Every new Amazon seller begins their journey with the hope of making millions. While some accomplish this feat, many fall just short. I won’t sugarcoat it. It’s not easy to sell on Amazon.
However, there is a real opportunity in online retail. The sector has seen phenomenal growth, and the COVID-19 pandemic has accelerated the climb. For instance, Amazon’s Q4 revenue was over $125 billion in 2020. That is a 44% increase from Q4 2019.
This growth came at a time when people had less money to spend. It was growth led by an increase in the number of online shoppers. So, this is arguably the best time to start selling. The industry is poised for rapid growth as a result of the shift in consumer behavior.
How can you leverage this growth? How can you make money by selling on Amazon? I’ll cover the fundamentals in this beginner’s guide to making money on Amazon.
Looking for a spark
All great things start with a simple idea. This is no different for an e-commerce or Amazon business. You need a product that customers keep coming back for. You need cash cows. So, to get started, you need a product idea.
You can find pretty much everything under the sun on Amazon. Finding an unsaturated niche is far from easy. You need to start by doing some research. Identify a few possible options and monitor similar products on Amazon. Study the competition and demand by using data.
You can use SellerApp’s Product Intelligence feature to track and keep up with product trends. Track a product for at least two weeks to ensure that there is consistent demand. These are the metrics that I track:
- Estimated revenue
By checking SellerApp’s product trends graph, you can quickly identify whether demand is rising or consistent. For instance, in the image below, it is clear that demand for the product is falling, and revenue is also falling as a result!
Focus on finding a great supplier
Finding a reliable supplier is vital for your margins. The most common platform where sellers look for suppliers is Alibaba.com. To find the best manufacturers on the platform, you can use SellerApp’s Amazon Product Sourcing feature. The feature not only helps you find a supplier, but it is useful during the product research phase as well.
The tool will give you detailed information on minimum order requirements and the cost price of each item. You can use this information along with revenue and FBA costs to find your estimated margins. You can expedite the process by using the profit calculator in-built into the SellerApp Chrome Extension.
Once you establish that your product idea is profitable, you need to get in touch with potential suppliers.
These are some of the factors you need to consider:
- Product quality
- Minimum order quantity
- Lead time
- Reviews and ratings
- Logistics capacity
Note: The cheapest option is not always the best option. Ensure that your supplier meets all your demands satisfactorily. Do not compromise product quality for the price.
Keyword research and SEO
Once you have a killer product ready to go to market, it is time to create your listing. To create your first listing, you can follow this step-by-step guide:
A product listing will only be effective if you use the right keywords and follow industry practices. Stuffing keywords does not help. However, you need to ensure that your product is indexed for all the relevant high-converting keywords. Otherwise, it won’t show up on the search results page.
You can use SellerApp’s amazon keyword research tool to find relevant keywords along with critical data like search volume. Alternatively, you can use tools like Google Keyword Planner or Ahrefs. However, these tools are built to give you optimal results for the Google search engine, not Amazon.
SellerApp, on the other hand, is built on data obtained directly from Amazon. Hence, in this context, SellerApp’s data and results are more relevant.
Optimize your listings
Keyword research makes sure your product is indexed for relevant search terms. To close the sale and improve your organic ranking, you need to create engaging product listings.
This is easier said than done. There is no science behind creating engaging content. It is all about trial and error. You need to identify your target customer and speak their language.
I believe there are four key elements in a listing:
- Product title
- Product images
- Bullet points
- Product description
All your written content needs to be short, concise, and informative. Ensure that all critical information is conveyed to the customer. Do not misinform them!
Product images are also a source of information for customers. That is why you always need to use high-quality images. Use at least six images that together cover every angle of the product.
Use Amazon FBA
Your fulfillment methods can make or break your business. I usually suggest signing up for Amazon FBA. This will allow you to scale your business quickly because Amazon takes care of storage, shipping, and customer service. There is a cost associated with the service, and the storage fee depends on product category, size, and weight. However, in most cases, it is worth the investment.
FBA also ensures that your product is eligible for Prime delivery. This improves your sales, organic ranking, and your chances to win the Buy Box.
Leverage sponsored ads
Amazon PPC is the best way to boost your business early in the product cycle. Getting to page one of the search results is near-impossible in saturated categories without advertising. It ensures that your product gets the visibility it needs to start flying off the shelves.
However, there are risks associated with Amazon advertising. At the end of the day, you are paying for every click. If you are not converting clicks into sales, you will end up bleeding money. Do not start PPC campaigns yourself unless you are well-versed with Amazon advertising. Do your research or hire third-party service providers like SellerApp. Our experts combine decades of industry experience with modern technology to deliver optimal advertising outcomes.
Arishekar is the Head of Marketing at SellerApp and specializes in digital marketing, in addition to website keyword optimization for search engines. His areas of expertise include enhancing the organic ranking of web pages on search engines with innovative SEO strategies and online promotions.