he first thing you need to
understand about Amazon
is that Amazon is in it for
the long-haul. Unlike most businesses,
Amazon is not concerned with turning
an immediate profit: they are
consistent, persistent and obsessive
about pricing. Amazon has nothing to
lose, which means most brands have
much to lose on it.
However, if you are not selling on
Amazon, someone is and they are making a profit that could
be in your pocket. It’s more important than ever to learn how
to navigate your business in the Amazon jungle.
amazon for spa resource Partners
Being on Amazon is all about making money and you’re
going to have to throw out all your old notions of how to run
your business and build a brand if you want to compete.
The first and foremost tip is don’t sell products directly
sold by Amazon. It’s like betting against the house. Amazon
knows all. They know what products customers are searching
for. They know what they buy, who the customers are, how
many they buy and at what price they buy it.
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November 2017
“Whether you make money or not, Amazon does,” warns
Buy Box Experts partner, James Thomson, former head of
Amazon Services. “It’s like opening a brick-and-mortar store
in the middle of a cornfield.”
Most sellers focus on selling more products and making
more money. In order to win on Amazon, sellers need to
focus on profitability. You don’t necessarily make money by
selling a lot. If you’re losing dollars or even pennies, with
every product you sell, especially if you sell a lot, you will lose
a lot. What matters is how much profit you make per dollar
sold.
How do you do this?
Thomson recommends eliminating SKUs with negative
cash flow and negotiating costs with wholesalers and
suppliers. He also suggested buying top keywords so you
appear first on customer searches and over-invest in listings to
answer any and all uncertainties a customer may have before
they realize they had them. Excellent photography and video
of customers using products is also important.
We live in an experiential society. People expect to be able
to Google their way to knowledge.
“Hope rarely gets you where you want to go. On Amazon,
you need to buy your way into the game. The reality is 20 to
40 percent of items sold on Amazon lose money,” said