I recently spoke at the first annual PROSPER Show, a new conference held in Salt Lake City, which included 90+ speakers and 12 ex-Amazonians. While there, we attended many of the panels and in this blog series will share the tips, tricks, and best practices for successfully selling on Amazon as shared by industry experts. Many of these best practices can also apply to your own branded website! This is the fifth of 8 posts in the series.
Search Engine Optimization (SEO) is one of the most important subjects to ecommerce retailers. There are both similarities and differences to keep in mind when selling on Amazon compared to your own site, and I’m excited to share those with you.
The keywords and content of your item names, titles, and descriptions are of course as important on Amazon as they are on your own website. What makes Amazon search different is their built-in structured data (adding an item to Amazon requires filling out well-defined fields), and their knowledge of your ecommerce statistics. Hosted sites like those on Aabaco need schema or markup to tell Google and other search engines what the data on the page is. (Need help with this? We have a number of vendors who can install schema for you).
Around 70% of Amazon sales are a result of items being found via Amazon’s on-site search. On Google, product searches account for only 9% of total searches, while on Amazon, product searches account for nearly 40% of all searches. In addition to the information you include about your product, Amazon’s ranking and buy box visibility also look at the following:
Your product’s conversion rate
Customer satisfaction (or lack thereof)
Content in customer interactions like Q&A (Avoid yes/no answers!)
It’s important to note that low conversion rates on Amazon decrease your visibility on search, so avoid sending window shoppers to your Amazon pages. Since you can’t use video when selling on Fulfillment by Amazon, it’s also difficult to leverage emotion as a selling tactic. To combat these issues, the experts recommend creating landing pages for your Amazon campaigns. These can easily be hosted on Aabaco Small Business, and can include video as well as any other content you would like to use to promote your Amazon products. This page would then send interested buyers to your Amazon product page to complete the sale and increase your conversion rate. Furthermore, if you’re currently only selling on Amazon, adding new channels like branded landing pages or an ecommerce site can add value to your business’ bottom line, and who doesn’t want that?
By Phil Grier Aabaco Merchant Development I recently spoke at the first annual PROSPER Show, a new conference held in Salt Lake City, which included 90+ speakers and 12 ex-Amazonians. While there, we attended many of the panels and in this blog series will share the tips, tricks, and best practices for successfully selling on Amazon as shared by industry experts. Many of these best practices can also apply to your own branded website! This is the fourth of 8 posts in the series.
One of the most interesting panels we attended at PROSPER was with large sellers on Amazon who sell over $1 million per month. As a percentage of their total business profit, these sellers attributed 55%, 40%, 90%, and 60%, respectively, to Amazon. All of these sellers were diversified and encouraged all of the attendees to follow their lead and embrace new opportunities when they present themselves.
One of these sellers makes 90% of his total sales on 15% of his orderable items. We also see this pattern with merchants selling on their Aabaco stores. Everyone on the panel here agreed that you make your money on good product acquisition, not when you make the sale.
Here are some of their other helpful tips:
Know your product better than Amazon support. Hopefully, this is a given.
Look at items that are doing well and learn why. Is it the price? Customer ratings? General interest? Double down on your winners and negotiate better pricing for the popular items you know will sell quickly.
Negotiate for the best cost of goods and give yourself more cushion when it comes to margin and sell-through!
Don’t be afraid to question your current processes. Look for the things that take too much of your time or make little sense, and change it. Always test and measure these changes to be sure the changes you’re making are the right ones.
Don’t rely fully on the products that are going well today. Your best products change over time, so monitor your products and adapt accordingly.
Finally, some of the largest sellers on Amazon had great advice about working with Amazon in general. Based on their experience, Amazon is focused on high lifetime value of their customer versus the value of the individual seller. In Amazon’s eyes, their customer always wins, which explains why their automated quality guidelines are tuned to such high standards. They don’t mind kicking popular sellers off the platform, and they recommend focusing on Fulfillment by Amazon (FBA) because it takes advantage of Prime memberships and FBA is where most of the largest sellers’ revenue comes from.
Noting that Amazon’s account management changes frequently, the panel also spoke about the company testing the idea of making account management a paid service for their sellers. It’ll be interesting to see if this option becomes available for everyone in the near future.
I recently spoke at the first annual PROSPER Show, a new conference held in Salt Lake City, which included 90+ speakers and 12 ex-Amazonians. While there, we attended many of the panels and in this blog series will share the tips, tricks, and best practices for successfully selling on Amazon as shared by industry experts. Many of these best practices can also apply to your own branded website! This is the third of 8 posts in the series.
Taxes are a sticky, complex subject for many ecommerce retailers. In many ways, it’s still the Wild West with so many states still determining how to best collect taxes. It’s also hard to get clear direction on taxes often because of the liability involved. What follows are some of the insights and suggestions tax industry experts shared at the PROSPER Show. As always, discuss your tax responsibilities with a professional!
If you sell on Fulfillment by Amazon (FBA), you may be selling out of warehouses in as many as 17 states which can act as a “local nexus” for tax purposes, requiring you to collect and remit sales tax. Many sellers don’t know this, and Amazon doesn’t go out of their way to educate its sellers on this. According to tax experts, if you have inventory or employees in a state, it’s probably a nexus.
Overwhelmingly, the experts recommended consulting a State and Local Tax (SALT) specialist to make sure you are in compliance. They suggest you have a low tolerance for being out of compliance on taxes: selling your business, for example, gets a lot harder if you don’t handle taxes properly because audit liability can extend back five years. Take action now, but do so carefully because states generally require that back taxes be paid all at once if you uncover a liability. If you are selling on Amazon, especially as a large seller, you are a lucrative target for states looking to recuperate income. The good news is, according to the experts, states aren’t looking for perfection (often they are unclear of their own jurisdiction and tax rules). They simply want compliance and understand that it can be difficult for small businesses owners. The danger for you, ultimately, is in not taking responsibility.
If you sell via one channel in one state, it may be easy to do your own tax calculation and submission. But if you use FBA or sell multichannel, the consensus from the experts is to get help! Tax tools and automation have become much more affordable and accessible over the years, and they’re definitely worth the small investment.
I recently spoke at the first annual PROSPER Show, a new conference held in Salt Lake City, which included 90+ speakers and 12 ex-Amazonians. While there, we attended many of the panels and in this blog series will share the tips, tricks, and best practices for successfully selling on Amazon as shared by industry experts. Many of these best practices can also apply to your own branded website! This is the second of 8 posts in the series.
Do you know how profitable your business is? How much of your revenue are you actually keeping after accounting for fixed and variable costs? If you don’t know, your profit margin can be calculated by dividing net income by revenue. So, if a company has a profit margin of 39%, that company keeps $.39 of each dollar of revenue. Profitability is a simple concept that is easy to lose sight of as you’re watching sales come in. And, as online retailers, the key to increasing your profitability may be to optimize your business at a product level.
A good first step to assessing your profitability is looking at the profit and loss of each item (or if you have a giant catalog, each item type). Can you answer which 10 products make you the most money? Which 10 make you the least money? Are you losing money selling some items (it’s more common than you might think!)? This is a serious concern for Amazon sellers especially, where fees and competition have a significant impact on how much money you take home at the end of the day.
Make sure you account for indirect costs that impact your profitability, like product returns. Amazon charges you 20% of the average commission for returned items, and returns on Amazon for categories like Apparel can be as high as 15%! If you’re an Apparel retailer, that’s a big chunk of change. Things like warehouse space, storage, utilities, insurance, bookkeeping, payroll, benefits, travel, business taxes, and web development should all be accounted for in your product pricing. If you are selling through Fulfillment by Amazon (FBA), those fees can be 10% of your product price, so make sure you are pricing accordingly and avoid putting low-margin items on FBA.
Speaking of pricing, it’s important that you be strategic about your pricing method. There are the three basic ways to set prices:
Value based (what is the product worth to a customer?)
Cost based (most common, based on your acquisition costs and markup)
Competition based (setting price relative to other sellers of similar products)
Be careful with competition-based pricing because it assumes your competitors know what they are doing and are making a profit, which isn’t always the case. If you change your pricing to account for your costs, it shouldn’t significantly raise your per-item prices to uncompetitive levels. If you do see an increase of $1-$4 or more per item, look out for inefficiencies in your costs and processes.
The bottom line: analyzing and optimizing your products can have real impact on your overall profitability.
I recently spoke at the first annual PROSPER Show, a new conference held in Salt Lake City, which included 90+ speakers and 12 ex-Amazonians. While there, we attended many of the panels and in this blog series will share the tips, tricks, and best practices for successfully selling on Amazon as shared by industry experts. Many of these best practices can also apply to your own branded website! This is the first of 8 posts in the series.
John Rossman is an ex-Amazonian who wrote The Amazon Way: 14 Leadership Principles Behind the World’s Most Disruptive Company. He was the keynote speaker and focused on what Amazon does as a business that sets it apart and drives success for them. Many of these principles also apply to small business owners. For example, trust is actually more important to your customers than selection or price. How well does your site establish trust with your shoppers? Things like design, professionalism, making sure checkout is secure, and a general feeling of safety are all important to build trust with visitors.
Amazon reinvents toward simplicity. As your business grows, it’s much easier to scale if you spend time looking for convoluted processes you are following and making them simpler. Avoid applying a band-aid if there might be a completely different and more simple way to do things. Don’t let “we’ve always done it this way” get in the way of doing things a smarter way. You can’t reinvent your business by defending the status quo.
Automation is a key to scale as well. The less you are doing manual work in your store, the more time you’ll have to focus on growing the business. Things like order management, shipping, inventory, and other backend processes can be outsourced to a connected service that specialize in those fields.
Put your customer experience at the heart of site changes. When you are thinking about changing how you calculate shipping, or what items to add to your site, think from your customer backwards. Getting customer feedback is vital to this process: not only collecting it, but taking action on it. Use a test, measure, and proceed process for taking that action. If you are measuring the results of your tests as you go, your customers, your conversion, and your bottom line will let you know if your changes are working out.
Finally, make a plan for what your business will look like in the future and work it backwards to today. This will help you identify the biggest obstacles and overcome them. Be careful not to get stuck in the planning phases and deliberate too long without taking action. One of the most detrimental things you can do is nothing, because the competitors are innovating, learning, and gaining incremental advantages. Don’t get left behind!
In September, we shared tips and best practices around preparing your store for the busiest shopping days of the holiday season, which for most of our retailers falls between late November and the end of December. However, this isn’t the case for everyone; while the traditional holiday season is an important time to ramp up on advertising and promotions to take advantage of the typical holiday shopping season boom, some retailers see a New Year’s sales spike in January.
We found that Aabaco Small Business merchants that self-identify as seasonal retailers saw a 25% increase in sales in January 2016 compared to December 2015, while tools & hardware retailers saw an 8% increase in sales month-over-month. Other retailers saw increases in industry categories like toys & baby (up 4%), computers (up 3%) and, home & office furniture (up 2%).
Not surprisingly, health and wellness retailers also had a good January, perhaps due to all of our New Year’s resolutions. For example, Dan and Mary Schlenger, the husband-and-wife team behind OVitaminPro.com, saw a 16% spike in sales the first two weeks of January compared to the first two weeks in December. The Schlengers started their business on our platform in 2007, and they have continued to leverage their unique digital health and wellness services to reach customers who are looking to maintain a healthy lifestyle in the New Year.
What does this mean for you? If you’re a retailer in the categories mentioned above, or you can find a way to “lean in” to the renewal and resolution-focus of the New Year, we recommend planning ahead for a January “holiday shopping season” next year. Below are some quick tips to keep in mind once you start preparing for the next New Year:
As other stores are ramping down on their advertising and promotions, be aggressive with your New Year marketing as soon as after-Christmas sales are over.
If sales during the typical holiday season (November - December) were good, make sure you stock back up on your most popular items, as sales will likely continue to pick up in January.
Consider your vertical and customers; the holidays are focused on presents, but depending on what you sell typically off-peak months could be growth opportunities. Not everyone stops shopping when Black Friday and Cyber Monday are over. Perhaps it’s an opportunity to highlight different items or categories than you would during the retail-focused holiday.
A lot has happened since my last blog post! Now that we’re into the new year, I wanted to share with you what our team is focused on for 2016.
In December, Yahoo announced its decision to suspend work on its previously announced spin transaction, which included Aabaco Small Business. At that time, we updated our site with new information, and I want to take a moment in the new year to reiterate what this means for you, our customers.
We will continue to operate as Aabaco Small Business, and we remain a part of Yahoo. We have upgraded our server and web services infrastructure to provide better performance, greater stability, and faster innovation.
Our new sign-in process allows you to create your Aabaco ID, password, and profile (big thanks to those who have already done so!). This new native sign-in system will allow greater flexibility in responding to your profile management and security needs.
We continue to innovate our products and are incorporating the feedback we hear from you, our customers, on your most important priorities. For example, we have re-engineered several key components of our offerings, such as Business Mail, and made investments on the customer experience front, with advanced billing tools. For our Merchant Solutions/Stores customers, we are upgrading our analytics and search capabilities to provide a better experience for you and your customers. In response to your requests to help you bring in and retain more customers, we are piloting new products, including a physical beacon that lets brick-and-mortar retailers retarget shoppers (want to be part of the pilot? send an email to storebeacon@aabacosmallbusiness.com).
Our team has begun planning our annual customer events; we’ll share more information on dates, locations, and how you can take part soon.
I am excited about the work already underway here for 2016. On behalf of the whole Aabaco Small Business team, I would like to say a heartfelt “thank you” for your patience and loyalty through 2015. We remain dedicated to continuing to work hard for your business in 2016. Happy new year, and here’s to our next chapter!
This week is a time to give thanks and express gratitude, and we couldn’t be more appreciative of you, our customers. We know that the holiday season is a critical time for your business, and our number one priority is to ensure you have a successful and profitable time.
We are thrilled to share that last week, Yahoo Small Business successfully completed the technical migration and rebrand of our services before your busiest shopping days. We are now Aabaco Small Business, a name which aligns better with our soon-to-be parent company, Aabaco Holdings.
Most of you have already received an invitation to establish your new Aabaco Small Business credentials in order to manage your account. If you haven’t yet received this email, you will this week. Additionally, we encourage you to use this helpful Aabaco Small Business question and answer documentfor more information on the transition. While you will notice the luminate.com domain for several months in URLs and email addresses, our name and branding has been changed to Aabaco Small Business throughout our website and product experience.
Our transition to Aabaco Small Business is a unique opportunity for our team to redefine our name and our brand – and serve you, our customers, better than ever. We look forward to providing you with the best possible support and tools to run your business during the holidays and beyond.
Providing the best possible experience for our customers is our biggest priority at Yahoo Small Business, and an important part of that is making sure we hire the best talent. Leading up to the expected separation and the introduction of Luminate later this year, we’re continuing to focus on expanding our executive team, which is why I’m very excited to let you know about three key additions to the team: Chris Wayne, our new head of IT and Infrastructure, Matt Cokely, our new head of Customer Care, and Brandon Cruse, our new head of HR.
Below is a little bit about Chris, Matt, and Brandon, and why we’re thrilled to have them on board.
Chris Wayne, Head of IT and Infrastructure As a Yahoo veteran of more than 12 years, Chris Wayne knows the ins and outs of the company. During his tenure, Chris led the Service Reliability Engineering team (or, as he likes to call it, the “technical firefighters”), where he was responsible for keeping Yahoo’s sites up and running. In his new role as the head of IT and Infrastructure, Chris has the important job of ensuring the technology behind our product is scalable, dependable, fast and secure.
Prior to Yahoo, Chris also served our country in the military where he was a combat engineer demolitions expert, a paratrooper in the 82nd division, and rose through the ranks to Sergeant. This unique background shows Chris’ loyalty, integrity, and honor, which he brings to the company everyday. I can’t think of a better person to entrust with maintaining our technology, which is the foundation of the services we offer.
Matt Cokely, Head of Customer Care Matt is no stranger to Yahoo Small Business; in fact, some of you may recognize his name. Matt has been at Yahoo for 10 years, and was most recently the Director of Product Support Management. He also worked in customer support for Small Business and as an escalation engineer. And prior to Yahoo, he was a web developer by trade, so he has extensive knowledge of the backend of online stores and sites.
Matt is very familiar with our business, and has spent years building relationships with many of you. Because of this, he understands your wants and needs and is deeply invested in your success.
As we welcome Matt back to the Small Business team, he’ll be spending his time reconnecting, listening to your feedback, and providing real value for each of your small businesses. Matt will also be intimately involved in the rollout of many product initiatives we have planned to ensure customer success.
Brandon Cruse, Head of Human Resources Brandon Cruse has many years of experience in HR, and we are thrilled to welcome him to the team. In his new role, Brandon will take a non-traditional HR approach, drawing from his experience working at a high energy startup and high growth larger company environments, with the goal of creating a results-driven, innovative, collegial, and most importantly, a customer-focused culture for our employees.
Most recently, Brandon was at Intuit and has experience managing HR for a global corporation. He also worked with a healthcare IT company where he learned the importance of a nimble, startup environment. With expertise in both large tech companies and smaller startups, he’s uniquely positioned to help us create a more dynamic culture, which is tantamount to the success of our team – and in turn allows them to give you the best possible care and attention.
These three new key hires ensure we have the best and the brightest to engage our customers and our employees. Our future is looking luminous.
By Phil Grier Yahoo Small Business Merchant Development
Cyber
Monday (the Monday after Thanksgiving) and Black Friday (the day after
Thanksgiving) are historically the two busiest online shopping days of the year
for many online retailers. Some retailers on our platform can make up to 30% of
their annual sales during these few days after Thanksgiving. We expect to see
more orders placed via mobile devices this holiday season than ever before.
Since it’s such an important time, we drilled into last year’s ecommerce sales
data to help you maximize your store’s sales this holiday season.
Let’s
start by looking at the Top 10 online shopping days for all Yahoo stores
combined in 2014.
Here
are some insights we can gain from this data.
1.
Six of the top ten sales days are Mondays and Tuesdays. Make sure you are
stocked up and are ready for business coming out of the weekend, because your
buyers are headed back to work, where they evidently do a lot of online
shopping.
2.
The third and seventh highest online sales days in the holiday season were
December 15 and 16. These are the last minute shoppers. Try to highlight
your fast shipping times during these days. Include a holiday shipping calendar
so shoppers know how late they can buy from you. Have a list of items that will
ship last minute if you can’t guarantee all items will ship on time.
3.
The day after Cyber Monday reported the fifth highest revenue day of the year. If
you normally run a sale from Black Friday through Cyber Monday to incentivize
conversion, think about including Tuesday, December 2 as well.
4.
An interesting omission from this Top 10 list is the Saturday right in the
middle of the Black Friday to Cyber Monday spread. This is “Small Business Saturday”, which promotes making purchases locally at brick-and-mortar small businesses, so if you have a physical location hopefully you see increased sales to make up for lower online sales. Otherwise, Saturdays are the lowest online revenue days of the week year-round,
and this busiest time of year is no exception.
Armed
with this data, be aggressive with your advertising and promotions especially
on these days when shoppers will be out in force. You’ll want to be front and
center, ready to convert.
It
looks like we need to come up with more catchy names for these dates!
