figures will be more accurate. Generally, the only benefit of watching your BSR is in comparing yourself to your competitors. Is your BSR increasing, but competitors’ BSRs are not? Then you you need to make some adjustments to your offering/listing so you can continue selling at the same volume as your competitors are. Is your BSR increasing at the same rate as competitors? If so, this is typical of seasonal items. As sales slow for a sub-market, all competitors will see an increase in BSR.

Your listing’s Best Seller Rank can fluctuate quite a bit over the course of a day, week, or month. The focus should really be on maintaining/improving search rankings, optimizing your listing, and improving your review funnel as these are the activities that will have an impact on your organic sales and ultimately your business’s bottom line. Continually watching your BSR is like watching the grass in your yard grow, it’s going to grow and at varying rates depending on external factors, but you watching your yard grow does not affect the process. It is only a waste of time. Being aware of your actual sales and responding to changes in the market or your listing are activities that will lead to better bottom line.

Conclusion

More often than not, rumors and misinformation are spread simply due to wrongful attribution. It’s so easy to wrongfully attribute the cause of sales improvements, ranking changes, BSR changes, etc. simply because there are so many moving parts. Amazon is a complex animal. It is wrongful attribution that I hold as the culprit for a lot of the myths around Best Seller Rank.

Know any other rumors? Have any questions? Am I wrong? I’d love to know what you think in the comments!

Product Visibility: The Importance of Categories in Amazon’s Search Results

Now more than ever, it is extremely important to have every single aspect of your listing in prime condition: stunning photos, optimized copy, beautiful product labeling, competitive reviews, etc. But there is one simple thing that some sellers are overlooking that has cost some sellers serious amounts of money in lost sales. It’s extremely important and a fairly quick fix: Product Category.

I know, that shiny Best Seller Badge is highly sought after, and it is relatively easy to come by with some obscure, irrelevant sub-categories. If you’re selling Vitamin C Serum and place it into the a smaller unrelated category, you won’t have to sell nearly as many units to get a Best Seller Badge as you would if you categorized it correctly into Skin Care. Loophole right? Unfortunately for sellers, no.

The Importance of Product Category

It’s crucial that you set your category correctly, and I’ll explain why. When searching “vitamin c serum” on Amazon, even when searching under “All Departments”, you’ll notice that just under the search bar, Amazon forces the search into a specific category. In this instance, I’m seeing just over 5300 results for: Beauty & Personal Care : Skin Care : “vitamin c serum”

Amazon positions itself in a way that is going to best benefit a shopper. If I’m a shopper searching for a “vitamin c serum,” Amazon shows me only what is relevant to the product that I’m searching for. Through Amazon’s algorithm, this means that only results categorized down to the subcategory “Skin Care” are going to be shown. And this makes total sense. Why would I be looking for anything outside of a Skin Care with a search for “vitamin c serum?”

As a shopper, I do have the option to choose “Show results instead in ‘All Departments,’” but I cannot imagine that many shoppers are doing so. As an Amazon seller, you know your product, your keywords, your listing, and your competition inside and out. Buyers, on the other hand, are trusting that Amazon is showing the best products for what they’re looking for. Having said that, it’s unlikely that a shopper would click “All Departments,” especially if they’re able to find what they’re looking for on page one. (Note: Mobile Amazon automatically shows results for All Departments)

These forced search results make it extremely important that your product is categorized correctly. Yes, you may have a Best Seller Badge through mis-categorizing your product. But that doesn’t matter if your product isn’t even showing up when a shopper searches for the biggest keyword associated with your product! If you put your product in some obscure category hoping to trick shoppers into thinking that you’re a top seller for your category, Amazon is onto you, and they aren’t having it. Shoppers will be searching for what you’re selling, but your product will be hidden by Amazon’s algorithms.

How Placing Your Product in The Wrong Category Causes A Loss In Sales

Here at Viral Launch, we want to see you be as successful as possible with your Private Label products. Among other things, it is a must to correctly categorize your product. This is even more important while you’re running a promotion because all of those giveaway sales are being attributed to the given search term in the context of the category the product falls under. If your sales are not being attributed to the proper category, you simply won’t show up when the average customer runs a search.  Make sure that your product is in the right category before running a launch. Switching it afterward means it’s already too late as the sales have already attributed keyword ranking power to the given keyword within the wrong category.

When choosing a keyword to target with a Viral Launch promotion, be sure that the keyword’s search results line up with your product category. If not, change your category, or make sure you’ve chosen a keyword that lines up with your product. You can place your item into a more specific category than the forced search result, just make sure that it’s in the most specific category of search results shown for that keyword search.

Big Takeaway: Categorize your product correctly, and your customers will be able to find and buy your product! If you don’t, no matter how hard you push keyword ranking, you’ll find your product ranking in the wrong category and will see very few sales!

Hopefully this tip helps you to understand why product category is so important and how it can have a tremendous effect on your visibility. We love to see you succeed as we navigate the Amazon together. Happy selling!

Amazon Success Guide Step 1: Sourcing A Great Product At A Great Price

Let me first begin by saying just about every product available to sell on Amazon as a private label product is a GREAT product to source, so long as it fits into your business’s strategy, you have the resources, and it makes sense for you as an entrepreneur. So the difficult thing is not finding a product to source. Go to Amazon.com’s home page, and you’ll see plenty of sourceable widgets. The difficulty lies in finding a product to source that fits You and Your business.

In this article, it’s our goal to help you identify what makes a product great for you, so you can build the foundation for the level of success you are looking for!

 

Identifying What Private Label Success Looks Like To You

While we are largely going to try to help you identify how to choose products that fit your ideal success model, we are also going to be challenging your definition of success. We’ve seen many many sellers succeed, and unfortunately our fair share of sellers fail despite our efforts. With the experience and data we have, we’d like to help you avoid the pitfalls we’ve seen others make.

So what does success look like to you in the private label world? Are you looking to hit a couple of home runs with some high volume products that profit you $10,000+ per month each? Are you looking to source a variety of low volume products that when added up bring in a hefty profit each month?

This is a decision you will have to make for yourself. If you expect to profit $5,000/month on a single product, but get into a product market where the average sales price is $10 and the average sales volume among the top sellers is around 500 units per month, you will be severely disappointed. If you are looking to source 5 products that add up to a monthly profit of $5,000/month, then this very well may be a good choice. See how expectations and how you define success matters?

Obviously we would all like 100 products that profit us $20,000 per month, but so does everyone else, which means you are going to be competing with a ton of other sellers. So in order to appropriately define your definition of success, you also need to understand how plausible your ambitions are given your current resources both financially and time-wise. Do you have a big team? Do you have thousands, tens of thousands, hundreds of thousands, a million+ to invest in your Amazon business?

Questions To Ask Yourself In Determining What A Successful Product Should Look Like

How Much Money Do I Want To Invest?

Do you have thousands, tens of thousands, hundreds of thousands, a million+ to invest in your Amazon business? The amount of money you have to invest will determine how much inventory you can afford. This may influence the products you select based on their per unit cost. This also has an impact on how large of team you can build initially (if necessary). The quantity of inventory you are able to purchase also has an effect on the amount of promotional units you will be able to give, having major implications on your ranking strategy. 

How Large Is My Team? How Large Of A Team Do I Want To Build If Necessary?

Some sellers prefer to not grow any larger than themselves and a couple of VAs they hire hourly. Other sellers are willing and ready to build a massive infrastructure of warehouses and employees. Obviously this is not a question if you are just getting into the business, but for some later stage sellers this may be a barrier to growth if growing a large team is outside of your comfort zone.

What Kind Of Profit Margin Am I Looking For Per Product And Collectively?

Are you wanting to go deep on a few high volume products? Are you looking to go wide meaning going after a larger variety of low to mid volume products? There are pros and cons to each, and we’ll outline those down below!

In total are you just wanting to add a few thousand dollars to your bank account each month or are you looking to build a mammoth $1,000,000/month Amazon business?

How Many Products Am I Looking To Sell In the Next 3-6 Months?

For sellers just getting started, again, this is not a question you can answer accurately right now. It is also highly dependent on your capital. Some sellers are okay launching just a couple of products and reaping the benefits each month. They don’t want the added stress and pressure of continuously launching product after product. Keep in mind the amount of profit you are looking to make total. Going after a couple of products that may add $1,000 of net profit will not get you to your total goal of $5,000 if you are only wanting to sell two products in the next 3-6 months.

What Is My End Goal With This Business?

Is this going to be a lifestyle business for you or are you looking to maximize sales to shoot for an acquisition?

This may or may not have an effect on how you choose your products. For example, from our experience with Amazon business acquisitions in the private label world, companies are looking for strong brands. So selecting products that will allow you to build a cohesive brand will be important. With that said, Amazon businesses that are purchased solely for cashflow purposes do not typically put emphasis on having a unified brand(s). Either way, it is an important consideration in how you will position yourself for acquisition if that is your goal.

How Things Will Change With the New Amazon TOS Update

Post TOS update, from our perspective, sellers must be more precise in selecting a “good” product because the playing field has been leveled. Pre-update, it was very easy to give away a large amount of product in exchange for reviews. Doing so generated a competitive number of reviews and built a sales history that got that product ranking for each and every keyword that the seller selected.

So if you had a super competitive product, you were okay so long as you had the money to run enough promotional sales.

Post-TOS update, generating a competitive number of reviews becomes much more difficult. Generating reviews today rests solely on having a killer product that customers want to review and leveraging a killer email follow-up sequence to ask your customers to actually leave a review.

So how will this affect your decision making in selecting products to source?

You need to be drastically more concerned with the number of reviews page one and two competitors have. While there is some misinformation in the space around a “magic number of reviews” needed to generate organic sales, our data shows us that the key to selling well organically is having a “competitive” number of reviews relative to those listings you find yourself around.

What that means is, if the page one sellers have reviews that look like this RUN FAR AWAY!

 

 

 

Here is a screenshot from the same keyword, “vitamin c serum” that shows how important having a competitive number of reviews is. The listing ranked 6th has 10,000 reviews and is selling 3,000+ units per month. The next guy, although ranking really well for a very high level keyword, is only seeing 270 sales per month. At the 8th position they have a decent number of reviews, especially compared to the the 7th and 9th position, so they are seeing a moderate volume of sales. At position 9 the seller is hardly seeing any sales at all because they have 0 reviews! While there are multiple factors that come into play when a customer decides which product to ultimately buy, reviews and price typically have the most substantial effect.

 

Are Home Runs Dead?

The short answer is no. Not at all. If you have already been working on a home run type product (home run = high volume product), then definitely don’t give up. Depending on where you are at in the product launch cycle, you may need to adjust your strategy, but don’t worry, success is still a very attainable goal.

If you are just getting started with a home run and it is your first product on Amazon, beware. It is likely to be a long and costly battle depending on what the market looks like. It can be best to get started with a relatively simple product to understand the market, the processes, and the expected results.

Our suggestion for new sellers is to get into markets where a “competitive” number of reviews is below 500. Ideally you could find a product where page one sellers ranking between #3 – #12 have a sales volume of 500-1000 units/month and have around ~250-500 reviews. These products are much easier to break into the market with and allow you to learn a lot of the ins and outs of selling on Amazon without investing too much money.

 

Keys To Sourcing Great Products Regardless of The Amazon TOS Update

  • Find a quality product!
    • Reviews are king on Amazon! If you have a poor quality product you are going to find yourself with a product that continues to generate poor reviews. Before too long you end with a product noone wants to buy. There is nothing worse than having thousands of dollars in unsellable inventory.
    • Quality products can result in the sales boosting effects of word of mouth, positive reviews, and repeat customers (depending on the product of course).
  • Find a product at a great price!
    • If you are sourcing your product at a 25% higher cost than your competitor(s) for the same exact product, they will always be able to beat you on price. You can quickly lose to the competition on listing price, promotion capabilities, etc.
    • Product sourcing Guru Alan Basinger has a quote that I love! He says, “You have to win on the buy!” It is spot on. Alan has a logistics company that helps bring products into the US as well as sourcing directly from manufacturers in China.
    • Go to China directly! The Viral Launch CEO recently went to Yiwu with a group called SourceInAsia as a mentor and saw just how powerful working with manufacturers directly can be to negotiating quality product at a great price.
  • Find a product with great margin!
    • Margin is a huge consideration for product price. Make sure there is a great margin between the price at which you source and the price at which you sell is key! If you’re not making much money per item what is the point in selling? The other fear is if the market decides to start competing on price you want to make sure you are not priced out. We’ve seen this happen all too frequently over the last couple of months.
  • Watch Out For Name Brands
    • We’ve seen a couple of sellers get into products that are largely dominated by name brands. This is common in baby/children’s products. For example, sourcing crayons as a private label product can be insanely difficult because the first couple of pages are almost completely dominated by Crayola. Good luck competing with them.
    • Also be weary of sourcing a product where the main keyword(s) is also a brand’s name. Ex. “Yeti Mug”. It can be very difficult to outrank a brand if the main keyword is the search term. Amazon attributes a LOT of rank power to the brand’s name.
  • Consider product size, weight and durability!
    • Knowing how the size and weight of a product will affect shipping is crucial to estimating margin and expense. Work with your sourcing agent or manufacturer to understand the costs associated with shipping your product into the country, to your warehouse, and/or FBA.
    • You will also need to know what Amazon’s FBA fees associated with shipping will be. For that you can use Amazon’s FBA Revenue Calculator which will give you a good idea (don’t bank on the accuracy of the fees).
    • Durability is key to providing a good customer experience and avoiding customer returns. You may want to avoid easily damaged items.
  • Long-Term Brand Building Or Revenue Generation
    • Are you looking to build a long lasting brand or just looking to solely focus on increasing revenue (not that building a brand won’t help you generate revenue)? If you are looking to build a brand, make sure to choose products that will allow you to easily add products that make sense such as a yoga mat, and some yoga massage balls. The added benefit here is you can take advantage of bundling and upselling. It also saves you time and money by allowing you to pay to have one brand created (logos, label/package archetypes, etc.).
    • If you are looking to simply grow revenue you can be very selective in the products you decide to source. Meaning, if the numbers make sense, source it. Sellers who take this approach end up selling products as different as a eye cream and a pet bed.
    • Either approach is great so long as it aligns with your idea of success in running a private label business.
  • Make Sure Your Product Is Created With Customer Approved Materials
    • You don’t want to source a cream that is going to cause rashes.
    • If you say your product is organic/natural/paraben-free/etc. make sure that it is. If all of your competitors are able to make such claims, you will miss out if you cannot, but don’t lie to your customers. Trust me, they will find out if you are!

Tools To Use When Product Sourcing

Jungle Scout

The Viral Launch team uses the Jungle Scout Chrome plugin religiously when putting together launch strategies. This tool is great at allowing you to quickly analyze the most important stats of products that rank for a given search term without clicking into each listing (at least that’s how we use it). Jungle Scout also has the most accurate sales estimates overall I’ve seen.

When sourcing, Jungle Scout also allows you to easily compare how a style of product is selling better than others. For example, let’s say you are wanting to sell grill/cooking gloves (which I would advise against due to the amount of competition). You would want to know if you should invest in the type of gloves that have 5 fingers or the mittens that have one slot for your thumb and one for the rest of your fingers. Choosing incorrectly could have major implications.

We also use Jungle Scout to estimate the number of units we will need to give in promotions to achieve keyword ranking and to help give for reviews. With the TOS change these numbers will differ (which we will get into in a different section of this guide), but having an idea as to the number of units you will want to use for promotion are crucial to understanding the total costs associated with launching a product.

Greg at Jungle Scout has plenty of tutorials on how to effectively use the tool. We personally use the tool for a very limited scope of its total potential!

Project Sourcing Success (Name To Be Announced Later)

Viral Launch has seen too many sellers lose thousands of dollars by making bad sourcing decisions. By the end of October of this year we are planning on launching a new tool that will help you make more intelligent decisions around product sourcing. It will go wonderfully along with Jungle Scout or similar type tools.

If we can help our clients avoid bad sourcing decisions, we will gladly seize that opportunity!

 

Conclusion

It would take us many blog posts to effectively cover the entire ins and outs of product sourcing, and to be honest, we are not the best company to handle how to source end to end.

With that said, our extensive knowledge, data and experience in running over 11,000 product launches and working mega sellers doing 50-100 million a year in sales on Amazon, we do have plenty of beneficial tips and knowledge that can help you avoid some major pitfalls that can have serious repercussions.
At the end of the day, you need to make sure you are selecting products that appropriately align with your idea of success and your resources. What is a good product for the next guy may not be a good product for you.

 

If you have any questions, we will be happy to answer them in the comments! If you have any feedback, we would love to hear it as well!

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