What are some ways you could increase your profits without spending a lot extra on your Amazon business?
In this article we outline some strategies to help you increase your net profit.
Improve Your Listing
The better your main image looks, the more people that will click onto your product and buy it. The same for your other listing page images.
If your images were taken in a dark room with your iPhone, it is gonna be really hard to justify a higher price & people will not trust the item is good quality.
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.
Test Your Price
The simplest way to increase your profits is simply to increase your price. Sometimes an increased price will result in a drop in sales or units per day but you make more per unit sold. Often it can have the opposite effect and lead to more sales.
If I offered you a $50 wine and a $5000 wine which one would you want to try more?
People associate a higher price with higher quality. Increasing your price to be slightly above your competition can give the perception that your product is better.
Improve Your Supply Chain
Small shipments are expensive. Also, factories give you a discount for buying in bulk. It makes sense to buy more inventory to reduce your average cost of goods per unit.
Increasing how much stock you buy each time you can drive down your costs and increase your profits.
This has another benefit too. If you can buy your product cheaper than your competition, you can use the extra profits to market more & grow your business more.
Track Your Sales & Profits
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.
You need to monitor all the key metrics 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.
Find a Better Supplier
It is worth searching for better suppliers. Maybe your volume has increased and a different supplier can offer you a more competitive price.
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.
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.