Best practices for selling on Amazon

Currently, Amazon is the largest marketplace in the world, and many researchers point to this phenomenon as the future of e-commerce. Best practices for selling on Amazon are related to wide reach, operational infrastructure, payments, customer communication, and promotion from day one of sales. This presents significant savings compared to building this on your own e-commerce platforms. Amazon is the ideal place to start selling, used by thousands of businesses around the globe. With competition increasing day by day, you must be well-prepared to ensure your sales are as effective as possible. In this article, we will share some general tips regarding sales practices on Amazon that will increase your chances of success on this platform.

The customer and their experiences (positive) are the most important

As customer service is a key metric by which Amazon determines your success as a seller, it is crucial to treat matters such as sales service on Amazon and customer communication as the highest priority. If you use the FBA model or Amazon Vendor Central, most operational service is handled by Amazon, but if you work in the FBM model, you and your actions are key in the customer service and order process. Daily monitoring of new orders should become as routine for you as having your morning coffee. It is essential that new orders are confirmed within the timeframe specified by Amazon, but if you can do it faster, the better for you. Amazon will reward this by providing the opportunity to shorten the delivery time.

By confirming shipment, you provide Amazon with information about the speed of order fulfillment by you and allow for the update of shipping information on the customer's account so they can see the status of their order. Therefore, it is important to ensure that, when confirming shipment, all relevant information is included - the date, shipping method, and tracking number.

The shipping time is one of the primary factors influencing purchase decisions, but it is not the only important aspect. The product should reach the customer not only quickly but also in perfect condition, so invest in packaging and protections that are as effective and safe as possible.

Of course, even though customer service on Amazon is prioritized, and we do our utmost to ensure customer satisfaction, there are situations that we could not foresee. If an order is delayed, you should contact the customer to inform them about it. Conversely, if a customer contacts you because they have not received their shipment or the product was damaged, respond immediately and take steps to rectify the situation. By communicating quickly and effectively, you will not only prevent many problems but also increase the likelihood of the customer deciding to purchase from you again and leaving positive feedback. Remember that in this communication, you must adhere to the principles that Amazon follows - the customer is the most important.

In a way, customer service influences sales and bestseller rankings on Amazon. The more positive product reviews you obtain, the more likely you are to increase sales, and when you increase sales, your products will rank higher within the product category. This is how effective selling on Amazon looks.

Inventory levels - the key to peace of mind

Although the tip regarding monitoring product availability on Amazon corresponding to our inventory levels may seem obvious, many sellers still forget about it. You would probably prefer not to find yourself in a situation where you receive an order for something you no longer have in stock. This is a recipe for negative customer feedback - which can dramatically impact future sales. You should continuously track the number of stock in your inventory and update it in your Seller Central - automated inventory integration is certainly a good solution, and there are simple tools available on the market for such integration.

The Amazon algorithm takes various factors into account when ranking products, including, of course, the time and quantity of sales but also the number of products available for sale. If you show that your stock levels are relative to your current sales and that you fulfill them efficiently, it is more likely that Amazon will display your products higher in search results. If the availability status of your products changes to "out of stock," they will drop lower in search results.

This is also the case if you use Fulfillment by Amazon (FBA), but here it is even more important to frequently check inventory and plan shipments to Amazon warehouses in advance. All your goods should be ordered and shipped before the stock runs out in Amazon's warehouses. When using FBA shipments, as well as shipments from your own warehouse, we should never allow our product to be out of stock. Products that are unavailable for an extended period lose their previously earned ranking within the category and fall in search results.

To increase your sales, a good solution is to switch to the Fulfillment by Amazon (FBA) model. This program allows sellers to send goods in advance to Amazon's warehouse. At the time of sale, Amazon sends it to the buyer. Additionally, FBA largely takes care of customer service, delivery, product returns, and refunds. In short, this provides a lot of time to focus on other aspects of your sales on Amazon. Of course, storing and fulfilling shipments through Amazon has its cost but significantly increases the volume of sales (from our experience, it ranges from 30% to 70% compared to sales through FBM) and has a very positive impact on the Buy Box, which we wrote about in the article "Amazon Buy Box - what is it and how to win it?" In most cases, the additional FBA fees are offset by reductions in packaging, labor, and shipping costs that you incur in the FBM model. This way, you save time and effort that you can dedicate to your products and customer service. Selling products through FBA also gives us a massive advantage by obtaining the "Amazon Prime" badge - Prime program customers can count on quick and free delivery of their orders.

Product offerings - an elevator to increased sales

Everyone involved in online sales pays special attention to the quality of product content in online sales. Effective selling on Amazon relies on what you can showcase to your customers on screen and how you can convince them to make a purchase.

If you want to increase sales, you should ensure that you utilize all available fields designated for product descriptions, add high-quality, professional images, and when creating titles and descriptions, consider the best keywords and Amazon's algorithm guidelines. A good practice is to take advantage of Benchmark offers that already exist on Amazon and other markets to see what positions those products hold in the search engine and how your offer can compete with them. This way, you will learn what elements are crucial in achieving such a position and how to choose the best sales methods on Amazon.

Amazon features tens of thousands, even millions of products in many categories, and your offer should contain as much valuable information as possible to stand a chance of being noticed. Here, product details play a key role. Authentic and detailed information or product specifications increase the chances of more effective matching of the buyer's search. However, your product listing must also be friendly to Amazon's algorithm, so it should contain carefully selected words and key phrases that will be indexed by Amazon and appear in customers' search results.

Images are also crucial when selling products online. A listing is incomplete without good photos and graphics. High-quality graphics and images that inspire trust and allow customers to explore product details and satisfy their questions or doubts are simply a "must-have." Your product sale will be effective if the product listing is consistent, and the product image corresponds with the details provided in its description.

Customer feedback - striving for perfection 

If you want to sell effectively on Amazon, you must take care of reviews and product feedback, aiming for the highest ratings on Amazon's five-star scale. This way, both the perception of your product offers by buyers will improve and their ranking will be enhanced. There are several practices regarding selling on Amazon that you can implement to build a good reputation:

Describe products accurately and as thoroughly as possible.

Send products to customers as quickly as possible.

Follow public customer questions on product pages and reviews, and based on them, supplement your listings with missing information. 

Proactively reach out to customers, informing them of any delays or changes to their orders.

Respond to customer inquiries within 24 hours.

Request customers to leave product reviews after purchase using automated emailing.

A negative or even neutral review can ruin a product's sales and adversely affect your business, and in some cases, your seller rating and account may be suspended. Therefore, always try to remedy these reviews by contacting the customer directly, explaining the circumstances, and offering an acceptable solution. If the review does not reflect the factual state, contact Amazon, which can remove questionable feedback.

Amazon currently has over 2.5 million active sellers on the market (Marketplacepulse, 2019), and in 2020, the number of newly registered sellers exceeded one million. Among them are around 25,000 sellers whose sales exceed $1 million per year and about 200,000 sellers whose sales exceed $100,000. With such results, Amazon is a place worth being, but just being here is not enough. You must make your offers stand out from the competition and attract customers.

All of the above sales practices on Amazon are very soft and may seem trivial at first glance, but remember that Amazon's primary value is placing the customer and their experiences at the forefront of the business - it is them and their needs that should drive every activity you undertake as a seller. Simple rules like putting the customer first, taking care of them and their experiences are just some activities that will bring you higher sales, and these are precisely those that are rewarded by Amazon and its algorithm.

We are happy to share knowledge and welcome your input. If you have any comments or questions, please share them below. They may also help other Amazon sellers.

Happy Selling,

Joanna Kubica

Head of Content