The Amazon Search Engine – How it Really Works
The eBay & Amazon Seller's News ~ August 8, 2017 ~ Volume 18, Issue No. 13
Tips, Tools, News and Resources for eBay, Amazon and Independent Online Sellers
The summer slowdown is finally over. Today, the 8th of August, marks the first official day of Back to School season. There are some folks who believe it already started on the 5th, but more experienced sellers realize that you can't really tell when it's mixed with weekend sales, so they look for the first Tuesday of August as the day.
Over the years, one of my best selling training courses has been The Wholesale Buying System for eBay and Amazon Sellers.
I originally wrote The Wholesale Buying System back in 2008 and have updated it several times since then.
Those updates happen every few years -but more importantly, I update the companion members' website once a month. The Wholesale Buying System teaches eBay and Amazon sellers how the wholesale market works. The companion members-only website is where I list all of the wholesale sources I have researched (over 1,500). I try to make sure all of these sources will work in reasonable quantities, and more importantly -will work with small eBay & Amazon sellers.
Important Note: If you have already bought either The Complete eBay Marketing System, or The Complete Amazon Marketing System, please do not buy this book as all of the information is included in those courses including access to the sourcing website.
When it comes to writing better titles and descriptions that sell, I have long recommended Karon Thackson. Karon recently put on a live Amazon Product Description Boot Camp. Karon has now released the entire boot camp contents as a series of videos -and best of all, she is offering my readers a 25% discount on the program. (If you are an eBay seller, over 95% of this information will translate to eBay.) To get the 25% discount, just use the coupon code - amzboot25 upon checkout. (Note: That coupon is case sensitive).
I have personally used Karon's methods (from an earlier training program) and seen almost immediate results in improved sales.
The program includes these key title and description components plus more:
So don't wait. Take this training and put it into effect before the Christmas selling season gets into full swing. Read about the Amazon Product Description Boot Camp now.
Notice from Amazon: Updated process for feedback removal requests:
To correct a feedback for Product Review, FBA Mistake, Personal Data or Foul Language - go to the feedback in your Feedback Manager, look to the right side of the page and click on the link that says: Details. This will bring up a form to request a change.
Wow! This is not related to the newsletter, but I wanted to share it with you.
We live near the Whidbey Island Naval Air Station. We live in a two-story house on a hill with a great view of the waters of the Puget Sound not that far away.
I was sitting in my office working a few minutes ago. I looked out the window and, an F-18 fighter jet went screaming by at wave-top level. The jet was so low, there was a rooster tail of water behind it. My dog, Kipling, is used to the sound of jets, but this was too much. As the jet went by, he jumped into my lap.
I recently had a shipment from China arrive in Nashville that was destined to my fulfillment vendor, My Fulfillment Team. I am not sure why it happened, but the shipment was received by a local freight forwarder who contacted me about clearance.
From the get go, their emails were confusing and incomplete. It turned out they were only a freight forwarder and not a customs broker who could clear the products. So, they told me they would give the shipment to a broker they used. I heard from their customs broker department and was told that everything was under control.
This morning, I heard from them and they told me to take care of this or they would send my shipment to US Customs to be auctioned off.
I usually use UniversalCargo.com, but this was a chance to save some money -Big mistake…
The reason I am telling you this is: If you are importing from overseas, make sure you use a reliable company like UniversalCargo.com. Don't screw around with fly-by-night companies.
I must admit, it was my mistake for not following up - but when a company tells me they are doing something - I tend to believe them. This was obviously a big mistake.
NOTE: Amazon long-term storage fees are effective in a few days - August 15th. On that day, units that have been in an Amazon fulfillment center in the U.S. for six months will be assessed a Long-Term Storage Fee of $11.25 per cubic foot. Units that have been in an Amazon fulfillment center for more than 12 months will be assessed a Long-Term Storage Fee of $22.50 per cubic foot.
If you are going to remove inventory, be sure and start the process before
August 15th. There are a few ways to recover some of your costs.
Interesting fact : On Amazon's Prime Day, just over 57% of all sales made, were by third-party sellers (like you and me) -not Amazon. Sales grew by more than 60 percent for small businesses and entrepreneurs on Prime Day 2017 compared to last year.
And, year-to-date, just over 61% of total Amazon sales were by third-party sellers (like you and me).
Can States really enforce Sales Tax Nexus requirements on you? Maybe not!
Are you bugged by State Sales Tax Nexus issues? Here may be one answer, the No Regulation Without Representation Act, H.R. 2887.
If you agree, write your congressperson to support this.
Despite the proposed bill, there is a lot of debate in the industry about State Sales Tax laws -whether taxes based on inventory you have in an FBA warehouse are legal and constitutional. The Supreme court ruled on this once, but it may be headed to the courts again for clarification.
The 1992 United States Supreme Court decision, Quill Corp. v. North Dakota said: "A Nexus exists in one four instances. The seller has:
The sticky issue is the first one, a warehouse in the state. Some states take the position that if you store goods in an FBA warehouse (even though it's not your warehouse), you are liable for sales tax under the Quill decision.
The matter of having goods stored at an FBA warehouse has been a matter of significant debate among legal scholars, with many claiming that such laws are unconstitutional and/or not covered by Quill Corp. v. North Dakota.
Some states have passed what are being called "Amazon Laws." These states usually have a threshold of annual sales that can vary from a low of $10,000-year, up to $200,000-year, in sales delivered to residents of that state. These so-called Amazon laws specify things such as getting a referral from a website in that state (which could include Amazon product clicks), or having an affiliate relationship with a company in that state.
This will not be settled anytime soon, but the deck is stacked against us sellers. You see, companies such as the big box stores and department stores are behind this legislation. They employ lobbyists who bribe State and Federal Representatives and Senators with campaign contributions and oftentimes straight-out bribes such as money, exotic vacations, expensive dinners and Super Bowl tickets.
And lest you think I am being political, this goes on in both political parties.
Amazon Announced Second Quarter Sales up 25% to $38.0 Billion. Compare that to eBay's 5% increase for the same period announced last week, although Amazon's net income (profits) decreased. Profits were $197 million in the second quarter, compared with $857 million, in same quarter last year. This was due to several investments by Amazon including:
Other significant events included a number of new video series, over a dozen Emmy nominations and:
Amazon's habit of sacrificing short-term profits for long-term growth is not new. That strategy used to affect their stock price -but not so much any more as Wall Street investors have gotten used to it.
Let's get started with this month’s articles:
If you want to make sales on Amazon, the first thing you need to do is come up in search - preferably in first place. That means you have to understand how the Amazon Search engine works.
Some sellers confuse coming up in search, with winning the buy box. They are not related. Winning the Buy Box is a completely different subject that I will cover in an upcoming issue.
So how does the Amazon search engine work?
No one really knows for sure - It's Amazon's biggest secret. But, we do have a few ideas.
First, let's look at what we mean by search results. I searched the word "Blender" and this is what came up. There were over 300 results, but these were the first four:
When I did the search, these were not actually the first four on the page. There were 2 or 3 results above these that were Sponsored Results. These are not true search results -rather they are paid placements - listings that sellers paid for.
Search engines are controlled by what is called an algorithm. What is an algorithm?
An Algorithm is: "A process, or set of rules, to be followed in calculations, or other problem-solving operations, especially by a computer, such as A Search Algorithm."
It's the algorithm that is the big secret. If you knew the algorithm, you could know how to game the search engine, so only your items came up in search. That is a bit of an exaggeration -but essentially true.
Although the entire algorithm is a secret, we do know a few things about the Amazon Search Algorithm, because Amazon has told us.
Amazon's goal for the algorithm is to find exactly what potential buyers are looking for by providing the most relevant search results. This helps sellers too, by not bringing your results up in non-relevant searches.
So what are some of the things we know?
Keywords are King. All of the above are important, but the single biggest factor is keywords (including keyword phrases), in your title and back-end search terms that match the words the buyer typed in the closest.
Let's look at a few ways you can improve your search results:
1. The Amazon Search Engine used to look in four places for matching keyword terms:
That has changed (almost). In 2016 Amazon said they will look for matching keywords and phrases in the title and listing keyword field only. However, that has not completely changed. I am still seeing search results from the bullets and descriptions. (I think they are changing it one category at a time).
2. Not all sellers are good at picking keywords. This can be especially true when you list a product against an existing listing in the Amazon catalog. Many sellers think, you cannot change these keywords. But you can. Here is how to do it:
By now, I suspect every seller on eBay and Amazon has heard of Retail Arbitrage (RA). But, in case you haven't -let me explain. The word Arbitrage essentially means buying at a low price in one market and selling for a higher price in another. On eBay and Amazon, the goods are usually (but not always) purchased on sale or clearance at well below retail.
eBay and Amazon sellers typically buy goods from box stores and large chains, and resell them on eBay and Amazon at a higher price. The theory is: People who cannot find these items in a local store, will pay a higher price to get them on eBay and Amazon (or other sites too). Because most buyers are buying from retail stores, this practice has become known as Retail Arbitrage (RA). Doing this same thing with online sites, is called Online Arbitrage (OA). In this article when I mention RA, I am referring to OA as well.
Finding products in stores and online, works until you buy a product, and discover that the brand or product is restricted on eBay, and/or Amazon, by the brand owner. Now unless the store has a return policy on sale items (which most stores do not), you are stuck with the product.
Most of the famous name designers such as Jimmy Choo, Gucci, Hermes, Channel and so on restrict the sales of their goods to exclusive distributors or certain boutiques and department stores. The simple fact is that Brand Owners don't want their brands selling on eBay and Amazon, so they are doing everything they can to make it difficult.
The brands enforce this on Amazon by notifying Amazon that sale of their brand is restricted, and on eBay by making a VeRO (Verified Rights Owner) complaint. Their basic claim is this is the only way they can be sure sellers are not selling counterfeit merchandise. And neither the brand, nor Amazon, cares if you can provide an invoice from Target or Macys. Unless you have an invoice from the manufacturer or their authorized distributor, they don't care!
It's not just the famous brands who do this, but many of the smaller brands are starting to do this as well... Here is an example:
A few days ago I went to list a pair of cutting boards from Totally Bamboo ™ and got this notice when I tried to create my listing:
And when I clicked on Listing limitations apply, I saw this:
Lest you think this is unusual, take a look at my free article: Restricted Brands on Amazon. (If brands are restricted on Amazon, there is a 95% chance they are also restricted on eBay). This will show you the large number of brands that are restricted.
So back to the original question: Does Retail Arbitrage Have a Future on eBay and Amazon?
The short answer is "probably yes -but it's going to become more difficult, and there are no guarantees." As more brands become restricted, it will become more and more difficult to buy retail products to resell.
We all know there are laws against restriction of free trade -but in this case the law is on the side of the brands:
This means they can prohibit you from reselling their products if you are not an "authorized" reseller.
What usually happens is you get an email (or a letter) from the brand owner telling you to kill your listing and desist from listing any other of their branded items. If you don't, they will file a formal complaint against you.
You want to take these letters seriously. If you get too many complaints about brand infringement, Amazon and/or eBay may suspend your account.
So how do you keep doing Retail Arbitrage (RA) with these restrictions? Most experienced RA sellers carry a smart phone logged into Amazon Seller Central. (For this to work, you have to download Amazon's Seller App).
When these sellers see an item they are interested in buying, they bring up the Add a product form, and type in the UPC (or brand name and product description), and attempt to list the item. If the brand is restricted, they will get a message like I showed above, and they know to pass on that item and look for something else.
As you can imagine this is very time-consuming. These time constraints are now one of the major drawbacks to RA. One trend that has become popular is to hire actual assistants to do the shopping, and virtual assistants for OA shopping.
Personally, I used to do RA quite a bit -but now it is rare (I only do it when I come across an opportunity while shopping for something else). The reason is, RA has just become too time consuming. Most of my business today is selling products I buy from wholesale sources and Private Labeling.
When you do RA, you are selling something different all the time. This means you have to create a new listing for everything you sell. However, with wholesale sourcing, I create a listing once, and when I get low on stock, I just reorder and use the same listing over and over.
As a way of summarizing, let's review some of the Pros and Cons of Retail Arbitrage:
Retail Arbitrage Pros
Retail Arbitrage Cons
It's only early August, but the Christmas selling season is almost here. Don't wait! There are some important steps you can take now to insure this is a profitable selling season.
1. Optimize for stocking Stuffers. I don't know the number
of searches that happen on eBay, but in November and December, there are
over 3-million searches a month on Amazon for the words, Stocking Stuffer.
2. Dramatically increase your inventory. Estimate what you
think you will sell during the Christmas Selling Season -and double it!
Every year I increase the quantity of my better-selling items -yet I still
run out by early or mid-December. So calculate what you think you will need
to get you through the season -and double it. Doing this will give you just
about the correct amount of inventory.
3. Don't Sweat Sales Ranks. A so-so sales rank in January
or July, can be a great sales rank in November/December. Here is what I
mean. I sell several products in the Sports & Outdoors category. That
category has about1.1 million items most of the year, but will expand to
nearly 1.6 million in the 4th quarter. A sales rank to get you
into the top 2% of the category most of the year would be 22,000. But in
the 4th quarter, that number grows to 32,000.
4. Ship Early and Ship Often! Most of the year, I find
that it takes about 2 weeks to get a shipment from my home in Washington
State to an Amazon warehouse distribution center in the Midwest or on the
East Coast. Then it can take up to an additional 4 business days to get my
shipment received and listed in my fulfillable inventory.
5. Wrap Carefully. Amazon hires a lot of part-time help
during the Christmas Season. These folks tend to be under-trained and
over-worked. It is not surprising when they pack goods for shipment, they
throw your merchandise into a box, and maybe (but not always) add a few
pieces of air cushioning. Last Christmas I received at least seven emails
and 2 negative feedbacks for items that were poorly packed for shipment
(Because they were Amazon's fault, I was able to get them removed).
I hope these tips help you have a profitable and successful Christmas Selling Season.
If you are a regular reader, then you know I am a huge fan of wholesale trade shows. In fact -they are the number-one place I use to source products for resale. But there are also opportunities to find suppliers at local retail shows also.
Whenever I attend a local food show or garden show, there are mostly large companies or reps and distributors of large companies -but there are always a few new small companies as well. It is with these folks where you find the opportunities. Let me give you a few examples.
A few years ago, my wife and I went to the Seattle Garden Show. This is a huge show with nursery's selling their plants, and companies selling all types of garden tools, accessories and décor items. When we were walking around, we came across a company selling wood-burning outdoor patio firepits (see photos below).
The company selling these was pretty new (only in business about 1 year), and the owner of the company was in the booth demonstrating and selling the firepits. I explained that we were eBay and Amazon sellers and would like to carry his products.
The problem was there were about 20 different models, and the firepits were large and heavy. I had no desire to carry a large selection in inventory. He said: "That is no problem. We already drop ship for many of our customers." The other thing he mentioned was, they already had several eBay sellers, and many of them were selling at steep discounts which they wanted to stop. Perfect - I went into my talk about the benefits of using an exclusive seller. He agreed, and we had the exclusive on eBay for about six years.
We were at another garden show, this time near Vancouver BC, Canada. We came across a small seller who was importing a line of unique cutting tools from Japan. Once again, we made a deal to buy them for resale on eBay and Amazon. This show was in August and we got our first shipment in early October -just in time for Christmas.
On another occasion, we were at a Gourmet Food and Cooking show in Seattle. There were over 100 exhibitors at the show, and about 15 of them were small entrepreneurial companies with the owners present. We made deals on the spot for three different gourmet food items, and with a company selling one of the earliest wine aerators on the market (they were all the rage a few years later).
The key to being successful doing this lies with your creativity and imagination, your personality and salesmanship. Just keep your eyes open, ask a lot of questions -and make the effort to seek out those small new companies.
ShoeLaces Wholesale offers a huge selection of shoelaces for men, women and kids.
Sleep Safe Box contains everything babies will need. A fantastic gift. Each box contains baby clothes, blankets, and other newborn necessities
Valor Communication, Inc. is one of the largest manufacturers and wholesalers of aftermarket cell phone accessories worldwide
The Real Insect Company sells bracelets, necklaces, key chains, globes, computer mouses, paper weights, and more. All come with genuine real insects, flowers, butterflies, sea life or four leaf clovers.
Heaven Dropt - Human and Pet Bandanas and other goods made from recycled military material.
Quick Click Belts Non-eye belts made from genuine cowhide leather. Cut the belt to the appropriate size and attach the buckle - One size fits all.
Cactus Scratcher - Unsatisfied with hard to use back scratchers? The Cactus Scratcher is all you will need.
C-Fold Tote Bag is water-resistant, durable, machine washable, expands from a flat 8" x 6.5" to a generous 16" x 20" x 7" size bag, with a sleeve that fits over rolling luggage.
Unrooted Plants sells a wide variety of ready-to-use Air Plant Terrariums.
Secret Safes make a high quality magnetic personal property protection box that safely conceals personal items and valuables on any metal surface.
Rocky Mountain Imports, imports and roasts coffee beans from Columbia to Indonesia, and sell a nice line of gourmet coffee.
Sleefs compression arm sleeves are made of tough Non-Woven Antibacterial 80% Polyester 20% Spandex material, with a second-skin feel.
The Sip-N-Oodle is a Beach or Swimming pool noodle you can drink from.
The Thera-Pro Harness is a therapy-grade Dog life jacket created to aid therapists in assisting with water therapy. Swimming is an ideal exercise for dogs recovering from surgery or with limited mobility.
That’s it for now. See you again in a couple of weeks.
P.S. If you missed the last issue, click here to read it.
© 1999- Harry McGrath, Inc., DBA Skip McGrath, Auction Seller's Resource and Vision-One Marketing. All Rights Reserved.
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