A new year is about to begin. Let’s see how you can make it a more profitable year; call that your New Year’s resolution if you like!
The best approach is to look methodically at each aspect of your business. Find out which areas are making the most profit, and which are not contributing much if anything. Then, simply do more of the first and less of the second, and hey presto! More profit.
For instance, look at your advertising. Which keywords are bringing home the bacon? If you have keywords that are bringing customers to your page, but they’re not converting to sales, you may have issues with your product listing, but if you’re spending on keywords that don’t bring anyone to your page in the first place, that’s wasted money. Cut those ads out, and you’ll have more profit, or more to spend on the really good keywords.
Don’t forget to look at your Advertising Cost of Sales. If you are paying too much for keywords, and your ACOS is too high, you won’t be making any money on those sales. If you can keep ACOS around 20-30 percent you’ll do well. For some keywords, you might be able to find long tail keywords that are similar, but a lot cheaper.
You can look at your product portfolio the same way. Some products will make up a big part of your sales, or they will be growing very strongly. Other products may show sales beginning to tail off, or have never sold well in the first place. Relaunching products can sometimes work, and it’s often worth making a tactical increase in advertising spend for a couple of months to see if you can boost a product that has begun to slow down. However, if a product doesn’t respond, and if it’s neither significant as part of your portfolio, nor particularly profitable, killing it off will free up your capital and your ability to spend on other products.
If you’re using Amazon Attribution (and you should be), you can see how your off-Amazon advertising and social media are paying off. Look at where most of your sales are coming from. If you’re spending a lot of time on Facebook and Twitter, but most of your sales are coming from TikTok and Instagram, there’s a message there for you. Do more of the stuff that works and less of the stuff that doesn’t.
Take a look at how efficiently you use your media assets, that is, your content. Do you use a template for your photographs? Do you tag them so you know exactly what you have on your hard disk? Do you write fresh content for each different social media platform, or do you write one piece and then re-purpose it for Twitter, Facebook and your blog?
Find ways of using the same infographic for more than one product; for instance, if you have sizing information (“how to measure yourself for our clothes”), you don’t need to do it over each time you have a new product. Equally, some of your lifestyle photos could go with different products. If you sell different sizes, shapes and colors of Dutch oven, why not show a variety of them in a single kitchen photo?
This drive for efficiency will really free up your time, and if you use a photographer or graphic designer, will save you money too.
Finally, take a look at Amazon’s fees and how much they’re costing you. If there’s a way to save money, for instance by not sending so much stock at a time, or by packaging your product more efficiently to get into a smaller size category, you can add to your profit easily by reducing the fees due.
Have a happy and profitable new year!