Amazon has been setting revenue on profit records all year in 2020 as more and more shoppers are turning to the online marketplace to shop safely from the comfort of their homes. Sellers on Amazon have been reaping the rewards of this trend towards online shopping, especially during the fourth quarter as families ramp up their shopping for the holiday season. While there isn’t too much time left in 2020, there still are some strategies sellers should be using to maximize profitability down the holiday stretch.
Here are 3 ways you can maximize your profits this holiday season.
1. Take advantage of the Fulfilled by Merchant option
Many Amazon sellers use Fulfilled by Amazon exclusively when selling their products on the platform. The FBA program is excellent for convenience and works great as long as you don’t have any issues with stocking. But sometimes during the holiday season, you could find yourself under-stocked or out out of stock on something. Replenishing your inventory takes much longer during the fourth quarter and sometimes isn’t a viable option if you are losing sales.
Unexpectedly selling out of a product is common among new sellers that don’t have previous years of data to go on when it comes to putting together their inventory requirements. Even experienced sellers can sometimes make mistakes, especially with new products that don’t have established demand patterns yet. Given how unprecedented the current situation around the world is due to COVID-19, even the most well-planned inventory strategies may be running into some unforeseen hitches.
Fortunately, Amazon sellers with accounts in good standing can use Fulfilled by Merchant and still get the valuable “Prime” tag on Amazon. If you find yourself low on inventory for a product that is performing well, create a Fulfilled by Merchant listing for that product and have it ready to activate if you run out of stock. This option will ensure that you don’t miss out on any potential sales while inventory is being shipped to or processed by FBA fulfillment centers.
Check out our article on switching to Fulfilled by Merchant for more details.
2. Closely monitor product performance
On the surface, monitoring product performance is an obvious enough thing to do. Virtually all sellers on Amazon do so to some degree, checking their Seller Central pages to see how sales are going during the holiday season. But to really maximize profit it is important to dive into your products’ performances as deeply as you can.
Study your products that aren’t performing as well as you’d hoped. Here are just a few questions that you might ask yourself:
- Are there any changes that you can make to these listings (like titles, pictures, or descriptions) to make them stand out more or to boost their conversion rates?
- Is the price in line with your competition?
- Would an advertising campaign be worthwhile to boost traffic to this listing?
- If you already are using advertisements, are you doing so in the right keywords?
Also take the time to comb through your products that are performing well. Instead of being content with their performance, make sure you aren’t missing out on ways to improve sales even more. Are there any logical bundles you could put these products in to lift up other products in your line? Could you afford to raise the price to increase profits or lower the price to increase sales? Similarly, would an increase or decrease in advertising be beneficial?
Asking these questions and making the proper tweaks and adjustments will help you get the most out of every SKU in your store. And if you are as data-driven as we are, be sure to check out FeedbackWhiz’s Profit and Loss Tracking Tool. With in-depth analysis on every facet of your business displayed in easy-to-read tables and charts, you’ll have a much easier time finding ways to maximize your profitability.
3. Stay diligent through January
After being so diligent throughout the fourth quarter and the holiday season to maximize your profits, it is natural to want to take a deep breath and relax when Christmas comes and goes. But keep in mind that the holiday season doesn’t end on Christmas or even on January 1 when it comes to Amazon shopping.
Thousands and thousands of potential customers will receive Amazon gift cards from loved ones this holiday season and will be looking for products across all categories to purchase. Travel concerns and lockdowns during the holiday season this year due to the coronavirus will prompt many families to postpone their holiday celebrations into January when it might be more safe to travel. And plenty of unhappy gift receivers will be making returns for Amazon credit that they could use anywhere on the site, too.
For all of these reasons, don’t expect your store to just “go back to normal” right away. Maintain the same laser focus that you had during the holiday season through the first couple of weeks of January to make sure that you aren’t missing out on any potential sales or listings optimizations while your competition is resting on their laurels.
Found this article helpful? Then you’ll love our newsletter! Sign up below to receive all the breaking news and recent trends to help you sell more on Amazon – directly to your inbox!