A featured contribution from Leadership Perspectives, a curated forum for enterprise technology leaders, nominated by our subscribers and vetted by the CIOApplications Editorial Board.

BigCommerce

Selling on Amazon without the Growing Pains

With more than 200 million active shoppers and over $100 billion in gross sales during in 2016, Amazon is by far the world’s largest marketplace. In fact, according to BloomReach, in the U.S. 55 percent of all online product searches begin on Amazon, representing a huge opportunity for retailers looking to broaden their product visibility.

For small businesses that have yet to begin selling on Amazon, often there is a reticence to begin selling in the marketplace due to the added burden of managing Amazon listings and orders. I get it. Meeting Amazon’s high customer service standards and dealing with additional inventory can be taxing for small business owners, many of whom already feel as though they are being pulled in a hundred different directions. Keeping track of inventory and resolving shipping problems across multiple channels takes a lot of time to get right. So how do you capitalize on the world’s largest marketplace without adding operational costs?

It all comes down to strategy. Here are three tips on growing your business on Amazon without compromising:

1. Know Your Marketplace

Selling on Amazon is not like selling on your own website. Competition is much higher and sellers tend to win on price. Despite the tighter margins, competitive pricing can lead to greater sales volume, ultimately resulting in a higher ROI overall.

Understanding differences between retail channels, and approaching each in a way that is best suited for its users, is key to succeeding on Amazon. Sellers also should not feel obligated to sell every product through every channel. The beauty of multichannel selling is that each channel can be tailored with a product offering that makes sense for that particular audience. For example, retailers may choose to sell high margin goods on Amazon, trading exposure for net profit while keeping lower margin inventory for their branded storefront.

Retailers must also learn how to cope with ceding control over their own brand, marketing and promotions, all of which are limited when selling through another channel that you do not fully control. In some highly-competitive product categories, your unique branding and positioning may not be as apparent in a marketplace where the lowest price typically wins. If you have a unique, hard-to-find product, you might find those are best reserved for your own site. However, there may be other products in your catalog that are suited for Amazon’s immense scale that will allow you to pull in new customers, then encourage repeat purchases through your product branding and customer service.

Knowing how to best leverage the strengths of both Amazon and your own storefront will help you form the best strategies, and achieve maximum ROI, for each.

SEO, great product reviews, and high customer satisfaction are just as important on Amazon as they are for your store


2. Simplify Inventory Management

Or rather, find a reliable ecommerce platform or technology that can help you manage inventory at scale.

Most retailers cite logistical challenges as a primary reason for not expanding into more channels. Managing inventory used to be a stressful experience involving spreadsheets, physical logs, and juggling skills to prevent shortages and overselling. Nearly every seller has a horror story about generating demand, only to find themselves unable to fulfill the orders in a timely fashion.

But today this need not be an issue—modern ecommerce platforms and inventory management systems have made this process far more efficient for merchants, regardless of how many sales channels they choose to add. Omnichannel retail no longer has to mean Excel hell. Ecommerce platforms designed for multichannel merchants will do 90 percent of the work for you, and using inventory management software that natively integrates with Amazon drastically reduces operational overhead for expanding into new channels.

Make no mistake, inventory mistakes can cost you a sale - or worse, a customer. If you are consistently out of stock, you won’t feature in Amazon’s Buy Box. The Buy Box accounts for 90 percent of Amazon sales, so you don’t want to miss even a minute of eligibility.

Secondly, inventory missteps might result in selling an out of stock item. For example, if you have one backpack left to sell in your warehouse and two customers on your branded site and Amazon click purchase at the same time, who gets the backpack in such a situation? Trying to sell something you can’t actually deliver is a poor customer experience and one that might dissuade even the most loyal customer from returning.

Finding an inventory management system that works for your business helps prevent omnichannel growing pains and allows you to never miss an opportunity to convert.

3. Don’t Forget the Basics

While the Amazon marketplace is a different playground, the basic rules still apply. SEO, great product reviews, and high customer satisfaction are just as important on Amazon as they are for your store.

For example, Amazon has a keyword tool similar to Google’s. Pay attention to the keywords that are used by your customers and your competitors. Attributes like title, subtitle, and product description—all factor into your Amazon search ranking. Having professional product photography will help boost your click through rate. If you’re unsure where to begin, evaluate competitors that rank highly for target keywords, then start by replicating what they get right in their product titles and descriptions.

Great reviews also boost your search ranking. Accurate descriptions, addressing questions on Amazon in a timely fashion and rapid order fulfillment are all effective ways to organically encourage positive reviews.

As more and more shopping moves online, customers will continue to value brands that deliver an exceptional experience. Start by learning what they are looking for and how your products fit into this. What drives them to purchase and what questions can you answer proactively to overcome barriers to the sale? Keeping your customer’s needs first and foremost, even on channels you don’t own, will skyrocket conversions.

Bend, Don’t Break

Incorporating an omnichannel strategy into your business model requires some flexibility. Not all marketplaces are equal. Adjusting your retail tactics for new channels can take time and experimentation to get right. Remember, success online is a marathon, not a sprint.

But if you do it right, the returns from growing on Amazon are certainly worth it.

See Also: amazon partner companies

The articles from these contributors are based on their personal expertise and viewpoints, and do not necessarily reflect the opinions of their employers or affiliated organizations.