Cash flow is the backbone of any eCommerce company. It is crucial to keep cash flow moving smoothly. If it becomes too much of a pinch point, it can kill the business. Cash flow is defined by the amount of cash available to your business throughout its operations. It is usually measured every month, and the primary source of promote cash flow for eCommerce businesses comes through selling product.
Cash flow is crucial for businesses and shows how much money passes through the operations. Yet, it is not the same as a profit. The funds received from customers are collected under the term cash flow. Businesses still need to pay for expenses like rent, labor, utilities, taxes, and other fees. Every company has a constant fluctuation of cash flow. The amount of cash received (and when) depends on supply and demand and the business’s monthly expenses. With proper data management, a company’s ever-changing cash flow can still be predictable and manageable and enable sound business decisions.
Why Is Cash Flow Important
Cash flow is the backbone of a business, so if it fails, the company fails. A recent study from CB Insights found that a third of companies failed because they ran out of cash. One-third of businesses also fail due to an insufficient market for the product they are selling. Which then leads to a lack of cash flow. Improperly managed cash flow streams can lead to poor decision-making, a misunderstanding of how a company’s money is spent, and ultimately be the downfall of a business.
Companies need to prioritize their cash flow to ensure that their business will stay afloat and reap more benefits from adequately managed cash flow. As businesses manage their cash flow, they pay close attention to how their money is spent and control their finances. When a company has a positive cash flow, it improves the relationships with its partners and customers and promotes brand loyalty. It can also help businesses find their strengths and weaknesses, and how best they can expand.
What Promotes Cash Flow
There are a few ways that businesses can promote cash flow and ensure that they will thrive. The first step in promoting cash flow is planning and forecasting. In order to spend money correctly, businesses need to know how much money will be coming in and when. With a better idea of how money flows through a business, there will be less overspending and fewer mistakes when judging how much money the company has.
With planning comes a strategy of what businesses should spend money on and when. Companies should plan when their cash flow is coming in and the best allocation of that money. If there is a low demand for a particular product, there is no need to spend cash flow on an abundance of inventory. Companies should find what is a priority for spending and what needs the most attention. Pay close attention to what needs fixing. This will promote more cash flow and allow attention to shift to minor issues.
Cash flow improves when companies receive money faster and hang onto it longer. Speeding up the process of obtaining cash can incentivize customers to choose a faster form of payment. Companies can hold on to money for longer by buying inventory, earning interest, and elongating the amount of time before paying expenses. This sales cycle gives control over when costs pay off and how much money is in the business at one time.
What Challenges Cash Flow
Many daily challenges come along with maintaining cash flow. Businesses that forecast their finances consistently can learn how to work around everyday challenges. Conversely, companies that do not find solutions to these problems end up with cash flow as a bigger pinch point, which can negatively impact the entire operation.
Some common challenges with cash flow include delayed payments from customers. Sometimes, purchases can happen pretty quickly. Businesses may not reap the benefits of the purchase and experience a time with a shortage of cash. Less cash flow is caused by bank deposits holding money. Or if a large sum of cash flow to buy equipment or machines, leading to businesses waiting for new revenue. Companies unaware of their total cash flow, or spend their cash flow before secure income experience negative cash flow. The life of the business is then solely dependent on the speed of its recovery.
How Payability Can Help
Payability recognizes the difficulties that eCommerce businesses face with cash flow. The funding programs are built for eCommerce businesses that need assistance filling the gap between paying expenses and receiving revenue. eCommerce businesses no longer have to worry about the risk of cash flow with the help of Payability. To see if your company qualifies for Instant Access to your marketplace payouts, visit Payability.com and apply now.
Thank you Payability for your guest post. For more information on Payability, head to their site. To better your selling business and software tools, head to Viral Launches main page.
Corey Gary is Viral Launches amazing Demand Generation Strategist and Advertising Manager. This guest post written by Corey highlights the importance of E-commerce and Advertising in how they go hand in hand.
I started my career in Digital Marketing as an Analyst at an agency located in New York City. I joined an account with separate teams for programmatic, paid social, and E-comm. Since we rarely communicated with each other, I felt siloed and inefficient.
A few years and a few clients later, I’ve worked across almost all facets of Digital Marketing. I’ve run Display & Video as well as Search & Social ads. There have also been opportunities to buy programmatic podcast ads and CTV (connected TV ads). I also purchased a programmatic Digital-Out-Of-Home campaign where the vendor claimed they could change ads at a bus stop based on the interests of the people walking by. We ran this campaign before iOS 14.5 and increased privacy regulations.
Working on a channel-agnostic team of digital marketers was not only rounded out my Working on a channel-Agnostic team of digital marketers not only rounded out my skill set but was best for the client’s expanding needs. Having multiple types of marketers on one team helped us own all stages of the digital marketing funnel.
Awareness campaigns matter for E-commerce and Advertising.
Awareness campaigns are excellent for large brands, but how about those small Amazon start-ups who don’t have millions of dollars to spend on billboards that connect to the Metaverse? That’s where e-commerce advertising is essential. Buying for conversions is where marketers can gauge the effectiveness of their campaigns. E-commerce advertising becomes essential once a consumer is familiar with a brand. As a consumer, if I allocate myself $150 for a new pair of running shoes, I can choose between big brands such as Nike or Adidas and Asics. Or, I can shop with up-and-comers like On and Hoka. These two shoe brands are agile and efficient in their digital marketing. Both On and HOKA have extensive running shoe digital marketing campaigns while the big brands are nonexistent on the SERP (Search Engine Landing Page).
As a consumer during the evaluation process of the marketing funnel: I decided to allocate my $150 depending on a wide range of criteria such as cost after taxes & shipping, quality of the product, reviews, merchant (Amazon or EastBay), and color. For the digital marketer on the other end of the purchase, yes, people buy running shoes based on color, guilty as charged.
The seller can optimize their ads to account for all these criteria to meet the customer when they’ve allocated time to research and budget. It takes time for the Digital Marketer to A/B test which ads perform best on a specific channel. Here’s one example.
On Amazon, an ad for the keyword [running shoe] could perform vastly different than an ad for the keyword [racing running shoe]. The first keyword is for buyers who want a running shoe but aren’t necessarily intense runners. However, [racing running shoe] clarifies that the buyer could be participating in this year’s New York City Marathon in addition to their local Turkey Trot. Viral Launch has expert-level keyword analysis software to help e-commerce marketers discover the best keywords to target for their online advertisement.
Conversions mean results.
So, why is it essential that all Digital Marketers learn E-commerce Advertising? Conversions drive business results, and ultimately the purpose of marketing is to have a positive return on investment. Marketers can spend all day ideating grand awareness campaigns. Still, conversion marketing is where CMO’s can go to stakeholders exclaiming, “look at how my campaigns drove an increase in sales with a positive.”
As the world recovers from the global pandemic, eCommerce is adjusting yet again to the modern landscape. We’ve seen some interesting Amazon selling trends in 2021, as merchants find new ways to stay ahead of their competition and leverage Amazon’s expanding offerings. Here is what to learn for 2022.
Now, as we near the end of 2021, let’s take a look at some key takeaways to keep in mind for 2022.
Inspect Sample Goods Before Switching Manufacturers
Poor product reviews break listings. Products with good reviews and listings influence 79% of Amazon prospects, so you can’t afford to lose consumer trust by accumulating bad reviews. If your products have a bad reputation, you will have trouble selling them to just break even.
So, be sure to order and inspect samples from manufacturers beforehand. If you’ve been using a supplier for a while, don’t drop the ball by compromising your vetting process; it takes one wrong delivery to ultimately tank your customer reviews. Another thing to learn for 2022.
Take Advantage of Amazon’s Expanding Branding Features
Amazon’s Brand Registry gives sellers more control over their products and brand representation. The program is easy to join, and here are a few reasons why you might want to consider it (other than the fact that it’s free):
Increase product sales and conversions
While you may not notice an immediate change in your bottom line, Amazon’s Brand Registry actively works to remove fraudulent listings and delist third parties that are fraudulently using your brand’s name.
Reducing fraud is vital to building trust in your brand and driving conversions. Otherwise, if buyers unknowingly purchase a knockoff, it may reflect poorly on your brand’s image. You can use the registry to report any perceived violations and have infringements removed.
Take back control over your product’s information
Sharing accurate, valuable product information is vital to building customer loyalty. It’s essential to avoid misleading prospects and help them understand precisely how your product can benefit them.
Unfortunately, third-party sellers may not honor your core values and alter your descriptions, spreading misinformation. You can’t avoid third-party sellers either, because they make up for more than 50% of Amazon sales.
Fortunately, Amazon’s Brand Registry gives sellers more control over how products are described in the listing. After submitting your product and company information, Amazon will regulate any third-party attempts to alter them, preserving the key information.
Beyond these measures, the Brand Register protects brands against more complex fraudulent efforts as well. For example, some third parties may use your company logo or information to sell their own knock-off products. Amazon’s Brand Registry combats these malicious activities by:
Removing listings that use your company logo or trademark on products that aren’t yours.
Images need to be removed with trademarked information/items that don’t represent your company.
Removing fraudulent listings that use your brand’s information.
Learn and implement this for 2022.
Access the Sponsored Brands Feature
The Brand Registry unlocks your access to Amazon’s Sponsored Brands Feature, which is an ad format that lets businesses promote up to three products. It also allows you to include your company logo and brand name, which is great for raising brand awareness if you’re selling on Amazon.
A big draw for using the Sponsored Brands feature is that your ad will appear at the top of search results, even above “Sponsored Products.”
Stay on Top of Amazon’s Evolving SEO Algorithms
Paying attention to Amazon SEO is vital to increasing your listing’s visibility and ensuring prospects can easily find you. In a nutshell, Amazon SEO’s purpose is to help consumers buy, so the algorithm works to meet this goal.
When a consumer searches on Amazon, the algorithm quickly determines which product listing has the highest likelihood of fulfilling the searcher’s needs. In other words, Amazon’s SEO algorithm needs to figure out which listing has the highest ‘purchase likelihood’.
Similar to Google on-page SEO practices, there are technical steps you can use to improve your product ranking, including the use of keywords, images, and optimized titles and descriptions. But, to beat out the rigorous competition and rank at the top of Amazon search results, you need to convince the algorithm that consumers are ready to buy your product.
That’s where the A10 (formerly known as A9) algorithm comes in. Amazon’s algorithm undergoes continuous updates, with the ranking factors adjusting slightly every six months or so. Thus, staying current with the evolving algorithm is important to keep your product listing at the top. Keep this up for things to learn for 2022.
Amazon’s A10 algorithm, in general, prioritizes two core criteria for ranking:
The number of customer reviews
Your sales rank, which includes details like how many customers are searching for your product and buying it
It’s important not to get bogged down by the algorithm’s technicalities. Sure, it’s updated regularly, but its core working and objective remains the same: to help customers buy what they need. This intention means sellers should focus on optimizing their offerings for customers.
True to Amazon’s MO, you’ll notice that the two core criteria behind the A10 algorithm are geared towards customers. The algorithm reflects Amazon’s commitment to delivering the best customer experience. By sharing this commitment i.e., keeping customers happy and meeting market needs, you can drive your search ranking up.
Have Both a Vendor and Seller Account
Many growing businesses struggle to decide between having a vendor or a seller account, because each offers unique pros and cons. But what if you could combine the best of both worlds? Turns out you can—Amazon doesn’t restrict sellers from having both accounts.
By having both a vendor and seller account, you can complement sales efforts and mitigate restrictions. For example, seller accounts usually get fewer sales because they lack the “sold by Amazon” endorsement, so having an additional vendor account can increase your bottom line.
Retailers can also leverage the advanced analytics and flexibility of a seller account to help launch new products. Generally, Amazon is hesitant to promote new vendor products because they lack performance information. So, you can do the initial heavy-lifting and sales testing from your seller account and eventually use the analytics to encourage Amazon to endorse the item from your vendor account.
Invest in Good Customer Service Mechanisms
Amazon’s commitment to customer service and delivering the best customer experience is a critical driving factor behind the eCommerce giant’s success. Amazon sellers can take a page out of the megacorp’s book and improve sales by committing to good customer service.
Ecommerce gives merchants access to a full suite of data, analytics, and meaningful insights to tailor marketing efforts and optimize the customer experience. However, without the right systems in place, your support team won’t be able to leverage the data to your brand’s benefit.
Thus, it’s important to invest in good customer service software solutions. For example, you might want to consider using email automation to deliver automated updates, like shipping notifications or order verification.
Additionally, it’s vital to invest in tools to centralize information to maintain customer satisfaction. If customers receive unsatisfactory answers or varying responses across channels, they become frustrated and confused, reducing your FCR (First Contact Resolution) rates. With a centralized knowledge base, you can resolve customer support requests faster and more accurately. Learn this for 2022.
The core best practices for Amazon Sellers don’t change. Whether you look at 2010 or 2021, successful sellers prioritize customer-first experiences, strive to deliver value, take feedback seriously, and leverage tools to optimize their operations.
As we break into 2022, it’s important to remember that these objectives won’t change, but the means to achieve them might. For example, SEO algorithms are continuously evolving, and new technological developments help businesses optimize their operations in new ways. Therefore, staying up to date with these advancements and trends is vital to keep your brand relevant and successful.
To sum things up to learn for 2022, don’t forget to:
Weigh your options out with Seller and Vendor accounts, and see if it’s beneficial to use both.
Invest in centralized knowledge and automation to deliver better customer service.
Leverage Amazon’s robust branding features.
Keep up with the latest Amazon SEO updates.
Inspect your products as they arrive.
And don’t forget to put your customers first!
Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.
Thank you, Jake for the guest blog post! Be on the lookout for more great content!
How you can make the most of the newest Amazon keyword: Squid Game.
As most of the world knows, Squid Game was released by Netflix on September 17th, 2021. Not even a month into its release, it is the number one watched show on Netflix. Plus, it is the streaming platform’s most watched tv show in its history. What once was a keyword no one has heard of before just 3 weeks ago is now one of the largest keywords on Amazon.
As you can see in the image below, “Squid Game’s” keyword phrases dominate halloween costumes and costumes in general. It is on trend to be the halloween outfit of the year. Similar to the Harley Quinn costume in 2016 with Suicide Squad. It is fascinating to see how quickly keyword trends and phrases pop up. This verifies again that it is vital for Amazon sellers to stay up to speed on social trends. If you are able to get involved with selling early, you can make thousands of dollars quickly and efficiently with not much competition.
Squid Game reaches beyond Netflix
Alongside costumes becoming a trending search on Amazon, Vans saw a 7,800% increase in sales of white slip on vans. They’re the TV show’s premier shoe with an increase in sales across the globe. Netflix, Vans, and those selling track suits are on par to make big bucks in 2021.
The trend continues.
According to our Keyword Manager and Research tools, Squid Game Costume has over 500,000 searches starting in October. In September, it only had around 50,000 searches. Those who were in the selling game that early were the first to make big bucks on those searches. It is still not too late. Our data shows that the search volume will most likely continue to trend upwards till about October 31st. After halloween, search volume will more than likely drop off.
What is next after Squid Game?
As the movies Marvel’s Eternals, new episodes of Netflix’s Bridgerton, and Spiderman: No Way Home are coming out later this year, it is important to keep in mind that these will open up avenues for more selling opportunities. Try to get involved in these early before they skyrocket in keyword trends like Squid Game.
With data research going back over 4 years, Viral Launch provides their users with the largest library of Amazon keywords. The Keyword Manager tool is the most popular among users. Especially for its ability to quickly compare and contrast specific keywords and how it compares to similar ones. Users can optimize the best SEO for their products to hit the number one spot on Amazon.
Conquering Amazon PPC is shifting from an elective skill to a prerequisite for success as a seller. In the not-so-distant future of selling on Amazon, the arms race for dominating a market will likely be through advertising.
Because PPC is transitioning from the elective stage, it’s still a facet of selling that gives many sellers headaches. But fear not, and try to view this as an opportunity, not a roadblock. By gaining PPC knowledge and experience now, you can distance yourself from the competition for short-term gains and long-term dominance.
To help, we chatted with Sumner Hobart, an Amazon PPC maestro who has utilized PPC to power his business and change his life through FBA. Tune in as we pick his brain to break down Amazon PPC tips and tricks on your way to advertising like a pro!
Get to know Sumner and his story of how selling on Amazon helped transform his life. (0:00)
Selling via FBA has changed so many lives, helping them live out their dreams through entrepreneurship. We say hello to Sumner and get to know his story from his experience before selling on Amazon, how he got into it, and how he turned it into a rewarding career and lifestyle.
When should sellers start running PPC campaigns? (5:22)
One common refrain we’ve heard from sellers considering making the leap into PPC is that they don’t think the time is right. We chat with Sumner to hear about his path in PPC and how sellers can know if they’re ready or not to introduce their product to ads.
What goals should sellers new to PPC be considering to determine success? (14:30)
Not all campaigns are created with the same goals in mind. Sumner explains the primary objectives behind PPC campaigns, and discusses what steps you take to accomplish these goals through ad campaigns.
Sumner shines a light on which campaigns outside of the norm should sellers examine in PPC and how to put them into place. (26:34)
After explaining some of the basic PPC campaigns, we dive a little deeper with Sumner on more niche campaigns. While the basics are tried and true, sellers can find more success and learn more about their performance by getting a little more creative ith their campaign structures.
Does driving external traffic play a role with PPC? If so, how can a seller integrate it into their strategy? (44:37)
Over recent months, the emphasis on driving external traffic has been further incentivized by Amazon. In terms of overall strategy, the ability to drive traffic from outside of Amazon continues to rise as well. Building a following on social media, growing an email list of potential customers, or driving traffic through ads from Google, Facebook, TikTok, or other spaces outside of Amazon can be extremely valuable.
Sumner breaks down how driving external traffic and PPC can go hand-in-hand to strategically grow and scale your Amazon business to new heights.
A huge thanks to Sumner for chatting with us and sharing his expertise. You can stay in touch for more helpful FBA gems by connecting with him on LinkedIn, or pick up tricks of the trade through his selling courses.
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Consider Glorify to be your one-stop-shop for product images. With its background–removing tool, a massive collection of stock images and models, and templates created for Amazon, Shopify, Instagram, and many other e-commerce platforms in mind, Glorify is the perfect tool for anyone who needs product photography.
Just as Canva makes graphic design a breeze for novices, Glorify simplifies product photography for e-commerce entrepreneurs. Designed to fit the needs and wants of online brands, Glorify is a time-saving, sales-converting necessity.
It’s no wonder 51,000+ entrepreneurs utilize Glorify for their design needs. With their tools, you can handle all of your product photography needs other than taking the actual pictures. Speaking of which…
When creating your Amazon listing, the value of product photography cannot be understated. In the old days of Amazon? Sure, you could skimp on high-quality product images and still pick up sales. But in 2021? High-resolution, professional images are a necessity for any seller looking for long-lasting success.
But not just any photographer will do. You’ll want a photographer with experience in e-commerce. One who knows the value of eye-catching product photography that shows how a product might be used.
That brings us to Dripped Image.
Photographer/owner Jason Weller has plenty of product photography experience under his belt, in addition to years capturing sports, concerts, and events from around the world with his camera. The result? Professional-quality photos that highlight the best of your product and lifestyles that wouldn’t feel out of place in a prestige magazine.
Although simple, it’s vital to remember one of the foundational elements of a successful product is the product itself. You can do everything right to identify a winning product idea, create a product listing with captivating images and search engine optimized copy, and perform advanced advertising strategies. But if you have a crummy product, you’ll likely be inundated with negative reviews and experience dwindling sales.
Thus, it’s critical that you find a manufacturer or supplier that you can trust to deliver a quality product and work with to make improvements.
Alibaba became one of the world’s largest companies, largely on the strength of its B2B e-commerce platform. Buyers choose from hundreds of importers and exporters worldwide to find their ideal product.
The sheer size of Alibaba’s marketplace makes it convenient for Amazon sellers looking for a perfect supplier.
Selling on Amazon is an incredible opportunity for those with the entrepreneurial spirit and attitude, and has paved the way for countless people to make their dreams come true and find financial freedom.
So it only makes sense that the go-getter ethos of entrepreneurs can lead to intense competition in the pursuit of perfection. As a result, that commitment and determination can lead to constant tinkering and monitoring of your store’s performance. And unlike traditional retail stores, your store is open 24/7/365.
Thus, you’ll want to keep an eye on the many aspects of running a business when away from the computer screen.
The Amazon seller app lets you take many aspects of managing your Amazon business from Seller Central with you everywhere you go.
Use the Amazon Seller app to track sales, fulfill orders, find products to sell, respond to customer questions, capture and edit professional-quality product photos, and create listings—all from your phone.
With the wide variety of responsibilities on an Amazon seller’s plate, a true one-stop-shop just isn’t realistic. However, Viral Launch has you covered when it comes to reliably accurate product and market research.
Whether you’re starting on Amazon and looking for your first product or managing a sizable catalog of ASINs, Viral Launch’s comprehensive software suite can help you make intelligent decisions backed by a treasure trove of Amazon data.
For those looking for a profitable product to sell, the Product Discovery tool reverse engineers results based on filters you apply based on your goals and resources. Our most popular tool, Market Intelligence, provides continuously updated sales data that sellers can peruse to be a master of their market.
With thoughtfully integrated tools, Viral Launch truly is a one-stop-shop for Amazon product research. With pricing packages catered to your needs based on where you are in your Amazon journey, you don’t need to spend an arm and a leg to gain that numerical advantage.
Simply put, Viral Launch’s Amazon seller tools offer almost everything a seller could ask for. In business, there’s no greater advantage than the statistical advantage.
One of the most anxiety-inducing facets of running a business is understanding the possibility that you’re not maximizing your potential.
“Is my hero image costing me sales? Would a price decrease significantly boost sales and increase profitability? Would tweaking the product title lead to more traffic?“
These are just a few of the countless questions you may have about your Amazon product listings. Implementing significant changes to your listing can be nerve-wracking due to the unknown outcome. Luckily, you can find the answers with actual results by split testing in smaller doses with Listing Dojo.
With Listing Dojo, you can let the data make the decisions. Listing Dojo allows you to run tests on your listing’s title, price, images, or description. As you run the split testing, you’ll be able to see how these changes are impacting your bottom line. Once the tests have run for an appropriate amount of time (recommended: 7 day minimum), you’ll have informative reports comparing and contrasting each’s performance. You may be surprised at how one minor tweak can impact your bottom line.
Moreover, Listing Dojo is entirely free, making it a no-brainer for maximizing profitability.
The topic of selling your Amazon business is one we’ve tackled recently, and the business valuation tool from Empire Flippers is the best starting point you’ll find. You can fill out their brief form at no cost, and they’ll run the numbers for your company evaluation.
Within minutes, you can discover your business’s estimated valuation to consider if selling is right for you.
Once you’ve received your valuation, you receive a breakdown that operates as a SWOT analysis for your valuation. , the tool provides automatic feedback to help you understand your valuation at a categoric level. Consequently, you can keep that feedback in mind as you advance your business.
An innovator in the e-commerce business transaction industry, Empire Flippers is as trustworthy as they come. Whether considering selling your business or not, every seller should take a few minutes to understand their business a little better from a buyer’s perspective. And if selling sounds right for you, you can certainly entrust the Empire Flippers team to guide you through the process.
In conclusion, these Amazon seller tools are among the many that can make life easier. What Amazon seller tools have been a tremendous asset for you? Let us know in the comments!
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In this episode of Follow The Data, John Cant of Rising Sun Commerce joins Cameron for a deep dive on tips and strategy to jump into Amazon Japan.
Amazon Japan is quickly becoming a hotspot for Amazon sellers to diversify online sales.
As international e-commerce sales continue to spike, more sellers are recognizing the massive potential of expanding their online business in additional marketplaces. The Amazon seller community continues to mature, and for many sellers expanding internationally may be a more profitable expenditure than adding another product or increasing marketing spend.
When it comes to selling on Amazon Japan, nobody knows it better than Rising Sun Commerce. Host Cam Yoder chats with John Cant of Rising Sun Commerce to discuss the pros and cons of expanding your business to Japan, best practices for finding success selling in Japan, and what NOT to do
This episode covers a handful of essential tips to consider when jumping into Amazon Japan (as well as any international marketplace). John, who has years of experience selling in Amazon Japan, shares his biggest tips and strategies for catering products, listings, and experiences for the Japan marketplace.
If you’ve ever considered going international with your Amazon business, or would consider Japan as a possible extension, this is a great starting point.
Find out John’s story and learn Rising Sun Commerce’s history (0:00)
To kick things off, John explains his e-commerce experience and how Rising Sun Commerce began. With the U.S. Amazon marketplace doing much of the company’s heavy lifting, why pursue Amazon Japan?
One common mistake from sellers is to assume customers act similarly across marketplaces. How does buyer behavior in Japan vary from other countries? (3:22)
Customer behavior changes depending on where you’re selling, so selling isn’t a One Size Fits All approach for expanding internationally. John breaks down what distinctions exist with Japanese customers in comparison to American or European customers.
Where does Japan rank in priority for seller consideration? (5:09)
When considering expanding your brand internationally, selecting the ideal country to start selling in is often the first question. With Amazon continuing to expand internationally, John explains why Amazon Japan is such a promising opportunity.
A top-selling product in the United States doesn’t guarantee similar success abroad. Continuing the conversation on buyer behavior, what categories perform better or worse in Japan? (7:02)
While finding out if Amazon Japan is right for you, market and product research is a necessity. Get an expert’s perspective on what products tend to do well and which ones fizzle out in Japan.
What are the first steps a seller can take to start selling in Japan? (15:14)
You’ve done the research. Selling in Amazon seems like an opportunity worth pursuing. You’re ready to take the next steps. But where do you even start? John lays out the step-by-step gameplan for expanding to Amazon Japan.
These important questions and answers are only a fraction of the valuable insights from a proven expert. Be sure to tune into the entire show to find out if Amazon Japan is right for you!
As always, we greatly appreciate John’s time and expertise. If you have any questions for John, reach out to him directly at: firstname.lastname@example.org Or visit his site to jump straight into Amazon Japan strategy.
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As the largest and latest round of stimulus checks make their way into bank accounts across the USA, we take a look into how you can use it as an investment into your business.
According to the IRS, about 90 million Americans were sent their $1,400 stimulus checks on Wednesday alone, with more to be sent in the coming weeks.
The newfound financial flexibility creates opportunities previously not afforded for those fortunate enough to receive the $1,400 as “extra” money. One popular way to view the stimulus check is as an avenue into investing, but investing isn’t limited to stocks.
Instead of investing in another company, why not invest in your own?
Whether you’re a longtime seller, beginner, or considering leaping into FBA, there are plenty of ways to rejuvenate or jumpstart your Amazon business with $1,400. By investing in your e-commerce business, you could easily turn your stimulus check into a long-term money-making machine.
We should mention this isn’t necessarily a guide. Every seller’s journey is different. The options we’ll highlight below are merely a few options you may want to consider. With prudent planning, these options present a promising opportunity for you to get a great return on investment from your stimulus check.
Without further ado, let’s dive into it!
Elevate Your Product Research Game
When it comes to selling on Amazon (and in most aspects of life), having the luxury of reliable data to base your decisions on is a tremendous luxury. For Amazon sellers, this is made possible through product research.
Whether you’ve yet to begin your FBA journey or have a catalog full of successful products, product research is crucial for sustained profitability. When you have access to comprehensive market data, it’s almost like having the answers to a test.
While reliable Amazon sales data is crucial at all stages, it’s especially vital for beginners. The research that goes into deciding upon your first product serves as a foundational aspect of your Amazon career. Choosing to source and sell a product without conducting intensive research with data you can trust is a surefire way to make your first product your last product.
So if you’re beginning to look into FBA, test out a few software providers. Most software providers will offer a free trial, giving you time to see if they’re right for you.
Feel free to test trials from different software providers simultaneously to compare and contrast the data. If you notice any inconsistencies, don’t be shy. Ask their customer service team how they arrive at their numbers. With such an important decision that can pay off handsomely, don’t leave any stones unturned.
Aspiring Amazon entrepreneurs aren’t the only ones who can take their product research game up a notch. Often, Amazon sellers don’t utilize all tools within their toolset.
Whether there are underutilized tools in your current software plan or an opportunity to upgrade your plan for additional access, there’s no better time than now to explore unfamiliar tools. Amazon is constantly evolving, so sellers must evolve with it.
Boost Your Business with Captivating Creatives
It’s springtime! You know what that means. Spring cleaning!
For Amazon sellers, the seasonal cleaning isn’t limited to dusting ceiling fans, clearing out the refrigerator, and giving your home a good deep cleaning. It may be worth considering if your listing creatives are due for an upgrade.
Do your listing’s copy and product photography abide by Amazon requirements and follow the style guidelines? Is your competition doing something with their photos that seems to be working? Are you maximizing your visibility by having a keyword-optimized product listing, or are you missing out on indexation for keywords customers are using to products like yours?
These are just a few of the questions you should ask yourself when considering updating your creatives.
Even if your product photography is in tip-top shape, additional photos can still provide plenty of benefits for your business. For example, possessing extra product images opens the door for creative advertising.
One way you can spruce up your advertising with enhanced photos is Amazon Posts, a relatively new option to increase brand visibility. Amazon Posts is a social media-like platform within Amazon that allows brand registered sellers to flex their advertising muscle. Appearing on product detail pages selected by Amazon, brands get the ever-important chance to poach customers from competing listings.
The best thing about Amazon Posts? It’s totally free. Well, submitting your Posts is free, anyway. You’ll still want professional photos capable of enticing customers to earn a click. Since Amazon Posts is somewhat new, it’s flying under the radar of many sellers, but can be an incredibly efficient weapon for stealing customers from the competition.
Additionally, having extra photos come in handy if you sell outside of Amazon or may consider selling elsewhere at a later time.
Lastly, having extra photos at your disposal provides an even better opportunity to experiment for peak optimization. Once you’ve got premium product photography, don’t forget to split test! With a plethora of split testing sites to choose from, it’s an easy step to maximize your conversions and profitability!
Flex Your Marketing Muscle with PPC
Another great way to invest your stimulus money into your business is by using it to take the next step with Amazon PPC (pay-per-click) advertising.
Although Amazon debuted PPC advertising in 2012, it has grown considerably over the last 2-3 years and shows no sign of slowing down. With Amazon expected to net nearly $13 billion in advertising in the United States marketplace alone, the company has every reason to continue pushing and developing PPC.
Whether this means finally taking that PPC course, creating your first campaign, or trying out an unexplored ad type, doing it with a bonus $1,400 makes it a prime opportunity to experiment with PPC.
For sellers currently selling, it especially makes sense to test out new campaigns now as plenty of customers are flush with their stimulus money and tax season right around the corner.
After all, you’re not the only one receiving the stimulus. More customers shopping with more money is a recipe for more customer searches. As your product appears more frequently through search and on competitor listings, the sample size for your campaigns grows larger and, thus, more reliable.
Fortunately, the options are flexible for you regarding your PPC campaigns. Set your budgets as low or as high as you feel comfortable with, and barring disaster, let them run until the reporting data begins to stabilize. Once they’ve matured, you’ll have real data on your performance that you can use to optimize to your advantage.
Scale Your Store by Expanding Your Brand
Suppose you feel like you’ve squeezed nearly all the juice you can out of a product. First off, congratulations! It’s every Amazon sellers’ goal to reach and maintain peak performance, but what do you do once you’ve achieved it? For many, it can be a never-ending pursuit of perfection.
However, it may be more beneficial to scale your brand by finding your next home run. Think of your stimulus check as $1,400 off the development of your next product, and this becomes especially beneficial.
Of course, this entirely depends on your goals, resources, and risk appetite. Ideally, the learning curve for launching a new product shortens with each new product. If you’ve built a strong brand on Amazon, the likelihood of your next product being a success increases exponentially.
Instead of squeezing every penny possible out of your current storefront, dig into your sales reporting numbers and do your best to determine the best course of action for your business.
Don’t miss out on the opportunity to supercharge your Amazon business! Whether jumpstarting your entrepreneurial career or looking to take your existing e-commerce operation up a notch, investing in your business with your stimulus money could provide an excellent, long-lasting return on investment.
No matter what you decide to do with your stimulus money, enjoy it! Without a doubt, extra cash in your pocket is nice. But creating long-lasting, sustainable sources of income is even better.
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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!
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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Chances are, you probably sell on Amazon because you recognize the huge potential ROI there.
But have you ever stopped to think about your next step after your FBA business? Many FBA owners have never considered selling their business—or even know the option is on the table!
We wanted to share why selling your FBA business could help you build an even better business and be the best thing for your entrepreneurial journey. Let’s explore the reasons FBA owners sell their businesses.
The Truth about Selling Your FBA Business
Selling an FBA business boils down mainly to personal or business-related reasons.
In terms of personal reasons, we’ve seen sellers exit because of an event or goal that meant they no longer had time to manage the business. Some of these reasons include a death in the family or wanting to spend more time with their kids.
Business-related reasons tend to revolve around raising capital for another project or losing motivation to stay with the business.
Whatever their reason for selling, some FBA sellers have received two to four years of net profit in cash in one payment. That’s the biggest windfall many entrepreneurs have ever received in one go.
But don’t start counting your chickens before they hatch: first, let’s dive into understanding how FBA businesses are valued.
FBA Business Valuation
Online business brokers and individuals working in mergers and acquisitions (M&A) usually value businesses by a multiple of earnings before interest, tax, depreciation, and amortization (EBITDA). EBITDA represents a business’s annual profit, and it is multiplied in the range of two and four times.
The valuation formula we use is:
Valuation = 12-Month Average Monthly Net Profit x Multiple
There’s not much difference between the two formulas. We stick to the average monthly net profit because it gives a more granular view of an FBA business’s performance than an annual profit figure.
While average monthly net profit is easy to calculate, determining the multiple is a bit more complicated as it takes into account the business’s age, traffic sources, branding, product line, and pricing window.
Age of FBA Business
A profitable older brand tends to be valued more highly than a younger one because it has survivability.
Unexpected market demands and changes place stress on FBA businesses, which can seriously affect cash flow and average order values.
A business’s ability to scale and grow through these challenges shows buyers that it’s resilient. While you can’t directly influence your business’s age, the takeaway here is that age works in a seller’s FBA business’s valuation, which is why a long-term Amazon selling strategy pays off more than a short-term plan.
Diversity of Traffic Sources
One of the greatest advantages of selling on Amazon is being able to leverage their brand, which customers love and trust.
However, selling on a single marketplace can lower a business’s multiple because if that source of traffic is shut down, there’s a higher risk that the business will be negatively impacted.
Amazon is well known for delisting products and shutting down stores for minor infractions. While you can prepare to ensure you fulfill Amazon’s requirements, increasing the number of traffic sources through multichannel selling is a good way to minimize your business’s risk and increase its multiple.
Branding has a smaller influence on the multiple than the other factors listed here since it’s hard to quantify how strong a brand is .
That said, the number of customer ratings and reviews, as well as how high the ratings are, play a part in determining the multiple. If people mention the FBA brand on social media, the context is also taken into consideration. Are customers raving about a store’s products and recommending them to their friends? Or are their experiences mixed, with varied reactions toward the customer service or the product’s functionality?
A strong brand is an attractive asset to a buyer, but it has less weight than the other factors that affect a multiple.
There isn’t a perfect number of products that will help you gain the highest possible valuation. A couple of key things to keep in mind are the amount of work it takes to manage your product range and the diversity of the revenue generated by the products.
Let’s compare two FBA businesses in the home niche, both selling kitchen products. Business A has only one product, while business B has 50, and both generate $100,000 in revenue from sales each month.
Business A’s single product has the same risk as a single traffic source: if the product is delisted, the business’s cash flow is completely cut off.
While it might look like business B won’t suffer from this issue, there are a couple of issues with its product range. For instance, if a single product generates over 50% of the business’s revenue, this is also cause for concern from a revenue-by-product basis. Managing all those listings could also consume most of your productive hours, time that could be spent growing the business in other ways.
We’ve seen the ideal range of products to diversify sales and be manageable without being overwhelming is between three and eight products.
Of course, there are exceptions to the rule. Some buyers with large capital reserves won’t mind paying for a single-product FBA business because the potential ROI of a future flip may outweigh the risk. These types of buyers will probably make strategic acquisitions and have a team of optimization ninjas to increase the value of their assets.
Buyers who can afford to buy only a few FBA businesses will be much more cautious about a business with a product range that’s too large or small. They are likely to be solopreneurs who manage operations on their own, so the stakes would be much higher if the business didn’t work out as hoped.
Another thing to keep in mind is for how long you’ll calculate the average monthly net profit.
12 months is the golden standard because it provides a good view of the business’s traffic and revenue earnings and takes fluctuations in buyer demand, aka seasonality, into account.
If you started your FBA business less than 12 months ago, we’d recommend waiting before considering a sale. While you could shorten the pricing window to three or six months to reflect the profits, buyers will look at the business holistically and see that only a short window of data is available to help them decide whether to buy your business.
Again, there are exceptions to this rule. Some buyers with more capital means or a higher risk tolerance might make an offer for newer FBA brands.
Shorter pricing windows narrow the buyer pool, making it harder to find the right buyer who’ll offer you a reasonable deal. You might receive only a single offer and find yourself settling for a much lower offer than you wanted to ensure you close the deal.
Who Would Buy Your Site?
Now that you have a basic understanding of FBA businesses are valued, you might be wondering who would be interested in buying one.
There’s a wide range of buyers with different levels of available capital and time, but all buyers recognize the power of selling on Amazon, and they want a piece of the ecommerce pie.
FBA businesses offer a lower barrier to entry for ecommerce entrepreneurship than full-blown ecommerce, which requires owners to manage many different moving parts. Instead of building a business from scratch, a buyer can acquire an existing FBA brand that’s generating steady profit.
To increase your chances of receiving a great offer and landing a successful deal, let’s discuss how to widen the buyer pool.
5 Ways to Optimize Your FBA Business
Buyers are much more likely to put down an offer after doing their due diligence if they think a business is a deal they just can’t pass up. So how can you make your business an asset that buyers will compete for?
By making it as hands-off as possible.
This is not to say that a less optimized business will attract zero buyers, but an FBA business that requires minimal work from the owner to maintain will be more attractive.
1. Use a Third-Party Logistics (3PL) Service Provider
Many sellers ship their inventory directly to FBA fulfillment centers, so storage and fulfillment are managed in one place. While it might be easier to allow a manufacturer to ship their products to FBA warehouses, it could be costlier than using a 3PL service provider.
Spend some time shopping for reputable 3PL solutions to see if there’s a more cost-effective route.
Another thing to consider is if you should use a 3PL as an additional storage facility. If stock doesn’t sell within six months, Amazon will charge long-term storage fees.
Depending on your products’ average turnover time, it might be better to hold stock in a warehouse and send batches of inventory to FBA centers according to your inventory forecasting.
While additional expenses sound like they should bring down your business’s valuation, removing essential services will in turn add extra burden and responsibility for the owner to manage and make the business a less attractive option.
A common mistake we see FBA sellers make is to cancel their 3PL solutions services, which brings down overall costs but adds 10–20 hours of work each week. The initial valuation price may increase but at the expense of making your business more hands-on.
2. Nurture Great Supplier Relationships
If you have exclusivity with your suppliers, ensuring that agreement will be carried over to the next owner makes purchasing your FBA business a more attractive prospect.
Establishing a strong relationship with suppliers saves the buyer the time and energy required to find reliable manufacturers, giving them one less thing to worry about, so they can focus on expanding the business in other ways.
Diversifying the number of suppliers the business owner can call on also works in a seller’s favor. The ability to order from multiple suppliers helps avoid dreaded out-of-stock situations for your top-selling products, especially during peak seasons.
We’re not advocating for drop surfing, where you’re encouraging suppliers to compete for your business by undercutting each other to offer the lowest price. Developing good relationships with more than one supplier opens up other manufacturing channels in case your usual supplier has production issues.
3. Optimize Product Listings
Creating a great product is only half the battle. Getting it in front of the right eyes is the other half.
Increase the chances that your products will appear to your target audience by optimizing the listings for SEO.
Search engine optimization will involve keyword research and the placement of target keywords in your copy’s title and body. Just don’t stuff the keywords in; Amazon’s search algorithm will deprioritize your listings if it detects too many keywords.
As an FBA seller, you can leverage Amazon A+ Content (formerly known as Enhanced Brand Content) to enrich your ASIN descriptions. A+ Content doesn’t get indexed by Amazon’s search engine but can increase conversion rates, leading to more sales.
Hiring virtual assistants or outsourcing time-consuming tasks frees you up to focus on your growth strategy.
A great way to improve your own efficiency and automate more of your processes is by creating standard operating procedures (SOPs).
Well-documented SOPs will help a buyer keep the business running as it currently does, so it doesn’t drop performance after changing hands. SOPs are especially helpful to solopreneurs, streamlining the transition period by providing a resource they can refer to at any time.
If the new owner decides to outsource, they can use SOPs to train freelancers to operate the business as you did.
5. Build a Monetized Email List
Many FBA owners overlook using an email list as part of their marketing strategy, but to understand the power of email marketing, the real value lies in the audience it builds.
Gathering subscribers looks great, but the number remains a vanity metric if the list isn’t used properly. When you consistently deliver value to an audience through curated content, the email list becomes a valuable asset in itself because you don’t rely on search engine algorithms for your content to be found and you can address your audience any time.
However, if you are considering selling your FBA business and haven’t started an email list, I’d recommend that you use your time and resources to bolster your business’s strengths instead.
Email lists take a lot of time, energy, and patience to get right.
You’re nurturing an audience from scratch, so you’ll need to experiment with the type of content you send out and to get all the elements aligned for the highest conversion rate.
The Myth of Timing the Sale
Deciding when to sell can be hard. Some sellers think they can time the sale like a stock based on market conditions and whether the forecast is bullish or bearish.
In reality, it’s extremely difficult to succeed with this approach. We’d recommend selling your FBA business when it’s at its strongest and performing optimally on the capital means available.
A buyer may be willing to pay a premium price for an FBA business generating steady sales that has products with Amazon’s Choice or Best Seller status in their subcategories.
A business’s value is how much a buyer is willing to pay for it, which is why it matters where you list your business for sale if you want to succeed in landing a deal.
Best Places to Sell Your Business
There are really only two options: selling privately or using a broker.
A third option is to use a DIY marketplace, but we’d strongly recommend against using this type of service. DIY marketplaces charge a commission comparable to that of brokers, and you have to do a lot of the work to source deals and market your business yourself.
If you’re selling for the first time, a broker is the optimal route (even though we might sound biased for saying so).
If you go for a private deal, you risk running into two of the worst kinds of buyers: the savvy kind, who know how to negotiate a low price, and tire-kickers, the sort who make inquiries and non-serious offers, wasting your time. There’s also the need to attract many qualified buyers, which can be tough if you don’t have a wide network of suitable connections.
Then you have to worry about marketing your business and making it as attractive as possible without overselling.
There’s a mixed bag of brokers available. A reputable broker will have processes in place to attract buyers who can prove their buying intent with verified liquidity. When shopping for a broker, do your due diligence to see if they have such a system, as it helps both sellers and buyers.
You can register for free on a broker’s marketplace to talk about selling your FBA business and how they’ll help you handle the administrative side of things so you can focus on managing the different offers that come your way.
What’s Next? Preparing for Life After an Exit
We hope that by this point you’re aware of the amazing potential that selling your FBA business holds.
One of those possibilities is to buy another FBA business and keep your momentum going. After all, no one said you had to hang up your FBA hat and call it a day! The skills and experience you’ve developed could be used to scale a series of smaller businesses, so they reach their potential.
In time, you could flip them for a profit, creating a money-making engine that provides five figures of capital for each deal you make.
In time, you’ll have built up an ecommerce empire.
This is just one of the routes you could go down. Of course, you can reinvest the capital in any way you want.
Whether you pursue a passion project or put the money from the sale in your kids’ college fund, the possibilities start with the knowledge that your FBA business is a highly lucrative asset to the right buyer.
This insightful guide was brought to you from Empire Flippers. Do YOU want to contribute to the Viral Launch blog with your expertise? Simply complete our brief guest blog post form and we’ll contact you if it it seems like a great fit!