fbpx

Wildcat Brand Management

Amazon Consulting and Brand Management

Home » Selling On Amazon

Selling On Amazon

Helpful Ways to Segment Your Audience and Buyers To Be More Successful

There are many ways in which to segment your audience and buyers in order to try to personalize your marketing to them. The key is to choose the data which will be most helpful to you in making sales. You can segment by industry, demographics, buyer persona, stages in the buying process, and more. 

Helpful Ways to Segment Your Audience and Buyers To Be More Successful

Why do you want to segment your audience? Shouldn’t you just send them all the same message?  The goal of segmenting is to give them the information that they want from you based on the stage of their buyers’ journey.  And if you sell in multiple categories, it’s really important to talk to your audience about the products they are interested in.  If you don’t they will ignore you and think you don’t understand them.  Which might be true.

Let’s look at a few of the most common methods of segmentation.

Niche or Industry

Focusing on a specific niche or industry is the recipe for success when it comes to online marketing. Instead of the “scattershot” approach of a TV ad, for example, you can focus specifically on people interested in pets, golf, health, and so on. Coca-Cola ads run all the time, but if a person is not a soda drinker, avoids caffeine, or prefers Pepsi, all the ads in the world are never going to make them buy.  Those generic ads are designed to make people more “brand aware” and they do not necessarily convert people into buyers.  If you don’t have a huge budget to spend (most of us don’t), then you should focus on your niche and target the people who are likely to purchase your product.

Demographics To Segment Your Audience

Demographic sets are the most common way to segment your audience. They are based on customer traits and can be used to formulate the outline for a buyer persona for the typical customer in your niche or industry.  When you do this, you can easily create an ideal customer story that will help you really connect with your customers.

The most common demographic sets are:

* Age

* Gender

* Marital Status

* Occupation

* Income

Geography

The location of your customers can have a huge impact. If you are a local café, for example, there is no point in marketing to people who live overseas. Targeting by zipcode/s near your establishment can help.  You are able to do this through ads and specific content on your site talking about the local area.  

Lifestyle

Also known as psychographics, lifestyle targeting focuses on hobbies and interests. A person might be interested in music, for example, and could be segmented into professional, amateur, particular instruments, recording equipment, stereo equipment, and so on.   While demographics explain about your customer, psychographics helps you understand why they would buy.  

You need to know if they have some things that they love and won’t compromise on, or what they find fulfilling in life.  That might seem like a tall order, but the better you get to know your audience the better you can sell to them.  Remember, you are providing a solution to their problem, so you need to know what problem they are having.  Do they want a healthy lifestyle but don’t seem to have time?  You can talk about how your product saves time.  But if you don’t mention that, your buyer isn’t even thinking it can work for them.

Behavioral Patterns To Segment Your Audience

This can be in terms of what brands this person typically buys, their buying cycle for items they need to buy regularly, and so on. The patterns can also include bargain basement shopping versus high-end, luxury shopping with no expense spared.  These in some ways are like lifestyle traits, but it’s a little bit more about what their usual year, month, and week are like.

So if they have children that go to a school to learn (vs homeschooling), they might only take vacations during typical school breaks, like Christmas and Summer.  You would need to know this about your customer if you are trying to sell them something related to taking time off and having a vacation.  Or if they are homeschooled, what’s the reason they might travel?  To do an educational trip?  Focus on that value for your customers if they fit in that category when segmenting your audience.

Benefits-Based Segmentation

Every customer is looking for some way to make their lives easier and to even transform it for the better. A soccer mom’s idea of better, however, might be very different from that of a New York City socialite. 

Benefit segmentation includes:

* Convenience

* Value

* Quality

* Status/prestige

A well-rounded marketing persona will have some data about each of these areas which can help you market more effectively to the various segments of your niche, helping you to personalize your marketing message.  You need to layer this into your messages.  And this is where segmenting really shines because you can talk in their language about things that they are interested in and how it fits into their life, and the customer feels like you are reading their mind!

Features versus Benefits

One of the most important ways you can use your marketing personas is when you write your sales letter and similar promotional material. Many marketers tend to give a shopping list of the features of their product without clearly stating the benefits. Don’t make your audience guess what’s in it for them — tell them upfront.

A good example would be car ads. They all list features like four-wheel drive, leather bucket seats, and so on. But what are the benefits of having these? 

Four-wheel drive will help you handle almost any sort of terrain. It might also be safer in bad weather, such as rain and snow.  

These details might not be important to a Manhattan socialite who rarely drives outside of the city, but it would be important information for people living in places that get a lot of snow. People who love off-road types of adventures would also find this an important selling point.

In terms of leather seats, they are sexy, sleek and stylish for a wealthy person, but durable, easy to clean, and kid- and pet-friendly to a busy soccer mom. 

Create different versions of your sales letter for each persona, and A/B split test. Or, let Wildcat Brand Management do the work for you, so the right marketing message gets shown to the right person.  When you are creating listings on Amazon, you can really talk to your ideal customer and make them feel great about your product when you understand your buyer.  So let’s talk about how we can help you write listings that will convert and sell more of your products. 

5 Tips For How to Price Your Product On Amazon

When you create a product, one of the first things you’ll have to consider as you complete it and get it to market is how much you will sell it for, what your expenses are, and how much profit you’ll make from each sale of the product.  When you are selling on multiple channels, one of the biggest questions comes from pricing on Amazon.  You should consider how to price your product on Amazon to make money. 

5 Tips For How to Price Your Product On Amazon

When you get to the stage of considering how to price your product on Amazon, here are some things to consider about selling that you might not have considered.  

1. Know Your Market And Competition 

When you create a product, it needs to be based on the problems that your ideal customer has and wants to solve. Part of knowing your market also includes knowing how much they can afford to pay for your product, based on where they place the importance or need of your solution.  You can do a lot of research right on Amazon to figure out what other related products are selling for and what the costs likely are.  

You can use the Amazon FBA Calculator to figure out the costs and fees to help you understand the margin you might be able to expect.  As you differentiate your product, you will be able to have a higher margin.  Try to stand out instead of being like every other listing on the platform.  When you are thinking through how to price your product on Amazon, aim for the prices on the first page of results.  Since it’s your goal to get to the first page and ultimately to the first 3 positions, you need to know that you will make money at that price.  So start with that knowledge and consider the other options.

2. Understand the Various Pricing Techniques 

There are numerous pricing techniques that you can learn about, such as cost-plus pricing, which involves adding up your costs then adding a specific markup. Then there is competitive pricing, which means that you check what your competitors are charging and base your pricing on theirs. You can also use value-based pricing and price your products based on the value of the item. 

The most efficient way is to choose the way that is most comfortable for you. It’s very important to know what your fulfillment fees would be and work to lower them through changing packaging to fit into a lower tier if possible.  When you can spend to acquire that customer (meaning you have more margin or more repeat customers), you have a huge advantage over your competition.

3. Know Your Costs For All Parts Of The Sales Process

No matter what pricing method you choose to incorporate into your product development, it’s imperative that you truly know your costs. When you can document how much it really costs you to produce a product, it’s going to be easier to not only price the item but also to justify the cost. 

So being aware of all the costs in the process, from the cost to manufacture the product to the fulfillment fees and marketing, you need to know what your profit margins are.  And don’t forget about the cost to write the listing and do the product photography.  These are things that you don’t want to skimp on because they are going to help with converting the customer to a sale.  Your investment in making a great listing and possibly advertising will pay off as your sales go through the roof.  

4. Know Your Customers’ Costs 

Another important factor when determining your price is to consider the other costs your customers may have associated with your product. For example, if there are taxes added, shipping, and other factors that you know about, always consider them in your pricing strategy to ensure that you maximize your price without outpricing your customers. 

While you might not think about this as a factor, it’s something that your customer is considering.  Whatever you can do to help with these, like making sure the customer experience is outstanding and teaching them how to use the product to it’s fullest potential, all go into their consideration.  When you think through all the costs to the customer, you can even create a better product by possibly including some accessories or making some adjustments to sell at a better price.

5. Determine Their Price Sensitivity 

Some buyers are more price-sensitive than others. If you have a lot of competition and your buyers know about the other offers, it will help you to consider this factor so that you can choose whether you’ll be the price leader or the value-based choice.  Considering how to price your product on Amazon needs to take into account the prices on the first page of results and how your product compares to those.  

Amazon buyers tend to not be as price-sensitive as other shoppers on other platforms, but if you are in a saturated market like garlic presses, pretty soon they all look the same.  Standing out and showing your value through growing your brand and knowing your customer all pays dividends when you find out how to price your product on Amazon.

Pricing strategy is affected by your ideal audience’s spending practices as much as the cost to produce the item. It depends on where the product you sell fits in with the buyer’s needs, wants, and desires. For example, whether this is a substitution to something they already use or a brand-new expenditure. It’s important to consider all these factors.  Consider how you can make the decision a no brainer for your customer through excellent keyword research, dialed in advertising, perfect pictures, and well-written listings.  This will get you more conversions and more sales and higher on page 1 on Amazon, which will then get you more sales.

If you need help with pricing your product or getting your brand on Amazon, schedule a call with us, and let’s talk about how we can grow your brand and more on this platform.

When Selling On Amazon FBA, Do I Pay For Shipping?

When Selling On Amazon FBA, Do I Pay For Shipping?

Many companies ask: When Selling On Amazon FBA Do I Pay For Shipping?

When brands are new to selling on Amazon, they often see the sales price of the product and think that people are making bank selling to customers.  What you might not realize as a brand are the fees associated with selling on Amazon.  The fees related to a sale on Amazon can amount to 30-50% of the sales price.  So you typically see sales prices higher than MSRP because the seller needs to recoup the fees + the cost of the product and make a little money for their time.  

On Amazon, you have sale-related fees that are based on the item category and sales price.  These fees can be from 6% – 20% but average around 15% of the sales price.  If you are selling media, you can also have a variable closing fee of $1.80 per item.  

You also have a choice fo setting up an individual seller account or a professional account.  The individual account incurs an additional $1 per sale while the professional account is $39.99 per month.  As I have said before, if you plan to sell over 40 items per month, it’s best to get the professional account and save a little on the fees.  You have more robust reporting and are able to sell in all categories.  You also need a professional account if you plan on using 3rd party software, so if you are using a platform to manage inventory across several e-commerce sites, you might need it from the beginning.

The main question you might want to be answered is, When selling on Amazon, do I pay for shipping?  The answer needs a bit of an explanation, so let’s get started.

In the first scenario, you are shipping the items to customers.  This is called FBM or fulfilled by the merchant, or MF for merchant fulfilled.  You would store the items at your warehouse or 3rd party logistical warehouse and when the item sells on Amazon, you pick, pack and ship the item.  In this scenario, you pay the cost at the time of shipping through your shipping service provider or you can purchase a label on Amazon to ship to the customer.  

You are able to create different shipping profiles that allow you to charge the customer for shipping at the time of purchase, so you might not lose money on shipping in this case.  You can charge a reasonable fee to ship and one that would cover shipping to most of the country.  While charges do vary depending on where you are located and the customer is located, you can find the rate to the furthest location and try to make your shipping charge equal to that amount.  You have the ability to set shipping rates by going to settings in the upper right corner, and clicking on shipping settings and creating profiles from there.  You then apply the profile to your products and voila! you are charging for shipping.  

You can also choose free shipping on your products, and add some of the cost into the product price so that you are not losing money with your shipping costs.  While you probably can get better rates creating shipping labels at your office as compared to purchasing them at the post office, you still have to pay for the shipment and that comes out of your price you get for the item.  Customers love free shipping but you need to decide if you can add the cost into your product price to recover some of the charges.  

In the second scenario, you sell the items through the FBA or fulfillment by Amazon program.  In this case, the items are available in Prime, and Amazon pays to ship the items to the customer.  You are responsible for paying the pick and pack fees, referral fees, and any other related fees for the sale once the item is sold.  Amazon stores the items in their warehouse and ships out based on where the customer is located.  

In this case, you do not pay for the shipping when Amazon ships the item from the warehouse.  But, you DO pay for shipping into the Amazon warehouse and some storage fees, depending on how long the item is stored and the size of the item.  Amazon allows you to use their very reasonable rates to ship to warehouses via UPS, but you still might pay from 50c + to ship an item to a warehouse.  (You can lower those costs even further with LTL shipping to pennies a pound) And Amazon usually has you ship to multiple warehouses, which can increase costs because they are often on the coasts.  Sometimes if you ship more than 18 of the same item (also known as a SKU), you will ship them all to a distribution warehouse.  Amazon then sends them to other warehouses – which does not cost you money but it does cost you time.  Those items may not be available to customers for 1-2 weeks after being received because they must be shipped to another location and checked in.

With the second scenario, your costs might be less than if you pick and pack, process and ship the item yourself because you can package the items together, ship them once, and then Amazon does the rest.  You can work more efficiently and manage your processes of shipping in case packs to your wholesale customers as well as Amazon.  In that case, you would not need to add additional systems to manage and ship individual items.  This can make selling on Amazon much easier, and customers love the option to Prime to ship quickly and have a lot of trust in Amazon’s processes.  

So if you have been wondering, “when selling on Amazon FBA do I pay for shipping?” as the manufacturer, you don’t have to pay for shipping to the end customer but you do have to pay to ship it to the warehouse, along with other fees that are associated with them handling your items and getting them out to the buyer.  

If you are looking for help with getting set up on Amazon FBA or writing your listings, you can reach out to us and schedule a call to discuss your needs.  We do all the things from listings to full management, and even consulting to get you started on your way to a successful business on Amazon.  Whether or not you intend to sell directly on Amazon or just let your wholesalers sell on there, you can control what your brand looks like on the marketplace.  Give us a chance to show you what you can do!

How Does Selling On Amazon Work For Brands?

Brands can leverage the traffic of Amazon for their own sales by selling directly on the platform.  Doing this can achieve more brand recognition and improve your sales and profitability, but it needs to be done the right way.  You might wonder how does selling on Amazon work, but getting your first sale can be easier than you think.

how does selling on Amazon work for brands

Individual Vs Professional Account

Your first decision is whether you want an individual or professional seller account.  I would recommend signing up with an email address that is different than your regular amazon buyer account so that if other people need access you are not giving them the keys to your personal buying habits.  This is your first hurdle to learning how does selling on Amazon work.

With an individual account, you can create an account for free and do not get charged unless something sells.  You can create new listings for your products, but you pay an extra $0.99 whenever something sells in addition to the selling fees.  You also have limited reporting and cannot use external software (usually) to manage your account.  If you plan to sell a few items (less than 40) per month as a hobby, this can be the right choice.

The professional account does have a fee of $39.99/month, so if you plan to sell 40 or more items per month, this is the right choice.  You also get more robust reporting and the ability to use 3rd party apps and tools.  You also can upload listings using a spreadsheet, which can come in very handy if you are making new listings for the catalog.

As a brand, you will likely want to create listings on Amazon for your products, regardless of whether you allow other sellers to sell your products on Amazon.  You can control the way the listing looks and the actual copy when you create the listing.  Having the ability to upload a spreadsheet to create listings is not only quicker but when someone changes your listing (it happens more than you think), you can re-upload the spreadsheet and “fix” the issues.

Shipping Yourself or FBA (Fulfillment By Amazon)

How does selling on Amazon work using FBA? FBA is a way of selling on Amazon where you ship the items into Amazon’s warehouses (and you pay to ship it there at a very reduced rate) and Amazon stocks the item and ships it when sold.  It does carry additional “pick and pack” fees that are close to the cost to ship it yourself.  It can depend on what you are selling on Amazon, but the convenience can often outweigh the extra fees.  Amazon also manages the customer service aspect so if an item is late, doesn’t deliver or other issues, they will work with the customer on a resolution.

You might wonder if it saves a lot of time to sell on FBA?  When you sell using FBA, you ship items together in a box, one time.  So if it’s 20 different widgets, you ship them all to the warehouse in one box.  You might have to ship different amounts to different warehouses (you don’t get to pick which one it goes to) but usually, if you ship 18 or more of the same item, it ships to the same warehouse.  Instead of taking the time to individually pack, label, and ship items individually to customers, you are doing it more in bulk.  

If you are a Prime member, you know that members prefer to buy Prime offerings.  Even when a merchant fulfilling the same item might be a dollar or two cheaper.  So it results in more sales with less effort.  

If you ship items from your location, it’s called FBM or Fulfilled By Merchant.  You are responsible for making sure the items get shipped daily regardless of the number of orders and your staffing.  This can place limits on 1-2 person operations because it’s hard to take vacations or days off if you have to ship product daily – Monday through Friday.  Shipping costs depend on what class of mail but you might spend anywhere from $4-$20 shipping an individual item.

How Can Brands Sell On Amazon?

How does selling on Amazon work for brands? As a brand, you are in many ways just like a regular retailer.  There are fees associated with each item that sells, so you often find higher prices on Amazon because the seller needs to recoup the fee and a profit.  As a manufacturer, you can have an advantage because you have a lower cost than someone who purchases the product wholesale.  This might allow you to sell the product at retail prices and make a higher margin.

The fees that Amazon charges for selling are easy to calculate using the FBA Revenue Calculator.  If you do not already have the item in stock, you can find something similar to the product you want to sell and it will give a good estimate.  The fees for selling on Amazon are related to the price of the item, so a higher priced item will have a higher fee.  You will need to plan on higher fees with FBA but the ease of selling through FBA often makes up for it.

How Can Brands Control Their Listings?

The best way to control your listing and what it contains is to establish a brand registry account.  This can be done if you have a trademark for your product and submit an application.  Amazon verifies the trademark and establishes the account.  This is not the same as an Amazon selling account and can be done regardless of your having a selling account.  Setting up a brand registry is the first step to controlling your listings.

Once established, this does not gate your listings or prevent sellers from selling your genuine product.  This does allow you to add video and EBC (enhanced brand content) to your listings that has been shown to increase conversions and sales.  This is one of the biggest features of having brand registry.  You are also able to use Sponsored Brands PPC and have the ability to advertise in placements that you cannot use in regular sponsored product ads.  You also can have a brand “store” where you feature your story and more about your brand in addition to your products.  This can drive more brand loyalty and sales.  

Selling on Amazon can be confusing and getting started is not always easy, but with a partner, you can find your way around the platform.  If you need an Amazon consultant to help you with setting up your account or launching PPC, schedule a call with us to learn more.  

Can Selling On Amazon Be Profitable For Brands?

When you are a brand, it's important to protect your products. Selling on Amazon might be something that you are concerned about because you feel there is little control over it as a brand. In this article, I want to explain how brands can sell and be profitable on Amazon.  I think there are 2 ways to do this:

  1. Sell directly – create an account and send items in as a 3rd party seller or working with Amazon as a 1st party seller.
  2. Sell through retailers/partners – selling to other businesses who then list and sell your products on Amazon as 3rd party sellers.

Amazon can be profitable because of the amount of traffic it receives.  Each month more than 197 million people around the world visit Amazon.com  Amazon had 49% of the US ecommerce marketshare in 2018 – more than ebay, walmart and apple combined.  Add to that the fact that 95 million people have a Prime membership in the US and over 50% of sales on Amazon come from 3rd party sellers.  It’s the 8000 pound gorilla in the online market space.

How Selling On Amazon Works

Let’s start with #1 – selling directly.  This one is feasible if you have the staff to manage your account, or you use an amazon account management company like Wildcat Brand Management.  You would sign up to be a 3rd party seller at amazon – go to sell.amazon.com to create an account and get started.  You can choose to ship items your self (merchant fulfilled) or have amazon ship them – FBA or Prime shipping.  Either way, you set up items and once they are available – either you ship them or ship the product to amazon and amazon ships them – you get paid when they sell after your fees.  Fees depend on a lot of things, but it’s around 35% of the price you sell for.  **Again, not an exact number **  You can use the Amazon FBA calculator to determine your actual fees for the item you are selling before you sell it.

How do you make money in this scenario?  When you are selling on Amazon and you sell an item, your price is typically the MSRP or retail price, but your cost is usually 25% of that if you are using keystone pricing.  So if an item costs you $4, you wholesale it for $8 and the MSRP is $16, when you sell it you are charged fees for the amazon marketplace (think of it like paying for advertising) and you have your cost for the item and the rest is profit.  You 100% control the price of your product.

If you ship it yourself to the customer, then you have to deduct your cost for shipping (you can offer free shipping or charge for shipping).  If you sell via FBA the fees are slightly higher and you pay to ship it to the Amazon warehouse (at a very reduced cost).  But you have the convenience of not having to worry about getting it shipped and prime customers are very loyal to Amazon.  If you are a small operation, this makes it easy to go on vacation or take days off and not have to worry about customer support and shipping for this channel.  

In this case, you often have to create the listings and brand image.  If you have a trademarked brand, then you can use your brand registry access to make the listing pop with Enhanced Brand Content and Videos.  Either way, you are writing the copy unless you hire a company to create it for you.  You are finding keywords and writing features and benefits of your product.

Option #2 is to allow another merchant/ 3rd party seller to purchase the items from you and resell them on Amazon.com or other platforms.  In this case, you are receiving your wholesale price for the product with not a lot of risk for the sale of the product.  If you have a trademark, you can easily have a brand registry and control some of the aspects of your listings.  You may write the listings yourself or work with the 3rd party to create the listings.  You want to work with them to ensure your brand image is consistent and presented in the correct way.  

In this case, as part of selling on Amazon, you can establish a contract or agreement with the 3rd party to help with keeping the selling price at MSRP or above and other issues that might occur.  

Profitably Selling On Amazon

To be more profitable on Amazon, you might want to do a few things to drive the demand outside of Amazon.  You can use PPC (advertising) to get eyeballs on your listings on Amazon and increase sales, but here are some other ideas to drive some traffic.

  1. Be a proactive marketer.  Being proactive means getting your brand name out there, doing lives and connecting with customers through emails.  All of these things drive demand for your product and can build your brand as well as sales.  Getting people on an email list on your website before they click over to Amazon is a great idea so you can market to them in the future.  
  2. Be competitive and know your competition.  Understanding your market means you know who you are selling against, what it costs, and what it retails for.  You need to know your competition on Amazon and write your listing based on keywords that your buyers are using to find your product.  You can create better listings using EBC and videos in your listings to really showcase your product to the consumer and increase conversions.
  3. Maximize your offerings.  Add more products to Amazon so that you are grabbing as many of the sales as possible.  Even if you sell to Brick and mortar stores, you can sell on Amazon and protect them with your reseller agreements for pricing limits.  This makes sure that buyers don’t go into BM stores and search for your product and find it cheaper on Amazon.  But the amount of buyer traffic on Amazon says it’s too big to be ignored.
  4. If you find out your product is already on Amazon but you didn’t create the listing or authorize sellers, you can work with a brand management company to ensure your brand is protected against unauthorized sellers or help manage the sellers you have on Amazon if they are not following MAP or MSRP. 

If you are a brand and you want to get help setting up an Amazon account, you can click on the schedule a meeting tab to set up a time to talk, free of charge.  We love helping brands sell more and be more profitable on Amazon.

Amazon is a huge eCommerce platform but it can be hard for brands to break through the noise to get sales.  At Wildcat Brand Management, we manage your amazon account from A-Z so you can improve sales and you can go back to managing the rest of your business.

>

Privacy Policy - Terms and Conditions