Five Business Tips to Improve Your Amazon Sales
By: Skip McGrath
#1 - Change your account to use Fulfillment by Amazon (FBA)
I have been selling on Amazon since 2006 and eBay since 1999. Before Amazon
came along, eBay was responsible for about 80% of my sales and I only sold about
20% on Amazon. Today we are now 80% Amazon and only 20% eBay.
#2 - Maintain Excellent Account Metrics
Amazon looks at all of your account activities to see how well you are doing. These include:
If your metrics get too bad, Amazon will suspend or cancel your account. Also –this is important to your overall sales because, Amazon uses these metrics as a major factor, when they determine who wins the buy box.
Price is still the biggest factor when Amazon determines who wins the buy box, but if your metrics are poor, you can lose the buy box even if you are the lowest price seller.
#3 - Increase Your Inventory
The more items you have listed (and in stock), the more you will sell every day. I am always amazed to see sellers who have been selling on Amazon for more than a year or two, who have less than 100 to 150 listing SKUs. (SKU stands for Stock Keeping Unit. A SKU is a number you make up to keep track of your products. Each separate item you list on Amazon requires a SKU. If you don’t assign one –Amazon will assign a random one.)
My wife and I used to have over 900 SKUs (different items listed). At that level, our daily sales were approximately 55 items per day.
We're getting older and wanted to slow down, so we decided to scale our business back. Now we are down to about 500 SKUs, and that translates to about 25 to 30 items per day. As you can see, there is a direct correlation between the number of active SKUs and your daily sales.
Keep investing your profits in finding more items to sell. Watch your
inventory levels to make sure you replenish items when you start to get low.
#4 - Reduce Your Non-Performing Inventory (NPI)
NPI is inventory that sells either slowly or not at all. Keeping this inventory in stock hurts you in two ways.
The fastest way to reduce NPI is to lower your price. But sometimes,
even that doesn’t work. When this happens, I remove the listing and the
inventory from Amazon. Then, I donate the inventory to my local thrift shop for
a tax deduction.
#5 - Raise Your Average Selling Price (ASP)
If you sell 50 items a day and make $1.50 on each one, then you are making
$525 a week or $2,100 per month. But, if you make an average of $5 on each item,
now you are talking about some serious money ($1,750 per week or $7,000 per
The second item is an item I sell where my product cost is $17.50 (again
including inbound shipping and shipping to Amazon). I sell that item for $49.95
and my net is $38.40. So less my product cost of $17.50, my profit is $20.90.
Which one would you rather sell more of?
Would you like more information on improving your Amazon sales?
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