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A Digest of Best Practices for Amazon Sellers

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A Digest of Best Practices for Amazon Sellers A Digest of Best Practices for Amazon Sellers SPONSORED BY: Prosper Connect held a Think Tank—an interactive breakout room exercise via Zoom on April 21, 2021. This conversational forum was ideal for meaningful knowledge exchange through the sharing of best practices and solutions among Amazon sellers. During this 90-minute digital event, sellers discussed the latest trends and challenges and shared their collective best practices. Participants of this event were sellers only and were grouped according to their company’s annual revenue. The three topic areas of focus included: This document is a record of the best practices that were shared. The next opportunity to participate in a Think Tank will be at the in-person Prosper Show on July 15. For more information on Prosper Show 2021, happening safely, this July 13-15 in Las Vegas, click here. Registration is now open. Register with code CONNECT21 for an additional 15% discount. We hope to see you this summer at the leading conference and trade show for top Amazon sellers. A Digest of Best Practices for Amazon Sellers 2 MEETING DEMAND In a year where demand outpaced anyone’s wildest expectations, we asked sellers what Inventory Forecasting, hurdles they had seen and foresee for the coming sales cycle. From receiving delays to material shortages and managing inventory dashboards, sellers had plenty of issues to Inventory Logistics and wrestle with this year, and a lot of solutions to get them through. Shipping Management BIGGEST CHALLENGES • Keeping the right inventory in stock • Tax Nexus (physical & economic) Moderators • Lost/damaged/destroyed inventory Anton von Rueden, President • Receiving delays – unplanned, unexpected & COO, Boosted Commerce • Right-sizing – operate two different businesses • KBG Amazon Program – Amazon will print workbooks for them and they have been Matt Snyder, Senior Director a big competition for them of Amazon, Vari; Former • Random consumer products – inventory demand planning has been difficult after covid Amazon Insider • Making sure discontinued product are moved out – and how to gauge forecasting without a lot of sales history Recorders • Raw material shortage (most suppliers increased 5-7%) Leilani Gastelum, Product • Full truck load – quicker receiving time Owner, Sifted • FBA problems to receive shipments: can take 4 weeks to be received • Needed to change manufacturing to the U.S. Courtnie Clemens, Director of • Material shortage issues (industry has been slowing down) Brand Management, Boosted • Amazon has limitation on storage; receiving is a lot slower • Improving IPI – Sending inventory and IPI keeps going down; several SKUs that Commerce need to replenish (mark other SKUs as not replenishable), need to lower # of skus so that your IPI will go up • Manage FBA inventory • Inventory dashboard: will show you which product you want to restock, but how is that matrix calculated? BEST PRACTICES Inventory Forecasting – The Magic Wand! • Twice daily checks • NetSuite Inventory forecasting system • Build in a 30-day cushion to account for unexpected receiving delays • Review monthly sales trends • Amazon replenishment reports • Forecasted SKU by SKU basis, out a full year PRO TIP: • New Product Launching Forecasting BEST PRACTICES • Trial run (3-month supply) Build in a 30-day • Competitive analysis (keyword and niche) • PPC cushion to account for • 90-day sales velocity unexpected receiving Inventory Logistics – The Secret Sauce! • Regular small parcel to FBA replenishment shipments, daily into FBA • LTL shipments every 2 weeks • 60 to 90 days of cover • Reliable partners Shipping Management – The Hidden Journey! • Mostly FBA • Get good software • ERP software • Recovery • Shipping management A Digest of Best Practices for Amazon Sellers 3 DRIVING SALES Unlocking the secret to sales conversions is all about focusing in on the customer and Advertising on Amazon and maximizing efficiencies. Learn how sellers are overcoming obstacles, grappling with advertising options and optimizing their listings in an extremely competitive landscape. Listing Optimization BIGGEST CHALLENGES Limitations of Amazon Moderators • No longer can comment back to customer’s feedback • No control of customer reviews if given for a product that is not yours and no way Joe Kiernan, Vice President of to have it removed Growth, Perch • Product details page changes, corrections or updates are difficult if you can update at all Jason Boyce, Founder & CEO, Avenue7Media Threats • Competition from Chinese sellers Recorders • Counterfeiting and black hat actors Nathan Sieminski, Marketing Costs Manager, Perch • Maxed out PPC...overspending • Capital + content – high interest rates which make margins tough Julie Glogowkski, Client Services Manager Industry Challenges Avenue7Media • For mature sellers, growth is difficult • Low barrier to entry in some categories limits exposure Amazon Fees and Payments • Amazon fees are becoming more and more expensive • Payout distribution is less than expected • No way for sellers to complain or resolve when Amazon holds payments for verification of seller Inventory • Forecasting and managing inventory (especially with products that have expiration dates) • Keeping the right inventory in stock • Large SKU count makes forecasting difficult. Slim margins as a reseller makes it hard to compete on price BEST PRACTICES PRO TIP: Overview • Ramp up Amazon ad spend to drive profits up – easiest way to track ad spend Focus majority of spend on • Focus majority of spend on new products, spend less on higher-ranked products new products, spend less • DSP, sponsored ads, sponsored display • Vine Program on higher-ranked products • Categorize your negative reviews into themes to see if there is something you can change and if changed you can add a New and Improved (value add) to your listing • Infographics – are important for customers when viewing listings, to call out benefits (including with mobile view) • Use videos to increase revenue A/B Testing • Manage your experience or marketing experiments o Improve click-through rates and generate more revenue o A+ details, main images and keywords/titles can also be tested PPC Strategy? • Target A costs. Two budget approach. Stretch budget based on hitting a 15% budget, and then a 20% budget • Return on ad spend varies on a month by month basis • When it’s working, increase the budget dramatically A Digest of Best Practices for Amazon Sellers 4 Amazon’s Ad/Marketing Death Spiral • People get stuck having to advertise if they’re down the page • Try to avoid advertising if possible. Organic from an outside source can really help your listing to go up. Use money to reduce the price because once you’re on top, it’s easier to stay there • Split tested strategy. Doesn’t work for every product, but it can be highly successful. Might take longer. Sustainable, ad-free campaign • 80% A costs on advertising on new product launch. Price elasticity testing to see what it takes. Counts that discount on the target retail as the price differential New Product Launches • 100-150% A costs for the first few months, after 3 months it needs to be 10-30% A costs. Can stay there for a year or two. It depends on the product. Crunching the numbers monthly and make changes QoQ Listing Optimization • Hire an art student for the summer • Hard to justify a full-time graphic designer/photographer • Students who will do great work with the right direction • May become employees or contractors. For engineering of legacy products, but also videographer Defensive or offensive strategies with target costs to auto set bids • Find balance of overspending or underspending (“Half of ad spend is wasted, but you never know which half”) • Both at times. Times to pull back based on seasonality but experimenting with continuing to spend. PPC will take as much money as you’re willing to give it • Budget is unlimited if you can get the return. Sell until you run out of product • Careful not to advertise yourself out of stock • Best seller lists - it can feed organic Vendors • Performance is relatively similar across vendors but fee structure varies (e.g. retainer, percentage, flat fee) • Add keywords for the listing with those in PPC campaigns – bidding on specific keywords for products that are branded • Automate according to scale • Huge advantage for offloading PPC vendors. If they’re big enough, they can see insights in the aggregate and move more fluidly. It’s hard to train people to manage PPC and keep them around. Pricing and Overbidding/Under Bidding • Difficulties with dynamic pricing due to 1P. Hybrid vendor problem • A/B testing? Splitly does sliding pricing testing • If people are coming to Amazon with your brand in mind, then you can command a price premium • Push it as high as you can, but as soon as it’s above what the market expects, PRO TIP: then it drops waaay off • Product maximization curve. You need so much data and high volumes. Way If people are coming to beyond 20, 30 or even 40 products a day Amazon with your brand Going Premium in mind, then you can • It’s an evolution of customer expectations. Product images, then banners, command a price premium product sales slide, quality has gone up • Watch evolution and stay up to date. Pay attention to widgets. Video is preferred. Great for mobile = it can be the second image you see • Product demos + videos. Differentiate yourself from black hatters • Amazon support program SAS Core. It can be underwhelming, but they can accelerate issues. Depends on the size of the brand. $2,000 a month • Elementary ideas. No access to beta programs • Lightning deals once a week, and they waved the cost, but it’s not worth the cost Content • Understand your customer and develop content targeted at them • Imagining like they didn’t even have a brand in place. How can we frame ourselves as a brand off of Amazon? A Digest of Best Practices for Amazon Sellers 5 CUTTING COSTS With costs often on the rise and out of seller control, cutting spend can often be a Staffing Systems, daunting task.
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