In this article we cover the top 5 ways to boost your Amazon profits.
Tip 1 Increase Your Price
The simplest way to increase your profits is simply to increase how much your product sells for. Sometimes an increased price will result in a drop in sales. But often it can have the opposite effect and lead to more sales.
Why?
If I offered you a $50 wine and a $5000 wine which one would you want to try more?
Usually people associate a higher price with higher quality. So simply increasing your price to be slightly above your competition can give the perception that your product is better. See the next section on how to make this actually work.
Tip 2 Improve Your Listing
If your images were taken in a dark room with your iPhone, it is gonna be really hard to justify a higher price.
If you invest in high end professional photos, great copywriting and excellent images for your product – then customers are going to perceive the same item as higher value.
The same item will look more valuable with better photos.
The same item will seem better if the copyrighting helps users see the benefits of your products.
Without changing anything but levelling up your amazon listing you can potentially increase the value of your product in customers minds. It will also lead to more conversions too. So the same 1000 customers now order 20% of the time instead of 10% of the time. An instant 200% boost to your profits.
Tip 3 Buy More Stock
I found when I ordered my product in larger quantities I was able to save 10 to 20% or more on my cost of goods. Why?
Small shipments are more expensive. Also, factories give you a discount for buying in bulk.
So my increasing how much stock you buy each time you can drive down your costs and increase your profits.
But this has another benefit too.
If your product costs you $5 a unit and your competition spend $7 a unit – you make more margin for every sale. Your business is more profitable, more sustainable and you can use those extra dollars on marketing to increase your rank and dominate the niche.
Tip 4 Track Your Profits
What you measure, improves.
The first step in increasing your Amazon profits is actually knowing exactly how you are performing.
Which of your products are making you the most money?
How much profit margin % do you really have?
Has there been a decrease or increase in your profits recently? And why?
These are some of the important questions you need to ask yourself on a weekly basis.
A tool like CashCowPro shows you all the key metrics you need to make decisions on your product. You can see your real time profits for your business and also compare how you have been performing over the last week, month or year.
It also gives you deep insights into each of your products. If you are serious about increasing your sales and profits – you need the Dashboard and Metrics in CashCowPro.
Tip 5 Change Supplier
There are 2 benefits to changing suppliers for your product.
First, you should be able to get a lower cost product. Every $1 saved from your costs becomes profit. It also means you use less capital when you re-order stock, your margin improves and your cash flow improves also.
The not so obvious benefit is that you should be able to switch to a higher quality factory.
Higher quality leads to less negative reviews and more positive reviews.
You will also have less returns.
Amazon notices this. That is why they measure seller return rates and penalize sellers that have too many returns.
When I invested into the quality of my product – I ended up getting the Amazon Choice badge for my item. This increased my sales by 200% and allowed me to charge $10 more than the competition for the same item.
Sometimes spending to make your product quality better can have a huge impact on your long term profits. And with Amazon – quality and returns are a huge factor in the ranking algorithm.
Conclusion: Win on Amazon FBA by focusing on the metrics that count
Track your profits and metrics weekly. CashCowPro makes this easy.
Create a plan to boost profits over the next 3 months by improving your listing at the same time improving the quality and value of your product. Find ways to cut costs by ordering more, changing suppliers or using SEA freight to reduce transport costs.