How To Increase Your Amazon Product Margin

You put in a lot of hard work to get your product into Amazon. Now you need to maximize the profits and return on investment for your business.

In this article we cover the top strategies for increasing the margin on your Amazon products.

Tip 1 Price

To boost your margin simply increase your price.

You may find that when you increase the price sales double or drop. I had products in the past that sold MORE at a higher price.

You won’t know until you try. Selling 500 units a month with a $10 margin is better than selling 800 units with a $5 margin.

If you are making $5 a unit profit selling at $20, by increasing the price to $25 your margin will jump up to $9.25, as Amazon only take $.15 commission of every extra dollar you sell the product for. With this simple strategy you’ll almost double your profit margin.

Most people talk about their Amazon revenue and how many units they sell a day, but what’s important is how much profit you make on your investment.

Even if you sell fewer units a month but make a much bigger margin, your overall profits can be higher. It’s also less likely that your competitors will notice you because everybody is going after high-volume products.

Test different price points and watch the change in your profits in cash cow pro.

Tip 2 Freight

Getting the products into Amazon, especially by air freight, can chew up your margin.

I estimated that one of my products would cost two dollars a unit by air, but because the packaging was bulky it ended up costing me $8 a unit. Bye bye margin.

It’s essential to ask your factory for the exact dimensions of your product when packaged and the outer carton dimensions so that you can check sea and air freight prices with several providers before placing your order.

This lets you optimize the costs and drop any products that are too expensive to ship in order to maintain a high margin.

Tip 3 Packaging

You can use packaging to increase your margin in two different ways.

First, you can reduce the cost of your packaging by using a printed paper carton that just fits the product. Second, using paper with a nice finish and great design can increase the perceived value of your product, which means you can sell it for a higher price.

Tip 4 Product

There are two main ways to reduce the cost of your product.

One way is to get a better price from your existing factory. The second is to find a different factory which is cheaper. Use both of these strategies at the same time, negotiate with your existing supplier and keep sourcing for new supplies for the same product.

Some of the factories are not on the online sourcing platforms, so it may take a while to find them via your agent.

Tip 5 Perceived Value

You should think of your margin as the middle seat on an airplane.

Imagine you are sitting in between two sumo wrestlers. On the left is sumo warrior Mr. Price, and on the right is sumo warrior Mr.Cost. You are getting suffocated in the middle.

The only way to create space for yourself is first to push down the cost as far as you can and at the same time to push the price up. Only then will you have a decent amount of margin in the middle.

The main ways to increase your price on Amazon are by improving your packaging, photos, listing and bundling. Directing off-Amazon traffic to your listing also allows you to boost the price.

Don’t let sumo warriors Price and Cost squeeze the margins out of your product.

Tip 6 Bundle

Bundle products together to give more for less.

For example, if you sell a kitchen spatula you might be able to get $8 for it. But if you add in three or four other tools the same buyer might need, you can bump the price to $20 or more.

You make more money and margin because selling the items individually means paying for Amazon fees individually. By selling multiple items together as one listing you can attract more buyers for the different keywords and also reduce your Amazon fulfillment fees.

Tip 7 Outside Traffic

If you are waiting for customers to find you through Amazon, they will compare you to all of the search results.

But if they find you through Google then they will go straight to your page. You can charge more if most of your traffic comes from off-Amazon.

Set up marketing on Facebook, Pinterest, Google product ads and optimize Google SEO so the majority of your traffic comes directly to your listing. That way you don’t have to compete with multiple other products, because the customer never even sees them.


Leave a Reply

Your email address will not be published. Required fields are marked *