As part of my job I spend a lot of time talking to business owners who want to explode their Amazon business or use Amazon to generate more cash. Luckily, at Magnet AMS we help them do exactly that, no matter your product or it’s price.
In this article we will cover a few things:
Pricing is not the only reason people buy from you
Now let’s start with why it’s not just about price and why I thought it important to post about this. Last week I spoke with a seller who has been in the plastic moulding business for almost 20 years. Like most modern businesses they sell directly to customers via their site, Amazon, and eBay. They were struggling with Amazon, though, and really wanted to grow sales by 25%.
I went on to ask him why he thought his store wasn’t succeeding: “Because we are more expensive and our product is better quality.” I said, “Well, surely there are benefits that come with your product that your competitors don’t offer,” to which he rambled a few sentences about it being produced in Europe and being British. He also quickly followed up with, “We have tried everything, all the ‘free Amazon repricing tools’ on Amazon and off Amazon, and sponsored ads, but as soon as shoppers see we are more expensive they don’t purchase”.
Interesting, I thought. He went further to say that he wanted to hear some strategies that we had because he’d heard and done everything under the sun, including branding.”Branding is a waste of time in this business because people don’t care about anything but price,” to which I replied, “But you don’t want to or can’t compete on price so how else are you going to differentiate on Amazon?”
If you are a business owner that can’t compete on price then the below strategies could help you generate more sales without completely eroding your profit margins:
Everyone talks about price floors, but this is particularly important for businesses that compete on quality. You are never going to be as cheap as those that compete on price, but you don’t want to be perceived as overpriced especially if other sellers are consistently using Amazon repricing tools. The key is to know the price difference between your product and the cheapest competitor. Another thing to think about is your price in comparison to the average price of the highest ranked sellers. This should give you data for what shoppers consider cheap and how expensive you are, and of course make sure to find your direct competitors’ price points (sellers with better quality products).
Identifying your audience
Today Amazon has an estimated 40% of online transactions, which means less price sensitive shoppers are also looking for products on the platform. For these customers Amazon repricing strategies won’t help you get sales. A key question is what benefits do you provide your customers if you are more expensive, and is it clear on your product pages? Most sellers list features and then complain about bounce rates (and they probably don’t know what their bounce rate is). If your bounce rate is high and time on page is low, then your page is not selling benefits to the shopper and they will move on to something else.
Look at the competitors’ page 1 gallery: do their images look exactly like every product on your page? If so then shoppers probably won’t be drawn to your product because it doesn’t appear to be that different for the premium. Another trick is to compare your product with competitors (a popular tactic used in tv commercials by detergent companies). It’s done because it works!
At Magnet AMS we see Amazon as a great acquisition tool if you embrace features that help you promote your brand to the billions of eyeballs the platform gets every month. Some of these features include sponsored brands, which helps promote your catalogue of products and helps expose your brand to new audiences when they are searching for a related product. Another feature that savvy sellers use is the storefront. It’s a great tool to promote your brand, and can drive traffic to your social media channels which ultimately helps you acquire customers. A+ content is another tool that can help you provide some more branded visuals (videos, infographics) about other products in your catalogue.
There is no one trick to selling on Amazon, it’s about thinking about the shopper’s experience and becoming shopper obsessed. Obsessing about the shopper will help you optimize the buying journey without depending solely on Amazon’s repricing tools.
Obviously for most businesses this can be time consuming and you may prefer to focus on other aspects of your business. If you would rather hand this over to experts we would love to talk with you. Book a free appointment with Magnet AMS here.