Opinions expressed by Entrepreneur contributors are their own.
Amazon is an undisputed leader in the ecommerce space and hence, attracts millions of sellers worldwide. With so much competition, valuating your FBA business during a potential exit depends a lot on your sales.
Your sales record during the 12 months leading up to exit is one of the most influential factors used to determine the profits you’ll receive from selling your business. But many Amazon sellers struggle with stagnating sales and don’t always have reliable expertise to help them out of a slump.
After helping many ecommerce brands grow their business, I’ve identified the key areas you’ll need to focus on to increase your product sales on Amazon. Whether you’re a DIY seller or prefer to take the help of a growth accelerator agency, focusing on the below points will help you take your valuation to the next level:
Killer product listings
It’s no secret that without high-quality product listings, you’re sure to get lost in the noise. A great product listing has five pillars:
Keyword research: Create your product titles around the keywords your potential customers are searching for. You can use multiple free and paid keyword research tools to discover the most relevant keywords for your products.
Images and video: High-resolution images and videos add to your brand authority and help differentiate your listings from the crowd. Plus, value-adding videos increase buyer confidence and eliminate any doubts they have.
Optimized descriptions: Your customers get the maximum product information from your product descriptions. Keep the fluff to a minimum in your descriptions and try to provide maximum value through concise and to-the-point information.
Automatic repeaters: Make sure your prices always reflect up-to-date market conditions. You can use advanced tools to automatically update your prices on the fly. This also helps increase your chances of winning the Buy Box (more on that later).
- Social proof: Product reviews on Amazon are highly motivated and can make or break a sale for a new customer. Always prompt buyers to post a review after a purchase. You can entice them with add-ons for posting a review.
Advertisement and buy box
Amazon PPC: PPC advertising on Amazon offers an impactful and economical way to boost visibility for your products. With multiple options like sponsored product ads, brand ads and display ads available, you have a lot to experiment with. Word of caution: It’s easy to lose money on PPC advertising if you don’t have expertise in advertising. From keyword research to writing copy, every single aspect matters. If possible, take the help of a full-service agency to manage it. If not, you risk losing money, time and customers.
Buy Box: Amazon prioritizes sellers excelling in competitive pricing, in-stock products, reviews, and seller performance standards to algorithmically decide the buy box winner. Winning the buy box means you get to be the first option for your customers, increasing the chances of conversion.
You cannot hope to generate the maximum value for your business focusing on Amazon’s single platform. You need to spread your efforts to multiple channels to unlock maximum traffic and brand stickiness. FBA buyers are looking for businesses that have a strong brand and can stand copycat sellers.
Website and other marketplaces: While building your Amazon businessdon’t ignore other acquisition channels like Walmart, eBay and above all, your own website. This your brand recognition, making customers more likely to increase purchase from you.
Content marketing: Your website and YouTube channel should be the go-to sources for your customers to discover the latest and greatest in your niche. Publish regular and relevant content for your visitors to establish yourself as the leader in your niche and generate organic traffic for your Amazon listings.
Social media marketing: Your potential customers spend almost 2.5 hours daily on social media platforms. Take advantage of this to engage with them and build your community. Leverage it to boost your sales and command a price premium later.
Influencer marketing: For every dollar you spend on influencer marketing, you earn a media value of $5.78 as the ROI. So, use the power of influencers and their communities to generate added traffic. The right influencers will also give you exposure to your ideal audience. Leverage this opportunity to build brand value and increase recognition.
Inventory and product mix
The strength of your supply chain operations is the foundation of your sales and valuation. If you scale your sales, but your supply chain isn’t able to meet the demands, your efforts will fall flat.
- Inventory management: Your products should never be out of stock. It hurts buyer experience and your chances of winning the Buy Box. Use analytics tools to always sync your inventory across platforms and get notified in advance in case of low stocks or seasonal demand changes.
- Product mix: You should double down on your best-selling products and choose a targeted marketing strategy focused on those select products. At the same time, having a business focused only on a few products is risky and can bring down your valuation.
- Global expansion: You should explore international markets using Amazon’s customized websites for different countries. Gaining access to a whole new audience can be the last step in scaling your business.
Above all, make sure you’re abiding by Amazon’s regulations. It might seem obvious, but many sellers often ignore them and end up facing account suspension. Having healthy sales is important for your business profits, but it also goes a long way in securing the best possible valuation for your FBA business, if you have plans of an exit. Working on the above aspects of your business is not only sure to give you a headstart, but you’ll also be in a good position when it comes to your exit.