Fulfillment by Amazon, or FBA, has opened the doors for a large amount of people to finally start their business — and fast track their way towards running a profitable operation.
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 between each sale you make.
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 to leave an honest review. This is a no-go – we’ll explain why in one of our future posts.
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 the amount of defective items you send to Amazon is just one part in the process.
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 st