Understanding Amazon Keyword Research in 2022
April 4, 2022 Posted by LEWIS FLETCHER

A key factor in your product’s success is something called Amazon keyword research. If this seems like a scary prospect do not fear. This article will outline everything you need to know in order to make 2022 a successful year for your business.

Amazon’s A9 Search Algorithm

Amazon, Google and Bing are all search engines. But whereas your homepage search engine deals in images, news and pictures Amazon focuses solely on one thing: listing products for sale by their relevance to buyers.

The search engine - called A9 – hates the idea of scrolling. It wants to make sure that customers have to scroll through, at most, three search results to find the item they’re looking for. A customer having to scroll through hundreds of unrelated items reduces the chance of a sale. This is why the A9 search engine is so important.

Product relevance and keyword research

The exact formula Amazon uses to measure product relevance is in fact a bit of a trade secret. If they told people then every seller would know how get their product listed in that coveted top spot on the results page.

So in reality it’s all a bit of an educated guess – but the general consensus from experts is that certain key criteria are essential to understanding how to get the best out of Amazon’s ranking methods.

1. Conversion rate and sales velocity

Conversion rate

News flash. People are attracted to popular products!

Predicting whether someone will buy a certain product is calculated using a formula called the conversion rate.

Sales ÷ total number of item views (page hits or ‘impressions’) = conversion rate.

Amazon’s conversion rate is a giant 13%. Top sites aim for 5.31% or higher while the industry average is 2.35%.

Sales Velocity

The formula for working out sales velocity is a bit more complex.

[Page impressions hits x sale price] x conversion rate = example number.

Example number ÷ sales length cycle = Sales Velocity.

This example will make everything clear.

  • Your product page has 5,000 impressions in 1 month.
  • Average sale is $30.
  • Conversion rate is 10%.
  • Sales length cycle is 30 days.
  • ((5000 x 30) 0.10 / 30 = 500

$200 is your sales velocity and that is what you make in a day on average.

2. Product title

Your product’s title tells your customer what you’re selling but just as importantly it tells the A9 search engine what your product is.

Until sales are generated the only way Amazon keyword research can classify and group your product is using the product title and its details. This obviously makes efficient Amazon keyword research essential for sellers.

At this current moment in time Amazon permits sellers 200 characters in their title.

3. Bullet points

Keep the information in your five allotted bullet points concise and short. They should include keywords that you weren’t able to include in your title. The information in the bullet points should explain your product to a buyer and shouldn’t include unnecessary information - your potential buyer should only have to read relevant product information.

4. Description

Although not as important as information higher up the page product description is still very important in persuading a potential customer to make a purchase – after all, if they haven’t bought the product yet they are probably still deliberating about whether to go through with the purchase. This an excellent opportunity to include any lower-volume keywords you felt unable to include earlier.

5. Other possible ranking signals

It’s important to remember that Amazon may change their criteria for ranking products. We can assume that they also take into consideration reviews, promotions, images and back-end keywords.

Amazon keyword research: the process

This is when things get a bit scientific. But absorb the following process about Keyword Research and ensuring your products are relevant to buyers will become second nature.

Long tail vs. short tail

Phrases with 1-3 words are known as short-tail keyword phrases.

Longer phrases of 4 words or more are called long-tail keyword phrases.

People search for short-tail keyword phrases a lot more than longer ones but due to increased competition costs are higher.

On the other end of the spectrum long-tail keyword phrases have a lower cost and a better chance of conversion. BUT they have a comparatively limited search volume. The result is that a large amount of long-tail keywords are needed to compensate for disparity in search volume.

Let’s look at some examples to make things clearer.

You sell shoes and the short-tail term ‘shoes’ gives a search volume of up to 1,000,000. But the competition associated with this keyword is very high so the keyword costs an expensive $5.

The inevitable result of this approach is that if shoppers click on your product it’s often not what they’re looking for. ‘Shoes’ is just too broad a category. You’ll probably end up with a conversion rate of around 1%. You’re making a gross profit of $10 on up to $500 advertising costs. And the chances are that you won’t make that money back.

The result is much better if you want to get ranked using the long-tail phrase ‘blue Adidas kids running shoes’.

Despite getting only 500 monthly searches the cost of each click is just $0.25. And the conversion rate is an excellent 19%.

At just $1.32 in advertising costs per sale the effect on your net income is obvious.

While it’s cheaper to use long-tail phrases, if you’re not hitting sales targets even with a conversion rate then there’s a problem. The solution is to add more long-tail phrases until you seen an upward trend in sales.

The purpose of adding more long-tail phrases is to compensate for their lower search volumes.

In general, the long-tail phrase approach is the safest bet for your business. The financial cost of converting short-tail opportunities is usually too high.

Amazon keyword research strategy

So now you know what the keywords are. Next step: how to actually find them.

Run Amazon PPC Automatic campaigns

You have two options for your Amazon pay-per-click advertising (PPC) campaigns.

  • Amazon PPC Manual Campaigns: This is where the choice of keywords is up to YOU. Sellers often find this surprisingly difficult as they deliberate over what keywords to rank for.
  • Amazon PPC Automatic campaigns: When Amazon chooses the keywords to advertise your product they try a range of keywords. They use ones that offer the best conversion. If there are changes to the success of certain keywords then Amazon will review and modify accordingly.

Our advice is to use Amazon’s automatic campaign initially. This isn’t as illogical as you might think - Amazon’s system knows how to find the best keywords and it will save you time and hassle.

A week into the sales cycle perform a report for your keyword search terms (found in Reports > Advertising). Order the spreadsheet by best-converting keywords. The conversion rate metric will tell you exactly what type of keywords you should be using.

To see what keywords Amazon is aiming for within your campaign without running a search terms report go to your advertising dashboard and click on the automatic campaign, go to the ad group and then click ‘Search terms’. Because you now know the best-performing keywords you can switch to a manual campaign. But remember to keep checking in and changing the keywords to optimise your listing.

Final thoughts

So as you can see Amazon Keyword Research is not as daunting as it first appears. It’s one of the most important ways to drive traffic to your product. Understanding the difference between long-tail and short-tail phrases, as well as regular review of what keywords work, will ensure your product has the best chance of selling well

Lewis Fletcher
Senior Content Manager
Amazon Seller Profit Calculator
April 18, 2022 Posted by JAZLYN HERRING

Tracking Your Amazon Finances Accurately

See how our Amazon profit calculator, Profit Cyclops, can ramp up your Amazon business today.

Looking to keep track of your overall finances as an Amazon seller? Profit Cyclops streamlines the whole process.

Sales, costs, profits, inventory… these are just a few of the line items in your ledgers when you are maintaining your Amazon business. Without the proper staff or tools, you can waste precious time and money following the money coming in and out of your coffers.

How Do You Calculate Amazon Profit Costs?

Calculating the profit margins for your Amazon business is central to managing and expanding your brand. In basic terms, as with any business, one starts with the revenue from the products’ sales and deducts from that the cost per unit and any other costs incurred.

At Amazon Seller Central, you may be provided information about your expenses and charges. These reports, while reflecting your previous expenses, are not sufficiently detailed or explained. Furthermore, you cannot review the majority of the expenditures that will be applied to your account in the next period. Profitcyclops not only offers all of this information but also visualizes it with graphs to make it more understandable. Before reading the full review of the site, you may go to the Profitcyclops homepage, watch the promotional video or you can try the demo version for yourself.

Amazon Profit Formula

Product Revenue - ( Cost per unit + Miscellaneous Amazon Seller Costs)

Amazon Seller Costs

Elements to track regarding your Amazon business’s profitability:

  • Gross revenue
  • Net profit
  • Orders placed
  • Units sold
  • Refunds requested
  • Promotions run
  • Return on investment (ROI)
  • Profit margin
  • Inventory level

Such elements make or break your opportunity as a seller to operate a profitable enterprise.

Just have more funds coming in than going out, right? Anyone who has ever run a real business on Amazon has certainly run into one or more of these issues when juggling their finances and championing their brand:

  • Tracking upward and downward trends in product sales
  • Waiting and waiting to learn the true reality of their profit margins
  • Keeping products in stock… or not and the agony of the missed sales that follow
  • Mismanaging product costs, shipping, refunds, reimbursements, coupons, promos…
  • Miscalculating profit and loss… and thus determining whether the business is a winner or a lose

But don’t despair… Profit Cyclops is here to place all this data right in the palm of your hand so you can track your profitability seamlessly…

How Profit Cyclops’ Amazon Profit Calculator Works

Within Profit Cyclops, you can track your Reports of Orders, Sales, Profit Margin Performance on Advertising, and Inventory Levels.

With Profit Cyclops’ Stock Alert service, you can track your inventory, that way your most profitable products will never be out of stock!

The tools Profit Cyclops have offer you a panoramic overview of your business's profitability with the following aspects in daily, weekly, or customized time intervals:

  • Gross Revenue - Total sales for a given time
  • Cost - Total costs including Promos and Amazon fees
  • Net Profit - Gross Revenue minus Costs
  • Margin - Percentage of Gross Revenue that determines your Net Profit
  • Orders - Total purchases
  • Units - Total unit numbers based on purchases
  • Refunds - Total items returned

Profit Cyclops Features

Our Amazon profits calculator illuminates whether or not you are profitable and provides insight into sales trends, performance, inventory, and much more. Here is more about the functionality of each Profit Cyclops feature to show the power of this tool:

Dashboard

It displays all of your spending on the dashboard without requiring you to do anything else. You can check how much your Amazon FBA fees are and other Amazon charges you have paid by adjusting the period of time. With Profitcyclops, there is no need for another Amazon seller calculator tool. Everything you need to sell on Amazon can be found in one place!

Click on the three bold lines in the top right corner of either graph to get export and printing options for your references.

Dashboard expands on the first section of Profit Cyclops by using graphics and spreadsheets for more informed and just-in-time decisions for your bottom line. It has additional sections including:

  • Last 24 Months Summary
  • Last 7 Days Summary
  • Total Products Count
  • Total Sale
  • Total Payout
  • Total Cost
  • Total Profit

Using this information gives you a broad overview of your success over time.

Orders

On the orders page, you can review the detailed expenses of the sold product for the selected period. Product costs, Amazon FBA fees, total monthly storage fees, PPC rates, and estimated Amazon FBA profits are all displayed in this section for each product. On the order summary page, you can see the orders made in certain periods and other information about the products.

Reports

On the reports page, you can find a detailed analysis including profit and loss reports, best-selling products, return orders over time, most profitable products, and a Advertising Cost of Sales (ACOS) report.

Reports Page

Profit and Loss Report

Most Profitable Products Report

The Bestsellers section illustrates the top ASINs of your brand during the latest month. You can hover over specific days for additional info as well.

Using this data, you can make key decisions about what products to keep featuring and those not to. As will the Top Selling Products section in the Insights tab, employ the view report link for comprehensive data about your ASINs.

Stock Alert

With this tab, you can track your stock of all your products. It is facilitating the management of inventory currently and into the future.

Calculating Amazon Profits: FAQs

Why stress out when figuring out your profits? Let our profit calculator lighten your load and streamline the whole shebang. Here are some of the questions our clients often ask:

How is Amazon profit calculated?

Simply take your total product revenue and subtract the Amazon seller costs and product cost. Profit Cyclops uses its Amazon profits calculator to take the guesswork out of determining the seller costs along with other tools which provide valuable profit metrics, illuminate inventory issues, highlight sales trends and much more.

What is a good profit margin on Amazon FBA?

As a newbie on Amazon, shoot for 100%! With growth and experience, you will grow your profit margins by finding what sells and how to sell through proper sales and marketing measures.

How do you increase Amazon profit margins?

Just as a journey of 10,000 miles begins with a single step, your profits start with an Amazon profit calculator. When you calculate your profit margin, you know where your money is and where you want it to be. Profit Cyclops can help you refine your keywords, PPC marketing strategies and so much more.

Final Thoughts

Make your journey to higher profits on Amazon with Profit Cyclops. We offer your Amazon business the timely data estimates you need to drive your sales higher and higher so you have the information you need to build the enterprise of your dreams.

Jazlyn Herring
Marketing Associate
Guide to Great Seller Performance on Amazon
April 27, 2022 Posted by FAITH EVANS

It sounds obvious but selling a product on-line is very different from selling the same item in a shop. Personal charm and persuasion might get you a customer on the shop floor but it doesn’t count for much on-line.

Therefore, selling your product effectively on Amazon requires knowledge of Amazon’s in-house selling rules and an understanding of the consequences if you fail to meet them.

Getting Great Seller Feedback

Seller feedback is how the customer rates your shipping, communication and packaging and is different from your Product Review Score. The excellent quality of your product counts for nothing if it regularly arrives late or you don’t answer customer e-mails.

Buy box status, listing rankings and future Amazon loans are all positively affected by maintaining a good seller performance rating. 98% and above puts you at the head of the pack. 95-97% is good. 95% and under and you have problems.

Customer confusion

Occasionally customers get confused and write seller feedback that was actually meant as a product review. If this happens Amazon has a special algorithm which analyses and changes the rating if you receive a 1-star review (you have to report the potential error).

Seller feedback score should be analysed on a regular basis.

Be proactive

Sending replies to issues within a 24-hour time frame (including holidays and weekends), and checking ‘no response required’ if the e-mail is spam will all contribute to high customer satisfaction ratings. Customers want to see their issues addressed promptly. If you see the little notification flag on the top bar of your seller central tab click it immediately!

Make sure you follow the ToS in your product image by always ensuring correct labeling on your FBA shipments.

Don’t ask for a 5-star review

This is a big NO NO. Amazon allows a seller to reach out directly to a customer one time. This should be conducted in a formal, unbiased and neutral tone. The e-mail (custom template) you send to customers one hour after purchase should include tips on how to use the product, how-to-use guides and most importantly a polite request to write a review.

Being Brand Registered

Being Brand Registered on Amazon has its advantages. This multi-option service gives you the opportunity to contact customers using a standardized template and, crucially for many customers, allows an instant refund.

Remember communication is vital. Consumers are drawn to negative reviews – just one of them could have devastating effects on your sales.

Strict tile rules

Brand name comes first, followed by the rest of the title. Titles have a 50-200 character limit. Exact character limit changes according to item category. The title field is what the customer sees first - If your business was a house the title field is the front door. Every letter counts. Short brands tend to be advantageous.

Maximum order quantity

Most Amazon sellers place limits on how many units a buyer can purchase in a single order.

Setting an order cap on demand for each buyer is important to avoid a problem known as arbitrage. This is when someone buys all your discounted stock and resells it at a profit.

Unscrupulous competitors will also purchase large amounts of your stock and then delay payment. The result is that items are held up in ‘pending’. This is a surprisingly common practice. Make sure when you have a sale or are offering coupons you pay special attention to setting an order cap.

Business Program

Multiple sales volumes items like office supplies, light bulbs and home accessories are often bought by schools, hospitals and other institutions which need frequent stock replenishment.

By joining the Business Programme sellers offer these registered business buyers bulk discounts which typically lead to a 5-15% increase in sales.

If you are a minority seller (LGBTQ, owner with disabilities etc) you can set your status to show this. This way, buyers, often large companies who need to fulfill a minority-based purchase quota, will know exactly where to go.

Obstacles to selling well

Never try to manipulate customer reviews. Amazon will suspend your seller account if you try to encourage buyers to change their review. You should try and deal with the problem they have and hope that this positive action induces them to change their opinion.

Don’t ask for positive reviews, only for HONEST feedback.

Getting family and friends to write excellent feedback will also be flagged immediately.

Be aware that Amazon may sometimes be at fault. Occasionally your product might get lost or damaged in the warehouse. They may reimburse you but it’s not guaranteed.

Amazon tends to do more for its customers than it does for its sellers so when you have a difficult buyer it can be a frustrating process. Just remember to be polite and professional and don’t annoy customers by asking them to do too much.

Product reviews Q&A section

An enquiry sent by a customer regarding your product will be pinpointed by Amazon and then forwarded to other customers who bought your product.

A selection of these questions will appear in the Q&A section of your product page.

Other customers can reply to these questions but in order to stop the spread of misinformation and prove your authority you should attempt to answer all of them.

Answerthepublic.com is an excellent research tool that tells you what questions people are asking about your product on Google.

If you reply to product questions using keywords your indexing and ranking on Google will improve.

Watch your customer return rates

If Amazon sees your product return rate go above 5% (not the case for clothing and fashion) they might suspend your listing.

Initially this is not normally a huge problem. Send Amazon a form setting out how you plan to fix the problem and they usually automatically restore your listing.

If the problem persists though a reinstatement of your listing may require manual approval from the powers that be. The worst-case scenario is a permanent suspension of your product.

Your overall return rate is made up of ALL returns from customer to seller. The key thing is to try and get your customer to keep hold of a faulty product (even if you replace them). That way the returned product doesn’t negatively affect your return rate.

Amazon and other platforms

Amazon often compares its own sellers with those on other platforms in order to ensure its customers are getting the best deals. If they find out that you (or another seller for that matter) have been selling your product for lower you might lose your buy box.

Faith Evans
Product Manager
The cost of selling on Amazon in 2022
May 2, 2022 Posted by LUCAS COOKE

If you’re worried about how much it costs to sell on Amazon then don’t be: it’s actually cheaper than many sellers anticipate.

The average spend is $3,836 (Amazon fees, product costs and other investments), but a lot of sellers manage to launch their product for under $500. Success doesn’t always have to be bought by a huge initial investment, and many products do well with relatively meagre initial investments.

This article will take an in-depth look at the costs of selling on Amazon, and we’ll look at how a variety of different investment approaches can affect your success.

The start-up costs

A recent survey reported the following when it came to how much sellers spent getting their products off the ground on Amazon.

  • $500 or less: 18% of sellers
  • $501: $1,000 - 10% of sellers
  • $1,001 – $2,500: 12% of sellers
  • $2,501 – $5,000: 18% of sellers
  • More than $10,000: 22% of sellers
Does more money equal more success?

The short answer is no, not really. Often sellers with a small budget have proved successful and lasted longer than those with deeper pockets.

Sellers who started with $500 budget and under:
  • 59% had their Amazon business operating in less than six weeks.
  • 31% have sold for five years or longer.
  • 73% spend under 20 hours per week on their business, and 30% say they spend less than four.
  • 24% say they sell over a 100 products on Amazon.
  • 60% made a profit in less than six months, and 40% made a profit in three months or under.
Sellers who started with $10,000 or more:
  • 73% spent more than six weeks getting their Amazon business set up.
  • 17% have sold for five years or longer.
  • 48% spend under 20 hours per week on their business, and 11% say they spend more than 60 hours on a weekly basis.
  • 15% say they sell more than 250 products on Amazon.
  • 28% made a profit in less than six months, whereas 47% said it was six months to two years before they made a profit.

What’s the cost to start selling on Amazon?

We can broadly group the costs of selling on Amazon into three categories.

Required costs – You can’t ignore spending money on these essential things and fees. Recommended costs – These aren’t absolutely essential but best practice dictates this expenditure would be a good idea.

Extra costs – These costs might help you sell well in the early stages but are not necessary for rookie sellers.

The process

‘Private label’ is the most common approach businesses take when selling on Amazon. This is when the seller manufactures and brands their own product.

It works in 4 steps.

  1. Research – Analysis of Amazon data that looks at products with high demand and low competition will help you choose the correct product category.
  2. Source – Learn from other sellers who create similar products to yours and design your own branded version.
  3. Launch – Get your product listed and utilise the Fulfillment by Amazon (FBA) - Amazon’s bespoke fulfillment obligation - to ship your product to customers.
  4. Advertise – The chances of the successful marketing will be increased if you decide to use Amazon’s advertising programme Amazon PPC.

Required selling costs on Amazon

What are you selling? How many units do you aim to sell? And how much will this cost?

An initial strategy might look like this…

  • We aim to sell on the Amazon US store (we are based in the USA).
  • To facilitate better scalability in the future our product will be a private label product, making use of the FBA model.
  • Total expense of making and shipping the product (landed cost) is $4.
  • Investment return is hoped to be 100%.
  • Product will ship by air as it conforms to standard size restrictions (fits in a small/medium parcel the size of a shoebox).
  • Initially we will buy 500 units to sell.
  • As a promotional ploy we have allocated 50 units for giveaways.
Samples - $100 each

Samples are essential if you plan to source a private label product using Amazon FBA.

This is because sometimes there’s a discrepancy between the actual product and the images you see on online manufacturing sources like Alibaba. Ordering samples will quickly let you know who the shoddy manufacturers are.

From your list of potential suppliers order samples from the top three only (this reduces costs). You will have to pay for the manufacturing and shipping of the samples.

The industry standard is $100 per sample. This $300 investment will get your products to you in 5 days or less. Carefully analyse the samples and choose the best one.

There are deals to be done with many suppliers. In order to attract your business some suppliers will reimburse your initial sample investment or give you the same outlay in credit if you choose them. If you have a small start-up budget this potential opportunity is worth exploring.

Inventory - $2000

Now you’ve got your supplier it’s time to order. Minimum Order Quantity (MOQ) is usually around 500 units. Negotiating a lower amount might not be worth it as the supplier will probably charge a higher price to produce each unit.

If we take $4 as the cost to produce and ship each unit we end up with an initial inventory cost of $2000.

As a new seller ordering big quantities can be daunting. If this is the case consider Dropshipping as an alternative initial selling strategy.

Promotional Giveaways - $200

In Amazon Seller Central it is possible to offer discount coupons and promotions to your buyers (50% or even more). In those important first few weeks of trading this could really boost sales and attract buyers. The Amazon discount site Jump Send will list your product and Amazon will respond to any higher sales by giving you a higher position in its search results. Reviews, hopefully good ones, will start to appear on your product page.

The cost of this is simply the costs (including any fees) of the units that you decide to giveaway.

Amazon Professional Sellers Account - $40/month

How much you pay Amazon to list your product will depend on whether you choose an Individual Sellers Account or a Professional Sellers Account.

It’s $0.99 per item if you use the Individual Account and a flat $39.99 per month for the Professional Sellers Account.

The Professional Account is your best bet if you plan to sell more than 40 units per month. Additionally, the promotional codes needed for giveaways are only available using this more advanced option.

This won’t be an up-front investment for you – these fees are taken directly from your Seller’s account and not your bank account.

UPC code - $30

A Fulfillment Network Stock Keeping Unit (FNSKU) is Amazon’s proprietary barcode that has to be printed on the packaging of all your products. To get this you will need a recognized barcode.

According to Amazon’s Terms and Conditions to acquire a FNSKU you must first get a Global Trade Identification Number (GTIN). This usually takes the form of a UPC code.

Because of a change made by Amazon in 2018 all seller barcodes must be from GS1, the top, world-wide provider. $30 is the standard cost for GTIN/barcode.

TOTAL REQUIRED SELLING COSTS - $2570.

Recommended selling costs on Amazon

As we have seen there are also additional, recommended steps you can take to make your business a success on Amazon.

Sponsored ads budget: $300 ($10/day for 30 days)

Giveaways and higher volume of reviews (remember to follow up via e-mail) should lead to more sales, and a better organic ranking for your main keywords.

To augment this you should consider using sponsored ads known as Amazon PPC’s.

Even with a small ad campaign budget of $10 per day (Amazon’s recommended default), AdBadger suggests you can expect approximately 20-30 daily hits on your product, leading to an average of 3-4 sales.

Learn more about running Amazon PPC campaigns by reading this article:

https://www.sellerapp.com/blog/amazon-ppc-basics/#:~:text=Amazon%20PPC%20also%20referred%20to,have%20to%20pay%20for%20impressions.

Registered Trademark - $30

Private label brand owners will need a registered trademark if they want to be listed in Amazon’s brand registry.

Amazon created the Brand registry programme so that sellers can officially be labeled as owners of their brand trademark. This official green-light from Amazon gives you ‘official’ status on their platform and gives you supplemental benefits too.

However, a trademark has to be applied for and then approved before those special features can be accessed. Because this process can take many months you should initiate this lengthy process as soon as possible: if you are not registered, and you list your product without a trademark, rival sellers may well list similar products on your listing.

You’ll want to avoid infringing on any existing copyrights or brand names, so when you apply for a Trademark thorough research is essential. $350 for a local trademark (using the services of a local attorney) may sound expensive but it will help you avoid any nasty legal disputes from rival sellers.

A new feature recently launched by Amazon – the IP Accelerator Program – aims to fast-track the trademark registration process. Amazon-selected intellectual property attorneys will automatically register your brand even when it’s not yet to officially authorized by the US patent office. Understandably, this service costs extra – usually around $750-$1,000.

TOTAL RECOMMENDED SELLING COSTS - $650.

Extra Amazon Selling costs

Although not necessary to get your business up and running these extra steps might give you the edge over rivals.

Design work - $200

A professional logo and high-end packaging give products a sophisticated feel and customers might part more readily with their cash if they think they are buying something bona fide. Your quest for legitimacy will be aided by a good graphic designer. These skilled artists can also help with infographics, touch ups and product inserts. Rates vary of course, but freelancer hubs like Upwork and Fiverr should provide you with the right person for the job, whatever your budget.

Product photography - $300

Photos that show your product in the best light help your product stand out from the crowd.

Of all the ‘extra’ expenses you can incur selling on Amazon this is probably the most important one. Having said that if you fancy yourself as an expert with your smartphone camera this can be a surprisingly effective tool if you don’t have the budget for a professional photographer.

Good lighting and a white background is a must. Amazon dictates a minimum 1000 pixels width for the longest side of the image. Variety is key as well – use a mix of close ups and some longer shots. Comparison shots and images of the product being used will all give the customer a feel of how the product looks and works in real-life.

If you go down the professional route, high-quality photos range from $25-$50 per image. 6-8 images seem to be the norm on most product pages. Good negotiating skills would put this expenditure at around $300.

TOTAL EXTRA AMAZON SELLING COSTS - $500.

Reducing the costs of selling on Amazon

Choose a different business model

Private label is not the only approach you can take. Selling used books and household items, making your own handicrafts and online arbitrage (buying from a store or other platform and selling on-line) are all potential routes to success. Once comfortable financially and with a surer knowledge of the basics of selling you could then switch to a private label model.

Buy less inventory - or none at all!

Instead of Alibaba you might try using Aliexpress. Smaller quantities are allowed and this lower-risk approach reduces start-up costs. If you’re happy with what you’ve ordered you could go ahead with a bulk order.

The chief disadvantage of this is paying a higher per-unit cost, and a reduced likelihood of customizations and specifications further down the line.

So even though Alibaba is pricier it is probably worth the investment – getting your own private label brand just right is one of the most important things in the whole selling process.

Sourcing products with a low cost-per-unit

500 units with a $4 production cost might be too much of an initial outlay for some businesses. On Alibaba it’s possible to source genuine, high-potential products for as little as $0.50. Even factoring in a $0.25 shipping fee per unit that’s a relatively low starting inventory cost of $325 (500 units multiplied by $0.75).

With the Amazon sellers fee of $40, the samples at $300 and launch service costing $50, the total upfront outlay is $715 – 80% cheaper than the average cost of creating a private label Amazon business.

The DIY route

If selling on Amazon is not your main source of income you may not have the time for product research, design, photography and product listing setup.

New sellers should try and do as much of the pre-launch work themselves. Then when the product starts selling you can start outsourcing – a nice reward for all that effort in the early stages.

Don’t waste money on…

Legal Fees

Despite lots of successful Amazon sellers creating a legal foundation for their business (like an LLC), this is not something you should consider until your business is well set and on a secure financial footing.

Your own website

A nice, shiny website is a lovely thing to have when selling because if your business expands you have your own template to start selling new products. However, your time and resources are better spent on the things we’ve already covered – at least initially. Amazon PPC ads and product optimization will lead to better sales in the early days - don’t run before you can walk.

Expensive training

Not all the courses which charge a fortune to teach you how to sell on Amazon are a waste of time - some of them know what they are talking about. However, many display all the hallmarks of quick fix, get-rich schemes. Learning the hard way by going it on your own is the best way to learn how to make a success of your business.

What’s the final bill?

$3,836 is the average price it takes to start selling on Amazon.

In terms of range, an outlay of $2,790 and $3,940 (including required, recommended and extra costs) is a good indicator of the average expenses required to get your private label business off the ground.

Fortunes are there to be made with a relatively small investment – so good luck and get selling!

Lucas Cooke
Marketing Associate
How to Rank on Top of Amazon
May 10, 2022 Posted by LAURA WILSON

Amazon's search engine is product-based, unlike other search engines it connects users directly with products. The search algorithm is designed to sell products and it is important for sellers to use this algorithm to their advantage and rank their products at the top of the search results. It is important to understand the signals that Amazon's A9 algorithm gives off and what factors affect a product's ranking. Here are some tips to use on-page optimization to maximize your selling potential.

Here are some important factors in selling potential:

  1. You must know everything about the product you are trying to sell. For example, this would be the dimensions, size, or material that a product is made for. This description could include the answers to the most random questions, but it shows that you are familiar with your products. A more in-depth description is likely to entice customers to buy the product.
  2. Knowing your audience is just as important as knowing your product. There are a few questions you can ask about your target audience. Who is most likely to buy this product? What would appeal to this audience? What is their lifestyle like? How can your product assist them with challenges in their daily life? Your product can be a solution to a problem, a way to achieve a goal, meant for entertainment or fashion. Remember, for example, that if you are selling products for children their parents are the ones with the buying power so they would be your target audience.
  3. Knowing your competition is also important to selling potential. You should spend time analyzing what they are doing that is working for them, and what can set you apart from the competition. You can use their success as a template, and then figure out how you can do it even better. One way to do this is to read through similar products' customer reviews and analyze the positive and negative comments from customers. You can see what customers love about the product and highlight this in the description of your own listings. You can use the negative comments to improve your listings and stand out from the competition. This is particularly important if there are many listings similar to your own on Amazon.

Keywords

Now that you know your target audience, your customer base, your competition, and of course your product back and forth, it is important to discover your keywords. In order to find your product, a customer can use a single word or phrase in the search engine. This is critical to your organic search rankings as well as on-page optimization. The more thorough you are with keywords the easier the search ranking process will be. You can use the search bar on Amazon and begin typing a phrase relative to your product. Many of the previous searches by customers will appear and you can use this to pull out popular keywords for your own product listing. You can also use identical keywords to other listings that would be related to your product. Don't forget to look at competitor keywords when creating a listing for your product, as well as other phrases that can be used in your own listing.

Crafting the listing is the final step in the process. Using your research to craft a perfect title, bullet and description will enhance your on-page optimization.

This title should include brand + product + feature 1 + feature 2

What this means is that first, we include the brand name of the product, the product itself, a feature of the product (think physical description) and another feature (this could be a function of the product). Remember to use the keywords you had previously researched when deciding on a product title and your target audience will be more likely to be reached.

Now that the title has been created, you will need to think of bullet points that not only address customer questions but also address their needs in a product. These points need to be attention grabbing and include clear keywords. This will improve your rankings even more.

A very important thing to remember is that your customers are real humans searching for products to fit their needs, and not bots. When thinking of keywords and bullet points, write them in a natural manner so they are able to lead customers directly to your product in an organic way. Look at listings as a way to communicate about your product with your customers, answer their questions and represent your products in a genuine way. Being clear about your products and answering questions ahead of time in the bullet points will save you time on customer service.

With these tactics, you will have some control over your own rankings on Amazon. In order to rank on top, and keep these ideas in mind when creating your listing.

In order to track your success with your listings and customer engagement, you can also consider using a profit calculator for Amazon sellers. Profit Cyclops keeps track of your sales and orders as well as the costs of your advertising for each order, This helps you streamline your business and track the costs for every aspect of your listings. This program also helps you avoid unnecessary costs and maximize your profit potential. Profit Cyclops is working closely with the Amazon Seller Tool, allowing the user to make better data-driven decisions to succeed on Amazon.

Laura Wilson
Content Creator
How to Set Up Promotional Discounts and Coupons on Amazon
May 18, 2022 Posted by LEWIS FLETCHER

You know how effective promotions in the form of discounts and coupons are in attracting new customers. Ever wonder how to set those up on Amazon? Here’s your pain-free guide for how to add these promotions to your store.

Promotions

Seller Central

  • Visit the Advertising tab located in Seller Central and click ‘Promotions’
  • Choose between a social media promo, free shipping, percentage-off or buy one get one free (BOGO)
  • See your promotions appear on your product listing page
  • Create product selections(s) by ASIN
  • Determine the parameters of how much customers must buy/spend to earn the discount
  • Pick promotion start/end dates

Claim Codes

  • None: discount can be auto-applied
  • Group: one code given to a group that can be reused by other recipients
  • Single-use: one-time codes; generates a list that is downloadable as a text file
  • Claim code combinability: ‘preferential ‘ option is suggested
  • Deselect ‘detail page display text ‘ to keep code secret and thus avoid casual shoppers emptying your inventory
  • Select ‘ Amazon influencers and associates’ to deliver your promo code to affiliates and influencers in the Amazon universe
  • Get posts about your promotion through social media and traffic referred by influencers

How to Set Up Deals

Where Can You See Deals?

  • Deals of the Day’ feature and ‘See All Deals’ option are often found on the Amazon home page
  • Customers look for Deals of the Day, Lightning deals and so forth on the Amazon home page

How Deals Work: 7 Day Deals and Lightning Deals

  • ‘Today’s Deals’: Amazon’s dedicated sales page
  • 7 Day Deals
    • Increase sales velocity and reviews
    • Move out products to be discontinued
    • Thin out overstock
    • 7 days or less duration
  • Lightning Deals
    • Flash style: 4-6 hour sales
    • Lightning fast sale velocity
    • Perfect for holidays and Prime Day

What are Deals Good For?

  • Create momentum for selling some slow-moving product
  • Lower your storage fees by moving excess product
  • Clear out your discontinued products

How to Set Up a Deal

  • In Seller Central, go to Advertising| -> Deals-> ‘Create a New Deal
  • Amazon will indicate what products you can make deals for
  • New sellers with no sales history or reviews may not be eligible
  • 3-star minimum rated products
  • Sales history required
  • Non-restricted categories only (ineligible categories include adult and medical devices)
  • Products must be FBA
  • No problematic products with numerous past performance issues
  • Seller feedback such as 5 feedback/mo average to indicate activity
  • Wait time to build a reputation needed
  • Avoid prohibited words or excessive heavy discounts
  • Select 7-day or Lightning deals
    • Flat fee, not per item
    • Pick a date range
    • 20% discount minimum
    • Product variations
      • As many as you want as defined by your strategy
      • For clothing items, at least 60% of the variations must be included
    • Review details and adjust deal as needed
    • Cancel the deal if you don’t like the assigned time window
    • Canceling too many times may result in penalties

Miscellaneous Bits

  • $ 150 Lightning Deal fee
  • Increased fees for holidays
  • Fee is charged regardless of the result
  • Fee to sales ration found in deals window
  • Multiple deals are permitted
  • Minimum quantity required.
  • Quantity can be increased
  • Social proof can be reviewed through current deals and the percentage claimed
    • Track social proof throughout the deal and increase as needed
    • Increase bit by bit to show a higher number of percentage claimed

Now that you have gone through the steps in our guide to setting up promo discounts and coupons on Amazon, you know everything you need to launch your first campaign. Put this knowledge into action and watch your sales increase like never before!

Lewis Fletcher
Senior Content Manager
Key Ranking Factors on Amazon
May 30, 2022 Posted by FAITH EVANS

The Fundamentals

The way to master the Amazon search algorithm is to think of it as a game. The name of that game is keywords, which is to say you have to learn how to rank with keywords. As the algorithm is patented and constantly evolving, one must seek to up their game when it comes to keywords. Becoming a master at the keyword game leads to beaucoup bucks.

Two Sales Paths: Organic and Paid

  • Organic: when people come across your product on their own through searching via the search bar
    Target: 80% of your sales conversions
  • Paid/sponsored ads (PPC): when people use a sponsored ad for your product via search results on related product pages, banner ads, etc.
    Target: 20% of your sales conversions
    • Upon initial launch, expect up to 100% of sales conversions to occur via paid sales
    • Ranking takes patience
  • Search-Find-Buy: when your strategy relies upon customers searching for your product and then buying ( still counts as an organic)
    • Amazon provides no details for organic sales
    • Amazon does provide stats for paid ads

Business Reports in Seller Central

  • Metrics for page views, sessions, sales, unit session percentage, etc.
  • Crafting ad reports or search term reports can show you how times your product appeared for various keywords and the number of sales through ads
  • Unit Session conversion percentage: Amazon conversion rate overall (organic and PPC)
    • Not to be less than 7%
    • Low metrics for your listing require more effective ads, pricing or content
    • Shoot for 15-20% and above

How well are you selling on Amazon?

Best Seller Rank (BSR): metric of frequency of your item being purchased

  • Measured against category competitors
  • Does not indicate profit
  • No need to track competitors’ BSR
  • Focus targeted keywords and sales generation on where you are ranked
Outside/external conversion rate:
  • Traffic for ads on Facebook, email marketing, affiliate links, Pinterest, Instagram, etc.
  • Regardless of sales, a click can boost ranking due to the fact that you are bringing people (potential customers) to the Amazon ecosystems

Amazon rates recent sales above all else

  • Increasing recent sales brings the good favor to the algorithm and eases your way to ranking on page one
  • A honeymoon period is granted to new product launches affording them the opportunity to improve their rank
  • The honeymoon period seems to exist for 30-45 days or the first 3000 impressions or so, though this is not certain
  • Launch as soon as your product is in stock by preparing your listing and promotions well before the launch in order to get the most of the honeymoon period

Click Through Rate (CTR)

  • Tells you the number of customers who click and then go on to purchase- especially vital with PPC
  • If your CTR is too low, Amazon will stop showing your ads due to the fact a low CTR reveals a lack of interest in your listing and product
  • Shows how your specific keywords are converting from clicks

Factors that Affect Rankings

  • Add to Cart
    • Items added to carts boost your rank because serious customer interest and buying intent
  • Page views by search terms
    • Sales increase when page views increase
  • Outside traffic and PPC
  • Review
    • Though being more for future customers than ranking, a good review does affect sales
    • Encourage longer reviews as too many short reviews appear dodgy and are thus penalized
    • Amazon prefers detailed reviews as they do evaluate what’s in the reviews
    • Duplicate review content will get you flagged
    • Timely reviews are rewarded and therefore are crucial
    • Amazon Vine and the like exist to help build customer review momentum for new sellers
    • Shoot for 20 reviews for starters to reach the threshold for customer trust in your product
    • Never cheat with fraudulent reviews
  • Stock and Inventory
    • 30 days of stock inventory is advised
    • Stock can affect PPC and ranking
    • If you will be out of stock for more than one week, close your listing manually. Avoid deleting your listing
    • Zero sales on an active listing for a lengthy period are penalized
    • Raising prices to slow down sales and thus keep inventory stock so as to keep your listing active will harm your ranking
    • Always have the Buy Box as a private seller
    • The Buy Box will be forfeited if another seller is selling the same product on your listing and if the price of your product is too high
    • Keep your Seller Feedback score above 98%
    • Age of account
    • Refund rate should remain under 5%
    • Include a product video with your listing
    • Shoot for a Review rating above 4.5 stars
    • A Q & A section is required for each product listing
    • Answers in the Q &A should have the appropriate product keywords to boost your ranking
    • Bestseller’s badge or Amazon’s Choice badge are based on subcategories and sales
    • Badges are assigned by Amazon and increase conversion
    • Badges are based on review score, FBA availability, etc.

It’s about perceived value, not the lowest price!

Your listing must justify your price. You need to make sure it is clear what value you are delivering at the price point you are listing.

Faith Evans
Product Manager
Prohibited Seller Activities
June 6, 2022 Posted by LAURA WILSON

Malicious Users; People who refuse to play by the rules

  • ‘Black Hat’ techniques are employed by those who break the rules with techniques/hacks knowingly such as leaving negatives reviews for their competitor’s products
  • ‘Gray Hat’ techniques are those techniques that exploit ambiguities
  • Take your business seriously and recognize:
    • Cheats/manipulations have only a beneficial short half-life
    • Short-term thinkers build their enterprise around such short-sightedness
    • You are influenced by the company you keep; avoid such charlatans

Ignorance of the rules is no excuse and won’t spare you from suspension. Suspensions based on rule infractions can last from days to months to even forever. Here’s what you need to know to steer clear of such problems with Amazon’s Terms of Service (ToS)

What do when you get a suspension

  • Contact Amazon and be sure to take responsibility EVEN if it’s clear that it is the customer’s fault
  • Fill out a form outlining how you’ll remedy the issue so it won’t occur again. This generally results in your listing being reinstated automatically
  • Severe violations necessitate a Plan of Action (POA). It must be:
    • Straightforward and to the point
    • Takes responsibility
    • May require getting Amazon to divulge specifics as to why you have been suspended
    • For peace of mind and certainty, enlist a specialist to get you out of hot water

Causes for Suspension

Directing people away from Amazon.com

  • Outbound links/URLs such as to your website in your listing
  • Anything such as in your listing such as the description, title or images that can lead away from Amazon is a no-no
  • Follow-up emails or other buyers/seller communications that contain Outbound links/URLs
  • Only link directly back to Amazon

Never Incentivize Reviews

  • In the good ol’ days, you could offer freebies for a favorable review. Those days are long gone.
  • If caught, you will be rewarded with a suspension. Amazon is strict about this policy
  • Request honest reviews and do not speak of 5-star reviews; Use neutral language
  • Don’t encourage customers to leave a review if they are happy and contact you if they are not. Amazon considers this misleading
  • Posting links for positive reviews and then a link to seller feedback for negative reviews is also a no-no in Amazon’s eyes.
  • DO: ‘ Hello, please share your experience by leaving a product review here ’
  • DON’T: ‘Hello, if you were satisfied with your product, please leave us a five-star review here’
  • Amazon can figure out if you are having friends and family give you reviews
  • Even if they buy the product, don’t have them leave a review
  • No freebies or discounts or gift cards for reviews
  • Amazon uses its Amazon Vine Program to incentivize reviews
  • New sellers get up to 30 reviews for their new product launch
  • Give away 30 units of your product
  • Amazon vets trusted reviewers to give honest feedback
  • Builds momentum at the beginning of your product launch

Never Attack your Competition

  • Leaving negative product reviews for competitors wins you a suspension
  • Upvoting negative product reviews for competitors wins you a suspension
  • If this sort of sabotage happens to you, report it to Amazon for assistance.

Ranking Manipulation

  • NO fake buys or adding to carts
  • NO fake orders
  • NO buying your own products and leaving reviews
  • When new accounts have an extraordinary amount of sales right off the bat, such as 100,000, Amazon may investigate and temporarily freeze your funds

Prohibited Products

  • Avoid products that Amazon prohibits
  • Be aware of products containing hazardous materials as they may be prohibited
  • Be careful with products that may be legal in some areas but illegal in others

Customer Abuse in Communication

  • Contact outside of the buyer-selling message is prohibited
  • One follow-up email to customers is allowed
  • Communicate with customers through the messaging system or tools that use the messaging system
  • Avoiding bombarding previous customers with promotions
  • Follow-up and customer service messaging is permitted
  • Target subsets such as those customers who have purchased a specific product with follow-up messaging, especially if instruction or other product-related messages are involved

Multiple Seller Accounts without Permission

  • Multiple accounts are permitted under these guidelines:
    • Different accounts for different brands
    • Different partnerships
    • Separate accounts equal separate business, thus separate bank accounts
    • Using a different bank for each account, with its own EIN, business address and so on is recommended
    • You will be BANNED for saying the same products across different accounts

Variation listings (parent/child SKUs ) manipulation

  • Do not use multiple unrelated products as variation listings (child SKUs) to raise rankings
  • Do not use the same product with multiple child listings
  • You may have both FBA and FBM listings of the same product but they must be variations of each other under the same parent listing
  • Do not list the same product with different ASINs

No Trademarked names (that aren’t your) in listings

  • You may not say ‘Brand X phone case ‘ but you can say ‘phone case compatible with Brand X’
  • Do not use brand names in your listing, your backend or keywords
  • Never copy another seller’s images or listing

Main photo guidelines

  • White background
  • No graphics or promotional text

No unsubstantiated claims

  • Health claims, certification claims, and the like that are untrue with result in a suspension
  • For example:
    • Lose 5lbs in 5 days
    • NBA certified
    • Licensed by WHO
Laura Wilson
Content Creator
Tips for Improving Your Amazon Profit Margins
June 8, 2022 Posted by JAZLYN HERRING

The great businessman, Michael Dell once said this about his business: “We were always focused on our profit and loss statement. But cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact we were running out of gas.”

When it comes to keeping track of your cash flow, line items like payroll, manufacturing, shipping and so on all go in to determine your bottom line, i.e. your profitability.

Understanding your profit margin is key to reaching that profitability and hearing that oh-so pleasing cha-ching in your pocket! Even if you are already rolling in it, you can always stand to 10x it, right? So, for you, in that case, improving your already robust profit margin is your obvious next step. Whether you are an absolute newbie or on your way to the Entrepreneur Hall of Fame… Profit Cyclops is definitely for you…

The Basics….

What is a profit margin?

That, in its simplest terms, is the percentage of profit from each sale. So, as an example, a 50% profit margin means that for one dollar of sales, you earn $0.50 in profit from that sale.

Time to warm –up those math muscles with a little equation action. Here’s the basic formula for overall profit margin:

Profit Margin = (Net Income/ Revenue) X 100

Your net income is net sales or revenue minus expenses. Then divide this net income number by your net revenue and multiply that number by 100 to get your profit margin. See, Mrs. Jones, your old math teacher, would be so proud of you!

How to gain an understanding of your business’s profit margin

You have calculated your profit margin. Congrats! That’s the first step. But only the first one. Now you need to get a firm grip on your profit margin so you can get a clear vision of the next steps: product pricing, inventory circulation, marketing, etc. With a low-profit margin, you may need to adjust one of these aspects of your business: raise your prices, add to your inventory, create some promotions…

But what makes a ‘great’ or a ‘terrible’ profit margin? Just a ‘good’ or a ‘bad ‘ number? Hard to say at first glance. It varies according to your product, industry, market, location, and the season for starters. What may seem like a low-profit margin for one of those indicators may be high for another. The average grocery store has a profit margin of just over 2%, while a restaurant could reach as high as 15%. And within each of those, each proprietor knows what their loss leaders and cash cows are.

For the US, 50% or so is the average profit margin for retail. Results may vary and it all depends on the product, industry, market, season, etc. Researching similar businesses in your area is always a good idea to help you get a handle on what kind of profit margin you are looking at.

Maximize your profit margin in 3 easy steps

1. Increase your prices

It might seem counterintuitive, especially when your sales are down, but raising your prices can be a sure way to increase your profit margin. It is well-known among sales gurus that people tend to value a thing based on its price and this little quirk of human psychology can help your business flourish.

How much you should raise your prices is a matter of careful consideration. Your pricing strategy is based on how the economy is going, what your competitors are doing ( or not) and what customers are paying. You’ll want to complete a competitive analysis whereby you find out what your competitors are doing with their prices. You need to find that Goldilocks sweet spot: not too high, not too low, just right!

Once you have the pricing dialed in, you need to be thoughtful about how you raise your prices. Ease your customers into the new you. Help them understand how much more value you are delivering by using your top-selling cash cows to lead the way. This will help you push up your profit margins and take the pulse of your customers.

2. Manage your inventory

What you have in your inventory can make or break a business. Your inventory should run out the door briskly like a clear mountain stream rather than stagnate in your stockroom like a fetid swamp. While you may need to drain a swamp at some point, the markdowns that follow can result in a downturn in your profit margin. To keep your inventory fresh and your profit margin high, employ an inventory management system.

When you know what you have in stock and how fast it’s leaving your shelves, you can stay on top of your purchasing and sales. But markdowns happen, even to the best businesses. When you have got to slash your prices to make room for new products, these points will ease the pain to your bottom line:

  • Move like the wind! The longer you hold onto your inventory, the less valuable it becomes. Once you know something is surplus, mark it down and get it out the door.
  • Make it personal! Find ways to personalize promotions to attract your customers. Free shipping? Added discounts? Avoid a one-size-fits-all approach.
  • 10x your order value! Never forget to upsell even when discounting and use the opportunity to add to an existing order’s value. Wait! There’s more….Throw in that set of steak knives! This moves your inventory and increases your sales.

Ultimately, you have to pour your efforts into what brings in sales in order to maximize your profit margin.

3. Lower your purchasing costs

Another way to maximize your profit margin is to reduce your purchasing costs from your suppliers. In other words, just as you offer a discount to your precious customers, you can ask for a discount from your vendors and suppliers. You may even consider finding other vendors or otherwise revamping your supply chain.

As the saying goes, ‘Everything is a negotiation,’ so you too can renegotiate with those vendors in your supply chain. As a valued customer, you can use this leverage to get your suppliers to keep you happy by lowering their prices or sweetening the deal with some additional units you can sell. You understand that size matters so ordering in bulk can reduce your price per unit. You may even go in together on an order with others or create some sort of buying co-op group to get the best bulk discounts available.

Next, look for other wastage in your supply chain. Seek to streamline any process in your supply chain by asking suppliers how the process can be simplified or made easier. Perhaps there are ways you can automate the ordering process. Look for discounts in shipping such as receiving more in one order but shipping less frequently to lower the cost. Once you start looking at your purchasing in this manner, you are bound to find savings that will increase your profit margin.

In the red? Or in the black? What color is your bottom line?

The key to building the business of your dreams and living that dream is found by growing your profit margin. Payroll, product inventory, and overhead are just a few of the elements that work in favor (or against) your bottom line. Let Profit Cyclops make light work of that profitability through its Amazon Profit Calculator. Profit Cyclops crunches the numbers in 3 areas: profits, products, and inventory, allowing you more time to get down to business and maximize your profit margin.

Watch your orders pour in through our innovative dashboards, compare profitability throughout months and seasons. Analyze your ad spending, storage costs, return rates and inventory levels all in one place. While others must download reports, comb through every fee and try to make sense of them all. We will show you an item by item breakdown of these fees so you can always focus on the big picture.

Jazlyn Herring
Marketing Associate
Amazon New Seller Incentives Program
June 22, 2022 Posted by LEWIS FLETCHER

Amazon has recently launched an Amazon New Seller Incentives program which aims to attract new sellers to its platform. Aimed at smaller brands, its intention is to connect new sellers with potential customers quickly and thus stimulate profits right from the off.

Potentially available to sellers for a whole year, those who qualify for the Professional Selling plan have access to a range of incentives worth over $50,000.

If products are launched in a new region existing sellers will also be able to gain access to the benefits. Currently available in the US, Europe, and Japan, sellers operating in the UK, France, Spain, and Italy will only qualify once for the region.

Benefits of Amazon’s New Seller Incentives Program

Those who qualify as brand owners with Amazon Brand Registry have the following benefits to look forward to.

  • A 5% bonus on up to $1 million in eligible branded sales (maximum of $50,000 in bonus value) or for 1 year after eligibility is confirmed, whichever comes first. $50,000 in bonus payments are up for grabs here; these are received as monthly credit which the seller can apply to the next month’s referral fees.
  • Amazon Vine - $200 in credits. Guaranteeing sellers credible reviews enrolment in the Vine program costs $200 per parent ASIN. In order to participate brand owners need to give free units to reviewers. Other criteria for enrolment include items being enrolled in Amazon Brand Registry, having fewer than 30 reviews, product and image description, the product being already launched with available inventory, and having an FBA offer in ‘new’ condition which can be purchased.
  • Transparency - $100 in credits. Zeroing in on defects in the supply chain, improving customer experience, and stopping the flow of counterfeit goods from reaching paying customers are the main objectives of the Transparency program.

Access to the following benefits is available to new sellers who adopt Fulfillment by Amazon (FBA) hosted fulfillment services…

  • The Amazon Partnered Carrier program gets you $100 credits in inventory shipping fees while Amazon Global Logistics gives an even more generous $200 in credits in fulfillment fees. Amazon Global Logistics is a program for international sellers as it facilitates the transport of inventory to warehouses the world over.
  • FBA New Selection provides free monthly storage, liquidations for poorly-selling inventory, and return processing for a seller’s eligible new-to-FBA ASINs.
  • New sellers using FBA have the option of launching a Sponsored Products pay-per-click campaign that lasts for at least 30 days (with no end date). The reward is up to $200 in promotional clicks. Unfortunately, this incentive is unavailable to sellers in France, Italy, Spain, or Turkey.
  • New sellers using Amazon Coupons can get $50 in coupon credits and advertise their products on the Amazon store using innovative promotional campaigns.

Who can take part in the Amazon New Seller Incentives?

If you launch your first buyable ASIN on a Professional selling plan on January 1st, 2022, or later then you qualify for the incentives. Certain benefits are only available to sellers who have opted for the Amazon Brand Registry and others are only available for those who joined the Fulfilled by Amazon (FBA) program.

New Brand Owner Benefits and Eligibility

A 5% bonus on branded sales and credits for Vine and Transparency is only available to sellers who have completed Amazon Brand Registry no later than six months after their first buyable ASIN was listed.

In addition to this, to get Transparency and Vine credits, a seller has to enroll into the Vine and Transparency programs. A registered trademark and Amazon Brand Registry enrollment are essential if a seller wants to get access to the Transparency benefits.

Fulfillment by Amazon (FBA) Seller Benefits and Eligibility

Inventory shipping discount, Sponsored Product credits, and eligibility for the auto-enrolment into FBA New Selection are available to sellers who send their inventory to an Amazon fulfillment center. If this is not done within 12 months of their first buyable ASIN being listed then no benefits can be accessed.

Furthermore, Sponsored Products credits are available to sellers who launch a campaign with no end date for an FBA ASIN. The initial reward is $100 in credits. The second $100 in credits is obtainable for sellers who advertise an FBA ASIN for at least 30 days. If your account was registered in France, Italy, Spain, and Turkey then you are not eligible for promotional clicks credits through this program.

Expert Help

With so many benefits available to new sellers there has never been a better time to launch your product on Amazon. This guide has introduced you to the basics of how to get started with the incentive programs, and you can find even more information about how to make the best use of all the help available to you by reading our Profit Cyclops blog page here at https://profitcyclops.com/Home/Blog.

Lewis Fletcher
Senior Content Manager
Finding Products to Sell on Amazon
June 28, 2022 Posted by FAITH EVANS

These days, everyone is feeling the bite that inflation is taking out of their budget. Many are looking for ways to find new ways to increase their income. This often takes the shape of creating a new business, a profitable side hustle that can lead to economic freedom. Those in the know understand that becoming an Amazon seller offers an amazing opportunity to begin that path to freedom.

That being said, the question these intrepid entrepreneurs often have is: What should I offer for sale on Amazon?

Look no further! We’ve put together this quick and easy guide to help you with that quest.

Everyday Life

Approach this question by first looking around your home and what things you require for everyday life.

  • Draw ideas from your immediate surroundings
  • Consider the products you often purchase at the stores you frequent
  • Focus on the goods in your home
  • Keep your mind open to products you can offer as you go about your day
Bargains at the Big Box Stores
  • Costco, Best Buy, and other bargain stores can be a source of inspiration
Amazon
  • Look at reviews on Amazon
  • Find the products that capture your interest and compare the reviews you see
  • Use the user feedback you find to come up with ideas for products that would solve the problems you see
  • Focus on Top Sellers for inspiration and guidance to fill a niche they aren’t
Handmade Items
  • In these days of mass production, handmade has a special charm
  • Etsy, Pinterest, and Amazon Handmade can show the way
  • Turn your hobby into a way to power your new venture
  • Visit arts and crafts markets and stores for opportunities
  • Vacations abroad can also offer ideas and unique products for your store
Kickstarter, İndiegogo, and other Crowdfunders
  • Find out what’s hot
  • Even if something didn’t get off the ground, it can still fly in the right hands
  • Research opportunities and look for good ideas that just need better marketing
Check for Expired Patents
  • Before you adopt another’s idea, make 100% sure the patent has expired
  • If it’s merely a design patent and not a utility patent, you may be able to make use of it.
Websites like Yiwugo and Alibaba
  • Perform a reverse search to find a high demand on Amazon for its counterpart on these other marketplaces
Fairs and Trade Shows
  • Attending these events can give you a hands-on experience with potential products for your new store
  • Find unique objects not available online
  • Research for annual shows in your area or take a trip to favorites such as ASD in Las Vegas, the Yiwu market in China, or the Canton fair in China
  • A clear idea of what you are looking for can guide the way but be open to wandering around for inspiration
  • Make connections with the vendors, suppliers, and manufacturers that you may want to work with
But wait, there’s more…
  • Infomercials, Shopify, and Brand Analytics can all help you identify a niche you’d like to exploit

Choosing a Product to Sell

7 Basic Steps:
  • Verify a demand exists
  • Identify your competition
  • Find a manufacturer who offers good value
  • Decide on packaging
  • Place the order for your product
  • Create your Amazon listing
  • Launch!

Products that Amazon Seller Beginners Should Avoid

  • Avoid restricted products such as those with Bluetooth
  • Restricted items require special fees and/or FDA approval and other such obstacles
  • Avoid products that are legal in some areas but not others
  • Avoid products that contain pesticides or other hazardous materials
  • Avoid medical and sexual wellness products
  • Avoid products sold throughout China as these have a definitive price advantage
  • Avoid fragile products
  • Avoid products that are not gated
  • Avoid seasonal products
  • Avoid patented products
  • Avoid products with lots of variations in color, size, etc
  • Be aware of categories with products all at the same price
Study your Competition
  • Make sure you differentiate your product from your competitors
  • Be wary of categories that big brands like Adidas or Nike dominate such as sports
  • Compete against fellow private sellers
Beginners should keep an eye for Amazon products like these
  • Newer products
  • Products with poor packaging
  • Products with poor listings
  • Listings with sub-par imaging
  • Listings without descriptions
  • Products only found locally
  • Large products
  • A niche and/or focused keywords for your product
  • Ways to set your product apart from the crowd

Once you have studied these steps to choosing a product to bring to market, you will be well on your way to the independence that will change your life forever. Approach these steps one at a time, be patient and allow for trial and error. Remember that the journey of 10,000 miles begins with a single step. What’s your first one?

Faith Evans
Product Manager
Guide to Making Sales on Amazon
July 6, 2022 Posted by LUCAS COOKE

This article will set out all you need to know about optimizing your sales potential on Amazon in 2022.

Keywords

Build relevant words into your listing.

Search Terms

It’s important that when customers type certain words they find your product.

Buyer Intent

Predicting customer intent by looking at what other items they might want to buy. Someone searching for shampoo might also be looking to buy conditioner.

Conversion

Showing up on the results page is one thing but you need customers to actually click on your listing. Poor conversion rates will result in the A9 algorithm not showing your results as frequently in PPC ads. A 20% unit session rate is great, 7-15% is OK and anything under 7% and you’re looking at penalization from Amazon. Remedy the problem by improving your images, search terms, copy and price. Bear in mind that Amazon conversion rates are higher than similar sites like Shopify.

Velocity

Rise and falls in sales volume is not ideal. Try and maintain a regular velocity of sales.

Organic Results

Because only 30% of customers get past the first 10 search results it’s imperative your product is somewhere in that first 10. The top 3 search results are understandably the most important. Getting a high position on the results page is particularly important when selling commodity items. Customers looking to buy less-frequently bought or big-ticket items such as Mother’s Day gifts will generally scroll down further.

Images

Your leading image is so important in getting people to click on your product. Guidelines have to be followed but be creative and show your product in the best possible light.

The Customers’ Decision-Making Process

These factors come into play when customers make the choice of whether to buy or not to buy…

Price

Does your product offer value for money? The perception of good value is important – if the customer thinks he’s getting a bargain they will most likely make the purchase.

Prime Shipping

FBA beats FBM. Customers love the speedy shipping that Prime offers and being listed as a Prime-eligible item increases customer trust in your brand.

Review Quality and Quantity

Potential customers love seeing positive reviews from certified buyers. The Amazon algorithm pays particular attention to longer reviews as they contain more information than shorter ones.

Brand

This aspect of your business can wait until you’re a bit further along in the process, but even small sellers can build reputable brands and challenge the big players.

Search Terms and Page Ranking

Popular search terms are not actually the best ones – they are ultra-competitive. Mid-lower-range long-tail keywords (more words) often offer higher conversion rates. Because they are specific long-tail keywords have a high conversion rate. You should really be aiming to appear on page one of the results page.

Between 8 am and 7 pm (PST) is when most selling occurs on Amazon – around 75% in fact: focus on this selling window. In regards to PPC maybe reduce your bids that fall outside this time frame - you don’t want to waste money.

Differentiation

Customers are more likely to buy your item if it stands out from the crowd. Sleek logos, fashionable coloring and good quality packaging will all help justify a higher price tag. Consider getting a legal patent if your product is easily duplicated by rival sellers.

Lucas Cooke
Marketing Associate
Getting Discovered on Amazon
July 13, 2022 Posted by LAURA WILSON

External links are a great way of driving traffic to your Amazon page but you shouldn’t rely solely on this. To sell well you really have to know how to promote yourself on the platform itself.

Keywords

We repeat this again here because it’s so important – title, bullet points, description and backend all have to be well chosen to stand out from the crowd.

Right Category

If you’re in the wrong category you won’t show up on a search page even if your keywords are great. Generally, Amazon only allows a product to be listed in one category. Under no circumstances should you deliberately list your item in the wrong category. Findbrowsenodes.com and keepa.com contain a wealth of information about this subject if you want to know more. In addition, have a look at where your competitors have listed their products and follow suit.

Listing Title

Keep it under 200 words and make it to the point. Better conversion rates come from using longer-tail keywords. Short-tail keywords are ultra-competitive and always in very high demand. Try to settle on a name and stick with it; changing your product title after thirty days is not ideal – returning customers may be confused by the alteration.

Bullet Points

The first three are the most important and should contain the main keywords. The first 1000 characters are where the key info should be. Distribute your keywords evenly. Mobile shoppers in particular see the upper part of the description first so focus on that area.

Search Terms, Subject Matter and other Backend Issues

If you failed to convey product info in your front-end then the backend allows extra space for any stuff you couldn’t fit in earlier. 250 bytes (not characters) is the maximum permitted in the search term field.

Optimize your listing by filling in as much information as possible (color, material, intended use, battery type etc). You never know what exact specifications customers might be interested in when making the decision to buy so include as much as possible. Include misspellings and Spanish keywords.

Miscellaneous Tips and Recommendations

In order to put a stop to personalized search results open your listing in private or incognito mode in Google Chrome (desktop, tablet and phone). This has the added benefit of letting you know what potential customers see when they click on your item page.

Even though you might think PPC ads are unnecessary you should still run them. Even if you’re hitting the number 1 spot organically paid ads are still necessary to maintain that position. Only lower your PPC spending if your product is selling well (but carry on running ads). Budget is important here – don’t throw money away on expensive ads when you don’t see any long-term returns from this strategy.

Outside Traffic

External links will drive customers to your page. Facebook ads are currently the most sought-after site but Pinterest, Instagram, blogs and a whole host of others are also good options. Consider coupon codes and custom links with keywords as well.

Laura Wilson
Content Creator
Amazon’s A9 Algorithm
July 20, 2022 Posted by ERIC HUNT

What is the Amazon A9 Algorithm?

The Amazon A9 algorithm powers Amazon’s search engine so that customers can find the products that best match their desires.

The algorithm’s emphasis on conversion otherwise known as purchases that customers have made makes it unique. To illustrate, when a search for Super Widget serves up Product A with 75 conversions and Product B with 50 conversions, A would be ranked ahead of B.

This algorithm shares similarities with the Google search algorithm but distinguishes itself with its sales conversion. It tends to promote listings that are likely to lead to sales. In order to do so, it favors the following: product relevancy, sales history, and conversion rate. Products with high relevancy and strong sales history go hand in hand with high conversion rates. A high rank on Amazon’s SERPs relies on this. The key outcome for Amazon is for searches to result in sales.

What are the Key Factors that Drive the Amazon A9 Algorithm?

Sales Velocity

The momentum of your ASIN based on a moving average across a date range determines your sales velocity, usually about 30 days

Sales Rank

Sales Rank or Best Sellers Rank (BSR) is assigned to each product in the Amazon catalog once it had had a sale. This is used to indicate how well a product sells in its category, only applying to the category and sub-category, not the whole of Amazon. Customers tend to put their trust in high-ranking products before lower-ranking ones.

Amazon is not forthcoming on how it determines the BSR, but most agree that it is based on these 3 key factors: product sales, product price changes or promotions, and any competing products. A strong sales history will ensure that your BSR will not fluctuate greatly.

Reviews

When your customers give a review for your product, there is a corresponding boost to the rank of your ASIN through the A9 algorithm. The laws of diminishing returns are in effect witnessed by the difference in the rank boost between those of 0 and 100 reviews than those of 1000 and 2000.

Amazon Vine Programs

Amazon selects ‘trusted’ reviewers who get your product gratis, for which you are rewarded a detailed and candid review. This program is free to enroll in and is just one click provided you meet their requirements.

Amazon Vine Program requirements:

  1. Be a brand-registered seller
  2. Have an image and description for your product listing
  3. Have your product in stock in your inventory
  4. Have your product in ‘new’ condition
  5. Not a restricted or ‘adult’ product
  6. Have less than 30 reviews on your product
  7. Pay for costs related to promotions

The Vine Program is the only acceptable way to garner reviews other than promotions via social media. But Caveat Emptor; an honest review from the ‘trusted’ Amazon reviewers does not mean that it will sing your product’s praises. Put your best foot forward in terms of the products you put up for scrutiny via Vine.

There are other methods to get reviews, but avoid those that are outside Amazon’s TOS.

Fulfillment Method

Preference is given to products that are Fulfilled by Amazon (FBA). FBA are eligible for 1-2 Prime shipping, which is a customer favorite. Being an FBA seller is key if you plan to compete with other FBA sellers.

Amazon PPC

The A9 algorithm offers some organic rank to keywords found in Amazon advertising and specific keywords in bidding, even when such sales conversions are discovered by sponsored products.

Off-Amazon Traffic

Bringing in leads from Google and other social media boosts the A9 algorithm and Amazon attribution indirectly values such off-Amazon traffic.

Listing Optimization

Optimize your listing with relevant keywords in the right fields and photography. Product relevancy depends on an optimized high-quality product listing. The three keys to this are clear eye-catching product photos, descriptive titles bullet-pointed product descriptions, and relevant backend search terms for your listing

EBC or A+ Content

The attractiveness of your product listing is best achieved by the use of Enhanced Brand Content (EBC), aka A+ Content.

Amazon A+ Content: A beginners Guide
  • A product banner
  • Useful images
  • Key info delivered in a pleasing way
  • Not text-heavy
  • Find an A+ content manager for guidance

What is the Positive Feedback Loop ‘Flywheel Effect’?

A classic newbie mistake, understandable but mistaken nonetheless, is to look for the one-size-fits-all tactic that will solve all your problems. While Amazon gurus, influencers, and such like will try to sell you on their Magic Bullet, the experienced seller knows better.

What is required is to build a positive feedback loop based on a number of positive effects. The Amazon A9 algorithm takes it from there to get a clear image of the extent to which your ASIN is meeting your customer’s expectations. Amazon calls this the ‘Flywheel Effect.

If these elements shown above don’t work together, the positive feedback loop short-circuits. Focusing on one area just to get clicks but doesn’t lead to sales will not drive up your rank.

Keyword Research

A relevant keyword is crucial to creating a positive impression with the Amazon A9 algorithm (A9). Us these keywords in your title and the bulleted points in your product listing so A9 knows precisely what your product is. This will also start your Fly Wheel up.

There are various tools available to help you find the best keywords to use. A reverse ASIN process will lead you to the keywords that customers use to search and purchase that ASIN in the past.

Keyword Relevance

Through the reverse ASIN process, you will get a set of relevant keywords. You will need to eliminate the wheat from the chaff by getting rid of the less relevant. Those most experienced with the marketplace will have an advantage here.

Start with no more than 30 words with at least 80% relevancy. This will mean that your ASIN will be an 80% match to the keywords. Bear in mind that despite the numbers, determining what is relevant or not is more art than science.

To illustrate:

Hamster equipment: 50% relevant (many other types of hamster equipment exist)

Hamster wheel: 80% relevant (a particular type of Hamster equipment)

12 in Hamster wheel: 100% relevant (a specific type of Hamster equipment)

To find out more about the relevance of your keyword, perform a search on Amazon. You are on the right track if the search results yield similar products that on found among the Sponsored Ads and the first few organic results.

How can You Optimize Your Product Listing for Amazon A9 Algorithm?

The first and most important step is an optimized product listing. This can mean the difference between a 10% and a 25% conversion rate. This lowers per-sale cost and raises your sales and profitability. Here is a quick guide:

Titles

  • 200 character limit
  • No repetition
  • One keyword at the beginning
  • Info about the variation (size, color, model)

Bullet Points

  • Highlight product benefits
  • Use keywords
  • Edit for grammar errors

Product Description

This affects the A9 less than the bullet points. Help the customer understand how the product can solve one of their problems. Think about and include answers to questions customers are likely to have such as those regarding the availability of a warranty, what is included, and anything needed that is sold separately.

Backend Search Terms

These search terms are not customer-facing and are collected by the A9 to match customer searches. There is a 249 bytes limit for the backend search term field, excluding spaces or punctuation. Here are some best practices:

  • Don’t include product identifiers such as brand names, product names, compatible product names, ASINs, UPCs, etc
  • Avoid inaccurate, misleading, or irrelevant information
  • No overly long content
  • Avoid redundant info
  • Use the logical order for search terms
  • Use single spaces to separate keywords. No punctuation required
  • Avoid temporary terms like new, on sale, or available now
  • No subjective claims
  • No commonly found misspellings of the product name
  • No variations of spacing, punctuation, capitalization, and pluralization
  • No abusive or offensive terms
  • Abbreviations, alternate names, and key characters for books, films, etc are fine

Keywords in Amazon’s Advanced view

This section is ESSENTIAL to ranking higher. Amazon gives you 250 characters for search terms. Use reverse ASIN Look Up tools to find products in your category from competitors to identify suitable ranking keywords

To narrow down your search term volume:

  • Use the first 3 organic searches to sort by high search volume and relevance
  • Use basic filters such as a minimum search volume of 1000, a maximum rank of 20, and a word count set to 2
  • Export as an excel sheet then filter by search volume in descending order and by ranks and exclude any null values. Sort in ascending order
  • Grab the first 100 keywords. Remove duplicates, common words, and phrases. Convert to lowercase.
  • Remove brand names and repetitive words. Reduce to 250 characters.

From here, you are ready to input it in your product listing’s search term box. Enhance your listing by inputting the Search Matter and inserting more terms in Other Attributes. Leave İntended Use and Target Audience blank so that your product is further limited to a smaller amount of searches.

Optimize images

  • High quality
  • Clear
  • Crisp with a white background
  • Fills up the frame with the least amount of white background possible
  • Makes an impression as a thumbnail
  • Have product call out, instructional and lifestyle photos

How can You Use Amazon Advertising to Further Optimize?

The in-platform Amazon paid advertising directly affects the organic ranking of your product. Unlike other platforms the paid–to–organic traffic relation is not just about clicks, but as you well understand, conversion to sales. Amazon’s main goal of its organic ranking algorithm is to support the products that people want to buy, that is to say, that have high relevance and buyability.

Amazon’s PPC can help you improve your product optimization through understanding the converting search terms’ metrics. Amazon PPC will show you how your keywords are impacting your sales so you can understand their relevancy. Follow your PPC campaigns’ reports to see that your listing has the proper keywords that convert to sales. You can fine-tune your listing’s optimization in this way.

Most brands that are achieving success on Amazon rely on the Amazon PPC. Any serious competitor can create a quality listing, optimized search terms, and sufficient ratings, even from your own! They can copy you in all these important areas, except the Amazon PPC bidding auction.

In the bidding auctions, only 1-3 products can garner the #1 sponsored ad rank. The way to get one of those coveted positions is to run an effective ad campaign through Amazon Advertising. We can help you do so with our resources for running effective ad campaigns. We offer comprehensive guides on the key differences between various types of campaigns, how they should be structured and what campaign budges to use. Such a campaign will help you understand your product’s sales performance on Amazon and how to push it higher in the rankings.

Constant Analysis

Continuous improvement is vital to moving your product’s Amazon rank higher. Once you obtain a high product rank, you must use constant analysis of various metrics to maintain and/or move your rank higher. This is easiest by running Amazon PPC. Here are the key metrics to analyze:

  • Total impressions - how many times customers viewed your ad
  • Total clicks - how many clicks you got
  • Bounce rate - how often customers exit Amazon after clicking your ad
  • Total spend - spend size of a keyword, ad type or ad campaign
  • Total sales - how many sales from a keyword, ad type or ad campaign

Amazon Seller Metrics

Use these ratios to analyze your keyword performance on a regular basis:

  • Clickthrough Rate (CTR): the ratio of total clicks over total impressions
  • Conversion Rate (CVR): the ratio of total conversions over total clicks, where conversions are clicks on ads that become sales
  • Cost per click (CPC): the cost of a customer clicking on your ad. İt varies according to the auction, so look at the average (aCPC)
  • Advertising Cost of Sale (ACoS): the ratio of the total as spend over total sales

An ACoS below 30% for most keywords and a conversion rate of above 10% is ideal, generally speaking. This usually helps you maintain a high product rank, but it varies from seller to seller. We recommend you invest some time in Amazon PPC training courses to get the most out of your store.

What is the A10 Algorithm?

Amazon updated A9 in 2020. This changed the ranking strategies required by Amazon sellers.

A10 is very similar to A9 of course. The main difference is that less weight is given to PPC or sponsored links and more to product relevancy. As Amazon’s mentality of ‘consumers first’ emerges even more strongly with A10, product relevancy is now the top priority. While this does challenge the utility of PPC, it is still necessary and listing optimization matters now more than ever.

Please feel free to post any questions or insights in the comments section. Please contact us at [email protected] to set up an appointment to discuss how we can help you achieve the Amazon business of your dreams.

Eric Hunt
Content Creator
How to Price Your Amazon Product: Setting Your Listing Up for Maximum Profitability
July 27, 2022 Posted by LUCAS COOKE

Pricing Amazon products can be a minefield. Too low and you won’t make a profit; too high and you’ll scare customers off. Here we look at the factors that you should consider when pricing your product.

The “Goldilocks Zone”

It’s very easy for a faulty pricing strategy to cost you sales.
In a recently published Harvard Business Review, pricing experts at McKinsey and Company showed that an 11.1% increase in profit could be gained by a mere 1% price improvement.
The conclusions the study reached were unequivocal: “The fastest and most effective way for a company to realize its maximum profit is to get its pricing right.”
If you want to be the best seller in your category you have to appear on page one of the search results page. Statistics show that sellers who appear on the first page get 70% of the sales.

More efficient conversions depend on three vital product pricing factors.

Calculating Cost

It’s absolutely crucial you know the exact cost of your item – manufacturing; shipping it to an FBA center – everything.

Consider the following when calculating your costs:

  • Raw materials: Any materials used in the manufacturing process (metal, wood, plastic, cloth, etc.).
  • Labor:  Workforce hours and time are needed to create any product.
  • Assembly: This describes the process of getting all your components into one finished product (includes labor and machine costs).
  • Storage: Housing inventory includes your own facilities if you fulfill your orders (Fulfilled by Merchant), as well as Amazon’s services (Fulfilled by Amazon).
  • Shipping:  Getting your products from your home/office to an Amazon fulfillment center anywhere in the world requires a sometimes lengthy and costly shipping process.
  • Marketing:  Content writers, marketers, and graphic artists need to pay if you want high-quality ad campaigns (both online and offline).
  • Returns: You will lose profits when customers return your product. Amazon also takes 20% of the original commission as a return fee.
  • Taxes: This varies hugely. Governments charge per transaction, and there’ll be both state and local deductions from your precious revenue.
  • Miscellaneous: The things that don’t fall into the above categories include accounting fees, insurance, and repairs.
  • FBA fees (If Applicable):  FBA services charge a monthly subscription for inventory storage (per item) and referrals.

Divide the final cost by the number of products you aim to produce in a given time period to calculate your average cost per item.

Your gross profit margin target (GPMT) is the profit percentage you want to generate per item that you sell.

It is calculated using the formula: (Price – Cost) / Price = GPMT.

Creating a spreadsheet and inputting a function equation will create your GPMT.

Follow these instructions if you’re using Google Sheets or Microsoft Excel.

  • The first three columns should be named as follows:
    • Column A – Price
    • Column B – Cost
    • Column C – Gross Profit Margin Target
  • Cell A2 – put the price of your product.
  • Cell B2 – put the cost of your product
  • Cell C2 – Type the formula =(A2 -ROW(B2) / ROW(A2))
  • To apply this formula to other products drag the formula down from the right-hand corner of cell C2.

After this you will need to work out your current profit margin so it can be compared with your new-found GPMT:

  • The first four columns should be as follows:
    • Column A – Revenue
    • Column B – Cost
    • Column C – Profit
    • Column D – Profit Margin
  • Input the sale price in the Revenue column.
  • Input the product’s cost in the Cost column.
  • Create a formula in the Profit column so the profit on the sale can be calculated.
  • Ensure the formula reads “=A2-B2” so it subtracts the cost of the product from the sale price. Your overall profit will be revealed by this difference.
  • In the last column generate a formula so the profit margin on each sale can be calculated.
    • Profit needs to be divided by the amount of the sale or =(C2/A2)*100 to get a percentage.

The majority of manufacturers and retailers set their profit targets at about 50% whereas distributors want closer to 30%.

Customers

Because customers are the most important feature of your product they play a significant part in how your Amazon product is priced.

The big question is what type of customer your business is aiming to attract in order to get things up and running as successfully as possible.

Make this decision by looking closely at your gathered cost data and scrutinizing the competition in your Amazon category. Find weaknesses in competitors’ listings and make sure your product listing avoids these errors. Customers will turn to you when they compare your product favorably with others that have poor image quality, commonly-recurring complaints, and item descriptions where info is confusing or lacking.

Knowing the different types of customer archetypes is a sure-fire way of pricing your product correctly and making sure your profits start – and remain – high.

  • Splurger: spontaneous spenders who make impulse purchases.
  • Bargain Hunter: these people are happy to spend time searching and comparing products so they get the best deal possible.
  • Quality-Driven: happy to spend more on quality and brand-name.

These shoppers tend to follow similar patterns of consumer behavior. The Splurger might disregard cost because they had a very positive first impression of your product. On the other hand, the bargain-hunter might forfeit quality for a lower price. Remember that making your item a bit more expensive than its nearest rival may attract customers who associate quality with higher prices.

Research consumer forums and take note of survey responses from existing and prospective customers to gain a better understanding of your target audience. Once you know which type of customer produces the highest sales volume you’ll be better placed to set your price and fulfill your customers’ needs.

Competition

Effective analysis of the multiple sellers in your category should give you some key insights into pricing. You may notice that some of your competitors have their pricing strategy set up perfectly and their profits handsome accordingly. Others might surprise you with odd pricing which seems to under-value or over-value their product. Product reviews and star ratings will tell you a lot about whether customers thought they got value for money.

Raising your price slightly so it’s more expensive implies a higher value and worth than the cheaper products in your category - perceived value is a very important aspect of consumer psychology. You must make sure you accentuate your unique and superior benefits in the description so that consumers know immediately that yours is the product to go for.

What happens if your item has the same perceived value as your competitors? In this case, setting your price a bit lower may appeal to bargain shoppers. Think long and hard about this strategy though - under pricing a rival can easily trigger a price war where everyone’s profits fall - the dreaded “race to the bottom”.

Final Thoughts

It’s quite difficult to get your pricing structure right, especially at first. Once you’ve found the magic number though the stability and confidence this brings your brand should pay dividends.

What’s the difference between $19.99 and $20? One cent in value, but according to recent studies (across the majority of product categories) a noticeable difference in profits if you choose the former as your pricing structure.

As a very last word remember that predicting product trends is important too. If you know what’s going to sell then you can plan accordingly and get a head start on competitors.

Lucas Cooke
Marketing Associate
Amazon Influencer 2022 Program Guide
August 5, 2022 Posted by LEWIS FLETCHER

Got mad social media skills? Looking for new angles to monetize those skills? Our Amazon Influencer Program is just what you are looking for!

Your influencer status can lead you to paydirt when you promote products your audience will love. No need for laying down your cash for inventory, creating product listings, or other upfront costs.

As an extension of Amazon’s Associates program, the Amazon Influencer Program allows anyone with a qualifying website to promote products and get a piece of the action through Amazon sales commissions. Up to 10% per sale!

Let’s get to how you can meet the requirements of the program and start banking those commissions:

  • How the Amazon Influencer Program works
  • How to apply and qualify
  • What to do once you are approved
  • How to promote products

How does the Amazon Influencer Program work?

The Amazon Influencer Program is tailored for those with large loyal followings on their social media accounts. Amazon is keen on the burgeoning marketing power of influencers which has shown itself to be a supercharged way for brands to reach specific audiences.

As the Amazon Associates program, the Amazon Influencer Program helps influencers monetize their promotions through commissions on the sales they bring to Amazon.

Unlike the Associates program where users can only share affiliate links for individual products on their own websites or social media accounts, Influencers create their own custom storefronts on Amazon to direct audience traffic toward the products they support. In other words, ALL of the influencer’s product endorsements are just ONE link away. Different products can be categorized in their store to ease navigation

Share your Amazon storefront link across the platforms you inhabit such as Instagram, YouTube, Facebook, Twitter, or your own website. These storefronts come equipped with your own custom URL vanity handle for ease of recognition of your loyal followers.

How can you qualify for the Amazon Influencer Program?

Qualifying for the Amazon Influencer Program is a bit more involved than for the Associates Program. Associates just need their own website. To be an Influencer, Amazon analyzes your social media accounts to see if you are up to the task.

Once you apply, Amazon has you review the public social media account where you have the biggest pull. The current options include Instagram, YouTube, and Facebook.

Amazon doesn’t put a specific number on a minimum number of followers to qualify, the number of followers you have is taken into account. Bigger isn’t always better, so don’t let that hold you back.

What really matters is real followers who engage with your content and hence are more likely to engage with your promotions. Post count, post consistency and follower engagement metrics are much more impressive to Amazon.

Let’s use some numbers here. Say you have 10,000 following you on Instagram. Even though that’s not a huge follower base, if they consistently like, comment, and share on your social channels, such engagements signal to Amazon that your followers are also likely to respond with sales for your promotions. Real engagement is what impresses Amazon and earns your acceptance.

That means it’s quality over quantity so put your energy into solid consistent high-quality content that brings your supporters back for more again and again. Focus your content on your niche rather than unrelated content. Position yourself to be the ‘Go to’ in your niche so that followers will seek you out for your perceived expertise.

How do you apply to the Amazon Influencer Program?

Once you have engaged followers and rabid fans on social media, you can turn your influence into cash through commissions on your product recommendations. Nearly 10% of third-party sellers turn to influencers to promote their wares and almost 50% of these sellers report their plans to grow their market share through social media and influencer marketing.

To apply, simply click on the ‘Sign up’ on the Amazon Influencer Program homepage.

If you have an Amazon customer account or are already an Amazon Associate, you can apply through that account. Otherwise, click ‘Create a new account.

Connect one of your social media accounts to your application. The one with the most followers is probably your best bet. YouTube and Facebook provide instant notification of approval or not, while Instagram may take up to 5 days.

Let’s use Instagram for our example. Amazon will ask for your Instagram handle, follower count and post count. Using those, they decide whether or not you can move forward. Then you enter your profile name, a short bio about yourself, what you promote and your other social media account links.

Once in the dashboard, follow the Amazon Influencer Program on Instagram with the account you used for sign-up. You will not be approved until you do so.

While you are waiting for the approval green light, start creating your store!

How much do Influencers get paid?

Each category on Amazon has its own fixed commission rate for Influencers. For example, the Luxury Beauty and Luxury Stores Beauty categories award a 10% commission. At the lowest end, Video Games Consoles, Grocery, Health and Personal Care categories earn a 1% commission.

You can review Amazon’s Commission Income Statement to decide which category to promote.

The low commission rate for some categories adds up over time so using your storefront link in your İnstagram bio or YouTube description is still well worth your efforts.

Let’s use a popular kitchen product to illustrate what being an Influencer can offer. This category offers a 4.5% commission. Let’s say you have 10,000 followers. The product you promote sells for $427.49 on Amazon.

Even if only 1% of your followers buy this product, merely linking to this product in your Instagram bio will bring in $1924! And the sky’s the limit when you supply your highly engaged audience!

Creating your Influencer Store

As with a seller’s Amazon Storefront, you as an influencer can add a custom logo and banner image to personalize your landing page. Your followers will instantly know they’ve reached your store.

Organize the different products you recommend into their respective categories. As your fans click on a category, they will see all the products you promote in that category.

Add shoppable posts to your store as you would on your social media platforms.

To add products to your storefront, click the link on your dashboard

Then select one of the four content options: an idea list, a shoppable photo, a video, or a live video. Let’s try an idea list to start with. Enter your idea list name and a description.

Now, start adding products. As customers click through to one of the products and purchase it, the commissions start coming in. Tracking sales and earnings is easy with your Amazon Associate account.

How can you promote your Influencer Store?

Once you are approved and get your storefront set up, the real fun starts. Naturally, the first place to start your promotions is through your social media accounts.

Share the products you love with your audience. Those that are engaged will trust your recommendation and this trust will be converted into sales through your storefront.

Here are some tips to help you get started across your various social media accounts.

Instagram

  • Provide a link to your influencer page in your bio.
  • Include a link in your post captions toward your recommendations
  • Have followers click the link to purchase the products you promote
  • Build engagement through Instagram stories that can highlight your promotions

Facebook

  • Link to your influencer page in your ‘About’ section
  • Employ Facebook stories to promote recommended products
  • Use a ‘Shop now’ button in your Facebook profile that links to your storefront
  • Include a link to your influencer page and the related product page with product-related posts

YouTube

  • Provide a link to your influencer page in your channel’s ‘About’ section
  • Create video promotions with your link in the video description so that viewers can shop through that link

Twitter

  • Link to your influencer page in your Twitter bio
  • Tweet about your product recommendations frequently along with your influencer link

Website and Blog

  • Blog about the products your followers are keen on
  • Post consistently to build engagement, add influencer links where relevant

Snapchat

  • Share your Snapchat Stories to highlight your influencer page and recommended products

Promoting Services

Amazon services, also known as ‘Bounties’ in the Affiliate program can earn you commissions through your promotions. These services include:

  • Prime Video Channels Free Trials
  • Amazon Baby Registry
  • Amazon Business
  • Amazon Home Services
  • Amazon Music Unlimited Free Trials
  • Amazon Wardrobe

The Amazon Bounty Program offers bounties (fixed commissions) for each service promoted. You can combine product-related promotions with service-related recommendations, such as baby products and the Baby Registry for a 1-2 commission-bounty punch.

Become an Amazon Influencer

Being an Amazon influencer helps you monetize your recommendation of products via your own custom Amazon storefront.

Put your skills at building a following on Instagram, Facebook or Youtube to work for you! Let your influence work for you through promoting products your supporters will love.

Lewis Fletcher
Senior Content Manager