For veteran PPC enthusiasts, it is well known that Google and Bing offer reporting on where your ad is delivering. On the other hand, Amazon Advertising does not give sellers insight into their sponsored ad placement. This metric, however, is an extremely important indicator of PPC campaign success and should be more heavily emphasized in paid strategies.
This week, Casey Gauss is joined by Brock Brothers, Viral Launch R&D Specialist. They discuss ad position in Amazon, especially as it pertains to two different PPC strategies: profit and launch.
Competitor Intelligence is an advanced Amazon reverse ASIN lookup tool that gives you unparalleled insight into exactly how your competitors are performing. Enter a product ASIN to quickly get a massive list of their top-performing and underutilized keywords, alongside the ability to analyze and track indexation, keyword rank, sponsored ad rank, sales, price, reviews, search volumes, notification options and more.
Join Casey as he talks about this game changing new tool and how you can use the features whether you are a new seller or scaling a 7 or 8 figure business.
This week, Casey Gauss and R&D specialist, Andrew Field, dive into some updates for Amazon dynamic bidding & bid adjustments.They also discuss a new Amazon PPC hack, discovered by Viral Launch’s R&D team. You won’t want to miss this!
For brands and entrepreneurs selling on Amazon, 2018 was a whirlwind of change with increases in competition, old success tactics becoming obsolete, new Amazon programs, and so much more. If history is any indicator, then we can expect even more of these changes in the new year. But what sorts of changes should we expect? How will these changes impact your Amazon business? And what steps should you be taking to prepare for these changes to best get ahead of the competition?
Here at Viral Launch, through helping drive more than $7 billion dollars in Amazon sales, we’re equipped with a vast amount of insight and data. This experience working with thousands of brands (from small private label sellers, to $100m+ 3rd party sellers and world renowned Fortune 100 brands) has enabled us to predict some of the biggest things to come in 2019. And we want to share them with you so that you can prepare for what’s ahead this year.
Not only that, but we teamed up with more than twenty 7, 8, and 9 figure sellers and Amazon thought leaders to get their unique perspectives on what to expect and how to prepare for success in the coming year. So, here are 11 predictions for Amazon in 2019 to inform your business decision making, formulated by Viral Launch and informed by top industry experts.
1. Major Brands Get Smart About Amazon Organic Ranking & Sales
We are predicting there will be more major brands that get smart about Amazon success tactics, putting even more pressure on Amazon sellers!
The reason third-party sellers (the small private label sellers) have had the opportunity to become ecommerce giants (we have a couple private label customers and personal friends that surpassed $100m on Amazon in 2018) is because when Amazon changed the ecommerce game, they changed the necessary tactics that drive success.
In a lot of ways, the primary tactics used in traditional retail – such as paying for shelf space, good in-person packaging, and branding – gave way to lower prices, organic keyword ranking, and pay per click/direct response advertising.
Amazon third-party sellers have been able to drive massive success because their only chance of driving sales among such established players was to become students of the new paradigms of retail success tactics. These sellers have worked diligently to understand the key drivers of Amazon organic keyword ranking and conversions, which has led to significantly greater visibility than their household name competitors.
Major brands continue to use deprecated success techniques, leaving the door wide open for third party sellers to reap the benefits of their Amazon expertise. Major brands typically only pay attention to Amazon PPC as their most impactful lever of driving sales. However, in general, only 15-40% of a product’s sales potential comes from Amazon advertising, while the remaining 60-85% can be found in the organic search results. It’s within this uncontested 60-85% space that third-party sellers have thrived and grown.
We are seeing more of these larger brands realize that there is far more potential beyond just Amazon advertising sales. They are beginning to hire successful Amazon sellers and/or software providers as consultants in order to help them become experts, much like successful third-party sellers. This is causing them to shift their focus from the 15-40% of sales potential to 100% of sales potential.
2. Amazon PPC Becomes Less Profitable But More Important
We are predicting that advertising on Amazon will see an increase in efficiency, significant increases in cost, and a significant increase in importance to success for brands on Amazon.
As Amazon increases their dominance in ecommerce and retail, brands are forced to move more of their budget to Amazon advertising. Significantly increased demand, combined with inefficient spend of untrained brands, will absolutely result in increased CPCs (cost-per-clicks). We’ve been observing this trend for quite some time in many markets, but we expect it to increase in velocity and ubiquity. It’s hard to go more than a week without seeing a new post in the media about Amazon’s advertising platform. With that said, we do think that while costs will increase, efficiency will improve.
Viral Launch still sees significant inefficiencies in general Amazon advertising campaign management, largely due to the limitations of Amazon’s in-house advertising tools and programs as well as a lack of sophisticated ad management and automation alternatives. However, we expect new tools/improved sophistication and functionality in Amazon advertising tools and programs will allow for an improvement in advertising spend efficiency. We also expect Amazon to continue improving their ad targeting technology with new programs and tools which will help brands improve overall spend efficiency.
Additionally, we believe that advertising on Amazon is and will continue to be increasingly more important to being competitive on Amazon. With more ad placements per page, we expect advertising to continue increasing the share of an individual product’s sales potential versus organic sales potential. Advertising can also be an important tool in affecting organic sales. Brands that have been using purely organic traffic to build their business will be forced to become experts at Amazon advertising in order to remain ahead of the competition.
3. The Reign of Building Brands Off Amazon
We are predicting that more Amazon sellers will focus on building brands off of Amazon as the effort/reward ratio continues to improve relative to the ratio of focusing solely on Amazon.
Up until 2018, Viral Launch has been a major advocate for focusing on Amazon and delaying true brand building until you crossed the $10m mark on Amazon. While we had obviously seen a few brands build success using a multi-channel strategy (selling outside of just Amazon), it was extremely rare. Much more frequently, sellers hit 7 and 8 figures ($10,000,000+) while focused almost exclusivelyon selling on Amazon. Opportunity cost is a powerful metric for optimal decision making, and for the vast majority of sellers, the opportunity cost was too high when focusing off of Amazon. The reason was because selling on Amazon still presented a lot of low hanging fruit and provided revenue growth rates you could hardly ever reach anywhere else.
As selling on Amazon has become increasingly competitive, we feel that the scales of opportunity cost are shifting to point to true brand building as the greater opportunity. Now don’t get me wrong, there are more people spending more money than ever on Amazon. The opportunity is greater than ever, but the cost and effort of seizing the opportunity is also greater than ever (in most markets).
4. Successful Brands Will Continue to Grow Significantly
We are predicting successful sellers/brands will see unparalleled sales volume on Amazon!
While it’s true that selling on Amazon has become more difficult than ever, there are more people spending more money on Amazon than ever before. This trend will continue into 2019, meaning those brands that are able to achieve/maintain top organic ranking positions, as well as perform well in advertising, will see sales volumes at unparalleled levels. The stakes are higher than ever! It truly is an exciting time to be selling successfully on Amazon.
5. Fewer New Entrepreneurs Begin Selling On Amazon
We are predicting fewer new Amazon seller accounts will be created in 2019.
According to Marketplace Pulse there were 1,200,000 Amazon seller accounts created in 2018 (a good portion never saw a sale). We are expecting new account creation to slow down quite a bit.
There are three primary reasons we expect this to happen.
Reason 1) Increased Barrier to Entry: the cost and complexity of driving success on Amazon has increased. While we still believe there is a massive amount of opportunity on Amazon still (see Amazon Product Research in 2019), the opportunity generally requires larger budgets and more complex strategy.
Reason 2) Market Fatigue: There are only so many aspiring entrepreneurs and mom and pop shops that are interested in selling on Amazon. We are predicting that the interest peaked in these two demographics in 2018.
Reason 3) While we are not economists or fortune tellers, the possibility of a global/US based financial downturn is looming. In the event of a financial downturn, we expect people to have less “free cash” available to start an Amazon FBA business.
6. Major Changes in Reviews and Rankings
In 2019, we think Amazon will continue to improve the security/integrity around many systems/processes including their coveted reviews.
While we have been expecting Amazon to make a major systemic change to their review system, we are guessing (and hoping) that 2019 is the year we see this change come to fruition. In 2018 we have seen some review changes, specifically around review locks, in which receiving too many reviews will trigger Amazon to put a lock on new review activity.
We expect many unforeseen changes to take place, however our greatest hope/prediction is for Amazon to change the review system to a LinkedIn-style review cap presented on search results. By this, we mean that on search results pages, we expect Amazon to begin showing review quantities over 1,000 reviews as 1,000+ (or some similar number). You can check out our Amazon review podcast covering why we think this is necessary to protecting the quality of products purchased and the integrity of Amazon’s review platform for more on that topic.
In short, sellers are incentivized to achieve the highest review quantity relative to their competitors. A higher review quantity indicates greater popularity to potential buyers. If a product has been selling for 10 years on Amazon, it has a distinct advantage over new, and potentially better, products that have not had as long to generate reviews. Let’s say Product A has been on Amazon for 5 years, has a 4.4 star rating, and 6,000 reviews. While Product B has been on Amazon for 6 months, has a 4.8 star rating with 1,000 reviews and a price point $1.00 cheaper than Product A. While most may think Product B is a better product at a better value, there is very little hope of Product B gaining the sales necessary to acquire the reviews to outperform Product A. Product A could allow the quality of their product to decrease because they have such a large review quantity built up that it will be very difficult for others to catch up. It creates a stale market favoring age over quality and value. Limiting to 1,000 reviews shown in the decision process would allow customers to know that a statistically significant number of other customers have purchased/reviewed the product so that review rating must be legitimate.
While we do not have many specific predictions we feel comfortable sharing, we do expect there to be rather significant shake ups in the key drivers of Amazon’s organic keyword ranking algorithm. As in the past, having access to significant amounts of data around key ranking factors/metrics while constantly testing will be the key to staying ahead of any algorithmic changes. Fortunately, Viral Launch has been able to stay abreast of any changes thanks to our wealth of data and brilliant R&D team.
7. Facebook Begins It’s Path of Becoming The Second Largest Ecommerce Site
We are predicting Facebook begins making big moves in ecommerce by subsidizing sales through their platform for merchants to sell direct through their platform.
For the last couple of years, we’ve consistently considered Facebook to be the entity with the greatest potential to challenge Amazon in the world of retail. We’ve lost quite a bit of hope in Walmart and Google over the years. If you think through the core building blocks to a successful ecommerce platform, attention, data, trust, and web/mobile capabilities/technology are top of the list. With more than a purported 2 billion monthly active users, unparalleled data around it’s users, and significant web and mobile technology, Facebook is more than well equipped to help brands sell their goods directly through their platform at a massive scale.
I’m not talking about Facebook’s peer-to-peer marketplace. I’m expecting a full fledged Amazon competitor, and we’re beginning to see the early stages. In some instances, Facebook is reimbursing merchants $5 for each product sold to cover the cost of shipping with no additional marketplace fees, making Facebook a cheaper place to move product already. We’re expecting Facebook to start making some big moves in the e-commerce world in 2019.
8. International Markets are the New Gold Rush
We are predicting a substantial movement of third-party Amazon.com sellers in offering their products and brands on Amazon’s international marketplaces in 2019.
Selling on Amazon.com (the US marketplace) still poses massive opportunity if played right, but there is no denying that it is certainly more difficult to grasp that opportunity than ever. We expect the real mad rush for low hanging-fruit sales (Amazon “gold”) will come in Amazon’s international marketplaces. Viral Launch has been a strong advocate of sellers expanding internationally for the last two years, which is why we invested in hiring domestic listing optimization specialists in each country containing a major Amazon marketplace, as well as expanding our tools to work internationally. We have seen success after success with minimal effort and marketing budget in Amazon’s international markets over the last couple of years (check out this incredible story of two 21 year olds achieving 8 figures on Amazon in 2 years, while selling internationally).
As creating and expanding a profitable and high-growth Amazon business becomes more difficult to achieve on Amazon.com, we think 2019 will finally be the year that third-party sellers look to international markets in droves! Selling internationally certainly has some drawbacks, but in general, Amazon advertising is significantly cheaper, driving organic keyword ranking is significantly easier, and growing top line revenue are all much less competitive relative to Amazon.com. Experienced Amazon.com sellers are able to use their learned success tactics and easily apply them to their brands in International markets.
9. Seller Fulfilled Prime Comes Into Vogue
We are not denying the importance of 1-hour and same day delivery, but we predict we will see a significant amount of sellers over the $1m mark moving to a hybrid fulfillment model.
Over the last 6-9 months, we’ve started to observe a trend in larger/more experienced Amazon third-party sellers moving to the Seller Fulfilled Prime (SFP) model using a combination of their own warehouses and 3rd Party Logistics providers (3PLs). The most compelling reason to move from fulfilling through Amazon’s FBA program to a self-regulated SFP model is cost savings.
We are not seeing only sellers with large items such as furniture moving to SFP, but sellers with products of all weights and dimensions. A customer of ours, selling more than $40m/year on Amazon, claims moving to the Seller Fulfilled Prime model has been his single best investment yet!
The second most common reason sellers are taking up SFP is to support fulfillment for other ecommerce channels that may not allow using Amazon’s Multi-Channel Fulfillment program. Having a dedicated 3PL network allows sellers cheaper fulfillment and greater channel flexibility.
10. More Amazon-Owned Brands
We are predicting there will be a significant increase in the number of Amazon owned (not “sold by Amazon”) in 2019.
We have seen a significant push from Amazon in their own private label brands, and we expect to see this trend continue into 2019. Amazon now has over 80 of their own private label brands, and those brands are receiving better placement than ever (Amazon’s “Our Brands” section now shows above organic results for many search terms).
Amazon kicked off a new program near the end of 2018 called their Accelerator Program, which essentially stands as a partnership between third-parties and Amazon to establish new Amazon-owned brands using existing product performance data. This presents the potential for the number of Amazon owned brands to sky rocket! It will be very interesting to see how this progresses in the new year.
The largest threat to Amazon’s private label brands is likely the government presiding over the country in which each marketplace operates. For example, India has banned Amazon from selling any of its own products on Amazon.in.
11. Less Ads Showing on Page 1 of Search Results
We are predicting Amazon reduces the Amount of clutter in Amazon search results which distracts shoppers from the organic search results.
This is not a common opinion, and we’ll admit that there is a decent amount of logic/data pointing to an extremely high probability that this prediction does not come true, however, when we really try to get in the mind of Amazon and Jeff Bezos, this feels right! I (Casey Gauss) want to walk you through my logic on this one.
As I think through what has made Jeff and Amazon so successful, it’s been their relentless focus on the customer experience (think lower prices, faster shipping, return policy, etc.).
In my opinion, in 2018, the actual shopping experience for customers suffered at the expense of Amazon’s advertising revenue and the promotion of their owned products. There are two contributing factors to what I believe is a lower quality shopping experience.
(One key point to understanding my thoughts below is the difference between “organic results” and “sponsored results”. “Organic results” are the items presented to a customer after typing in a given search term that are showing in the results out of merit. Organic results have been selected by Amazon’s A9 ranking algorithm based on performance factors such as conversion rate, number of units sold, etc. “Sponsored results” are items showing with a “sponsored” denotation, and are showing in the results because merchants have paid for the placement. Theoretically, organic results are the best selling products for a given keyword which is why they are showing in the results. The products most likely to best satisfy the customer’s request. While Sponsored results are artificially placed based on how much the merchant is willing to spend.)
1) Overwhelming Information in Results: In general, our data shows that anywhere between 60-85% of a product’s sales potential come from placement in the organic search results. This means the majority of customers’ shopping experience consists of inputting search terms in the search bar (e.g. “fish oil supplement”), sifting through the results, and purchasing a product. In 2018, we saw an increase in the amount of information being shown on the results page which can be confusing, overwhelming, and a barrier to purchasing the products showing organically (the most likely to satisfy the customer’s request based on real buyer behavior).
The shopping experience is overwhelmed with information and creates a barrier to the shopper arriving at the best performing products based on real data from hundreds to millions of real customers. I feel this direct and indirect inhibition to the best customer experience does not align with Amazon’s mission and what has allowed them to be so successful to date.
2) More Sales Through Amazon Ads: There are more advertising placements on Amazon than ever before. Paid media sales are increasing their market share versus organic sales. When customers are purchasing artificially placed products (products presented through ads versus showing based on performance), the probability of the sponsored product being as high quality as an organically ranked product is low. By more sales being driven through advertising, Amazon is selling less of the proven and theoretically higher quality “organic results” to customers for the sake of driving more advertising revenue. More ad sales = more pay to play, versus quality & value to play.
Now, I don’t think that Amazon has nefarious intentions with advertising. They haven’t set out to create a lower quality shopping experience so they can make a few billion dollars more per year. My assumption (with almost no inside Amazon insight) is that this is a classic case of competition priorities between departments (i.e. the Amazon advertising business units are focused on maximizing their top line, without much focus on the overall customer experience).
Either way, I’m predicting that someone in Amazon, perhaps Mr. Bezos himself, will realize that there has been a slight deviation from the company’s overall focus, and will begin to peel back some of the excessive ad placement.
12. Amazon Significantly Outpaces Other Retailers in an Economic Downturn
We are predicting Amazon significantly outpaces competitors if/when there is a downturn in the US economy.
While we are not economists or fortune tellers, there seems a high probability that there will be an economic downturn of some degree at some point in the near future. If the next economic downturn occurs within 2019, we are predicting Amazon will outperform other retailers significantly. With unbeatable low prices, convenience for working families, and an incredibly large catalog of low priced necessities, we expect Amazon to be the go to store when budgets and time are tight.
Amazon changes the way they are indexing and ranking products, which means sellers have to be smart about their sourcing decisions.
As you’ve probably noticed, there was plenty of overlap between Viral Launch’s predictions and those of the included industry experts and thought leaders. I’m not sure if it is fair to say that this indicates the prediction is more likely to come true, but it does indicate that there is likely more data pointing to that assumption.
An underlying commonality throughout these predictions was increased competition, focusing on building traffic off of Amazon, and adapting your Amazon success strategies. There is certainly the opportunity to look at this with a negative outlook on the future, but please do not forget that Amazon is continuing to grow it’s ecommerce footprint significantly.
As the opportunity for incredible degrees of success continue to grow, so does the difficulty of achieving that opportunity. Instead of playing the victim to increased competition and “unfair” changes, the truly successful adapt with the times, play the long game, and focus on solutions.
I want to encourage you to focus on the solutions. How will you diversify your Amazon business? What strategies will you use to guarantee you and your team are staying ahead of the lastest success tactics? How can you drive sales, reviews, and keyword ranking in this new landscape?
While there are many components that comprise a winning strategy for the future, Viral Launch is focused on giving you the data, automation, and thought leadership around topics like driving sales, keyword ranking, and product selection. Now, it’s up to you to use these to stay ahead of the curve and continue growing exponentially on the world’s largest marketplace!
We’ve all been there. You look around and notice you have somehow collected enough books to open a mini library. There’s old textbooks you’ll never use, books that were given to you as gifts, and the stack of books you keep saying “one day” to. No? Just us? That’s fine. The point is, sometimes you find yourself with a stash of books, and you don’t know what to do with them. You could donate them, but sometimes those books cost a small fortune. And you don’t want to lose out on all that cash you spent on that geology textbook you didn’t even use (Sorry, college professors). So, what do you do with them?
Solution: Sell Used Books on Amazon
If you’re looking to get into the Amazon selling game, selling your new or used books is a great place to start. There’s no risk of spending a small fortune sourcing a product that may or may not sell and no need to worry about manufacturing or importing costs.
And if you’re already in the Amazon selling game, adding books to your inventory is a no-brainer if you’re looking to make a few extra bucks here and there.
How to Sell Used Books on Amazon – Getting Started
First things first, you’ll need a stash of books to sell, and you’ll need an Amazon seller account to access your dashboard, Seller Central. Amazon offers two types for you to choose from: Individual Seller or Professional Seller
Individual Seller: $0.99 per sale closing fee, NO monthly subscription
Professional Seller: $39.99 monthly subscription fee, NO per sale closing fee
If you’re unsure which option is right for you, consider how many books you are wanting to sell per month. Amazon allows a maximum of 40 items per month on an Individual seller account. If you are planning on selling more than 40 books, or you are planning on selling books in addition to other products totaling more than 40, you will want to opt for a Professional seller account.
Listing Information – What You Need to Know
Once your Seller Account is all set up and ready to go, gather the appropriate information about your books. This allows you to have all your information readily available when it comes time to actually list them on Amazon. Whether you just make sure you know where the information is located in each book or you write it down so it’s all in one place, here is the information to gather:
What’s an ISBN and where can I find it?
ISBN is an International Standard Book Number. They always consist of 13 digits and are assigned to each edition and variation of a book. It can be found on the book’s barcode.
How do I know what the book condition is?
When selling pre-owned books on Amazon, you are required to list the book’s condition. This is applicable to hardcover and paperback books. Your books can be one of six types of conditions:
Used – Like New
Used – Very Good
Used – Good
Used – Acceptable
Used – Unacceptable
Books categorized as Unacceptable are not sold on Amazon. This includes books that are sale of advance reading copies, including uncorrected proofs, of in-print or not-yet-published books.
Listing Books to Sell on Amazon
Once you have all the information, you’re ready to list your books for sale. When it comes to actually listing books, Amazon is by far the easiest platform to use. Creating a listing for your book can take as little as one minute.
When starting a listing, there are three different options for you to choose from:
“Sell Your Stuff” and enter the Title or ISBN number
Search for the book as if you were wanting to buy it and click “Start Selling”
List a New Title if no results come up for the ISBN you’re wanting to sell
Sell My Stuff
Go into your Seller Central and find the “Sell Your Stuff” tab. Type in the title or the ISBN number and search. Make sure your category is set to “Books.”
Click “Start Selling” and begin your listing.
Go to the Amazon homepage and use the search bar to find the book you are looking to sell. Once you find it, go to the listing detail page.
Click “Sell on Amazon” on the right side of the screen to begin your listing.
On the rare occasion the above two options don’t work, Amazon will provide you with the option to create a brand new listing.
This will happen when you search for an ISBN and no results come up, meaning there is no existing listing for that book. Amazon will then direct you to begin a new listing.
For a new listing, you will need to provide the following:
Setting the Price – What’s the best price to sell my books for on Amazon?
When listing your book, Amazon shows you how many other offers for the same book are being sold and what price range the books are selling within.
This is super convenient and helpful, as it will allow you to determine your price point. If you’re a new seller listing a single copy of a book, you should list it as the lowest price in the price range. This will boost the chances of a quick sale.
For some books, it might make more sense to list in the higher price range. This could be for current edition textbooks, first edition novels, or special edition books.
Shipping and Costs
Once you input all the required information and click “Save,” your listing will go live on Amazon and will be ready for potential buyers to search for.
You will need to decide on your shipping method: FBM vs FBA.
FBM – Fulfilled by Merchant
If you’re only selling a handful of books, this might be the option for you. Because you already have the books, you just keep them in your house until someone buys them. No additional storage fees! Once a book is sold, you are responsible for boxing it up, labeling, and shipping it out. Shipping costs can be calculated into your initial price point.
FBA – Fulfilled by Amazon If you’re selling more than 40 books, multiple copies of a book, or you don’t want to have to worry about shipping, FBA is a great option. For extra fees, you ship your inventory to an Amazon Fulfillment Center and they take care of the rest when an order is placed.
Make sure you fully research the pros and cons of FBA and FBM before deciding. Deciding on a fulfillment method is important as additional steps and fees may apply.
The Pay Out
Getting paid is arguably the best part about selling on Amazon. If you already set up your seller account and have everything approved, you probably remember Amazon requesting your bank information.
Amazon will directly deposit payments into your account every two weeks. Each deposit can take up to 5 business days and Amazon will send you a notification when the payment is sent.
Other Ways to Sell Books
If you’re looking to sell books that aren’t pre-owned or used, there are definitely options. Amazon offers 5 book selling portals for you to sell from if you wish. These portals are for selling e-books, audio books, and even self-published books. But that’s a blog for another day!
While Amazon is now the second largest ecommerce platform in terms of sales, it actually got its humble beginning as an online bookstore in 1994. It all began inside of Jeff Bezos’ rented garage in Bellevue, Washington!
Jeff Bezos chose books due to the high demand of literature worldwide and their low price point. This still stands true today so selling used books on Amazon is a smart move to make some extra pocket change and relieve your overcrowded bookshelves.
Shipping, Importing and Freight Forwarding is perhaps one of THE most confusing, yet essential, aspects to selling on Amazon. There are a LOT of changes happening in the Amazon space right now. Policy changes, Tariffs, Q4, Q1… and we’re breaking it ALL down in this two-part series.
I’m bringing Michael from Flexport onto the show – you’ll learn what Flexport’s all about in the intro of the topic discussion, just know that Flexport is on TOP of the Freight Forwarding and Shipping Logistics game, AND is focused on innovating in the Amazon space. They’re incredible at what they do, and have incredible perspective for what’s going on right now.
This week, which is part 1, we’ll be talking a LOT about Amazon’s Policy change and what’s happening with Tariffs. Next week, in part 2, we’ll be touching on General best practices and some solid Q4 / Q1 strategy. Pay attention here everyone, there’s a LOT to digest, but this information is ESSENTIAL.
Manufacturing and Sourcing is an INCREDIBLY important subject for optimizing the sales process of your Amazon storefronts. There are certain steps that you need to implement in your Seller processes. Oftentimes, however, Sellers aren’t even aware of the fact that they don’t have all of the necessary steps in place. Sellers miss out on thousands of dollars, or miss out on time invested, because they weren’t aware of one small step they could take — or because there’s something else they could be doing that will save them hundreds of hours down the line. This doesn’t just apply to sourcing and manufacturing processes on Amazon… but that’s our focus for today.
The journey to selling on Amazon can be a long one. The first step is of course choosing a product that matches your budget in a market that you can confidently break into. Next up is turning your idea into a tangible product! You may be wondering how to find manufacturers, especially if you are a first-time Amazon seller, but it is easier than you may think.
Finding a supplier or manufacturer can be an intimidating process for experienced and first-time sellers alike. You want to find a supplier that will not only supply you with stock, but will also become a business partner with you as your company grows.
Domestic vs. Overseas
Your first step is to decide whether to buy from a domestic or overseas supplier. Most sellers will end up sourcing from China because the costs are so much cheaper, even after accounting for shipping and quality inspections. There are benefits and disadvantages to both, and it will ultimately come down to your personal preference and budget.
Advantages of sourcing overseas:
Cheaper production costs
More manufacturers to choose from
Wider variety of products
Disadvantages of sourcing overseas:
Turnaround time is longer
Harder to ensure the manufacturer’s legitimacy
Quality of goods is not guaranteed
Little to no legal safeguards or payment protections
Shipping is more expensive and must clear customs
Communication barriers and cultural differences may be hard to navigate
Advantages of sourcing domestically:
Quality is perceived as higher
Shorter turnaround and shipping times
Easier to verify the legitimacy of the manufacturer
More legal safeguards and payment protections
Disadvantages of sourcing domestically:
Production costs are dramatically higher
Fewer product options
You do not have decide between one or the other right away; just keep those factors in mind as you begin your search.
What to Look for in a Supplier
Your goal should be to find a supplier that you can have a lucrative long-term partnership with. As you begin searching for suppliers that can create your product, look for those who exhibit these traits:
Good communication: Do they respond to your messages in a timely manner? Do they ask for clarifications?
Helpful: Do they answer your questions completely? Are they honest about setbacks and shipping delays? Are they willing to have a quality control inspection done by a third party?
Reputable: What do other vendors in the space say about them? Will they provide copies of their business licenses and agree to a property inspection?
Experienced: Have they been in business for 3 years or longer? How many orders do they process every year?
Flexibility: If there is a problem with production, are they willing to work with you to find a solution?
Affordable: Do your profit margins allow you to work with them? Are they willing to negotiate prices?
In addition, look for suppliers who make a wide range of products and can keep up with your growing Amazon business. If your orders increase dramatically, or if you want to diversify your products, you want a supplier who will be able to meet your needs right now as well as in the future.
Finding a Supplier
Compile a list of at least 10 suppliers to make initial contact with so you can find the right partner as quickly as possible. The process may seem overwhelming at first, but there are multiple sources of information that can speed up your search and make it easier.
The internet is a great place to start looking for suppliers. Most online directories allow you to browse products and get in touch with suppliers worldwide, all in one place.
Alibaba is the largest online wholesale manufacturing directories and one of the most popular one-stop shops for sellers looking to source their products from overseas.
We actually just hosted a Webinar with Alibaba.com, talking a bit about Q4 but also about sourcing and manufacturing! Check it out in the video below:
Because counterfeit accounts are harder to track on such a massive database, Alibaba offers several supplier verification categories to protect buyers from fraud and increase payment security, including (but not limited to):
Trade Assurance: Your payment is protected if the supplier does not ship on time or if the product quality does not match what you specified in your contract.
Gold Supplier: Suppliers with a gold rating have gone through a verification process by an approved third party inspector.
Customs Data: You can access the public trading records of all the companies that have shipped into the United States.
Inspection Service: If you make an order through Trade Assurance, you have the option to get a quality control inspection from an Alibaba approved third-party inspection company.
To further narrow down your choices, you can filter search results by vendors that have Trade Assurance and Gold Supplier badges. You can also browse the supplier’s company profile to check their certifications, production capacity, and physical location to determine their legitimacy before making initial contact.
Other popular online directories include:
Trade shows offer buyers a chance to talk directly with a large number of potential suppliers at one time. The Canton Fair is the largest and longest-running trade fair in China and takes place twice a year. Most booths display finished products, but you should still ask if they can do custom orders. You can also collect free product samples instead of paying expensive airfare to ship them. Being able to communicate face-to-face with suppliers is essential for building trust and developing a better relationship for future orders.
Ask businesspeople and other eCommerce sellers in your professional network about how to find manufacturers that would work best for your needs. You are more likely to get an honest assessment of a supplier’s capabilities from someone who has worked with them in the past. If you develop a rapport with a supplier who ends up not being a good fit, do not be afraid to ask them for recommendations.
Always keep your profit margins in mind as you look for a supplier. Pay attention to minimum order quantities, and add up the costs of production, including shipping and FBA fees to determine if you could actually make a profit.
You may be able to put yourself into a better financial position by negotiating prices with your supplier. For more tips on how to find and negotiate with a manufacturer, be sure to check out our Follow the Data podcast episode on the subject.
Final Thoughts on How to Find Manufacturers
Finding the right manufacturer takes patience, perseverance and a little elbow grease, but by the end you will be one step closer to making your Amazon dreams a reality. Here at Viral Launch, we want to provide you with all the information you need to become a successful Amazon seller. For more on Amazon selling strategies, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.
EPISODE 50! We wanted to make something SPECIAL for our 50th official episode of Follow The Data. All of this episode was created as such a huge ‘thank you’ to all of our listeners. We brought Casey back on to touch on where Viral Launch is now, where we’re headed in the future, and what to expect from the Amazon Seller Space currently and in the future. Who knows, if you listen in, you might even get insight into what Viral Launch is releasing next 😉
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The goal of this series is to talk through high-level Seller Strategies from Amazon Sellers who are killing it in the CURRENT Selling Game. We’re talking through what they’re doing to scale their business: What’s currently working, what’s NOT working, where underpriced attention is, where you should be investing your time, and where Amazon is headed in general.
In today’s episode, I’m talking with Tom Wang, a Seller of his own who’s been implementing a lot of high-level strategy and is VERY in-tune with what other sellers are going through. Part of what we talk about in this episode involves developing a healthy entrepreneurial / Amazon-oriented mindset. Let’s dive in.
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