Fulfillment by Amazon, or FBA, has opened the doors for
With the rise of new entrepreneurs comes one glaring, disheartening fact: most successful FBA sellers are winning out of sheer luck, and their lack of business sense is blatantly obvious.
This isn’t to say that there’s anything wrong with new era digital entrepreneurs, though. In fact, it’s commendable that so many have taken the first step to starting their own business, and have found success through Amazon’s FBA program.
What ends up happening, even though the businesses are profitable, is that they’re leaking money out of holes the owners probably never knew existed.
Owners of successful FBA businesses don’t know the holes exist because they’ve never attended a traditional business school, showing them the finer points of running an operation the right way.
The ease of getting started selling and shipping products through FBA means that you don’t have to hold a business degree from the world’s most prestigious schools to earn a healthy living.
What typically happens, though, is that the successful sellers end up feeling like they’re running a side gig, or part time hustle, instead of like the full-fledged entrepreneur they should be feeling like.
This guide is going to help you fast track your way to not only increasing your earnings through FBA but also plugging up some of those holes that you may not know actually exist in the first place.
The top 5 mistakes we see entrepreneurs making in their FBA business are finally being brought to light, with actionable steps to help you turn your hobby, part-time, or side gig into a full-fledged business that empowers you to take your future by the reigns, and finally have control over the outcome instead of winging it, like so many current FBA sellers are victims of doing.
Mistake #1: Improper Planning & Utilization Of The FBA Platform
Quite a few FBA sellers have jumped onto the platform, started seeing wins, and just kept repeating the process without any real rhyme or reason. In spite of themselves, they’ve still been successful.
If you’re guilty of making this mistake, there are ways that you can properly utilize the FBA platform to help increase those wins, and leverage them into even bigger successes. The type of successes that can be repeated, to help you build a system.
Using “AutoSuggest” To Find Product Keywords
There are currently two different ways you can come up with product keyword ideas for your FBA business. The first is by using a tool like LongTailPro. The second? Getting your hands dirty and taking advantage of the “AutoSuggest” box.
Let’s address the first tool, LongTailPro. It’s great for coming up with your initial seed list of keywords to target, but it has one distinct disadvantage: it doesn’t have enough useful data to run with. It’s not utilizing data straight from the horse’s mouth -- in this case, Amazon’s customers.
There’s nothing wrong with using the tool to get started and build up a healthy list of keywords, but if you really want a competitive advantage, you’re going to have to start getting familiar with Amazon’s search box.
The “AutoSuggest” box is the search box on Amazon that gives out suggestions to potential customers. As they start typing in their search query, Amazon will come up with a list of potential keywords they could end up typing, to help guide their purchase.
Let’s assume you’re selling laptops on Amazon.
You’re not just going to be pushing the laptops themselves, right? There’s going to be complimentary products you can offer to your customers to increase your average order per sale -- if you know what the customers are searching for.
To utilize the AutoSuggest box, jump over to Amazon and use our laptop example. When you type it into the search box, a list of other suggested products and keywords will pop up.
Put together a list of related product keywords that Amazon deems relevant to the products you’re going to be selling.
There’s another box on Amazon you need to focus on, too -- the “Buy Box”.
Winning In The “Buy Box”
You know, that box underneath the “Buy Now” button on the top right hand side, as your customer is about to make the purchase?
Winning in the “Buy Box” and becoming a featured merchant is a guaranteed way to increase your sales.
There’s no guarantee that you’ll ever become a featured merchant, and land yourself into the coveted buy box. There’s a method to the madness, though, and a blueprint you can follow to help increase your chances of overtaking one of these coveted spots.
The primary determining factors in whether or not you make it into the Buy Box are dictated by your past sales performance. The biggest factors are your ODR (Order Defective Rate), customer feedback, A-to-Z Guarantee claims, and chargebacks.
Offering fast delivery, multiple shipping options, competing on price, and having 24 hours a day, 7 days per week customer service can greatly increase your chances of landing a top spot.
To monitor your Buy Box eligibility, follow these steps:
1. Login to your seller’s account.
2. Click the “Inventory” tab, and then select “Manage Inventory”.
3. Click on “Preferences”.
4. In the Column display list, select “Buy Box Eligible”.
5. At the bottom of the page, click “Save changes”.
One of the key steps in improving where you show up in the Buy Box is your BestSeller ranking (BSR).
Improving Your BestSeller Ranking
Your BestSeller ranking is a factor that’s not completely out of your control. There are things you can do to have a major impact on it, which directly increases your sales -- by getting you in front of more customers on the Amazon platform.
By using the FBA service, you’re automatically placing yourself in the higher rankings, because of the automated customer service process offered to FBA sellers. Keeping happy customers is crucial to Amazon staying successful, and when more customers use Amazon, you make more sales.
Ignoring it completely is a mistake that we see a lot of sellers and our partners making. You don’t have to continue making that same mistake. If you follow the advice laid out in this guide, your sales ranking will increase over time.
Remember, the more sales you make, the better it gets.
Your job is to improve it by limiting the amount of time between each product sale, using whatever means you possibly can.
If increasing your sales rank could be summed up in one sentence, it would be “decrease the amount of time between your product sales”.
Bundling other products you know the customer is looking for is a great way to do that.
Bundle Products For Increased Average Sale Price
Let’s go back to our laptop example. Imagine you’re killing it, selling laptops by the crate full, but want to increase your average order per value (OPV), or decrease the amount of time that goes
The best way to do that is to offer other products you know the customers are going to need once they’ve purchased your laptop.
You can figure out what products to bundle in, and complimentary products that could also increase your overall offering by properly utilizing the AutoSuggest box, as mentioned earlier.
If you go back to the screenshot from our earlier tip, you’ll see that customers are also looking for laptop stands, bags, backpacks, stickers, and a wide range of other products.
Putting together bundles not only increases your average price per order but also goes a long way to helping you achieve a higher bestseller ranking while helping you land into the “Customers Also Purchased” box, too.
Using Coupon Codes
If you want to increase your sales ranking, and tap into a quick way to generate massive amounts of customer reviews, using coupon codes is one of the best strategies you can implement.
Don’t just start throwing coupons at your potential customers, though.
Not only are you going to risk losing money without having an end goal in mind, but you also run the risk of cheapening your brand. That’s why there are only three times you should be using them.
The first is through deals sites. Which we’ll get into later.
The second is when you want to solicit customer reviews and know of reputable, legitimate services who will trade $1 coupons for your products in exchange for the customers making the purchase
The third, and final situation it’s advised to use coupons is when you need to give your sales a kick start. Once the sales have started moving, you’re recommended to increase your pricing to keep from losing your shirt.
Coupon codes have their place in your FBA strategy.
When used properly, you can make a huge impact on your bottom line. Send them without having a strategy in place, and you’ll realize pretty quickly why it can’t be sustained over long periods of time, and could actually cost you a lot of money in lost revenue.
Another mistake FBA sellers are making that could cost them their entire business is through improper inventory management.
Minimizing Returns, Lost Items, & Defective Items
There’s going to be times when the supplier that you’ve chosen ends up messing up your order in one way, or another.
Unless you’re working directly with the head of manufacturing at the company you’ve chosen to source your products through, you’re going to end up dealing with lost items, or defective items, and have to manage returns and refunds.
You want to do whatever you can, within your power, to minimize potential returns and refunds. One way to do that is by properly labeling your inventory, and verifying the products before you ship them to FBA.
Doing this requires that you have the products shipped to your house before you send them off to Amazon. In the beginning, it’s well worth your effort to verify what you’re ordering, and make sure that the proper labeling is being included in each package.
Amazon requires you to have a product UPC code, and an inventory label inside of each box that you send to them. If you’re unable to put the UPC codes on the products yourself, you can pay Amazon to do it for a small fee.
While this does take up more of your time, it’s crucial to minimizing returns and defective products, and proper labeling keeps your inventory from being lost -- costing you money over the long term, and reducing your profit margins.
Inspecting what you expect is just part of running a business -- any business. Verifying your inventory, properly labeling it, and minimizing
You also need to inspect the product listings you’re using to actually sell the products to customers once they’re on Amazon.
Triple Checking Your Listings
This is a simple mistake that a lot of FBA sellers make. Even as common as it is, it needs to be avoided at all costs.
Not only does it make you look like an amateur while you should be building a professional brand, but it distracts your customers from your main goal -- getting them through the sales copy and hitting the “Buy Now” button.
If you’re guilty of rushing through creating the content being used on your FBA product pages, or you’ve outsourced the process to someone else and failed to check in and verify what you paid for, it’s time to rethink your strategy.
Stop, right now, and go back over every single one of your current listings on Amazon. If your grammar and copy editing skills aren’t up to snuff, find a reputable contractor who can do the work for you.
Poor grammar in your sales copy is an indirect way you’re costing yourself sales, and is one of the cheapest, and easiest fixes you can implement at this very moment.
Track Your Results
Now that you know how to properly utilize the FBA platform, you can take steps towards implementing what we’ve laid out for you.
However, before you jump in feet first, and start tweaking your process, you need to have a baseline.
Figuring out where you stand before you start implementing the steps above is crucial for being able to properly measure the impact that the changes have made on your bottom line.
Automating your business through FBA is one of it’s many perks. Just because it’s automated, doesn’t mean you can kick your feet up and relax, though.
There is a wide variety of metrics you need to be tracking and analyzing to ensure you’re making constant forward momentum.
Mistake #2: Failing To Track, Record, Analyze, and Adjust
Unless you’ve gone to business school, and had proper training in managing inventory, tracking, recording, analyzing, and adjusting to hit your monthly revenue goals, a lot of the terms we’re going to discuss here are going to seem like a foreign language to you.
That’s OK, though. It’s why we’re here.
Understanding the terms will help turn your hobby or side job on FBA into a full-blown business that has verifiable metrics you can use to make quick determinations about how well you’re actually doing.
Inventory To Sales Ratios
One major problem beginning FBA business owners make is by ordering too much inventory. The more inventory you buy, the more opportunities you’re giving yourself to potentially hold onto it too long.
If you’re holding onto inventory too long, any number of things can happen -- a competitor could come in with a lower price, forcing you to lower yours and reducing your ROI. The product could fall under legislation that ends up getting it banned from being sold in the main country you’re selling to to.
Or worse, Amazon could ban the sales of your product because of high returns or customer complaints, which was the case for electric hoverboards during the previous holiday season.
To measure your Inventory To Sales ratios, start by adding up the value of all the sales you’ve made in a predetermined period, say a 3 month time span.
Then, subtract the value of any returns that have been made, damaged goods you had to send back to the manufacturer, and discounts that you’ve given to customers from your gross sales.
This will help you figure out your overall “net sales”.
Finally, divide the gross sales by your ending inventory, which leaves you with your inventory to sales ratio. This number can be multiplied by 100 to give you a percentage.
Your “inventory turns” are the number of times you’ve successfully turned over the inventory you’ve sent to Amazon in a one year period.
According to Wikipedia, the definition of inventory turns is: “The number of days in a year, divided by the inventory turnover ratio.”
Figuring out your inventory turns is easy.
Either take your Cost Of Goods Sold (COGS) and divide it by your average inventory, or the amount of sales you’ve made in a specific period (say, 3 months) and divide it by the inventory you keep on hand.
In general, a higher inventory turn is preferred, because it indicates that you’re making more sales in a set period of time, and holding onto less inventory.
It’s a metric you need to track and manage, though, because if your inventory turns ratio is too high, you could fail to supply the demand that exists in your market.
Gross Margin ROI
Your gross margin ROI or (GMROI) is the evaluation you use to determine your inventory profitability and needs to take into account multiple aspects of your business that a lot of new owners fail to realize.
To calculate your GMROI, you need to take your annual sales amount, and divide it by the average inventory cost. This difference, explained as a percentage, will help you determine your total return on investment.
For instance, if you have $100,000 in inventory, and you’ve been able to sell previous batches of inventory at $150,000, your gross margin ROI would be 150% -- or 150% of the amount you spent to acquire the inventory, and get it to Amazon.
Cash To Cash Cycle
The cash to cash sales cycle is how long it takes you from paying for the inventory, to receiving cash from your customers.
It helps to determine how much cash you’re going to actually have tied up in your business, and a quick way to determine how long it’s going to take you to see the return on your investment (ROI).
By understanding your days of inventory, you’ll be able to figure out how long it takes you to see the full return.
Days Of Inventory
Ok, stay with us here. Almost done.
Recording your DOI means that you’re going to be tracking how long it takes you to completely turn over (or sell) the inventory you’ve shipped to FBA, and then figure out how many times you can do that in one calendar year -- 365 days.
Build Your Own Tracking Spreadsheet
Amazon can provide you with a lot of different metrics to help you judge the viability of your products, but nothing works better than building your own spreadsheet.
You can build it in the office software of your choice, with the majority of business owners using spreadsheet software such as Microsoft Excel, OpenOffice Calc, or even Google Sheets.
The metrics you want to include, track, and analyze are:
• Cost Of Goods Sold (COGS)
• Days Of Inventory
• Inventory Turns
• Cash to Cash Cycle
• Return On Investment
Remember, if you don’t track it and consistently analyze, you’ll never be able to adjust it. Being able to quickly glance at your stats and make a determination on what can be improved is how you increase your bottom line, in any business.
Mistake #3: Not Building A Proper “Brand” For Their Business
If you take the time to go over Amazon’s best seller’s list (which should have been done long before you get to this point) you’re going to notice that the biggest sellers all have one thing in common -- they’ve built a brand for themselves.
These days, you don’t need a high end marketing or branding agency to achieve the same results. In fact, after reading this section of the guide, you’ll be equipped to put together your own branding.
The first step is building (or having built) a website that represents your product lines, and your company.
The colors you choose, your business name and logo, and the types of products you offer all help to determine your branding, and should remain consistent both on your website, and whatever promotional platforms you use -- mainly, FBA in this case.
Build A Proper “Branded” Website
Taking advantage of the FBA platform makes building your brand on it easy. However, you have quite a bit of power that’s being untapped, in the form of building up your own branded site.
Having your own site gives you multiple new opportunities to increase your sales and revenue, if you use it properly.
Things like promoting your products on social media aren’t really feasible if you’re just sending the customers straight to your product pages on Amazon.
Likewise, with a branded site, you’re able to get in front of the communities that use your products, and could also end up becoming customers at some point in time.
You can separate your products from Amazon, and even offer products that are only available through your website, along with other incentives that are only available to visitors of your site -- coupons for instance.
The goal with a “branded” website is to use the same look and feel across every platform you use -- from Amazon, to your website, to social media platforms, and even in the advertising that you use.
Push Affiliates To Join
One of the best ways to increase your sales is to build a sales force that are constantly pushing new customers to both your website, as well as your product listings on Amazon.
If you’re unfamiliar, this sales force is typically called an “affiliate”, which means they earn a commission each time they recommend someone to purchase one of your products.
A lot of people fall flat when it comes to figuring out how to go about finding affiliates, but there’s a cheap trick you can use. Amazon’s Associates program requires that all affiliates include a disclaimer on their blog, stating that customer could be sent to Amazon and the blogger could earn a commission.
To use that to your advantage, think of keywords that people searching for your products might be typing into Google to find blogs to read, who provide information about how to best use those products.
At the end of your keywords, put this blurb into quotes: "participant in the Amazon Services LLC Associates Program, an affiliate advertising program"
In other words, type this into Google: your niche topics “participant in the Amazon Services LLC Associates Program, an affiliate advertising program” -- adjusting your keywords to the one’s you’ve just brainstormed.
What this is going to do is bring up a list of blogs that are part of Associates, which means they’re already an affiliate and are used to earning commissions.
Then, you want to take the time to reach out to the bloggers, letting them know that you’re a seller on Amazon, and are offering to give them sample products in return for a review.
Once the bloggers accept, send them the products, and then follow up to make sure the review is posted.
After, the blogger will begin sending traffic to your product pages, earning themselves a commission in exchange -- while you increase your number of sales.
Utilize Your Blog
An easy way to get in front of communities that could end up purchasing products from you is through the use of a blog.
Think about the last time you saw someone trying to push their products into a group that you were apart of. It’s spammy, right?
Now think about another situation where people have shared relevant, high quality information to the same group, that just so happened to have the company’s branding attached to it. Not spammy, right?
That’s why you need to implement a blog onto your branded website. You can promote the content in a lot more areas of the web without being viewed as a spammer.
If you’re not a writer, don’t worry about coming up with the content yourself. You could reach out to the bloggers from the previous step, and ask them to write it for you, or use one of the many services available.
Implement An Outreach Campaign
Now that your branded website is up, and you have a blog running, it’s time to start getting it in front of the community.
The step you previously used to find affiliates to help push your product sales is the same strategy you’re going to use to find blogs and other websites that may be interested in linking to the types of content you’ve put on your blog.
This part does take a bit more work, but the payoff is well worth the time you’ll invest. Your goal with the outreach campaign is to achieve incoming links to your website.
By getting in front of the communities that use your products, you’re going to be able to not only generate more sales over time, but build high quality links coming into your site that also send referral traffic -- and boost your rankings in the search engine.
If you’ve put any time into it, that is.
Put Time Into Your SEO
Outside of paid advertising channels, another great source of traffic to help increase your product sales is the major search engines.
Ranking higher in the search engines could have you feeling like you need to be a technical wizard sometimes, though. Not to worry, though. If you focus on your customers first, and implement a few basic SEO strategies, the search engines will reward you with higher traffic counts each month.
Instead of using Amazon’s AutoSuggest box, you’re going to use another keyword tool: Google’s Adwords Keyword Planner.
The Keyword Planner will let you come up with a list of keywords that people are typing into Google, so you can begin implementing them into the pages on your newly built, branded website.
Mistake #4: Not Leveraging High Converting Paid Advertising
If you want to instantly increase the sales coming from your FBA products, the best strategy you can implement is putting advertisements on the big platforms, such as with Amazon themselves, Google AdWords, Facebook, and others.
Before you jump in both feet first, you need to know ahead of time how to manage your budget, and make sure that your I’s are dotted, and T’s are crossed.
In other words, don’t start out spending $100 a day on advertising until you know what you’re doing and have a campaign profitable with a smaller amount.
Here’re few tips to help you get started, and make sure that you’ll have the best chances
A/B Split Test Everything
A/B split testing means to test different aspects of your copy, images, and page titles to determine which version resonates best with your customers.
You can start by coming up with multiple different titles for your product pages, creating multiple images to use, and running a couple different versions of the page copy itself.
When you begin testing, you want to make sure that you’re only changing 1 aspect at a time, to ensure the results you receive from the test are going to be quantifiable, and you know exactly which portion of the test made the biggest impact.
For instance, if you’re going to split test your product page titles, you want to write, say, 4-5 different versions. Then, adjust the page title for 1 version, and let a couple hundred visitors see it. Then record the results from your conversion rates with that title.
Next, adjust the page title to include your second version. Allow another couple hundred visitors land on it, recording the final data from your conversion rates once you’ve received enough traffic.
Then, continue repeating the process until you’ve worked your way down the page. The end goal is to have data that will help you figure out which page title to use, with which main product image, along with the right page copy, that’s going to give you the highest conversion rate.
When you increase your conversion rate, you increase your sales. There are tools available to help you with split testing, but most of it can be done with a spreadsheet and a Google Docs file, containing the various texts that you’re going to be testing.
Once you have visitors on your product pages, you’re going to want to implement a way to stay in front of them, especially if they didn’t make a purchase. That’s where remarketing and retargeting come into play.
Implement Retargeting / Remarketing
When a customer comes to your site, and doesn’t make a purchase, they’re usually gone forever. Until now.
With retargeting pixels, you can stay in front of the visitor with your advertisements, keeping your brand and products fresh in their mind.
That means, when they finally come to a decision to make a purchase, they’re going to end up coming back to your website before they visit one of your competitors.
Implementing these pixels is a fair straight-forward process, but one that can intimidate some beginners. The first thing you’re going to need to do is setup your ad accounts with the major players.
Setup Ad Accounts With The Major Players
There are a few different networks that are going to perform better than others, when it comes to paying for advertisements to your site and product pages.
Those are: Amazon’s Advertising, Google AdWords, and Facebook Ads.
To get started on each of these platforms, click the links below.
As you’re creating the accounts, remember to keep your ad budget in mind. While you can dramatically increase your sales by paying for advertisements, it’s also very easy to completely blow through your budget without making a sale.
Because of this fact, you need to spend some time going over videos created by each platform to help you understand how to best utilize your new account, and how to properly set it up to prevent potentially blowing your budget.
Start Working Third Party Deals Sites
Pulling all of this together, between your FBA product pages, your branded website, and creating single-use coupon codes, you’re setting yourself up for increasing your sales through coupon sites.
These deals sites let people save money by consolidating deals from around the web.
Most of the time, they don’t go out searching for deals, though. They rely on business owners, like yourself, to upload your own deals to the site.
To get started, you want to make sure that you’ve created platform specific single-use promotion codes on Amazon, that you can upload to each of the various deals sites.
Just remember to keep your metrics from the spreadsheet you created earlier in mind. If you don’t, you could end up costing yourself money, instead of tapping into an amazing source of traffic that’s ready to buy your products.
After tapping into these advertising channels, you’re going to have a massive influx of new visitors to your site.
Mistake #5: Not Understanding The Power Of An Email List
Ecommerce websites owners are some of the biggest offenders of not properly utilizing the power of staying in front of their past customers -- or their email list, in this case.
Properly building an email list, and utilizing it to it’s full capacity is a great way to even out your sales from month to month, instead of having peaks and valleys that occur in most product sales based businesses.
Chances are, you’re already collecting emails whenever a customer makes a purchase. If you’re not, that’s the first step you need to be taking right now.
If you are, however, there are a few quick wins you can score by implementing some time-proven strategies for not only gathering more emails from potential customers, but also bringing back past customers to make repeat sales and help grow your brand.
Implement A Cart Abandonment Followup
You’ve put in tons of work getting the potential customer onto your site, have products that they want to buy, and then successfully funneled them into putting the products in their cart, only to have them back out at the last second.
What can you do? They’re gone forever, right? Not necessarily.
With a shopping cart abandonment solution, since the customer has already entered their email to get to the checkout portion, you can bring them back.
After abandoning their cart, a few days may pass, and your abandonment software or script will send out a message to the customer, letting them know that they’re only one step away from having your product in their hands.
Just telling them about your products again may not work, though.
Remember, the customer abandoned their cart for some reason -- usually a reason that you won’t be able to quickly identify.
To get started identifying why customers abandon their carts, check out this study produced by Shopify.
That’s where your abandonment solution comes in.
The best way to figure out how to get customers past the point they were at (when they abandoned their cart) you want to split test different strategies.
You can follow up with the customer, letting them know about a hidden promotion you’re running, such as a 10% discount, free shipping, or some other incentive you believe will help push them over the edge, and get them to finally make the purchase.
Remember, the goal is getting them to make the purchase, not cost yourself money. This is another area you need to make sure you’re properly testing, tracking, and measuring the results, to ensure you’re actually still turning a profit.
Collect Emails From Your Site & Blog
Now that you’ve figured out how to bring back customers that were already at the brink of making the purchase, it’s time to start grabbing customers that haven’t yet made the decision to buy, but are enthused enough with your brand to share their personal information -- in the form of an email address.
By having a branded website, you can grab emails on a regular basis, and follow up with the subscribers to convert them into a customer. The best way to do this is by using widgets, or subscription boxes, on your site.
When a visitor enters their email into your subscription box, their information is added to a database on your email marketing provider’s servers, giving you quick access to be able to send out live broadcasts, or even an automated series of emails that helps potential customers understand why your products are the best solution for them.
You can use a service like aWeber or GetResponse to quickly implement an autoresponder onto your site. They have various subscription boxes that make it easy for even the freshest of beginners to have a functioning autoresponder in a few short hours.
Create An Autoresponder Series
Once you have the subscription boxes implemented onto your site, you will need to start brainstorming some emails that can automatically be sent out to new subscribers.
As a general rule, your emails need to take your potential customers from where they’re at right now, on a journey to visualizing having your product in their hands -- and how it’s going to change their lives.
This type of content ranges from industry, to industry, and is usually best produced by the person interested in the topic (you, as a business owner) or a professional copywriter that can tap into your subscribers mind, and help move them from not having your products, to chomping at the bit to make a purchase and get the products in their hands.