Ryan Cramer walks through his perspective on where international e-commerce is headed and how sellers can take advantage of the growing seller momentum around the world.
At Viral Launch, we constantly hear from Amazon sellers who want to take their business to the next level. The option to sell internationally on Amazon is a low-risk, high-reward opportunity that’s being underutilized in the seller community.
Why is selling internationally such a promising proposition? Follow the Data host Cam Yoder chats with Ryan Cramer of PingPong Payments to find out!
PingPong helps e-commerce businesses sell worldwide by providing international payment solutions. Since 2015, more than 600,000 e-commerce merchants have entrusted PingPong with their cross-border payments, resulting in more than $10 billion processed for global sellers.
With experience in sales, marketing, and e-commerce, Ryan expertly explains the benefits of going global and how you can take full advantage of growing seller momentum around the world, so you can expand your business as Amazon continues to grow. Don’t miss out on growing with Amazon international!
HIGHLIGHTS
Get familiar with what PingPong does for sellers and Ryan’s extensive background in e-commerce (0:12)
Ryan lets us in on his professional journey to PingPong Payments and how it fits in with his goals. With a background featuring a steady mix of sales and e-commerce, Ryan provides an insightful perspective on where those fields overlap.
Ryan, on how he sees international fitting into the typical Amazon seller’s strategy (10:39)
Quietly, Amazon has been steadily expanding around the world. As e-commerce continues to grow at different speeds globally, it allows yet another way for Amazon sellers to scale their business. Ryan breaks down why it’s worth keeping an eye on international opportunities, and why it should be on the minds of current or prospective sellers.
With Prime shipping, Amazon changed the way we buy online in the U.S. Is changing the way the world buys online up next? (12:57)
The future of selling is closer than it may appear. Amazon is rolling out programs to provide the same revolutionary two-day shipping program in its international marketplaces. For many U.S. sellers, the idea of selling internationally can seem quite foreign. Ryan lets us know about these programs, what they may mean, and why now may be the best time to take your business global.
So you want to sell internationally. What are the prime marketplaces to target? (15:57)
While selling internationally might be easier than you think, there certainly are important decisions to be made before getting started. We discuss the importance of locating emerging markets, understanding cultural differences, local habits, and more aspects to consider before taking your business abroad.
More money is being poured into buying Amazon businesses than ever. What does this mean for the traditional Amazon seller in the near future? (23:14)
With millions upon millions of venture capital money going to companies that buy Amazon businesses, are the days of the traditional Amazon seller numbered? Ryan doesn’t think so in the slightest and believes it’s actually a great opportunity for more traditional sellers.
Lastly, a huge thanks to Ryan for coming on the show and sharing his knowledge with us!
Check out PingPong to save a LOT of money if you sell internationally!
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When it comes to selling on Amazon, there’s always an abundance of items on the to-do list. As many brands are made up of just one person or a small team, there’s a lot to keep track of from picking a product and managing inventory to creating a listing and advertising… and everything in between. So how do you keep track of everything? Luckily, there’s an Amazon web app or tool for nearly every step of the selling process.
Here’s a list – in no particular order – of some of the best paid and free Amazon FBA tools and web apps designed to help you take your e-commerce business to the next level.
1.Take your Business On-the-Go with the Amazon Seller App
Before we get started, we should first mention one smartphone app every seller should have.
This might be pretty obvious for more seasoned sellers, but it’s definitely an important one. This is essentially Amazon giving sellers a free tool to help make their selling experience a whole lot easier and organized even when you’re on the go. You’d be crazy not to take advantage of it, right?
What it does: In short – a lot. This is essentially Seller Central in your pocket. With this app, you can analyze sales, quickly make pricing changes, view fees, create listings, upload photos, manage orders, respond to messages and much, much more.
Why we love it: For starters, we love it because it’s free. It’s also great because it has many of the major features and functionality of Seller Central available to you at any time. With this app, you’ll be able to manage your business from just about anywhere.
How to get it: This app is available for free in the Apple or Android app stores.
Ok, now that we’ve covered the Amazon Seller app, lets get back to the best third-party web-based apps and tools for sellers!
2. Take the ‘Ew’ Out of Reviews with Feedback Genius
Amazon reviews are a touchy subject to say the least. That’s why finding any tool that helps sellers manage and gather reviews within Amazon’s terms of service is like coming across an oasis in the middle of the Sahara. One of the most popular review apps is Feedback Genius from Seller Labs.
What it does: Reviews serve as social proof on Amazon, and they’ve got a major impact on clicks and conversions. Therefore, reviews are extremely important, and sellers must have a solid review-gathering game plan. Feedback Genius is a powerful Amazon FBA tool to help sellers gather and manage reviews as well as communicate with buyers through automation and helpful notifications.
Why we love it: Feedback Genius is great because it takes a lot of the legwork out of review aggregation and management. This app allows sellers to automate the bulk of their messaging to buyers and set up notifications so you never miss a review or feedback.
How to get it: Visit the Seller Labs website and create an account. New users can also try out a 30-day free trial!
3. Track Inventory and Run Ad Campaigns with Teikametrics
Making sure you’re on top of your inventory and successfully managing your advertising campaigns are extremely important aspects of selling on Amazon. Knowing how much product you have left and when to restock helps you to maximize profits and maintain ranking. And getting in front of shoppers through sponsored ads expands your sales potential. Luckily, there’s an FBA-focused tool out there that can help you keep track of inventory and advertise your products called Teikametrics.
What it does: This tool helps Amazon sellers create and follow smart inventory systems and sponsored ad campaigns. Manage your investments, track replenishment, and find your true profitability with Teikametrics’ FBA platform. You can also automate your sponsored ad campaigns to increase profitability. It’s all in one place.
Why we love it: Teikametrics is great because it’s designed with the FBA seller in mind. You get help managing inventory to reduce stock-outs while also learning valuable strategies to improve sales velocity and ranking. And when it comes to PPC, Teikametrics’ automated bidding allows you to get the best placement for max profitability without lifting a finger.
How to get it: Visit the Teikametrics website to create an account and get started.
4. Utilize Viral Launch’s Suite of Tools to Launch your Business into the Stratosphere
Here at Viral Launch, our mission is to provide sellers with the best information and tools out there for their selling journey – whether it’s from us or not. So with that being said, please forgive us for this shameless plug. Our Viral Launchpad (see what we did there) is based around 4 main tools:
Product Discovery: Our product finding tool allows you to find individual products that meet your criteria, review initial keywords, discover successful brands, and search subcategories for up-and-coming products. It also has advanced filters allowing you to customize your research process to get personalized results.
Market Intelligence: Once you’ve used Product Discovery to find a few products you’re interested in, it’s time to use Market Intelligence to verify your choices. This tool lets you verify demand for products by showing you estimated sales numbers, keyword search volume, trends, market conditions and much more.
Keyword Research: Like we mentioned earlier, finding the right keywords to include in your listing is huge. Our tool allows you to search a general keyword associated with your product and then presents you with a list of other possible keywords. Along with the keyword list, you’ll also get data like Search Volumes, Priority Score, Relevancy Score, Opportunity Score, Trends and more.
Launches: Also known as giveaways, launches are a great way to help move your product up in keyword ranking. At Viral Launch, our clients work with one of our Amazon Seller Coaches to target a major keyword for their product with a lot of search volume. Then, we determine what number of units to give away at a discounted price and for how long. Amazon recognizes these sales which in turn moves the product up in rankings for the major keywords, getting it in front of the eyes of more shoppers.
5. Own Your Taxes with Avalara
Is there anything more fun than doing your taxes? Oh, wait, there is? That’s right, unless you’re a CPA or an Excel whiz, taxes are tedious at best and massively confusing at worse. As an FBA seller, taxes can get even more confusing as changing legislation makes things increasingly difficult. Not to fear, Avalara is here with tax tools designed specifically for the needs of Amazon sellers.
What it does: Among other tax solutions, Avalara software automates sales tax compliance. Amazon sellers can easily understand how much they owe in each state that they have nexus. Avalara can even prepare and file your returns according to a filing calendar. It’s like having your very own accountant on your payroll!
Why we love it: Avalara provides real-time rate calculation and automatic return filing. No more manually entering data and other tax information… with Avalara’s sales tax engine, the right rates and rules will be applied every time!
How to get it: It’s simple, visit the Avalara website, sign up and get started!
6. Make Accounting Easy with Quickbooks
Whether you’re a solo Amazon seller or part of a small team, there’s a lot to keep track of. From expenses to taxes and everything else, that’s a lot of work to put on the shoulders of one, or in some cases, a few people. But with Quickbooks Online, you can keep track of all the important aspects of your business all in one place.
What it does: It might be better ask what Quickbooks Online doesn’t do. Sellers love this tool because of the wide range of services it offers. With Quickbooks Online, you can keep organized books with everything in one place. Automatically import and categorize your transactions, and you can even share your books with your accountant for seamless collaboration. This way, when tax time rolls around, you’re set up for a painless experience.
Why we love it: To be successful in any business, you need to know how much cash you’ve got on hand and how much cash you’re spending. Quickbooks Online allows you to see in real time how much money you’re making and spending… all in one place.
How to get it: Visit the Quickbooks website and sign up for the plan that best fits you and your business! There’s also an option for a free 30-day trial. If you’re having trouble setting up Quickbooks for your Amazon FBA business, get help from the pros. Find a bookkeeper like CapForge BookkeepingPros, who specializes in FBA, and they can help you set up your books correctly. After a free consultation, you’ll understand how CapForge can simplify your Quickbooks for peace of mind.
BonusRound: International Sellers
7. Take Your Business Worldwide with WorldFirst
One of the main reasons Amazon provides sellers such a massive opportunity is because of the sheer size of their user base. Millions of shoppers from around the world are browsing Amazon every single day. But with different rules and regulations in each overseas economy, selling worldwide can be tricky. With the help of WorldFirst, you can build your business overseas and easily bring your money back home.
What it does: Amazon requires you to open a bank account in any country where you sell products, which can cause logistical headaches and great confusion. WorldFirst allows you to set up Amazon receiving bank accounts in overseas marketplaces like USD, JPY, CNY, GBP, EUR and CAD.
Why we love it: One of the best things about WorldFirst is that it’s extremely cost effective. For starters, it’s free to open an account which makes it easy to get started. There are also no fees for receiving money and no monthly charges.
How to get it: All you have to do is visit the WorldFirst website and sign up for an account.
Combine Amazon FBA Tools and Web Apps with Hard Work and Dedication
While the Amazon FBA tools and apps listed in this guide are great resources, they aren’t the end-all-be-all for whether or not you’ll be successful on Amazon. By that, we mean that merely signing up or using these tools won’t ensure success. It’s also completely possible these or other popular tools just aren’t right for you and your business – and that’s fine!
The best way to maximize your chances of successfully of being a successful seller is to combine Amazon FBA tools like these with hard work and plenty of research. It’s also important to make sure you stay up to date on any changes that may be taking place within the Amazon marketplace.
The great thing is a lot of this information can be easily found online, it just takes some effort on your part to find them. Like we mentioned above, Viral Launch hopes to be your source for information about all things Amazon. We encourage you to subscribe to our blog, check out ourYoutube channel or listen to our podcastFollow the Data.
Most people have heard of the online retailer Amazon. A lot of people use it as one of the main ways they buy products and goods. In fact, in early 2016, it was reported that Amazon had more than 310 million active customer accounts worldwide. And in 2017, net sales totaled $178 billion. What a lot of people might not know, is that a good portion of Amazon sales come from private label products.
And the great thing is, anyone can learn how to sell on Amazon, especially through private label.
In this post, we’ll go over private label products and how you can use them to build an Amazon business from the point of view of a seller. We’ll cover what a private label product is, where to get them and how to pick the right one.
First, we need to answer the question:
What is Private Label?
The concept of private label as it applies to Amazon and selling is actually pretty simple. Think of all the products that are on Amazon. Everything from phone chargers and first aid kits to kitchen utensils, toys and everything in between. Have you ever stopped to think about where these products come from and who is selling them? More often than not, the “company” behind the product listing you’re looking at isn’t so much a company as a single person or small team selling products.
So where do they get the products? People who sell private label products on Amazon “source” generic products from manufacturers and then market them under their own brands as a “third party seller.” This is actually one of the most popular ways to sell on Amazon because it’s the most scalable. As a third party seller, you buy your product in bulk from a manufacturer at lower per unit prices and then re-sell on Amazon for profit.
Sourcing Private Label Products
So this next step in understanding what private label is learning how sellers find them. One of the most popular ways to source products is through the website Alibaba. In short, Alibaba connects you with overseas manufacturers allowing you to purchase your selected products in bulk for resale. However, there are some things you have to keep in mind. Many of the manufacturers you work with will be from another country, so you’ll have to think about possible communication issues and cultural differences when dealing with them.
Just to give you an idea of what the Alibaba interface looks like, take a look at this example search we performed for a random product, in this case a phone charger.
You can’t see on that screenshot, but there are literally 100 pages of products related to phone chargers that you could source and sell under your own brand. By just browsing through the searches, you can get an idea of what the per unit prices will be for products like these, what the minimum order the manufacturer will accept is, and there’s even a button to “Contact Supplier” directly through Alibaba. And once you choose a specific product listing, there’s even more information available.
All this available information will allow you to do your homework on the manufacturer, to ensure they will be a good partner to work with. Alibaba also has its own quality assurance metrics to help you pick legitimate manufacturers to work with, but a lot of the work will still come from your end during communications with prospective partners.
Picking the Right Product
Now you that you know where to get a product from, let’s talk about how to choose the right product. Like with everything on Amazon, this process takes a good deal of research. You don’t just browse Alibaba, find a product you think is cool and then sell it. First, you need to do your homework.
Choosing the right product to sell private label is crucial to your success. One wrong move can cost you time and money, or worst, ruin your Amazon business before it begins. When thinking about what product to sell there are a lot of factors to consider like price/profit margins, marketplace viability, popularity and much more. By using a product finding tool, like Product Discovery from Viral Launch, you can generate a list of possible products that align with your goals.
After you’ve got a list of items you think could be winners, it’s time to validate. There are a lot of market research tools out there for Amazon sellers, including our own Market Intelligence. This type of software eliminate guesswork so you can steer clear of risky products that might lose you money.
For instance, our tool allows sellers to see demand for a product by looking at estimated sales numbers, keyword search volume, and market trends. You can also take a look at how top competitors have performed and are performing with similar products.
Our tool also allows you to look at potential barriers to entry like reviews, big brands and high initial investment.
Want to learn more about how to find great products? Check out this video:
Next Steps
Now you know where a vast majority of the products available to buy on Amazon come from, you might be thinking about getting involved. If so, there’s still a lot to learn about how to become an Amazon seller. You’ve got to start an Amazon seller account, figure out how you want to fulfill your orders, learn what makes an effective listing and how to market your product and much more.
One of the most important things to keep in mind as you continue on your journey of becoming an FBA seller is to never stop learning. Things can change on Amazon in what seems like the blink of an eye, so it’s important to stay up-to-date. What’s great is that information is out there, you just have to be willing to put in the time and effort to research.
Your friends at Viral Launch would love to be there every step of the way by providing tools and resources for your Amazon journey. If you’re interested in learning more information about all things Amazon, we encourage you to subscribe to our blog, check out ourYoutube channel or listen to our podcastFollow the Data.
For even the most seasoned sellers, mastering the intricacies of Amazon can be difficult to say the least. Like with any online or internet-based venture, things change on Amazon sometimes seemingly overnight. It can also be difficult to get concrete information about some of their elements – especially Amazon sales rank, also known as Best Sellers Rank (BSR).
This metric is quite possibly the most disputed and researched element in Amazon’s arsenal. Sellers truly have a love-hate relationship with BSR. Viral Launch’s own CEO Casey Gauss made it his own mission to learn more about the mysterious metric by reverse engineering Amazon’s algorithm. You can learn more about that in his Definitive Guide to Understanding BSR.
But for now, let’s answer a few questions:
What is Amazon Sales Rank?
Essentially, Amazon Sales Rank is used to determine a product’s popularity within a category. It actually exists for all products, even those that aren’t part of a category. Products can have a sales rank of 1 to over a million. The lower your number is, the more sales your product is getting and vice versa. Basically, it’s calculating the period of time since an item last sold, so if you want a low BSR, ideally you want the period of time between sales to be as small as possible. Just think of your BSR like your golf scorecard – the lower the number, the better you’re doing.
You can find the BSR of any product in the Product Information section of a listing. As an example, I searched for a random product – in this case, a phone charger.
As you can see in the image above, you get quite a bit of info at a quick glance.
This particular phone charger’s BSR is 28 in its main category of Cell Phones & Accessories. You also have the option to look at a list of the Top 100 products in that main category. Once you boil it down to subcategories, it ranks 1 and 28.
Why Does Amazon Sales Rank Matter?
From a seller’s standpoint, BSR matters for a few reasons. For starters, it’s an indication of how well your product is selling compared to competitor products, which gives you an idea of where you’re at in the marketplace. So ideally, you want to have as low of a BSR score as possible.
Just remember, when looking at BSR for the products you’re selling it’s an indication of past sales. Think of it this way, does a report card from a previous semester impact your grades in next semester? No. It’s just an indication of your past performance. So like a report card, BSR has no bearing on your future sales and won’t directly help you drive organic sales. This is actually one of the biggest misconceptions about BSR.
For more info about BSR misconceptions, check out this blog about Busting BSR Myths.
How Can I Improve my Amazon Sales Rank?
Now that you know a little background about Amazon sales rank, let’s go over some guidelines of how to improve it. The very best way to improve your Amazon sales rank is to make more sales. I know, that seems pretty obvious, but it’s something newer sellers still struggle with. Here are a few ways to improve your chances at more sales:
Optimize your listing: Choosing the right keywords for your product is imperative. It’s also important to make sure you include keywords in your listing, especially in your title and bullets. This will help your listing be seen by more people, increasing the chances of your product being bought. There are a lot of keyword tools out there, including Keyword Research from Viral Launch, that can help you with this.
Create great copy: Along with including keywords in your listing copy, you also have to do a great job selling your product to customers. Make sure to highlight all the important aspects of your listing and tell people why they should buy it.
Use professional photos: In addition to copy, product photography plays a huge role in increasing conversions. Many people think a few smartphone photos and some Photoshop is all you need and that couldn’t be farther from the truth. Professional photography can make a huge difference in selling your product to customers.
Run a giveaway: Giveaways, or Launches, as they’re called here at Viral Launch, are a way to increase your listing’s ranking for a major keyword. In short, we target a major keyword associated with your product and do product giveaways – usually around 90% off – for a period of 7-10 days. As your product racks up the sales, it is organically moved up in rankings. While the goal of a launch is to improve keyword ranking (which is more crucial to generating organic sales), an improved BSR is frequently a side effect of a promotional campaign.
PPC Campaigns: Pay-Per-Click Campaigns are essentially the “sponsored content” you see when browsing Amazon, Google or other search engines. Basically, you pay a small fee to search engines for a specific keyword. This helps get your product in front of more people who are searching for similar items.
One thing you don’t want to do while chasing a lower BSR is intentionally miscategorizing your product in a less competitive subcategory. Some sellers try this tactic because they think it will be easier to achieve a lower BSR. However, we don’t recommend this because it limits the product’s visibility as many searches filter to a relevant subcategory. This means your product could be filtered out of valuable results.
Final Thoughts
Here at Viral Launch, part of our mission is making sure sellers have the best possible information about all things Amazon in their arsenal. That’s especially true when it comes to a widely disputed, misunderstood and, frankly, confusing topic like Amazon sales rank. Is it important? Sure. It’s great to know how your product is doing in comparison to others. But you should view BSR as more of a symptom rather than a cure. If your product isn’t performing well compared to its peers, check out competitor listings. Try to see what they’re doing right and you might find ways to improve your listing. Just remember, what your BSR is today has no bearing on what sales you’ll make tomorrow.
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When starting your Amazon FBA business you’re taking a risk. One false move could cost you precious time and money or worse. A mistake when looking for what to sell on Amazon FBA could send your business crashing down before it even begins. The Amazon ecosystem can be confusing to navigate, but by arming yourself with plenty of information, you can maximize your chances for success.
So if you’re a newer Amazon FBA seller, you’re in luck. We’ve compiled a list of the most common mistakes to avoid when starting your FBA journey. Most of these are centered on the Private Label selling experience since over half of Amazon FBA sellers have one or more Private Label products.
#1 – Following the wrong resources
It’s extremely easy—maybe a little too easy—to find courses, gurus or service providers that give out or sell lists of the “best products to sell on Amazon.” If you see someone selling or giving out “hot product ideas,” run away.
There’s a huge market for courses, gurus, and consulting services centered around the Amazon FBA seller journey. And it’s not hard to see why. Amazon can be confusing, to say the least, and people want to be told how to be successful. The problem is, when everyone takes the same advice, especially when it comes to products, it can lead to oversaturated markets. That means it can be exceptionally hard to generate visibility and drive sales. A market can be great, but if a few hundred sellers all source that same product, the supply can overtake the demand, leaving you with high competition and a bunch of inventory that’s too hard to sell.
#2 – Following trend markets
Just like you ran from the gurus and best product lists, do the same for trendy markets. Chasing trends can be extremely risky, especially as a newer seller. They’re only really profitable for those who are really, really early to the party.
For an example of this, look no further than 2017’s fidget spinner:
In late 2017, the fidget spinner made some early sellers a lot of money. But as more people hopped on the bandwagon, demand crashed, and a lot of money was lost. Think of it this way, if a product is trending on social media or TV, you’re probably too late to the party. Even if a market looks amazing, with tons of sellers moving thousands of units with low review quantities, you probably won’t have enough time to capitalize on it. On the short end, it’s going to take you two months to get your product to the market. And by that time, public hype will have started to die down.
If you do hop into a market that quickly becomes saturated, many sellers find themselves in pricing wars with their competitors, limiting their profit margins. This could lead you to sell below cost and lose money.
The people that profit from a trend market either get extremely lucky with timing or they have a low cost (meaning they are a manufacturer) or a ton of capital to pour into a product to drive and hold ranking. Everyone else will likely end up taking a financial hit.
#3 – Not thoroughly researching restrictions/barriers for your desired market
There are quite a few categories on Amazon that have a required approval process to begin selling. For these categories, you may need to submit formal documentation and invoicing. You may also have to pay an upfront fee to be permitted to sell in the category. This can be disastrous for new sellers hoping to hop into a category quickly and start selling. Make sure you have taken the time to understand categories that require this upfront work by checking out Amazon’s approval process. Additionally, there are also specific products that have different restrictive barriers.
#4 – Sourcing low-quality products
If you are planning on selling a private label product, make sure it’s high quality. Sourcing a low-quality product can doom your Amazon venture from the start. Reviews are extremely hard to generate on Amazon, and a few negative reviews early on can sink a listing in a flash. Take the time to order samples and analyze durability, functionality, and overall quality to address any concerns that could drive complaints from buyers. Also, take the time to read through negative reviews from your competition and see if there are any issues that you can improve on. You may even want to purchase a few of your competitor’s products to compare to your samples as a quality check.
#5 – Sourcing an expensive product (for that market)
Another thing to be aware of is all the hidden costs of starting a private label business. Until you actually get started with the selling process, it can be difficult to understand all the costs associated with an FBA business. Between shipping, sourcing, Amazon fees, PPC, promotions, listing creation and more, there’s a lot of costs to be aware of before you jump in. At Viral Launch, we actually have a tool that can help you with initial cost estimates. Amazon also has some great resources about referral fees by category and shipping tiers you should check out before getting started.
While it’s extremely important to have a high-quality product, if you cannot match or beat the majority of your competition on price, it’s probably not advantageous to enter the market. We recommend being sure you can break even by selling at a lower price than everyone on page one. This isn’t absolutely necessary, but it will afford you some flexibility to adjust pricing with fluctuations in the market.
Keep in mind that while quality is important, it is extremely hard to sell a higher priced item based on quality on Amazon. You’re allowed limited space for copy and images and shoppers are typically looking for low prices.
#6 – Selling a product you’re passionate about
This one might surprise people. It might make sense to some to sell a product you’re knowledgeable or passionate about, but it can often do more harm than good. Sourcing a product you’re passionate about can cloud your judgment, lead to mistakes in pricing and make it harder to bail out if a product just isn’t selling. While it’s not wrong to sell something you’re passionate about, it can cause you to react emotionally rather than logically. So just remember to focus on the bottom line.
The 12 Most Common Amazon FBA Mistakes to Avoid – Video Version Check out the video version of this blog below and don’t forget to like, comment and subscribe:
#7 – Not inspecting a product
This is another note for private label sellers and it goes hand in hand with sourcing a low-quality product mistake. It’s important to ensure the product that comes off the manufacturing line and to your customers is in good shape and quality. Many sellers hire an inspection agency that will go in and observe the manufacturing process to check out inventory and monitor any defects or flaws. This step can save you significant time and money in the long run because you’ll catch mistakes before the inventory is sent to the United States or Amazon.
#8 – Sourcing a patented product
When looking for private label products to source from a manufacturer, it’s important to consider patents. In some cases, sellers will have a product manufactured that’s actually under a patent. Most likely, manufacturers you’re buying from won’t know the product is patented and will try it to sell to anyone who will buy it. However, that doesn’t mean it’s legal. Imagine investing a bunch of capital in product inventory only to get a cease and desist or lawsuit from the patent holder.
#9 – Not putting enough effort into building your listing (including photos)
If you’re a private label seller, you own the product listing. That means you have to set it up. You’ve put a lot of effort into finding and sourcing your next great product. It would only make sense to put the same amount of effort into creating your listing, right? Unfortunately, many Amazon FBA sellers don’t subscribe to that notion. Between your photos, title, bullets, and product description you don’t have much space to capture a customer’s attention and explain what your product is and does. That’s why it’s so important to use the limited space you have to its full advantage.
Effective listing copy accomplishes two goals. It provides persuasive sales copy while also helping you to index for valuable keywords. Before launching a listing, make sure to do extensive keyword research. Find the most relevant keywords for your product and make sure they’re in your listing, most importantly in the title and bullets. And, make sure you’re writing engaging and accurate copy for your product. If you’re not comfortable writing your own copy, check out the listing optimization service from Viral Launch.
As for photography, many sellers think a smartphone photo and a few clicks in Photoshop will do the trick, but they’re mistaken. Professional photography can play a huge role in whether or not a product fails on Amazon. Because Amazon is such a crowded marketplace and you have limited space to sell customers on your product, including high-quality photos can truly make a difference in sales.
#10 – Violating Terms of Service (with reviews or by attacking competition)
There are a lot of companies that pitch different “black hat” (against Terms of Service) strategies. Most of these are centered around generating reviews. While these strategies may seem tempting, Amazon heavily polices review generation. If you get caught paying for (or otherwise incentivizing) reviews, you’re putting your selling privileges at risk. Engaging in review manipulation tactics is common on Amazon, and many sellers get away with it initially, but Amazon has been seriously cracking down on review fraud and the impact can be extremely detrimental to your business.
#11 – Not monitoring your listing or data
For private label sellers, your product listing is sort of like a living, breathing organism. There are ups and downs and changes from day-to-day. Far too many private label sellers throw their listing up and think they’re done. It’s important to continue monitoring your listing to collect data and see how it’s working. You should also keep track of how competitor listings are doing and the category as a whole. Make sure to monitor your ranking for important keywords and ad campaign data as well, using those insights to develop a long-term strategy. Getting your listing up is only half the battle. Tweaking and optimizing based on feedback is the other half.
#12 – Putting your product into the wrong category
As a private label seller, one part of setting up a product listing is deciding what category your product will be listed in. During this step, it’s important to place your product in the proper category. Some sellers try to categorize their product in a lower competition market as a way to earn the Best Seller Badge. However, many searches filter to a specific subcategory, so incorrectly categorizing your product could filter you out of crucial search results.
Sellers can look up their product in Seller Central to determine potential categories, just make sure your product is relevant to the one you choose. If my first aid kit, for example, is not for survival or tactical purposes, there are several options below I would want to avoid in terms of category choice. More than likely, I would want to be in generic first aid kits under Health and Personal Care:
Learning from Your Mistakes as an Amazon FBA Seller
This is the part where I wish we could tell you a magical secret that would make you wildly successful with your Amazon FBA business and richer than you could have ever dreamed. But on Amazon—and in life—these magic shortcuts just don’t exist. The only way to maximize your chances for success as an Amazon FBA seller is through hard work, data leveraging, and constant research and education.
It’s also safe to say that you’ll make some mistakes. The hope is, however, that those mistakes are minor and few and far between. But, when you do make mistakes it’s important to learn from them. Hopefully, this blog has helped open your eyes to things you’ll want to keep in mind and help you from making a big mistake that could doom your FBA business.
Here at Viral Launch, we’d love to be your resource for all things Amazon. To hear more from us, we encourage you to subscribe to our blog, check out ourYoutube channel and listen to our podcast Follow the Data.
Whether you want to start a profitable side hustle or you’re ready to become your own boss, many choose to sell on Amazon; a massive and lucrative opportunity. But despite what some online marketers would have you believe, it isn’t just a magical money-making scheme.
Success takes an adequate budget, hard work, a lot of research, and some dedication. In actuality, many people who start their Amazon journey quit before they ever have a chance to succeed.
But if you work hard and do your research, you can maximize your potential to start and build a successful business. In this guide, we’ll learn how to sell on Amazon step-by-step. Let’s hop into it!
1. Find a Product to Sell on Amazon
Now that you’ve decided to sell on Amazon, your first step is determining what you want to sell. The research you conduct at this initial stage is one of the most important tasks in this entire process. The data you gather and the product choices you make from that data will determine the success or failure of your entire project. Finding good opportunities depends on a lot more than imitating the success of a popular product or competing against products with mediocre Amazon product pages. You’ll need to thoroughly research the products, competition, keywords, and market trends before deciding.
Before you start to formulate ideas, you’ll need to be aware of the various selling methods. Consider your situation and resources when deciding which selling method makes the most sense for you.
Methods of Selling
Retail arbitrage is generally a great starting point for an Amazon newbie. Otherwise known as RA, retail arbitrage is when you visit retail stores such as Walmart or Target, buy discounted products, and then resell them on Amazon at a higher price. What’s great about this technique is you can get your feet wet selling on Amazon without a huge investment upfront. Online arbitrage is the same idea, only that sellers buy discounted products online and resell them on Amazon.
Private label is perhaps the most scalable model for selling on Amazon. With private label, you find a generic product and a manufacturer who can make the product in bulk at a cheap price. Then you tweak the product, add your logo and business information, and sell it under your own brand.
Wholesale means you buy products directly from a major brand (such as Nike, L’Oréal, or Fisher-Price) at wholesale price and sell them on Amazon. The difference between this and private label is that with wholesale, you’re buying products directly from an already established brand and then selling them under their brand name with their approval.
This guide specifically deals with private label, since it’s the most scalable, while still being a viable option for a newer seller. Your first step to getting started with private label is to start brainstorming product ideas. The possibilities are practically endless, but you can’t just pick a product at random and expect to make money. The best method for finding the best product ideas is to use data. Doing so will help you identify products with existing demand, which results in high sales potential for you. To gather this data, your best option is to use product-finding software with market analysis capabilities.
Our favorite product finder is Product Discovery. This tool provides you with a list of product ideas that match your budget and sales goals. With a few simple filters, you can easily locate product markets where you can compete as a new seller.
If this is your first product, your market criteria should look something like this:
Decent revenue: We suggest a range of $10,000-$25,000
Low reviews: We suggest a maximum of 250 reviews
Search volume: We suggest a minimum of 5,000 searches
Sales to review ratio: We suggest a minimum of 3 (This means the average monthly sales are at least 3x the number of average reviews. Reviews are the toughest barrier to entry in a market, so you want to make sure you have plenty of sales opportunities to gather reviews and compete with existing sellers.)
These criteria are just a starting point, and you should customize them to your own goals. The more personalized your inputs, the better your results will be!
After gathering a list of products you’re interested in, you’ll then need to validate your ideas. Again, you must use accurate data to ensure you’re choosing a product that sets you up for success. Market Intelligence integrates with Product Discovery, so that you can dive right into the validation stage. This process helps you avoid oversaturated markets or markets where your sales potential is low. When you plug your ideas into Market Intelligence, you should analyze the following:
Barrier to entry: How easy will it be to enter a market and compete with the existing brands? If there are already many established, successful brands with high sales and a lot of customer reviews, then your chance of success will be low. The ideal market for new sellers is one with low competition and high demand.
Revenue and profit potential: How much can you make with this product? The ultimate measure of how well a business performs is profit, and each business will have different goals. In Market Intelligence, you’ll see how much each existing product is making per month, which will help you determine how much you can expect to make once the product is up and running. Remember to look at market averages, not just a few outliers, so you can accurately predict revenue. And don’t forget: you will encounter costs such as manufacturing, shipping, and Amazon fees. (We added a cost calculator to help with this).
Monthly sales: How many units are sold each month? To understand how many products you need to order from the manufacturer (which is typically in China and leads to long shipping times), it’s important to know how much demand for this product currently exists on Amazon. Look at how many units are sold each month for products on the first few pages for the product’s main keywords, keeping in mind that you’ll likely need to order at least 2 months’ worth upfront.
Market trends: How does this product sell throughout the year? Certain markets are seasonal and see spikes in sales during certain times of the year related to holidays or seasonal changes. You’ll need to anticipate these trends for inventory reasons, and if this seasonality doesn’t appeal to you, it would be best to avoid products that depend on demand at certain times of the year.
The Amazon marketplace can be overwhelming, especially to newer sellers, but by using software like this to gather data and help find strong product ideas, you increase your chances of success.
*Note: before selecting a product, you’ll want to make sure that you can source it for a price that allows for a healthy margin. Use a site like Alibaba.com to get an initial idea of how much you will have to spend per unit, and don’t forget to account for shipping.
If you’re ready to start using data to find the ideal product for your Amazon business, sign up for a free trial. You can find 25 product ideas and validate 5 of them for free! Have questions about getting started on Amazon? Contact our team 24/7 at service@viral-launch.com.
2. Open an Amazon Account
Once you’ve chosen a product to sell, you’ll want to make yourself official and open a Seller Central account, which will be the hub of your online business. This portal is where you’ll add product listings, manage your inventory, view your reports, and more.
You’ll start by signing up with a valid email address and then be prompted to add the following information. Make sure you have all the info you need on hand to make the process a little smoother:
Business name and address
Telephone number
Credit card/bank information
Tax information (If you have an LLC, add your EIN. If not, you can use your SSN)
Later when you start making sales, Amazon will deposit payments directly into your bank account every two weeks and will notify you that your payment has been sent.
After clicking Next, you’ll enter your billing information. During the signup, you‘ll also choose which account type to sign up for. You have two options:
Individual: This account type gives you access to 20 product categories and restricts you to a maximum of 40 items sold per month. You’ll be charged a fee of $1 per item sold, although there is no monthly subscription fee.
Professional: With this option, you’ll have access to 30 product categories and are eligible, upon approval from Amazon, to sell in the additional restricted categories. This account costs $39.99 per month.
If you’re just looking to sell off some old books, you’ll probably want an Individual account. If you plan to flip items through Retail Arbitrage, you’ll need to decide how ambitious you want to be. A Professional account will be best if you plan to sell more than 40 products a month. As a brand-new seller, there’s no need to pay $39.99 a month until you’re actually selling your product. Just before your inventory arrives at the warehouse, you can easily switch over to the Professional plan.
3. Choose Your Fulfillment Method
The next step is to choose the method of fulfillment for your products. Fulfillment refers to the responsibilities of storing, picking, packing, and shipping products to customers. The two options are Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM):
FBA: This method can be best defined using Amazon’s terms: “You sell it. We ship it.” Using the FBA model, you send your products to be stored in an Amazon fulfillment center, and Amazon will then pick, pack, and ship your products when a customers order. Amazon also takes care of customer service issues, such as returns. It’s an easy-to-use, hands-off model, but it’s important to know that additional fees are involved.
FBM: Using this method, you list your products on Amazon and then you handle all aspects of storage and order fulfillment. You are also responsible for any late, missing, or damaged packages.
In this step, you’ll log into Seller Central and begin creating your product listing, which is the product page where a shopper will learn about and purchase your product. A product listing is your opportunity to show consumers what your product is, what it does, and why they should buy it. It’s important to be as accurate as possible when describing your product. You will also want to include all the necessary information, including ingredients, materials, dimensions, and anything else a shopper needs to know.
What this looks like on Amazon:
To have your product listed on Amazon, you’ll need to be assigned a specific product number from Amazon, known as a Fulfillment Network Stock Keeping Unit (FNSKU). However, to acquire one, you’ll first need to get a universal product code (UPC), which is a bar code. UPCs are created by the standards organization, GS1 US, and you can obtain your product’s UPC from their website. To get your FNSKU process started, you’ll need to obtain a UPC, which can take some time. Then once you’ve received it, you can create your product listing on Amazon.
The most crucial element in a listing is the keywords, and the effectiveness of your listing depends on your use of them. You could write some great copy for your listing, but if you haven’t included the keywords people are using to search for your type of product, your listing won’t be found. In a later step, you’ll focus on ensuring that your listing is optimized with the top keywords to earn strong organic search results and draw traffic. For the time being, you’ll get acquainted with creating a listing and everything that needs to be included.
A product listing consists of the following elements:
Title: The title is the most important element in your listing since it’s what Amazon focuses on the most when it comes to keyword ranking. In addition to your main photo, the title is what shoppers will see first In a search results list. Keep in mind that a title should give an accurate overview of what your product is and does. For some products, this will mean including dimensions or quantity counts. It’s also crucial that you include the most important keywords here.
Bullet points: In Amazon, these bullet points are known as product features. This is where you can elaborate on and highlight important aspects of your product. This is also where you’ll want to include any important keywords you didn’t fit into your title.
Product description: Your product description is where you can write in greater detail about your product and expand on what you covered in the bullet point section. Although brevity and keyword placement is key in the title and bullet points, the product description is where you can establish your brand voice.
Backend keywords: This section doesn’t actually appear on your live listing, so your customers won’t see it. This is where you should input any related keywords you weren’t able to fit in the main parts of your listing. You can include foreign-language keywords here along with misspelled words to gain the most visibility.
Photography: Each listing can have a maximum of nine product photos. The first, and most important, image in your photo set is called the hero image. This is the main image shoppers see when looking at your product in search results or on your listing page. In addition to your hero image, you can add images to show your product in use, known as lifestyle photos.
5. Find a Manufacturer
Let’s say you’ve decided to sell private-label products as an FBA seller. Where do you get your inventory? The goal of this step is to answer that question. It’s time to research the potential manufacturers and decide on the best one for your business.
Among the most popular sourcing options for private-label manufacturers is Alibaba. This site is a good place to begin your search for an overseas manufacturer who can supply bulk orders of your product.
When making this choice, make sure you do your research and choose a legitimate company to work with. Alibaba provides its own quality assurance metrics such as its Verified Supplier and Gold Supplier memberships. These designations are certified by third-party groups outside of Alibaba and confirm the business’s legitimacy. When looking at a supplier’s product page, you can view information that includes their response rate and the number of transactions they’ve had in the last six months.
We recommend creating a longlist of 10 or more suppliers and contacting each of them. Alibaba offers a messaging system for getting in touch with a manufacturer; just click the Contact Supplier button on the product page.
In assessing each one, you’ll be looking for several different characteristics. You’ll want to avoid any language barriers and find someone who will be easy to understand. Pay attention to how quickly a supplier responds to messages and they should be able to provide good answers to your questions, as well as ask good questions of their own regarding sizes, colors, and other specifications. It will also be preferable to find a supplier who has experience working with other Amazon sellers and is familiar with Amazon’s requirements. You’ll also need to know how flexible they’ll be if you need to make changes after an order has been placed.
Pricing is also a vital point since you’ll want to source a quality product that meets your budget. Once you have prices from each supplier, go to Viral Launch’s FBA calculator to ensure you can make a profit. To estimate your potential profit, you’ll need to know the cost of goods sold, the shipping costs to Amazon, and the selling price of your product on Amazon.
After communicating with each supplier, narrow down your list to two or three and request product samples from each of them. Also, buy some competitor products from Amazon and compare them. After reviewing everything, you can decide on which supplier to work with.
For more in-depth information about finding a manufacturer, listen to this episode from Viral Launch’s podcast, Follow the Data.
6. Order and Ship Your Product
In the last step, you’ve decided on the best supplier for your product, so now you can place your first full order. We recommend that you order enough product for at least a two-month run of inventory (or, at least enough to cover your lead time)
Since you’ll be ordering from an overseas supplier, you’ll have a few different payment options:
Bank wire (or telegraphic transfer): This method is the riskiest since you make a payment directly to the supplier’s bank account before you receive your order. Of the other methods, this requires the least amount of fees. Manufacturers usually prefer these kinds of payments, but we would recommend using a different option, especially when forming a new supplier relationship.
Credit card/PayPal: This is a more reliable and secure payment method, but requires more fees. Because of the security involved and ability to cancel a payment, many that sell on Amazon prefer this method. However, due to fees, some manufacturers will not accept these for a large order.
Escrow service: Alibaba provides this payment option, which is essentially a combination of the previous two. Your payment is sent to the supplier, but it’s held by Alibaba until your confirm the receipt of your product. This is a great middle ground; try to find a manufacturer who is willing to accept Alibaba pay or similar, which protects you and them.
Before you make your payment, you’ll need to plan where your goods will be shipped depending on your selling plan. You’ll also need to provide the supplier with box labels, pallet labels, and FNSKUs.
If you choose FBA, the destination will be one of Amazon’s fulfillment centers. You’ll need to let Amazon know that your order is on its way through creating an inbound shipment in Seller Central. If you choose FBM, your manufacturer will send your product directly to you or to your desired warehouse. You can work with your manufacturer and a freight forwarder to handle shipping logistics.
At this stage, you’ll want to consider an inspection. You can have a third-party inspection company check over your inventory to make sure it’s up to your standards, either in the country of origin or in the United States. Alibaba has an inspection directory to help you find an affordable provider in the origin country. We’d recommend an inspection on your first order, followed by inspections every few orders after that to ensure the highest quality.
7. Optimize Your Listing
In this step, we return to the product listing we started in step 4 to do some search engine optimization (SEO). The goal here is to ensure the listing will reach the greatest number of consumers seeking your product. As discussed earlier, using the most relevant keywords will be crucial to creating a listing that earns a high search ranking and draws traffic.
You may have already started gathering the important keywords from the earlier product research step, but if you haven’t, entering your product in Keyword Research will give you a list of the top keywords to include. You’ll want to write a title that artfully incorporates the top keywords, and the first five words in your title are the most important to your ranking. The following is an example of a well-optimized title for a first aid kit:
First Aid Kit Emergency Preparedness Medical Supplies for Home, Office, School, Car, and Travel – 150-piece small basic kit with full range of medical supplies for treating common injuries
Our Listing Builder tool provides an efficient and simplified way to create a listing, helping you build each element. Enter your title, product features/bullet points, description, and backend keywords, and you’ll generate an optimization score, telling you how effective your listing is. If it needs some work, the score will tell you and you can keep adding keywords from the displayed list to increase your score.
Your business as an Amazon seller officially begins now. Once you have your product listing completed and your products ready to ship, it’s time to go live and sell on Amazon.
However, there’s much more to it than just throwing up a product listing and expecting sales to start rolling in. To set yourself up for success, you’ll want to increase your visibility. We recommend a couple of different tactics:
Running a pay-per-click (PPC) campaign.
Offering a product giveaway, or what we call a product launch.
PPC Campaigns
PPC campaigns are essentially the “sponsored content” advertisements you’ve probably seen when browsing products on Amazon. In these campaigns, you bid for your advertisement to appear in a sponsored ads section for a specific keyword related to your product. When a consumer searches for that keyword, your ad appears and you pay a small amount of money to Amazon for each click your ad gets. This helps you generate some initial visibility and gets your product in front of even more people than you would otherwise.
Product Launches
Another way to get your product more visibility is through product launches. These will help kickstart your listing through deeply discounted sales. This helps Amazon’s algorithm understand your product as important for the keywords in your listing, and the goal is to increase your product’s rank in search results. The higher a product ranks on Amazon, the greater your sales opportunity. Most shoppers don’t make it past the first couple pages when browsing, which is why page-one positions for major keywords are so important.
For a launch, you can work with a Viral Launch Amazon seller coach who will look for a major keyword for your product with high search volume that will lead to the most relevant impressions possible. Next, your coach will research how many units you should give away at a discounted price. Usually, the discounts end up being about 90%. A heavy discount helps ensure all of your giveaway units are purchased within the right time frame. Your coach will determine how many products to give away based on the sales of page-one competitors. Most of our launches are for a period of 7 to 10 days because we’ve found that it’s a long enough period of time for Amazon to recognize the sales but also short enough to limit the number of products being given away.
The end result of a product launch is that your ranking in Amazon’s search results will be on page one, providing you with some strong exposure to consumers and the chance to drive significant sales. Sales and rank both influence each other. As your sales increase, your organic ranking will increase. As a result, this exponentially helps visibility to drive sales, and cause your rank to continue to rise.
You’ve now learned the essential steps of how to sell on Amazon. Now, it’s time to dive deeper into the process. Enroll in the free How to Sell on Amazon course today to learn how to become an Amazon seller and make your entrepreneurial dreams come true!
Amazon’s move from garage-based book seller to massively successful global ecommerce giant has inspired countless entrepreneurs to sell products through the Amazon marketplace. With a good product, tireless work ethic, and a dose of luck, you could be the next Amazon seller success story. But getting Amazon sales tax wrong can undermine such success. Here’s what you need to know about sales tax compliance to start off on the right foot.
The changeable nature of sales tax
Sales tax, rates, rules, and product taxability change frequently at the state, and in some cases local, level. Though tax authorities do their best to disseminate information to taxpayers, the burden of keeping informed and complying with new rates and regulations falls squarely on the shoulders of the seller. If you make a mistake, even due to ignorance, you’ll likely pay the price.
A need for revenue
Due to a 1992 Supreme Court’s ruling, Quill Corp. v. North Dakota, a state cannot oblige a business to collect and remit sales tax unless it has a substantial physical connection to the state, or nexus. Consequently, although consumers are buying more online, state and local sales tax revenue is not seeing a corresponding increase. According to a report by the U.S. Government Accountability Office (GAO), states lost approximately $13 billion in 2017 to untaxed remote sales.
In response, states are aggressively redefining nexus to include ties to in-state affiliates, economic activity, warehouse inventory, web cookies, and more. Many of these laws impact Amazon sellers. Since Amazon now collects sales tax on its own products in all states with a sales tax, states stand to gain the most — approximately $6 billion in 2017 — by taxing its marketplace sales.
States eye marketplace sellers
Different states are taking different tactics to acquire that revenue. For example, Massachusetts is trying to get Amazon to identify its marketplace sellers, while South Carolina is suing Amazon for uncollected tax on its marketplace sales. Virginia law now holds that storing goods in an in-state warehouse is enough of a connection to mandate tax collection, so you better know where your inventory is stored. And as of Jan. 1., 2018, Washington is requiring Amazon to collect and remit tax on its marketplace sales.
While some states are being sued over their efforts to tax remote sales, they’re undeterred. In fact, South Dakota created an economic nexus law with the express purpose of challenging Quill’s physical presence standard. It’s on the steps of the Supreme Court now, and if the court takes the case, it could overturn Quill and grant states the right to tax remote sales.
Getting Amazon Sales Tax Right
Given the current climate, it’s essential for all Amazon sellers to track state efforts to tax marketplace sales. Equally important is the need to understand the risks of not collecting tax. The more aggressively states pursue tax revenue from third-party sellers, the more you can expect to spend on audits and assessment-related costs. According to the GAO report, small and medium-sized businesses could be audited “should states gain the authority to tax remote sales.”
Avalara automates the complexities of collecting and remitting Amazon sales tax, so compliance doesn’t have to be a nightmare. Click here to learn more about how Avalara works with Amazon sellers.
We’re off this week preparing for the launch of our latest software tool. If you want an exclusive offer and to be among the first to find out what the tool is, join us for the unveiling Tuesday March 6 at 8pm. Reserve your spot at launchevent.viral-launch.com In the meantime here’s a rebroadcast of Dispelling Myths: 90% Off Promotions.
Do launches work? Amazon gives higher keyword ranking to products sold at full price, leaving deeply discounted promotional products in the dust… Or so the myth goes. In the inaugural episode of the “Dispelling Myths” series, Viral Launch CEO Casey Gauss dives into the data to validate, or dispel, this widespread concern among Amazon sellers. Originally aired on October 5, 2017
Casey Gauss: Everyone’s looking for like that next hack. It makes logical sense that 90% off promotions don’t drive as much keyword ranking. You know the problem is that the data just doesn’t show that.
Cameron Yoder: The buzz about town is that running promotions to get ranking may not work the way it used to. Today we’re diving into the data to see what’s really going on. I’m Cameron Yoder.
Casey Gauss: And I’m Casey Gauss, your host for Follow the Data: Your Journey to Amazon FBA Success. So in this show we leverage the data we’ve accumulated at Viral Launch from over 20,000 product launches and our experience working with over 5500 brands on Amazon to help you understand the big picture when it comes to Amazon and, most importantly, the best practices for success as an Amazon seller.
Cameron Yoder: These first four inaugural episodes of Follow the Data are all part of our Dispelling Myths series in which we explore topics that have garnered a lot of conversation among the Amazon seller community recently, but that until now have not been proven or disproven using factual evidence.
Casey Gauss: We’ll talk about where these Amazon myths come from, why they seem to logically make sense, and what the data is saying, and what is actually happening and how you can apply that moving forward.
Cameron Yoder: All right, Casey, so this is Episode 1 of Dispelling Myths. We’re talking about promotions here. Can you tell us a little bit about this myth? What exactly is this myth?
Casey Gauss: Yeah, so essentially this myth is basically stating that Amazon gives higher ranking power or effect to sales at full price versus, you know, the promotions at 90% off. The theory is that if you are running a promotion, if you’re giving a product away at a discount or selling it at a discount, especially 90% off, you’re not going to get nearly as much ranking power as a full-price sale.
Cameron Yoder: So someone selling on Amazon, let’s say they give away items at 50% off. People are saying that those are not as effective or efficient as – or that the 90% off promotions are not as effective or efficient as the 50% off coupons. Is that right?
Casey Gauss: Yep, correct.
Cameron Yoder: Okay, okay. So where – or when, when did this idea start? Like where did it come from?
Casey Gauss: Yeah, you know, we’ve seen this idea ever since 2014 when we got started. To be honest, I think that it’s definitely had a resurgence. We’ve seen people say you know back in the day oh Amazon will only let a review stick, or you can only get review power if it is at zero dollars, or if it’s over five dollars. You know there’s always these kind of arbitrary metrics that people throw out, and so now there’s just this resurgence. You know I’ve probably seen it a lot more over the last three months maybe, maybe around May, maybe around June, somewhere around there.
Cameron Yoder: So why do you think it’s researching? Like why is this coming back?
Casey Gauss: The – so yeah, so I mean with any myth I think a lot of it boils down or finds its root in everyone’s looking for like that next hack. It makes logical sense that 90% off promotions don’t drive as much keyword ranking. You know the problem is that the data just doesn’t show that.
Cameron Yoder: Another point I guess that’s important, right, is that I mean it would be really, really great if it wasn’t true, right, that oh, that means if 90% off promotions aren’t as effective or efficient, then we don’t have to give products away at 90% off. Like that is a very appealing notion, right? So then that means that sellers don’t have to give products away for extreme discounts.
Casey Gauss: Yeah, okay, yeah, very true. I would definitely like to point that out as – so it’s called consistency bias, right?
Cameron Yoder: Yeah, right.
Casey Gauss: And so you don’t want to spend the money associated with selling product at 90% off, and so you would like to tell yourself that it is great to – or that Amazon prefers full-price sales, and that’s why you want to head that way. Oh yeah, so another instance in which this kind of comes up is, you know, people run one promotion and they don’t get the keyword ranking they expected to see, right? So I’m selling a fish oil. I think I need to give away 50 units a day, let’s just say. And so I do that, and I expected to get to page 1, but I only got to bottom of page 2, right? And so then instantly everybody would jump to oh my gosh, promotions don’t work nearly as well. It must be full-price sales that are the answer. And you know the problem with that is here’s where, you know, the Viral Launch data or perspective really comes into play is that we’re running hundreds and hundreds and hundreds of promotions every day. So we have tons of data where you know, we’re tracking keyword ranking –
Cameron Yoder: Right.
Casey Gauss: – for keywords, the targeted keyword, as well as keywords that we find in the title, in the bullet points, in the rest of the listings. So we really, really understand how sales interact with the content of a listing, or tracking the price point of sale, or tracking are coupons present when we have MWS access. And so yeah, we’re able to really get this really broad perspective of the market versus you run one promotion, maybe your keyword, main keyword, wasn’t in the title. Maybe it wasn’t in your listing at all. Maybe, you know, you weren’t even indexed for it, or you know there’s a number of different factors that – and sometimes you know there’s things like cursed products where we just cannot get those things to rank in –
Cameron Yoder: Cursed products.
Casey Gauss: Yeah, that’s what we call it. So yeah, there’s so many different variables coming into play that running one test and then not getting the results that you had expected or intended is not enough of a sample size to really draw a strong correlation or a strong conclusion.
Cameron Yoder: Right. And we, in terms of data – like you were talking about data – we really have that sample size. Again, like we run – we run promotions every single day, and they’re all built off of – or not every single one, but almost all of them are built off of 90% off promotions.
Casey Gauss: Yeah.
Cameron Yoder: If that didn’t work and it wasn’t effective, it wouldn’t work for us.
Casey Gauss: Right.
Cameron Yoder: And we see it every single day.
Casey Gauss: Yeah, so I mean getting into the data of it, simply we’re running hundreds and hundreds of launches, and the amount— our ability to drive keyword ranking is just insane. And so at the end of the day Amazon is paying attention to did a sale happen? They’re not paying attention to the number of units that occurred or the price at which it is actually purchased. I think Amazon cares or is paying more attention to the price that the product is listed at.
Cameron Yoder: Let’s transition to a break. We’ll be back right after this message.
Rebecca Longenecker: Hey, I’m Rebecca Longenecker, the producer for Follow the Data, and I wanted to let you know about a really cool resource the Viral Launch team just published. With this holiday season promising to be the biggest yet for Amazon, we’re offering an e-book that walks 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. There are also fun facts, helpful notes and handy little checklists you can use to evaluate how prepared you are. Don’t miss out on this year’s holiday sales. Go to viral-launch.com/Q4 to download the e-book now. That’s viral-launch.com/Q4. Thanks!
Cameron Yoder: And we’re back again talking about the myth of giveaways and promotions. So Casey, let’s talk a little bit more about the data that’s backing this dispelling up. Can you touch on everything just a little bit more?
Casey Gauss: Yeah, you know I think the really simple analogy or the simple logic here to kind of give everyone an example is as simple as this. So let’s take fish oil as an example, and someone wants to run a promotion to get ranking for the keyword, “fish oil.” Well, what we do is we go and we look, okay, here’s page 1 for fish oil. You know these guys are selling, let’s say it’s 50 units a day average page 1 or bottom half of page 1. And we want to get ranking there. So what we will do is we will give away 50 units per day targeting this keyword, “fish oil,” and after three days, five days, maybe seven days we’ll be ranking bottom of page 1 for fish oil, and we did – we ran 90% off promotion. So 90% of the sale price, these guys are selling 50 units a day at the organic price, and we sold at 90% off, and we’re still able to drive the same amount of keyword ranking. And so again, if Amazon did not – or reduced the amount of keyword ranking power as some kind of function of the purchase price we would not be ranking alongside these people that are selling just as many units except at the organic price. So that alone kind of just busts that myth, completely dispels that.
You know, another area this myth came from is there are these, you know, quote unquote experts or service providers in the space that are saying oh, you have to do these full-price deals with us, and the reason they’re doing that and they’re promising these crazy affects, right? So if you come and use our service we will guarantee you hit page 1 or number one most of the time, and we guarantee you will stay there for 30 days. The reason our method is so effective is because we’re using these gift cards to run full-price sales, and in reality what people didn’t realize was this person was running a bot or this artificial ranking method to your listing, and that’s what was getting you the results. That’s what was helping to maintain those results. It wasn’t the fact that you used these gift cards. And so that’s really frustrating to me because one, you know this person is operating on your business without your consent in a black hat manner, and two, they’re just, you know, completely lying about what is driving the results, which then goes and leads people down these dark paths. You know, it is against terms of service to compensate someone or reimburse someone for buying your product. It is absolutely stated explicitly in the terms of service that you cannot do this. It’s black hat. You know, will you get caught for it? I personally don’t know anybody that has. But you know, I think it’s one little slip up and now you’re in trouble for, you know, manipulating Amazon’s system or compensating buyers for purchasing your product.
Cameron Yoder: Right. Let’s touch a little bit on just like the mentality of why, like why 90%? So why not? Why not? Why can’t – people are asking, why can’t I just launch my product at 50% off? It’s still a heavy discount, right, so why is 90% necessary? Touch on that.
Casey Gauss: Yeah, so the discounted price or percentage is not a function of effectiveness.
Cameron Yoder: Right.
Casey Gauss: It is really, you know, we’re running generally around 450 or so launches a day right now, and so yes, we have a buyer list of 350,000 in the US, but you know these guys have – some of these people have been on our list for, you know, years and years and years.
Cameron Yoder: A long time.
Casey Gauss: And so if we’re selling an iPhone 7 case or a fish oil, like this demographic that we have only has so much discretionary income, and if you’re selling your product at 50% off, let’s say $10, versus the usual $1, $2, whatever, like that’s $8 less discretionary income they have to go buy our other products. And so in order to make sure the demand is high enough in the group for every launch that we’re running, we want to keep prices as low as possible so they have the money to buy more stuff.
Cameron Yoder: Right. The 90% off is very much – it’s a means of control. Like you need to move – you need to move, if you’re launching, again, for fish oil, you’re going to have to move an insane amount of units to get to the top. The 90% off really gives control and gives you the ability to launch to page 1 for that. So the 90% off is a means of moving the launch forward and making it effective.
Casey Gauss: And you know, to be honest, from like a competitive standpoint, you know if I were a larger seller I would actually kind of prefer this because the smaller sellers don’t have the budget –
Cameron Yoder: Right, right.
Casey Gauss: – to be really aggressive in these high-volume markets at these low prices. So they have to, you know, work their way up in a much slower process. And as a larger seller, yes, it is more expensive, but you’re essentially pricing or paying your competitors out of the market, which, you know, for large sellers that works. For smaller sellers, you know, this is why we definitely suggest getting into smaller niches where you don’t have to give away 100 units a day for seven days just to get on page 1, let alone maintain that ranking or whatever.
Cameron Yoder: Oh, but what about fidget spinners?
Casey Gauss: Yeah. We don’t want to talk about those.
Cameron Yoder: No, no, no. So that’s actually a good transition into the takeaway. Let’s talk about what is the main takeaway? From my perspective it’s all about the risk, right, the reward of the risk. You have to take a huge risk. You are taking an investment, kind of an investment with giving away this many units. But giving away this many units at a 90% off discount is going to give you the control and get you on to page 1. And from there, then you will be able to make that increase in sales.
Casey Gauss: Yeah, oh, completely. I would say, especially like – or specifically to this particular myth I think the takeaways are one, really be careful of who you’re trusting and paying attention to. Two, definitely make sure that you are getting a really solid sample size when you are making conclusions. Again, running one promotion that doesn’t get the ranking effects that you expected it to, you know, maybe you underestimated the number of units needed to give because the guys on page 1 are selling more units through that keyword than you had anticipated. Who knows? But anyways, yeah, please pay attention to your sample size when drawing conclusions because the last thing you want is to draw some conclusion and then spend the next three months and $20,000 trying to build a business around this, you know, this wrongly-founded conclusion. Yeah, and then three, really is at the end of the day, like you have to spend money to make money, like Cam is saying.
Cameron Yoder: Right, right.
Casey Gauss: And you know, unfortunately that’s the case right now. And yeah, you know, we’re definitely biased in saying that, but the problem is in that bias like we’ve just seen so many people have success. We just posted three Viral Launch case studies where this guy came, and he was doing $400K a month, and he came in, ran promotions across his product line, and after 30 days he’s doing $650K a month organically just because he improved the keyword rank position of his product. So yeah, he spent a bunch of money. I thought it was $250,000 to get that ranking, but now, you know, his sales are just killing it compared to where he was at. So –
Cameron Yoder: Yeah.
Casey Gauss: Yeah.
Cameron Yoder: Take a zoomed out perspective. Ask why with everything that you’re doing. Make sure you’re getting all the data. Make sure you’re getting all the facts.
Casey Gauss: Awesome. All right. We’ll see you guys later.
Cameron Yoder: Hey, that is all for this week. Thank you so much for joining us here on Follow the Data. For more reliable information about what’s really happening on Amazon subscribe to the podcast and check out the Viral Launch blog at Viral-Launch.com.
Casey Gauss: And don’t forget to leave a review on iTunes if you liked or enjoyed the podcast. We really appreciate your feedback as we work to build this podcast for you. Want to be featured on the show? Leave us a voicemail and tell us your thoughts on today’s episode, or ask us any of your Amazon questions. Our number is 317-721-6590. It will be linked in the show notes. Join us next week when we dispel the myth of Amazon sales velocity. Until then, remember, the data is out there.
Sponsored ads provide sellers with an incredible opportunity to gain exposure to streams of shoppers. But most sellers don’t know how to utilize sponsored ads, spending way more money than they need to for minimal returns. Join host Cameron Yoder as he talks to sponsored ads guru and Viral Launch Head of Innovation, Leo Sgovio, to find out how you can grow your business using Sponsored Ads.
Sponsored ads work a lot like a launch, driving sales through a targeted keyword. Read our recent blog post about Viral Launches and how 90% off promotions continue to work for our customers.
CAMERON YODER:
Sponsored ads provide massive potential for sellers to gain exposure to streams of shoppers, but most sellers don’t know how to utilize sponsored ads, spending way more money than they need to for minimal returns. I’m Cameron Yoder, your host for Follow the Data: Your Journey to Amazon FBA Success. In this show we leverage the data we’ve accumulated at Viral Launch from over 30,000 product launches and our experience working with 6500 brands to help you understand the big picture when it comes to Amazon and, more importantly, for success as an Amazon seller. In today’s episode we sit down with our Head of Innovation, Leo Sgovio, to talk about the best practices for sponsored ads. We’ll talk about how to use sponsored ads to your advantage without breaking the bank so you can put your money towards more important investments for your business. Let’s jump in.
All right, so we’re here today with Leo. Leo, how are you doing today?
LEO SGOVIO:
Amazing, guys. Thank you for having me today on the podcast. I’m really excited.
CAMERON YODER:
For sure. And you’re in Canada right now, right?
LEO SGOVIO:
Yes, I am.
CAMERON YODER:
What’s the weather like?
LEO SGOVIO:
It’s cold in Canada. It’s terrible outside. Actually, it’s not too bad lately. It’s a big plus so I can’t complain.
CAMERON YODER:
Okay, that’s good. Well, just to intro Leo a little bit because he deserves introducing, Leo is a performance-based advertising specialist with expertise in multichannel digital advertising, and he’s the Head of Innovation here at Viral Launch. So he’s worked for over nine years in digital marketing, during which time, during this time he successfully built and managed multimillion dollar traffic acquisition strategies in travel, career, real estate, finance and online retail marketing, including Amazon.com.
So Leo, can you tell us about your past a little bit, just kind of everything that you’ve been involved with because you’ve been – I mean obviously you’ve been involved with a lot. So maybe just expand on the experiences that you’ve had and just briefly kind of what you’ve learned from everything.
LEO SGOVIO:
Yeah, thanks for the introduction, Cam and Casey. So like you said, I’ve been involved in the digital space for a very long time, and that’s really what gives me an advantage when it comes to understanding what the major search engines, including Amazon on the sponsored side of things, does. So I’ve been managing over $6 million, $7 million a year ad spend on both Google AdWords, Bing, Facebook. And so when it came to – when I started selling on Amazon.com I adopted sponsored ads almost from day one because I knew that it was one of the best ways to always drive traffic to my product and always have my product in front of people that were looking for it. So I didn’t use that as a second option when my sales were low, for instance.
And yeah, so going back almost like 10 years ago when, you know, Google was still in its infancy I understood that for them there was an advantage of, obviously, for us as an advertiser it was an advantage on using sponsored ads together with traffic that we were getting organically because there was a field that the search engine obviously looks at it. Okay, they’re making money when you buy traffic from them. And so there is some sort of reward when obviously they see that you are both paying for the traffic through their sponsored programs and as well as, you know, doing well organically. So it’s a win-win situation that works well for the advertiser and the partner you are working with, which in this case would be Amazon.com.
CAMERON YODER:
So how did you initially just even get involved in the SEO space?
LEO SGOVIO:
Yeah, that’s funny actually. When I came to Canada, and I was visiting this country, I was already doing some SEO stuff back in Italy where I’m from, and I got really passionate about it. And I remember and I met one of my family members, and I asked him okay, you need to tell me what’s the hot job right now that is going to make me good money? And he’s like you know you should learn SEO, and a week later I was already Google certified. You know, I had already started all the hoops. And you know I got the certification of Google AdWords, and I was ready to rock it. And then since then I just, you know, kept studying and learning, and this is how I really got into it. But it became a really a passion for me. I would never do anything else right now. I mean I love e-commerce. I love, you know, like understanding traffic sources and generating sales online and all that comes with it. So I’m really happy what I’m doing right now.
CAMERON YODER:
I think your perspective is so valuable, number one, because you’ve been in the space for a really long time, not in just the Amazon space, right, but the Google space as well. So your perspective is very valuable, and it’s a perspective that not a lot of people have, especially in this space. And so I mean we’re talking about – this show is all about Amazon specifically, but there’s value in comparing Amazon to something like Google, especially when it comes to sponsored ads. So can you touch on, just here in the beginning, kind of what the difference is for when it comes to sponsored ads between Amazon, Amazon.com and something like Google?
LEO SGOVIO:
Yeah, so I think it depends on like, you know, what perspective we look at it, right? So for example, in both cases, right, Google AdWords, or Bing, or Facebook, or Amazon sponsored ads, you know we’re familiar with display advertising. You know, format is pretty much the same, as well as, you know, text ads. So if we look at it from a format perspective, then, you know, it’s pretty much similar, right, when it comes to the way we build ads, like starting with a campaign, ad groups, and then, you know, looking it down all the way to keywords.
However, when we look at objectives that’s when things are really a bit different. So for example, on Amazon.com the main goal is to drive sales to your product. And so when you look at Google or Facebook instead there are so many different objectives. You can set it for your goals, for example, or it could be an email capture or, you know, an account creation. Or if you’re an e-commerce store obviously a sale, a purchase. So these platforms are similar in certain ways and completely different in others. So it really depends on how you look at it.
CAMERON YODER:
So really when it comes down to the primary differences Amazon is very focused, right? Like Amazon, the goal of sponsored ads on Amazon is just kind of one; there’s like basically one goal, and it’s to drive sales to your product. At least that’s one of the primary goals, right?
LEO SGOVIO:
Yeah, and that comes, you know, because of the, obviously the intent of the user on the platform. It’s a different kind of intent. When you’re on Google.com you’re, it’s kind of, you’re looking for information. You’re still in the shopping process. You’re looking for something. You’re, you know, gathering information around the web, and then eventually you make your decision. When you go on Amazon.com you’re ready to purchase. You probably already have your credit card on the desk ready to be, you know, typed in – the card, right, the checkout page. So over there you’re going to be really – do your best to make sure that your product is in front of these people. And so sponsored ads help you with that specific goal, right?
CAMERON YODER:
Yeah, and that makes sense. People go to Amazon. If you’re searching in Amazon, like the search engine of Amazon, you’re intending to buy something off of Amazon.
LEO SGOVIO:
Correct.
CAMERON YODER:
If you’re searching in Google you’re searching for a large number of different things. It could be to buy something, but it could be just for like, for another piece of information.
LEO SGOVIO:
Correct. And you can see like the conversion rate, for example. It’s a good metric when it comes to, you know, understanding the difference between the two different platforms. Usually an e-commerce site, Shopify or WooCommerce, as a – in a good case scenario, like the average, let’s say, conversion rate is probably like 3%, 4%, sometimes lower, like say in the travel space I’ve seen is 0.8%. And on Amazon I personally aim for at least 25%. So it’s a huge difference there, right? So obviously user intent is, you know, where the conversion rate comes from, right?
CAMERON YODER:
Of course. So okay, in your mind, in your experience using sponsored ads on Amazon specifically, is it – is using sponsored ads more focused on making a profit or gaining something like keyword ranking, or a little bit of both?
LEO SGOVIO:
Well, yeah, I’d say little bit of both. I mean there are different goals that are usually set when I use sponsored ads. The main one is obviously to generate more profit, and I’ll explain that in more detail. Let’s say if I’m just launching a product and want to start generating awareness toward my brand or build sales history, which is very important for a brand-new product, then I don’t care much about profits. As long as I can break even my numbers look good based on the analysis that I’ve done prior to my launch. Then I’m fine with, you know, like breaking even, even losing maybe a few cents, a dollar. But my goal at that point is to generate, to build my sales history so that Amazon, you know, falls in love with my product because eventually it’s going to make money. So once I’m comfortable with these numbers I took the listing first of all to get a good conversion rate. And so when we look at using sponsored ads for rankings, it’s a little bit of a different strategy. But yeah, both – like I use it for both reasons. One is obviously to drive rankings. The other one is for profits.
CAMERON YODER:
So kind of the baseline, bottom-line goal of sponsored ads really, like we said before, is to drive a sale. But in that, that purpose and that primary goal kind of splits into two things. You can use those sponsored ads to either drive a sale or promote keyword ranking, really. Like it’s kind of twofold. So Leo, can you describe for us then, can you even expand a little bit more on advice you’d give when it comes to increasing ranking using sponsored ads?
LEO SGOVIO:
Sure. So the first thing I do when I start with a brand-new product, for instance, is launching ad campaign and set it on automatic targeting, which means that Amazon targets your ads to all relevant customer searches based on your product information. So if my product is in a highly competitive niche, which means that the search volume is high, obviously, I wait let’s say 4 to 7 days and then I download the report that shows me the customer search terms and the keywords that resulted in clicks on my ads.
CAMERON YODER:
You said you do that first, right? That’s like one of the first things you do?
LEO SGOVIO:
I actually, yeah, that’s one of the first things I do because I want to make sure that whatever I’m doing after makes sense, right, like I’m targeting the right keywords. And so at this point I know what consumers are searching for rather than just relying on you know, a guess, or I see how there through other tools. And I first tweak and optimize my listing to ensure that those keywords are included in the key section of my listing. For example, the title, the description, bullet point. This is very important because if I’m targeting something out through a launch, for example, either way or sponsored ads and my listing is not optimized, I don’t think I’m going to get as, you know, results as good as otherwise, right, if my listing was optimized for this keyword.
And so once I make sure that I have the right keywords in the listing I then create campaigns targeting these specific keywords using exact match and phrase match only. Then I look at the report. Usually if I have time I look at the report, you know, on a daily basis, maybe every two days. I just want to make sure that the campaigns are performing well. I look in my [unintelligible], and if it makes sense for me then I keep running these campaigns, or I tweak. So ideally this process lasts about a month, and during this month I try to build campaigns very targeted. So with my experience with, for example, Google AdWords, Google also, when you add a very thin campaign, a campaign, very tight so the name of your campaign, ad groups, what you are targeting in terms of keywords, as well as the ad copy. So I try to use the same practice, same guidelines on Amazon as well. And so I end up with a campaign that only has exact match keywords because those ones are clearly [unintelligible] and usually the CPC is pretty low, and then I go and use one for like phrase, phrases only. And then I keep an eye on this one because obviously it gives me a little bit more insight. It might be that search strengths change, or people are searching for the product in different ways because maybe a press release came out, or someone is advertising the product in a different way, and so people go on Amazon and search for it. So I try and go and discover these new keywords within this report.
But again, it’s very important that, you know, the listing is obviously, you know, it keeps optimizing it so that eventually Amazon grabs these keywords from your listing and ranks your product, especially if you have that automated campaign still running to gather data.
CAMERON YODER:
I think a lot of people get overwhelmed from this whole process. Like they see sponsored ads. If they’re not familiar with SEO they get overwhelmed easily, and then they just throw on an automatic campaign and then just leave that forever because it’s just easy to do. But I really like your process. And correct me if I’m wrong, but there were like maybe like three steps with it, -ish, maybe four. So run the automatic campaign, get the primary keywords, change your listing to match the most, like the best keywords, or at least use that as part of that process, and then run specific kind of targeted sponsored ads and then reevaluate consistently?
LEO SGOVIO:
Correct, correct.
CAMERON YODER:
Yeah, that’s – and you’ve found that process to be just very effective?
LEO SGOVIO:
It is, yeah. It is. It’s like you said, just four simple steps. Like find, optimize, tweak and scale.
CAMERON YODER:
Yep. And that’s very easy to digest, and I, for our listeners I think that’s so valuable. Again, just to map it out and to make it less complicated, that’s great. So you’ve touched on this already a little bit, but when talking about looking up specific keywords you mentioned using auto campaigns. Again, that was like the first step that you mentioned, but is there any other way or any other thing that you would recommend for sellers to really dig into which keywords they should select to optimize sponsored ads or just there listing in general?
LEO SGOVIO:
Yeah, so this is my perspective on things, but I believe that automatic targeting campaigns are one of the best ways to start because you’re buying data straight from Amazon rather than relying on tools that might not give you accurate results. And so you really see what users are searching, and this is also very good practice when you’re starting a Shopify site or an e-commerce site. Usually you build a campaign in AdWords with a broad match, and you just, well, you’re wasting money. You’re just throwing money outside the window, and that’s fine because you’re just buying data from that source. So it’s the best way to know exactly what people are buying. And so you have now a good set of keywords to go after.
However, if I’m just getting an idea of what people search, I usually – I do these, and I’ve shared with some people a couple of times, and I’m hoping that those that are listening will start adopting this method. What I do, I usually scan my competitor’s listing why I keep this Chrome extension open. It’s called SEOquake. This extension was initially used for, or was an SEO extension, was just, you know, built to understand what the page was optimized for and calculate the keyword density within the page. And so I use this extension to show me what are the keywords that this specific competitor, let’s say the top 50, are going after. So the SEOquake, once I click on a link, sorry, a page analysis, it’s going to show me a list of keywords. And then I can filter by two-keyword phrase, three-keyword phrase, four-keyword phrase [unintelligible] keywords. And it will sort them by keyword frequency. So it’s basically like a density score.
And so it gives me a good overview. It’s like okay, if this user, this seller is optimizing for this keyword it means that it’s probably working for him, right? It’s probably ranking well, and so I should also keep an eye on this keyword. And then what I do, I combine in Excel all the keywords I find using SEOquake, the keywords I have from the automatic targeting campaigns, and then some keywords – I also use the Google keyword tool to get an idea on, you know, what people search on Google because it’s very important considering that these days Google is still the homepage of any website out there, and every search starts on Google. And then my secret weapon, it’s actually the AMS person campaign builder, like the campaign builder, because what I do, the way I use it, I create just a fake campaign. I never launch it. But what you could do there, you just create a new campaign and, you know, ad group and then with AMS you have the option to actually advertise any product, not only yours. And so you can now select a competitor’s product, and Amazon is going to give you suggested keywords based on that product. And I thought that was amazing, right, because I get keywords straight from Amazon without really relying on anything else that I don’t know data.
CAMERON YODER:
So you create a campaign for a competitor’s product, and you don’t start – did you say you start the campaign or you don’t start it, you just –?
LEO SGOVIO:
No, I never start it. I delete it after. I just download the keywords that Amazon is giving me, and then I delete that campaign. I don’t need this. It’s just for me to see okay, this is what Amazon thinks are really good keywords.
CAMERON YODER:
Gotcha. Okay, wow. Shoot, I actually have not heard of that before. That’s great. And you found success from that so far, at least mixing that with other things?
LEO SGOVIO:
Yeah, of course.
CAMERON YODER:
Yeah, that’s great. And so jumping back to the other tool, the other tool that you mentioned was SEOquake, and I think the principle – I don’t think people are very familiar with the principle of what that’s doing, or at least with the idea behind something like keyword density that you mentioned. So in this case what this is doing, or one aspect of SEOquake with Amazon is it’s pulling – it’s basically kind of a – you put in a search term like fish oil, and then it searches for keyword density, which in this case means which keywords are being used frequently across each listing, right? And then it’s giving you that information.
LEO SGOVIO:
Well, kind of. Like so if you search for fish oil on Amazon, then what you will do, you will click on each one of the results, and once you are on the listing, then you will click on this chrome extension, SEOquake, and then it will analyze that page and give you a result of all the keywords that have been used in that page and score them by, like score them by frequency, right, or density. And so the ones that are obviously at the top, maybe if you look at one keyword phrase or the two keyword phrase you might find words like “buy now” or these things that don’t really matter because they appear on every page. But as you go down to like the third and fourth result, now you see like some pretty cool keywords, like for example fish oil, right? And then you get a 4%, 5% density. So this is now – I don’t want to go off topic, but it’s very super important for SEO, for example, we can have another podcast about it, but what I do usually, I analyze each keyword, each listing, and I see that on average each one is optimizing this listing with a let’s say 4% density, right? And so when I build my listing I try to match that or go a little bit higher so that when the Amazon bots go and crawl my page, consider mine as relevant as theirs, if not more, right? So that’s obviously now going into optimizing listing, but that’s what I use also the tool for.
CAMERON YODER:
Gotcha. And that’s very relevant. I think that’s something that not a lot of people are familiar with, so that’s great. I’m going to switch up topics just a little bit, just to keep things moving. But when it comes to cost, that’s one thing that a lot of sellers ask is oh, how much should I be spending on my sponsored ads, which I’m sure depends a which ads you’re running. But do you have any just general advice on costs that people should be spending or where people should cap themselves at, anything along those lines?
LEO SGOVIO:
Yeah, I actually have a really simple formula that helps to calculate the cost, and obviously it’s focused on ROI. But the formula is pretty simple. What I do, I look at my organic conversion rate. So for example, if my listing is converting at 30%, and then I look at the selling costs, so how much is this product costing me after all the FBA fees and the margin that Amazon is making, the referral fees. So by dividing that, right, by the conversion rate, you get your break even ACoS. So by making the calculation you get, okay, in order to break even my ACoS should be, let’s say, 10%. And so once you have that you know your organic conversion rate and the selling price, now you calculate your recommended default bid.
And now you obviously base your budget on that, right? Like if you cannot afford to spend more than $0.50 because now you’re going to lose money, then go below that. And so I usually calculate that default bid just before starting so I know that, and you know, in this case I’m breaking even. And then I tweak my campaigns as I go. So I launch, you know, like a bunch of different campaigns. The budget is obviously based on how much you can afford to spend. But at least you know that worst-case scenario you’re not losing money; you’re breaking even, unless you’re willing to lose money, for example, doing maybe just a ranking campaign but you don’t care about making money; you just want the product to end up on page 1. And so that’s usually what I do. It’s pretty simple, and I think it would be really beneficial for the listeners.
CAMERON YODER:
Yeah, that’s really good. And there may not be another answer to this. I just want to kind of jump back to automatic campaigns. So automatic campaigns can be good for finding your initial keyword list, right? But are there any other things that people should use automatic campaigns for, or should they just kind of stay away from them once they get more advanced? Like you said before, it was kind of that first step in your process for optimizing sponsored ads and listing and everything. But is there any other place for automatic campaigns, or not necessarily?
LEO SGOVIO:
So I think the main goal of an automatic campaign is to give you that initial set of keywords, kind of like understanding of what people look for when buying, looking for your product. However, obviously once you get familiar with the sponsored ads and become more experienced with the platform I will suggest to, you know, keep automatic campaigns running with huge budgets. Most likely you’re going to waste a lot out of it but however, I still have some catchall campaigns that I’m usually running on automatic targeting, and those ones, usually what I do, I lower my bid so I won’t be more than let’s say $0.10, $0.15, and they turn out to be pretty profitable, to be honest with you. So yeah, I usually just keep a catchall one after I’m done with, you know, the optimization scaling process, and these ones will just catch everything else that I’m not covering in my targeted ones.
CAMERON YODER:
Yep. So once a campaign is, I guess, successful in your mind, in your eyes, once a product is converted organically for a keyword that you’re targeting through sponsored ads, what generally would you say is the next step, just to kind of lower everything down and keep on going or to just keep an eye on everything? Like where – what is the next step from that point on?
LEO SGOVIO:
Well, if you’ve identified some good profitable campaigns I would scale the budget as much as I could. I mean as long as you are making money I would just feed the beast, right? Traffic on Amazon, like is there. Like people are searching for your product. So why leave that, you know, food on the table for somebody else to eat it? And yeah, like I would still try to look for other low-hanging fruit. So what I usually do, for example, one of my best practices with not only like with sponsored ads I only go and target, for example, my competitors with display ads, right? It does work extremely well for me when I target some related products, not necessarily my competitors. Obviously I get some good results when I target a specific competitor, they’re selling the same product and I know I have better and more reviews than them. So it’s pretty easy to win that customer. But it’s also very profitable for me when I go and look at for example, I’m selling, I don’t know, a face cream and someone is going to buy something related to it, maybe like a face brush or something to like related anyway, but not necessarily my direct competitor. And that works really well for me. There is a tool that shows you, for example, the frequently bought together. It’s called YASIV, y-a-s-i-v.com, yasiv.com. It shows you all the combination of like it’s a graph that pretty much maps all the frequently bought together. And that’s a good way to target your competitors and non with display ads. Those tend to do really well, and what I do is – I’m giving away a tip here as well – I usually target one competitor at a time per campaign. And this way it’s easier for me to see which one is winning, and then I just pause anything that is below like, you know, like 10% ACoS. And like you know, ended up with like 1500 winning campaigns.
CAMERON YODER:
So this is a – I know it’s a relevant question, but it’s a little bit out there, as well. How much time do you think people should be spending on sponsored ads and optimization, just optimizing the ads that they’re running, the campaigns that they’re running or starting new ones? How much time should people be spending on this?
LEO SGOVIO:
I would say obviously at the beginning you need more time than later on when you’re product has really been selling organically. But I would say probably I think a couple of hours a week, like two, three hours a week is plenty. You don’t need to, like the first week just to set everything up, and then maybe the second week, you know, it goes down to two just to, you know, go through the reports and make sure that everything is optimized. Maybe even one hour is enough. It doesn’t take really a long time unless you have, you know, a lot of products. Then it’s a different story. Maybe I will use a service for that. But I wouldn’t, like personally, I don’t spend a lot of time on building and managing campaigns.
CAMERON YODER:
And I guess it takes time. Like you said, it’s going to take more time at the beginning.
LEO SGOVIO:
Of course, yes.
CAMERON YODER:
Especially if you’re not familiar with how sponsored ads work, or SEO, or practices in general, like that. But once you learn all of that, really I’m assuming it just becomes easy to kind of just press play and go and spend a couple hours here and there a week, optimizing everything.
LEO SGOVIO:
Correct, yeah.
CAMERON YODE:
So I mean you’ve given a lot of really cool hacks and tips so far, especially like yasiv.com and the other tool that was called – what was the other tool called, the chrome extension?
LEO SGOVIO:
SEOquake?
CAMERON YODER:
Yes, SEOquake. But are there any other just general hacks, tips or tricks that you would recommend for people when it comes to sponsored ads?
LEO SGOVIO:
With sponsored ads, to be honest, it isn’t – like it’s a straightforward process and platform. So there are no really hacks that you can adopt so that, you know, your sales go up. I mean it really comes down to how smart you are and how, you know, like if you think outside of the box, okay. Really like what I find really effective is the kind of wording I use in my headlines, for example, or my, you know, like display ads. I try to trigger some sort of interest in like, so playing with the customers’ emotion, and then that usually gives me a higher click through rate, which means, you know, lower CPC. And that applies to all the different, apart from including, you know, Facebook, or Google, or Bing, if you play with a good ad run you usually tend to perform much better. What I would suggest as a good tip is to, you know, build different variations of your ad, not only one, because one of them most likely is going to outperform the other ones. And so I think that’s super valuable.
CAMERON YODER:
So essentially split test the ads you’re running?
LEO SGOVIO:
Exactly, yes.
CAMERON YODER:
Well, Leo, thank you so much for being on the show. Thank you so much for everything you do, for all your information. Really, there’s so much value, I think, and in the space that a lot of people get overwhelmed by. Leo, again, thank you so much. Really it was a blast having you on the show.
LEO SGOVIO:
Thank you, guys.
CAMERON YODER:
Well, that is all for this week. Thank you all for joining us on Follow the Data. For more insights and reliable information about how to succeed on Amazon, subscribe to the podcast and also check us out on YouTube. I have a series of product discovery walk-throughs up on our channel that will really help you understand how to leverage the tool. And if you want to check it out, just search “Viral Launch” on YouTube. Go to our page and look for my face. So if you’re listening on iTunes and you like what you hear, don’t forget to leave a review and rate the show. You can also leave feedback on our Facebook page or tweet at us @viral_launch. Use the hashtag #VLFollowtheData.
And if you have a seller friend who you think would appreciate the show, tag them in your post and send them our way. We want to really be a great resource for sellers and the information source in this space. So please tell your friends. Tell your family. Spread the word, and share the show. And thank you all again so much for listening. And as always, if you want to be featured on the show, or if you have an Amazon-related question, or in conjunction with today’s episode, if you have a question for Leo or another idea for an episode, feel free to leave us a voicemail. Our number is 317-721-6590. Until next time, remember, the data is out there.
Do 90% off promotions still work for ranking Amazon products?
Are 90% off promotions still effective as an Amazon product launch strategy? The question is making its rounds in the Facebook groups, and we’ll answer it now by digging into the data.
Are 90% Off Promotions Effective?
A launch is a deeply discounted promotional giveaway used to increase your Amazon sales, and more importantly your keyword ranking, allowing you to capture more impressions, clicks, and sales. Sellers want their product on the coveted page one, so they discount units to 90% off, offer them to Viral Launch’s buyer audience, and match the daily sales of top sellers in their markets.
Here at Viral Launch, we’ve run over 30,000 product launches. We currently run over 300 launches each day. For each launch, we track keyword ranking for multiple keywords, BSR fluctuations, organic sales and promotional sales. This massive amount of data we’ve accumulated gives us incredible insight into what is working and what is not.
When rumors spread and sellers ask if 90% off promotions don’t work anymore, we turn to the data. And the data is clear: 90% off promotions are still effective for ranking products.
Case (Study) and Point
If 90% off promotions did become ineffective for ranking products (as an Amazon product launch strategy), we would be the first to notice. Since we track multiple keywords for each and every launched product, we would see a major shift in our data. We would also be the first to notify our community, as we never want to promote an ineffective tactic. Viral Launch exists to be the launchpad to success, and we take our clients and their businesses very seriously.
With over 300 promotions running each day, we still see tremendous ranking results for launches that are set up correctly. Here are just a few of the hundreds of recent, successful launches.
*Note: We cannot share the specifics of a launch, such as the actual product or keyword, in the best interests of our clients.
Tools & Home Improvement Product:This seller gave 35 units per day and achieved end rank on day 6
Start rank: 22 / End rank: 1
Sports & Outdoors Product:This seller gave 50 units per day and achieved end rank on day 6
Start rank: 50+ / End rank: 7
Pets Product:This seller gave 35 units per day and achieved end rank on day 6
Start rank: 50+ / End rank: 8
Clothing Product:This seller gave 30 units per day and achieved end rank on day 8
Start rank: 50+ / End rank: 3
Office Product:This seller gave 15 units per day and achieved end rank on day 8
Start rank: 50+ / End rank: 1
Kitchen & Dining Product:This seller gave 20 units per day and achieved end rank on day 8
Start rank: 50+ / End rank: 8
Sample Set of 94 Launches from Early 2018
23% ranked #1 for the target keyword
52%ranked in the top 10 for the target keyword
93% increased rank for the target keyword
Reasons for the Myth
This myth is not a new one. Every few months, rumor seems to spread that 90% off promotions are no longer effective for keyword ranking. But why has this rumor resurfaced over the past few months? We see six major reasons for why some 90% off promotions are ineffective for ranking, a major contributor to the spread of this myth.
Inefficient Sales History: The single largest reason this myth has been spreading over the past few month is because of sales history. Products that are currently ranking at the top saw a major sales boost over the holiday season, creating a very strong sales history. These launches that aren’t increasing in rank are typically not giving enough units to overcome the top sellers’ current sales and that strong sales history from the holidays. Listen to our podcast episode about why sales history on Amazon is crucial for ranking.
Not Enough Units:Many of the launches that do not achieve the desired ranking are simply caused by not giving a sufficient number of units. To rank for a keyword, you want to match or exceed the top sellers’ daily sales for a period of 7 to 10 days. Learn how to choose the number of units to give away during a launch.
Low Coupon Redemption:Some sellers see a disparity in coupons given and coupons redeemed. This is often caused by variation confusion or a falsely inputted promo price. An example of this is giving out 100 coupons with only 60 claimed, and this will result in a less effective launch. If you have variations and want to make sure you’ll see high redemption rates, reach out to our coaching team for assistance.
Targeting Too Many Keywords:Sellers can input up to four keywords per launch, but the more keywords that are targeted, the less units will go to each one. For example, if you give 100 units targeting one keyword through the Organic URL, all 100 sales will be attributed to that one keyword. But if you give 100 units targeting two keywords, the units will be split and 50 units will be attributed to each keyword. Essentially, this cuts the ranking power in half for each keyword. For this reason, it is often smarter to target one keyword with more units in order to achieve the desired keyword ranking. Learn how to choose the target keyword for your Viral Launch.
Missing Keyword in Title:Keywords in your title are crucial because with each sale, each word in your title is fair game for a boost in ranking. This means your most important keywords should be in your title. For this reason, when running a launch, if your target keyword is not in your title, you likely will not see ranking.
Lack of Patience:Keyword ranking during a launch generally takes at least 2-3 days to take effect, but it can often take up to 5 or even 10 days from when a promotion begins. Some sellers write in concerned or end their launch early after only 1 or 2 days. It’s important to have patience and wait for the rank to increase. To ensure your launch is set up for success, reach out to our coaching team.
Myth: Busted
This myth is not a new one. It seems to resurface every few months with sellers wondering if this is truly the end for deeply discounted promotions. But time and time again, the data says otherwise for launches that are set up correctly. With countless examples of successful 90% off promotions each and every day, we remain confident that a strategic launch can drive results. We expect this change to come some day, but that day has yet to come. Rest assured, if/when that day does arrive, we will be sure to let you know.
Pro Tip: Setting Up Your Promotion for Success
With Viral Launch, you can upload your product to our system and schedule the launch, and then we will distribute your one-time-use coupon codes to our massive buyer audience. With targeted sales driven to your listing, you can increase rank for your chosen keyword with the goal of increasing your organic sales.
In order to achieve your desired ranking, your launch must be set up correctly. Here are some tips to consider as you’re scheduling your launch:
Make sure your listing is setup for maximum conversions. Once you achieve ranking, you need sales to “stick.” And to get those sales, you need an optimized listing with a competitive price point (this means not pricing your “premium” product 50% above market average), professional photography that shows off your product, and enticing sales copy.
Choose a target keyword with solid demand where you can convert. You want to make sure the keyword that you’ll be ranking for will have lots of people searching, and you want to be sure it is a search term that your product is relevant for.
Run your 90% off promotion for a period of 7 to 10 days. This is long enough for Amazon to recognize the change in sales but short enough to limit the total number of units you’ll have to give away at a loss.
Match or exceed the daily sales of the top sellers in your market. This will let Amazon’s algorithm know that your product is competitive with those at the top of your target keyword. To see how many units the top sellers are moving each day, use a product research tool like Market Intelligence.
To “stick” or maintain rank, you need to continue matching the sales of top sellers in the market. The hope with a launch is for your product to sell competitively organically. Many sellers will run aggressive PPC right after a launch, or they’ll choose to run a maintenance launch. A maintenance launch involves giving away a smaller number of units over the next week or two to help maintain the ranking as organic sales pick up.
Please reach out to our team with any questions about 90% off promotions, how to correctly set up a Viral Launch, Amazon product launch strategy, or selling on Amazon in general. We would love to help launch your business to the next level. Still have questions? Check out our Amazon seller podcast episode on this very topic, where Casey (CEO) and Cameron (Seller Coach) dive into the data to dispel this widespread concern among Amazon sellers.
