Anyone acquainted with the internet is aware that they can buy almost anything at the best prices from Amazon. The e-commerce giant has become every brick and mortar business’ nightmare and generates $4,722 every second, making an average of a whopping $17 million or more every hour.
With over 12 million media products and services, it’s quite well understood why Amazon is attracting more sellers than ever. In the third quarter of last year, third-party sellers accounted for 54% of total units sold. Nine out of ten shoppers check Amazon for the best deal before buying anything, which implies that sellers have endless opportunities.
In this article, we discuss the ideas or plans a seller must have before hopping onboard this lucrative journey with the biggest e-commerce brand. These suggestions have been proposed by Tom Wang, a successful millionaire who has a seven-figure beauty brand on Amazon and is also a thought leader and innovator in the Amazon FBA (Fulfillment by Amazon) selling space.
Costs and margins
Before the product is launched, set a price that covers your production cost, shipping charges, and other costs while also leaving space for more profit in your hands. First, you have to calculate your product’s cost, keeping in mind the prices offered by competitors to ensure better sales and financial viability. Needless to say, the pricing doesn’t have to be over the top if you’re starting out in the business.
You can get introduced to the market with competitive prices. This will allow you to get your initial sales and reviews needed to establish validation for your brand. If you want to go for a hard push, your margins may only break even or be below 10% in profit. But once you are established, you can adjust your product’s pricing later for larger margins.
You must know the goal of selling your product and how you plan on getting results. If you project to earn a certain amount of revenue in the first quarter, you also need a strategy of how that revenue will be earned and what might prevent you from getting the results you expect. For instance, you should prioritize the quality and ease of use of the product.
Let’s say your product is unparalleled in quality, but it is complicated to use. Eventually, the customer may opt for something more comfortable to use and ultimately make their lives easier. A simple example is the Segway. Interesting concept and very well designed, but most people would just prefer to walk.
Similarly, if your design is excellent, but the quality does not match, then the overall worth of that product will drop tremendously. I am sure you have had moments where you were excited to buy a product, but it was defective or it was hard to use because of the poor materials. You want to put yourself in the shoes of the buyer. If you bought the product you are selling, would you buy it again?
Know your competitors
One of the best ways to enter the market is by offering a product that is missing or under-served. To get started, read all the negative reviews on your competitor’s products. This will help you understand the flaws that customers complain about and will help you design your product accordingly. Good research, such red flags, will have you ready with a checklist of everything you need to watch out for as you launch your own product.
There’s a lot of back-end work that goes into making your product market-ready. Before launching it, strategize about how you plan to sell it. Amazon ranks products based on their own A9 system. They designed it to get the user the most relevant results. There are many factors that go into ranking well in their system. You can click here to get a general overview of how Amazon’s ranking system works. If you want to rank on the first page, you have to be well-acquainted with it to construct a plan of action and reach the top of the rankings.
These are the recommendations from Tom Wang. He also coaches young entrepreneurs to kick start their journey with Amazon and teaches them all he knows about the business. Tom went from losing $5,000 on his first attempt in e-commerce to becoming a millionaire. And through that journey and experience, he is able to help others succeed.