The Seller’s Guide to Amazon Keyword Research
This is a guest post from Lena Einschütz. Lena is the Marketing Manager at BidX, which supports Amazon merchants with software solutions that automate and optimize advertising on and off Amazon.
If you’re an online seller looking to boost your visibility on Amazon, then conducting Amazon keyword research is essential.
By finding profitable keywords, you can improve your rankings on Amazon’s search engine results pages (SERPs), drive more traffic to your products, and boost sales.
Let’s get started!
Why Is the Right Set of Keywords So Important for Amazon Sellers?
Three out of four online shoppers never scroll past the first page of search results. So if your products are ranking low on Amazon’s SERPs, you could be missing out on potential sales.
This is why inputting the right set of keywords is crucial to your success on Amazon. The right keywords can improve your rankings on Amazon’s SERPs, increasing your product’s chances of being seen and purchased by potential customers.
Additionally, Amazon is constantly changing its algorithm, which can impact your rankings over time. By doing Amazon keyword research periodically, as well as making adjustments to your listings and PPC campaigns accordingly, you can keep your products visible and drive long-term sales.
How to Find the Right Keywords for Your Amazon Listing
There are several ways you can conduct keyword research to boost your product’s visibility:
1. Get to Know Your Customers’ Shopping Behaviors
Online marketers use the term “buyer persona” to describe a customer’s needs, wants, and shopping habits. When you know your buyer persona well, you can better understand the types of keywords they’re likely to use when searching for products on Amazon.
To get to know your buyer persona, consider these factors:
- Need: What problem are your customers trying to solve?
- Want: Why would they want to purchase your product?
- Location: Where are they searching from?
- Language: What type of language do they use when searching for products?
- Budget: How much are they willing to spend?
Once you have a good understanding of your target audience, you can then brainstorm the types of keywords they might use when searching for your product on Amazon.
2. Find Keyword Combinations Using the Cluster Method
The “cluster method” is a keyword research technique in which you brainstorm relevant keyword stems and then “branch off” of those stems with a list of related keywords.
Here’s how it works:
First, identify a few keyword stems (or “seeds”) that best describe your product in a straightforward way. For this brainstorming exercise, we recommend that you hold off on using an online keyword tool like Google Keyword Planner to generate ideas. Keyword tools may be useful, but they can also limit your creativity.
Instead, think back to your buyer persona and the questions you have answered about your customer’s needs and wants. What words or phrases come to mind when you think about what your product offers? How does it help your customers solve their pain points?
For example, let’s say your product is a coaster that prevents glasses, cups, and mugs from sticking to it whenever your customer takes a drink (as some plastic-coated coasters are guilty of).
In this case, you might come up with a “non-stick coaster” or “non-slip coaster”.
Note: Amazon’s algorithm typically covers related keyword combinations and individual words, so the non-hyphenated “nonstick” and “nonslip” may also be included in the SERPs.
Once you have identified a few potential keyword stems, it’s time to branch off. Some keyword combinations for Amazon sellers might include the product’s material. For example:
- non-stick coaster ceramic
- non-slip coaster silicone
And some may target a particular use case:
- non-stick coaster for wine glass
- non-stick coaster for cold beverages
- non-slip coaster for cold drinks
As you can see, the cluster method can help you generate a long list of relevant keywords. Once you’ve found them, add them to a spreadsheet so you can track your progress as you optimize your Amazon listings later.
3. Use Online Tools to Find Additional Keyword Combinations
Once you have a list of seed keywords, it’s time to dig deeper and find even more keyword combinations that customers might use when searching for your product.
There are a few different ways you can do this:
Amazon’s Auto-Complete Feature:
Typing a word or phrase into Amazon’s search box will trigger a drop-down menu of suggested keywords based on the platform’s search data.
For example, if you’re selling hiking boots, Amazon’s auto-complete feature might suggest the following keywords and phrases when you start typing “hiking boots” into the search box:
– hiking boots men
– hiking boots women
– hiking boots size 10
– hiking boots waterproof
– hiking boots men waterproof lightweight
Do any of the suggested keywords align with your buyer persona and your product itself? If so, consider incorporating them into your product listings or PPC campaigns.
Research Your Competitors
Do a simple Amazon search for your main keyword stem and take note of the products that appear on the first page of the results. These are your direct competitors.
Next, click on each product listing and take a close look at the keyword section. Notice the product’s title, description, and bullet points (if any). What keywords do your competitors include in their product listings? Are there any combinations that you haven’t thought of yet? If so, add them to your spreadsheet for further consideration.
Use Keyword Research Tools
Keyword research tools provide valuable insights about which keywords are being searched for the most on Amazon (and other websites).
Some keyword research tools that Amazon sellers use include:
- Google Keyword Planner
- SEM Rush
- KW Finder
These tools are especially useful in determining which keywords have “high-volume, low-competition” scores. That is, a lot of people are searching for these keywords, but not many sellers are targeting them in their product listings or PPC campaigns. Therefore, using them on your product page may help you rank higher in the SERPs.
What Are the Different Keyword Types That Amazon Sellers Should Be Aware Of?
When conducting Amazon keyword research, it’s important to understand the main keyword types you’ll encounter. This is especially useful if you plan on running paid campaigns, as the keywords you choose to bid on will determine your ad’s success. Paid ads are especially important because they drive traffic to your product and increase the chances of sales.
Example: If you sell sunglasses and advertise a product with the keyword “sunglasses men”, your ad will appear at the top of the SERP (if you have a certain relevance and make an appropriate bid) if “sunglasses men” has been entered into the Amazon search field.
Keywords for paid ads are separated into different match types. Here’s a quick overview of each match type and how they work:
Exact Match: This search query must match your keyword exactly for your product to appear in the SERPs. For example, if you’re targeting the keyword “non-stick coaster,” your ad will only appear when someone types in that exact phrase or its plural form.
Phrase Match: These keywords must be included in the customer’s search query, but they can appear in any order. For example, the phrase match keyword “non-stick coaster” could trigger your ad to appear for a customer search query like “best non-stick coaster” or “non-stick coaster for cold drinks.” It won’t, however, trigger your ad to appear for a customer search query like “no-stick coaster” (misspelling) or “coasters non-stick” (keywords in the wrong order).
Broad Match: These keywords will trigger your ad to appear for customer search queries that contain all keyword terms or close variations, so words can be in any order and additional words can be included. For example, the broad match keyword “non-stick coaster” could trigger your ad to appear for customer search queries like “ceramic non-stick coasters” or “coasters that don’t stick.”
Manual management of keywords is very complicated and time-consuming, as you need to regularly adjust the bids and move the keywords to the respective match type. For this reason, we recommend a PPC management tool like Bidx, which adjusts the bids for your keywords and match types fully automated based on machine learning algorithms.
How Does Amazon SEO Differ From Google SEO?
If you’re familiar with SEO for Google, you might be wondering how Amazon’s search engine differs. After all, both platforms are essentially search engines, so the basics should be the same, right?
For starters, Amazon ranks products based on:
– The relevancy of a product’s title, bullets, and description to the customer’s search query
– Seller authority (historical sales data, reviews, etc.)
– Click-through rate (the number of clicks the product receives from the SERPs)
– Conversion rate (the number of sales the product generates)
By contrast, Google’s search engine ranks websites based on factors like:
– The quality and quantity of a website’s backlinks
– The relevancy of a website’s content to the customer’s search query
– The website’s domain authority (the higher the score, the higher the ranking)
As you can see, there are some key differences between Amazon and Google SEO. However, the same best practice of optimizing your product page for relevant keywords still applies.
How To Optimize Keywords for Product Listings
To optimize your product listings for Amazon SEO:
Use keyword-rich titles:
Make sure your product’s title includes the main keyword you’re targeting.
Use keyword-rich descriptions:
In the “Product Description” section of your listing, you can include a longer description of your product. As with the title, be sure to use keyword-rich phrases and bullet points to further optimize your listing.
Use “backend” keywords:
Backend keywords can help Amazon’s search engine better understand what your product is about. Because they aren’t visible to customers, they’re also called “hidden” keywords or meta tags. These are typically synonyms, abbreviations, and other related terms that you can add to your listing from your Amazon Seller Central dashboard.
Amazon keyword research is an essential part of Amazon SEO. By targeting profitable keywords, you can improve your listing’s visibility in search results and increase your chances of making a sale.
Remember to use keyword-rich titles and descriptions, and don’t forget about backend keywords. With some effort, you can optimize your listing for Amazon’s search engine and especially your PPC Ads to drive more traffic (and sales!) to your product page.
If you want to be successful on Amazon, you should optimize your Amazon PPC Ads for maximum visibility. Since this is really time-consuming and you need a lot of expertise, we recommend a PPC Management tool like BidX. BidX continuously analyzes your keywords and bids and adjusts them accordingly, so you can make the most of your money.
The Ultimate Guide to Preparing and Selling Your Amazon/eCommerce Business For $1,000,000+
This is a guest post from Empire Flippers, removing the friction from buying and selling online businesses and have helped people buy and sell over $400 million worth of online businesses.
When Amazon and DTC sellers come to the end of a year of selling, they tend to ask themselves: “Can I repeat the same level of success next year?”. This question becomes bigger every year as the markets and economy change.
With the huge task of running your business successfully for another entire year, you might also ask yourself: “Do I want to do the same again next year?”
There will eventually come a point in your life when it’s time to move on from your business:
- A personal life change might need your full attention
- You might get tired of slugging away for years and want to take a nice long vacation
- You might not want to reinvest most of your profits and a ton of resources into continued growth
When you get to this point, it’s time to start thinking about selling your business.
Should I Sell My Amazon/eCommerce Business?
With careful planning and a solid exit strategy, you can free yourself from your business, hand it over to a new owner who has the capital and resources needed to take it to the next level and enjoy your capital reward for everything you’ve put into it.
Plus, you’re freeing your business so it can reach its fullest potential!
Your financial goals will probably be the biggest factors that dictate how and when you sell. We’ll cover how your business is valued in this article.
But to give you an idea of the current state of the Amazon and eCommerce mergers and acquisitions market, the average sale multiple—a figure that reflects the value of your business as an investment asset—for Amazon FBA and eCommerce businesses is 40.84X. This figure is multiplied by your monthly net profit to arrive at your business’ valuation, so if your business is earning $25,000 in monthly net profit, it could be worth over $1,000,000.
In this article, we’re going to walk you through the stages of preparing and selling your Amazon or eCommerce business to give you a clear exit plan. You’ll learn how to increase your business’ salability, profitability, operability, and overall strength.
So let’s get into it!
Who Buys Amazon and eCommerce Businesses?
Buyers of $1,000,000+ businesses tend to be acquisition firms called aggregators. They’re funded by venture capital and family offices to acquire, run, and scale online businesses on behalf of investors.
These aggregators are typically looking for established brands with a few niche-dominating SKUs, a simple supply chain structure, good supplier relationships/exclusivity contracts, and a unique brand.
Other buyers of Amazon and eCommerce businesses are operators funded by high-net-worth individuals and institutional investors looking for a passive way to invest in online businesses.
You may have received offers from these types of buyers already, especially aggregators who are highly active in seeking acquisitions.
We’re going to talk about why you should be careful with these private offers in a moment. However, first let’s get into how you can prepare your business for a smooth, timely, and highly-profitable exit.
Getting the Most Amount of Money For Your Business
The process of preparing your business for sale requires you to go under the hood and see how healthy the engine is. You’ll look at operations, logistical efficiencies, profitability, the strength of its brand, and its longevity.
Doing this health check allows you to identify ways to make your business more efficient, profitable, and overall stronger. So even if you don’t want to sell your business any time soon, you should go through this process to optimize your business.
The first step is to prepare your business analytics data.
Step 1: Prepare Analytics Data
If your business is solely built on Amazon, then all of your analytics data will be in your Seller Central account.
If you’re selling on Shopify, Walmart, eBay, or any other eCommerce platform, then your sales data will be viewable on your business accounts. However, it’s beneficial to also install Google Analytics or Clicky onto your website for highly-accurate data.
Potential buyers of your business will want to see its sales data to assess its performance—make sure you have them sign a non-disclosure agreement (NDA) before giving them even just read-only access to your business platforms.
Step 2: Organize Your Finances
Amazon’s dashboard and software like Sellerboard may not tell you how profitable your business actually is as they’re not the most accurate financial tools. The best way to track your business finances is to log them yourself in a profit and loss statement (P&L) or have an accountant track your finances for you.
That said, be careful not to do what most entrepreneurs do and only hand over your figures to a certified public accountant (CPA) once a year; this keeps you blind to the money their business is leaking through the holes of irregular and poor financial management.
Many also don’t realize that a CPA does finances for taxes, not to increase a business’s profitability, so they never see where their business is losing money unnecessarily and where it can earn more.
The best way to manage your business’ finances is through accrual accounting carried out monthly by a bookkeeping firm that specializes in eCommerce.
The key metrics buyers focus on when analyzing your business’ finances are:
- Inventory turnover levels
- PPC spend (ACoS / TACoS)
- COGS margins
With accurate financials, you can calculate the true value of your business; avoiding overvaluing (which will get your business ignored) or undervaluing (which will lead to your business selling for too low).
Step 3: Focus on Your Winning SKUs
Once you’ve got a clear picture of your business’s finances, you’ll see which SKUs are moving the needle and which aren’t. You should consider shelving the ones that aren’t to simplify the income streams for your business—when we vet businesses, we clear out the dead SKUs from your P&L that would reduce your valuation if you sold privately.
Step 4: Remove Supply Chain Redundancies
With a mostly hands-off supply chain, you’re free to focus on business growth.
If you’re self-fulfilling orders, imagine how much time outsourcing that process to a 3PL would save you.
Removing redundancies will make your supply chain easier to oversee. For example, if you’re sending inventory to a 3PL for quality control, but you’re finding that your supplier is consistently delivering high-quality goods, you might want to remove that step in the fulfillment process.
Having backup suppliers for your best-selling products secures your business’ income and makes buyers feel more comfortable about investing. To have the strongest-possible supply chain, you should source at least two different manufacturers for your products, ideally from two different countries.
Delivery time is also a key part of the supply chain, as consumers become increasingly used to fast delivery—three to five business days delivery has become the norm, so you should make sure your chosen fulfillment solutions are able to meet this demand.
A hands-off supply-chain foundation makes your business straightforward to transfer to a new owner.
Step 5: Increase Your Business’ Earning Power to Fuel a Higher Valuation
The fastest and most straightforward way to get your cost of goods sold (COGS) down is to renegotiate rates with your suppliers. If you’re consistently purchasing their products, they’re highly likely to be open to negotiating.
Changing from air shipping to sea freight is another great way to reduce costs.
Margins make a big difference in value. For example, if your business is earning $1,000,000 in revenue per year with 25% profit margins, its sale multiple will be based on the $250,000 annual profit. But if the same business is earning the same revenue with 28% margins, the multiple will be based on the $280,000 annual profit. When you consider multiples are often over 4X annual profits, this is likely to make a $120K+ difference in valuation.
When evaluating your business, COGS is one of the most important valuation metrics buyers consider.
In a private sale situation, a buyer will typically calculate your COGS over the entire lifetime of your business. When we value businesses, we believe it’s more accurate to use your current COGS to calculate your profits as that figure is a more accurate reflection of where your business is at now. This can lead to a higher or lower valuation depending on what your COGS are now compared to the past.
Step 6: Protect Your Business Against Competition. Protect the Buyers’ Investment
A moat around your business makes buyers feel comfortable about investing.
The best way to build that moat is to apply for a trademark and register for the Amazon Brand registry to prevent competitors from copying your product and eating away at your sales.
Step 7: Don’t Disrupt Your Business’ Stability
Buyers want a stable asset. Making any moves leading up to the sale that could upset the steady track record of your business will hurt your selling position.
You can carry out some small quick-wins like listing page tweaks or PPC optimizations, but try to avoid any drastic marketing campaigns or launching products too close to listing for sale just in case your sales don’t increase.
Instead, focus on keeping your products in stock—the last thing you want is to miss out on potential sales. Even if you have to over-order a little bit, that’s ok as long as the buyer purchases your inventory at product landed cost outside of the sale price.
Step 8: Optimize Your Operations to Make it Easy to Acquire Your Business
Buyers want an asset that’s easy to run. When your business operations are so well organized that anybody can easily learn the processes to run it, acquiring your business becomes easy.
The best way to organize your operations is to create standard operating procedures (SOPs) for all of your business operations. Document your supply chain process, too.
It’s best to also do this for the operations that are carried out by employees so the new owner can hand those SOPs over to new employees if needed.
The added benefit of doing this is that it will highlight operational inefficiencies in your business and allow you to improve its efficiency, in turn increasing its profitability.
Step 9: Secure Your Business’ Operations With Contracts
A good relationship with your supplier is a valuable asset, but only if it’s continued on with a new owner of your business.
Let your supplier know you’re selling your business and try and ensure that the current relationship you have will stay in place. The last thing you want is for the buyer to take over and the supplier suddenly shoots up their rates. Also, get an exclusivity agreement if you can—this will increase the value of your business.
Good relationships with your employees are also important.
You don’t have to let employees know you’re selling, but if you can it’ll be good for the buyer to know whether they’ll be continuing with the business after the sale. Contracts are a good asset to keep employees on—the same goes for contractors.
If your employees aren’t continuing with the business—maybe they’re staying with you on another business—be sure to have high-quality SOPs the buyer can hand over to new employees. In addition, train the buyer on your business as much as you can for a smooth transition.
Once you’ve gone through this process of getting your business prepped for a smooth exit, it’s time to initiate the selling process.
The Selling Process
There are two routes you can take to sell your business. Which one you choose depends on your situation.
Sell Privately Or Through a Broker?
If you haven’t yet been reached out to by a business buyer and you’d like to sell privately, you’ll need to market your business to potential buyers.
You can do this on marketplaces like Flippa or online groups, or you can reach out to business buyers and aggregators yourself.
You should reach out to multiple buyers to get an idea of what the market is willing to pay for your business, but beware when sharing business data. Don’t reveal too much without protecting yourself legally.
If you’ve received an offer from a buyer already, before you dive in and sell your property to the first buyer who knocks at your door, plan your exit and see what you can get on the market.
When you prepare and time your sale, you not only set yourself up for a smooth selling process without any unexpected costs, you give yourself the chance to sell when your business is on a growth curve and get the highest possible valuation.
While selling privately can go well if you receive the right offer, there are many issues that can be avoided if you sell through a broker.
Selling Through a Broker
The biggest benefit of selling through a broker is you get access to their expertise, trusted buyer contacts, and selling processes they’ve developed over years of transacting businesses.
If they have experience with eCommerce businesses, they’ll facilitate a smooth sale for you from carrying out a professional valuation to connecting you with the right buyer suited to your business with a proven track record who’s not going to run your business into the ground, and helping to mediate the deal.
Taking advantage of this concierge service is the easiest and most effective way to sell in the majority of cases.
While you’ll pay for the service with most brokers, don’t let this lead you to believe that you’ll make more money selling privately where you won’t pay a broker’s fee.
Beware of the “Off-Market” Fallacy
The off-market fallacy is the belief that you’ll earn more on the sale of your business privately than through a broker since you don’t pay brokerage fees. While this sounds logical, it’s not always true.
Your broker should be upfront with you on how much they think they can get for your business based on their buyer network and the value of your business and whether it’s suited to their buyers—we’ve turned away sellers who’ve received an offer we didn’t think we could beat.
When you sell through a broker, you get access to their buyer network. You can have buyers competing to acquire your business, as opposed to one buyer making an offer with their best interest of getting the lowest price possible for your business in mind.
Brokers work on your behalf to get you a bigger sale since they earn a commission on the sale price. Unless the broker works on buyer commission, in which case you should be careful as they will have opposite intentions.
Not only do you get to put your business to the market and see what you should be getting when you sell through a broker, but you also get their support and experience as they steward you through the sale.
If it’s your first time selling, you should sell through a broker because online business M&A is a subject that requires a lot of knowledge and expertise. Plus, things can get very messy if templated contracts are being thrown around and you’ll end up paying a fortune in lawyer’s fees to rectify the mistakes.
If you’ve received an offer, seek professional advice to make sure you’re being offered the right price.
Calculating Your Business’ True Value
There is a simple formula we use to calculate a business’ value:
Some brokers and mergers and acquisitions (M&A) professionals use your business’ annual profits to calculate its value.
When we value businesses, we take your monthly net profit as an average over the past 12 months to account for any seasonality or increases or declines over the year.
There are exceptions to this rule, for example, if your business has experienced considerable growth over the past 6 months, we may consider using a 6-month multiple as that timeframe is a more accurate reflection of the current state of your business compared to its past 12-month performance.
There are two main methods for calculating net profit:
- Seller discretionary earnings (SDE)
- Earnings before interest, tax, depreciation, and amortization (EBITDA)
The SDE method is commonly used for businesses earning up to $5,000,000 in annual revenue. The method assumes the business is owner-operated, so it takes into account the business owner taking home a salary.
The EBITDA method is more granular and is used for larger businesses. It uses a lot of the same methodology as the SDE method, but it assumes that the business is not owner-operated since large businesses tend to be run by teams of employees. Therefore, owner salaries are usually classified as expenses, because they’re considered as costs necessary to run the business.
This method of profit calculation shows how the business performs on a pure cash flow basis, taking the current owner out of the equation.
An important element of a P&L is add-backs. These are regular or one-off expenses of products, services, or activities not required to run the business. For example, if you ran a one-off marketing campaign a year ago for one month, then that expense can be classified as an add-back and thus won’t be taken from that month’s profits.
Some other examples of add-backs include:
- Personal travel expenses
- Co-working spaces
By accurately categorizing add-backs, you end up with a P&L that shows the true profitability of your business.
The next element of the valuation formula is the sales multiple.
What Goes Into a Sales Multiple?
A sales multiple is a figure that represents the value of your business and is calculated from a number of trackable and intangible factors.
How your business is growing or declining shows how healthy it is as an investment asset.
Buyers will assess why growth or decline is happening in your business by looking at:
- The number of SKUs you’re selling per month
- The best-seller rank of SKUs
- Organic vs. advertising sales
- Profit margins
Stability and diversity of earnings
A stable earnings history is the gold standard in business as buyers want to see that their new asset is going to earn consistent returns for them.
A good way for your business to earn consistently is to have multiple sources of income and traffic, as your Amazon and PPC accounts are just a ban away from choking your income and traffic sources.
By selling on multiple platforms and driving traffic from multiple sources you support your business since it can still earn and drive traffic even if one source gets taken down.
Diversity of SKUs
Having a range of shoulder products to support your best-selling SKUs is a good way to solidify your earnings in case one of your main products is taken down or you have supply chain issues.
Just remember that having too many SKUs will make your supply chain too complex, which is an off-put for a buyer.
Trademarks and Amazon Brand Registry
An important valuation factor is defensibility.
Trademarks and Amazon Brand Registry defend your brand against the competition. If you’re selling hard-to-qualify products with a high barrier to entry, this will work in your favor when your business is being valued.
Supply Chain Strength
Stockouts are the number one biggest threat to an eCommerce business, so multiple suppliers and exclusivity contracts are key elements of a highly valuable business.
If you have special, exclusive rates with your suppliers that will also boost your business valuation.
The best way to scale your business is to make yourself redundant.
The fewer hours you spend working on your business, the more valuable it becomes as long as it has a strong operational structure with employees, contractors, and software tools helping run the business.
This is an indication of your business’s proven track record and longevity. The older your business is, the more established it is in its niche and the harder it is to be taken down by competitors.
Another defensibility factor—this is the number one indication of your business’ reputation. You know how hard it is to get those thousands of positive reviews and the odds of competition taking your reigns become smaller the more reviews you get.
Strong reviews are also an indication of how loyal your customer base could be. A large audience of repeat customers is worth a lot of value to a business.
Amazon Seller Central Account Health
When assessing the health of your Amazon Seller Central account, a buyer will be considering:
- Account age
- Old account permissions that may affect your account
- Inventory performance
- Customer feedback scores
Well-aged accounts with a good performance history, strong scores, and features that have been grandfathered into the account are the gold standard.
Businesses heavily reliant on organic Amazon or Google ranking or PPC campaigns for traffic are at risk.
When Amazon or Google penalizes your account or updates its policies, you lose sales.
Brands with multiple audiences on various platforms get a higher valuation because if one traffic source gets shut off, it has another one to keep people coming.
Email is the best audience asset you can own because it’s free from algorithms and you have direct access to your audience’s data.
Email lists and social accounts with large followings are some examples of assets that increase your business valuation. Another physical asset that you’re likely wondering about is your inventory.
What About Inventory?
When we sell a business, we leave it open to the buyer whether they want to acquire the inventory or not, so we don’t consider the inventory in its valuation. This is because if the inventory doesn’t sell, then it’ll cost the buyer to keep it—inventory is only valuable once it’s sold.
At Empire Flippers, we don’t take any commission on the cost of inventory. However, it’s important to note that some business brokers do. What happens to inventory should always be a consideration when you’re deciding on which broker to sell with.
Common Deal Structures
Once you have a clear understanding of your business’s profitability, you can command the value that your business is worth, as opposed to going blind into negotiations and being bartered down.
Buyers have good intentions and most won’t lowball you, however, knowing what your business is truly worth based on accurate financials will allow you to set the price you deserve. And while a broker’s goal is to facilitate a fair deal, it’s in their best interest to get you the most amount of money possible for your business (but that’s not the goal for buyers, naturally).
Your business will likely sell with one of the two following deal structures:
- Full-cash buyout
A full-cash buyout is what it says on the tin: a buyer offers you all of the cash for your business in one payment.
An earnout is a deal where the buyer pays a percentage of the sale price upfront and the rest over a period of months or years.
We regularly hear of sellers receiving offers of 50% upfront from buyers off-market, but we get sellers of $1M+ FBAs an average of 83.7% upfront.
Earnouts can offer an opportunity for you to earn over the sale price. We’ll usually negotiate a performance-based element to the deal for sellers. Meaning if their business grows, they earn a bonus percentage of the profits over a set threshold.
There’ll also be a minimum threshold to eliminate the risk of you not earning the sale price in the event that the new owner accidentally (or intentionally) runs the business poorly.
This shouldn’t be a concern with one of our buyers as the majority have a track record of deals with us. But if you’re selling on your own, conduct due diligence on buyers to ensure visions are aligned and check the buyer’s history of achieving performance targets.
Protecting Yourself Legally
Unsurprisingly, you’ll receive and have to produce some contracts when selling your business.
The first one is a letter of intent (LOI). If you’ve already received an offer from a buyer, you’ll know what this looks like.
An LOI is a document indicating a mutual intention from a buyer and a seller of a business for it to be sold.
Usually, the buyer produces the LOI as their intent to buy the business, and the seller reviews and agrees to the terms to indicate their intent to sell the business according to the terms outlined in the LOI.
The purpose of an LOI is to set the expectations of how the buyer will conduct their due diligence—a detailed review of the business’ sensitive data to assess the legitimacy of the business. The terms should protect the seller’s business’ data, but a non-disclosure agreement (NDA) should also be signed to add another layer of protection.
The due diligence process usually takes about 30 days. During this time the buyer will need view-only access to your business’s financial information, analytics, sales data, and business operating accounts to carry out their assessment.
Once they’ve conducted their due diligence, it’s time to meet at the negotiating table.
Talking About Your Business’ Potential Can Kill Negotiations
It’s natural for you to see the potential of your brand. After all, you built it from the ground up.
However, many sellers get deluded by this vision of potential.
The reality is that buyers are looking predominantly at your business numbers and past performance—this is where there can be sticking points in negotiations. The seller is trying to sell the buyer on the future of the business with growth ideas that although well-thought-through, are not a promise of future success.
The buyer is taking on a lot of risks when they acquire your business. They don’t have you to run it, market changes are out of their control, and there are hinge points like your business’s reliance on Amazon that can negatively impact your business at a moment’s notice.
When talking about your business to a buyer, it’s best to share what’s worked and what hasn’t in the past and focus on how it’s performing now. Knowing the history of your business will help the buyer plan its future—let them see its potential on its own.
After the final handshake is made, it’s time to transfer your business to the new owner.
Transferring of Ownership
Migrations of eCommerce accounts on platforms like Shopify, Walmart, BigCommerce, WooCommerce, WordPress, and eBay are fairly straightforward.
Amazon is trickier as there’s more risk of your account being suspended in the process.
When transferring an account, you’ll need to make a number of changes to it. Make sure you understand Amazon’s policies well before making any of these changes. If you’re selling your business privately, check the buyer understands how the Amazon account migration works.
When we transfer accounts on behalf of sellers, we have a process we’ve created over the many years we’ve worked with Amazon that includes simply sending them an email and letting them know the business is being sold.
How Long Will It Take to Sell My Business?
How quickly you’re able to sell your business depends on how prepared it is for sale. If your analytics and financials are unorganized then it’ll take a long time to organize them before listing for sale and presenting your business to buyers.
However, if you follow the steps above, you’ll be able to sell quickly.
The average time it takes to sell an eCommerce business on our marketplace is 21.7 days from the first listing to the final offer accepted. The migration process can then take another few months after that.
The benefit of selling through a broker is once you’ve listed for sale is that you can run your business as usual while they find buyers for you. If you sell privately, you have to actively search for buyers and manage them yourself.
How Do I Get Paid?
If you sell privately, you should have the support of lawyers and work with a 3rd party escrow company that will act as a reliable middleman to facilitate the transfer of funds.
If you sell through a brokerage that offers an escrow service, they’ll collect the funds on your behalf.
As for an earnout deal, it’ll typically start from the moment the business is fully transferred to the buyer unless otherwise stated on the sales agreement.
And that’s it! Now you know how selling your business works and can use this guide to steward you toward a successful sale.
When you take the advice above, you’ll be able to sell your business for more money, faster, and safer than if you jump in without any preparation.
Regardless of whether you want to sell soon, in a year or so, or you’re not planning to sell at all, go through this process as you’ll increase your business’s profitability, and performance, and make it more defensible, securing, and increasing your cash flow.
Now you know how to prepare and sell your Amazon or eCommerce business for over one million dollars, it’s time to take action!
You can start going through the stages outlined above yourself, or if you’d like some expert guidance, you can talk to us on a free, no-obligation exit planning call. After outlining your exit plan, we’ll follow up with you regularly to see how you’re getting on and there’s no obligation to sell with us.
6 Unique Strategies to Retain Top Talent in eCommerce
This is a guest post from Payro, a short-term loan for businesses specifically to cover payroll on time, even when cash flow is thin. Payro secures funds instantly, so they are available for weekly, biweekly or monthly payroll.
Every business is trying to find that competitive edge that will help them crush the competition, scale, and become more profitable. In this article, we’re going to explore 6 unique strategies to retain top talent in eCommerce, helping your business to hire better and keep the good ones for longer.
Some of it might seem like common sense, but you’d be surprised to discover many companies fail in that regard.
Are you optimizing your employee retention?
Why Retain Hires Rather Than Just Replace Them?
For starters, people are not commodities. Just because you need someone for your position, doesn’t mean you’re going to find a good fit right away, or at all. It’s always easier and more profitable to be good to the staff you have and train them to grow to your expectations, if possible.
Here are the major driving factors for keeping good employees.
It takes money to search, recruit, hire, and train a good employee. Meanwhile, you’re losing the function of having that good employee in place to make your company money, which is an added cost over time.
Related to cost, your ideal fit may take months (or years) to find. Meanwhile, your other employees may burn out if they’re covering extra hours or workloads because you’re understaffed. The longer your good employees stay with you, the more you reduce this extended talent gap.
Limited Talent Pool
With the advent of remote work becoming the new normal, many talented employees have gone on to hop into higher echelons and take on new positions. This mass exodus of talent from job-seekers often leaves companies scrambling to find a good fit in training and skills for their open positions.
Ripple Down Effect
Your other employees are always watching, learning, and reflecting on your company culture. If you don’t show that you value your employees, they will in turn not value your customers. Additionally, in-house conflict leads to hindered productivity across the board.
How to retain good hires?
If you’re on board with why you should make extra efforts to keep your good employees, here are six strategies you can implement today, on how to achieve that goal.
Start With the Right Hire For Your Team
Competence is something that you want to look for in an employee, but it’s not the only trait that makes someone successful for your company. On paper, you can look at someone’s skills and training, plus their proven success, and imagine that they will be a great fit for what you do.
However, if you step back and look at the bigger picture, this person will also be working collaboratively with your team. That means that no matter how good they are at any given task, if they don’t play well with others, they are not a good fit.
This can be an especially difficult deal breaker when you do find someone that has a rare talent. Your first inclination may be to jump out of your seat and hire them on the spot. Hold that excitement for a moment as you consider this: do you really want to be responsible for training that person to be kind to others, to listen, and to say thank you?
Unless you’re an empty-nester parent or a former kindergarten teacher, it’s likely that you expect people to come to your team as a professional.
Conversely, when you do find someone who has an exceptional interview and epic soft skills who would easily mesh well with your team – do they have the skills to pull off complex tasks? A little on-the-job training is expected for any position, but that’s more about company culture and not the skills demanded every day at work.
Finding the uncommon blend of talent with people skills in an applicant is a rare find, but it’s the ultimate goal in hiring.
A Company Culture of Psychological Safety
In our cutting-edge world of business, the paradigm of how we accomplish anything frequently shifts. Employees who feel like they’re allowed to make mistakes will speak up and voice their opinions, offering unique insight and different perspectives to anyone willing to listen.
Beyond that, they will feel seen and heard. Employees who feel like they’re making an impact at work have a sense of value and importance, making the work more important to them. Tap into this powerful psychological effect by letting your team members know that you’re listening and open to their ideas and feedback.
Value Your Employees
In an ever-growing less personal and digital world in which the metaverse is taking over real life, it’s essential to see your employees as real people. This means honoring their commitments outside of work, which could include a partner, kids, sick relatives they’re taking care of, or anything that’s important to them. As long as they’re a contributing member of the team and able to hit their deadlines with quality work performed, try to remain flexible for them.
Making an employee choose between their family and their job is a sure-fire way to get them to either quit the position or resent being there when they show up to work. You can proactively come up with a model that works for both you and them so that your needs are being met as well.
Honesty is still the best policy. As companies proudly puff out their chests and brag about numbers while their infrastructure is collapsing, it’s important for your employees to know they’re on the inside along with you. If there’s risk ahead, let them know. If finances are falling, show them the stats and have them brainstorm ways to improve KPIs.
Being clear is always the best option. Set reasonable and clear expectations, while being clear on your feedback about what you like about their performance and what you think can be improved on for next time – with the gentle nudge and encouragement for them to improve.
Aim For Exceptional
Another way to say this is “Lead by Example” as long as the example your setting is for excellence. Whatever your vision is, share that vision until your team can see it too. Let them add to the vision. Always ask yourself and the team, “what more can we do to improve this?”.
Start small and work your way through every offer and touchpoint you have with your customers. Or start big and rethink your mission vision, then trickle that down to affect everyone in the company. Regardless of how you go about it, don’t settle for just “good.” A comfortable job that pays the bills is the death of creativity, and your talented employees will jump ship at the next port.
Ensure They Always Get Paid
Perhaps the most obvious of all of these strategies is to pay your employees. Don’t laugh this one off, because many companies fall on hard times, or quite the opposite. They are expanding so rapidly that they hire a number of new employees. Cash flow can easily become a problem for most businesses at some point.
Not having the cash on hand to make payroll means you will not pay your employees on time. This will shake their foundation and belief in the company being able to provide for them, eroding trust and any vision for a long-term future.
There are options to always make sure your employees get paid. Companies like Payro offer low-cost business loans to cover that narrow gap in timing, which will ensure you’re able to pay all of your employees – on time.
Managing Your Company Cash Flow
The money is coming, it’s just not where you need it to be right at this moment.
It’s a common problem that affects all businesses to varying degrees. Especially small to medium companies and Amazon businesses that can see their sales charts, but are not able to collect on the money they’ve earned until they’re paid by Amazon.
Add to that, there are constant expenses to stock physical products and goods.
The beauty of accessing money for a short time period when you need it is that you can pay invoices without getting fined, and always ensure your employees are paid on time. A company like Payro offers attractive options, like:
- 48-hour approval and same-day funding once approved
- Financing up to $500k
- Rates as low as 1.5%
- 28 days to pay back the loan
Knowing you have money on demand if and when you need it will also help decrease your own stress levels, so you can retain your joy for your business.
Nurturing your employees is an essential skill to learn, and goes a long way in recruiting and retaining the top talent in your industry. It’s much less expensive (and more humane) to treat your team right and keep them around for the long haul.
The six strategies to retain them include:
- Start With the Right Hire For Your Team
- A Company Culture of Psychological Safety
- Value Your Employees
- Be Transparent
- Aim For Exceptional
- Ensure They Always Get Paid
If your company is experiencing a temporary cash flow issue, it’s easy to find a company like Payro that can get you a low-cost, same-day business loan, specifically designed to cover payroll, for up to $500k. Making sure your employees are taken care of is the most important way you can put your money where your mouth is and show them you value them.
WordPress vs. Magento: An Overview of Two Powerful Business Platforms
This is a guest post from Muhammad Safeerullah. Muhammad is a professional digital marketer and content writer who is currently working for FME Addons. He likes to research and write about eCommerce, search engine optimization, and digital marketing trends. His goal is to help others use WordPress and WooCommerce in innovative ways.
The market is flush with eCommerce platforms designed for various business needs. Some are built specifically for eCommerce businesses, while others have multi-purpose functions. The two most popular platforms for eCommerce are WordPress and Magento, both of which have a vast range of tools and design options.
Each provides open-source and self-hosted platforms. Magento offers Magento Open Source and Magento Commerce, while WordPress has WordPress.org, a self-hosted platform, and WordPress.com, a premium hosting service.
Despite their similar natures, these platforms operate differently as eCommerce business solutions. Both WordPress and Magento have unique pros and cons that affect their suitability for an eCommerce business. In this article, we’ll briefly discuss each platform’s advantages and disadvantages to help you decide which one is right for you.
Incorporating 37% of the websites on the internet, WordPress is one of the most embraced content management systems (CMS) for eCommerce and non-eCommerce websites alike. It’s user-friendly, with a quick installation process, and boasts hundreds of plugins for almost any functionality — at no cost.
WordPress boasts over 455 million active websites. The reason for such a high number is its ease of usability and eCommerce-friendly nature.
Pros of WordPress
- WordPress is not a dedicated eCommerce platform, but you can easily set up an eCommerce store by downloading its WooCommerce plugin (one of its most popular extensions). Additionally, the process of installing a plugin is simple, requiring minimum technical knowledge.
- It’s affordable and easy to run an online store on WordPress thanks to its user-friendly UI/UX that simplifies operations.
- WordPress accommodates various website add-ons like WooCommerce conditional checkout fields, Facebook Messenger chatbot, and many more. In addition, the WooCommerce plugin allows you to add new products and categorize and manage them easily.
- Users can customize their storefront and personalize themes without investing significant time.
- WordPress lets users include various payment methods for their eCommerce business through plugins such as Paypal, Square, Stripe, and more.
- It’s commonly used in small businesses with tighter budgets and requires the least technical knowledge.
Cons of WordPress
- WordPress lacks built-in eCommerce functionality to run a business; you have to install a WooCommerce plugin to operate an online store.
- For every functionality on WordPress, you have to install a new plugin on your website, and some plugins and themes may be incompatible with each other.
- WordPress’ security isn’t robust, making it risky to run a large eCommerce business.
Magento (Adobe Commerce) is a dedicated eCommerce platform seeing increasing adoption. Its purpose is to help users build an eCommerce business, but it can also support blog posts and regular site pages (however, this capability requires a plugin).
Like WordPress, Magento offers Adobe Commerce (also known as Magento Commerce), a fully hosted website, and free open source for a self-hosted, developed website. Big companies like HP, Coca-Cola, and Ford have built robust eCommerce businesses using Magento.
Pros of Magento
- Magento has built-in eCommerce functionality, making it a powerful and effective platform for online businesses.
- It can support medium to large stores more easily than WordPress, and constructing a multi-vendor marketplace is also more convenient.
- You can sell both physical and digital products on the platform, as well as manage multiple stores and catalogs.
- Magento boasts a high level of customization and functionality, with users able to use almost 5,000 extensions and apps in the Magento Marketplace plugins to enrich their store’s functionality and boost sales.
- Magento provides extensive user support through its dedicated help desk.
- It’s a very secure platform with built-in features like a web application firewall and DDoS mitigation. (Note: Open source users are required to install a security plugin.)
Cons of Magento
- Due to its vast, complex structure, businesses will likely need a team of experienced, professional developers dedicated to setting up a store on Magento. It can also be difficult to manage for those new to eCommerce platforms.
- Launching a Magento site requires a large investment of both time and money, and the costs of premium Magento extensions are much higher than those of WordPress.
- Magento’s functionalities are limited, as it only supports eCommerce extensions.
The final verdict
WordPress and Magento are popular open-source CMS options for eCommerce. Magento has the upper hand over WordPress in terms of running a large business, as it’s more stable and has robust security. However, WordPress offers many advantageous features and plugins that are less costly compared to Magento’s extensions.
Overall, WordPress is suitable for content-driven websites while Magento (Adobe Commerce) is ideal for building an eCommerce website (provided you have an expert development team and a large budget). If you’re an eCommerce merchant looking for a highly secure, eCommerce-focused platform, Magento is the better option. If you’re new to eCommerce and looking for an easy-to-use eCommerce platform, then WordPress would be your best bet.
How to Run an eCommerce Business: Outsourcing vs. In-House Work
This is a guest post from Career Karma, the easiest way to find a job training program online. They help over 1 million workers navigate their careers every month through advice and coaching.
Running an eCommerce business can be challenging for both first-timers and established business owners. Primarily, it’s crucial to understand the market and then determine the tasks that can be outsourced and the ones to keep in-house. When making these decisions, it’s important to consider key factors including language, location, company needs, and quality of services.
Generally speaking, outsourcing is quickly becoming the go-to service for both small-scale and large-scale businesses. In fact, research shows that the global outsourcing market is valued at approximately $92.5 billion, and nearly 74 percent of businesses rely on eCommerce outsourcing services. However, to run a successful eCommerce business, you must understand the ins and outs of outsourcing and in-housing.
This article will explore the benefits of both services and determine the right tasks to outsource and keep in-house.
What is the Difference Between Outsourcing and In-Housing in eCommerce?
The difference between outsourcing and in-housing is primarily based on the delivery model. eCommerce outsourcing involves hiring a third-party company or contractor to complete duties and responsibilities related to your company. On the other hand, in-housing or insourcing involves completing all company operations with the help of in-house staff.
Benefits of Outsourcing Work in eCommerce
Focus on the Company
When you’re overwhelmed at work, it’s easy to overlook significant aspects of the company. Hiring third parties lets you focus on your core and uphold the company’s vision through brand-influencing activities. For example, you don’t need an entire department for content creation, as you can outsource content creators and retain a smaller sales and marketing team.
Outsourcing tasks can save your company a lot of money. Full-time employees require a monthly salary, benefits, and training. You must also maintain office equipment and invest in system integration, logistics, web development, and back-office support. Investing in a third-party contractor allows you to save money because you’ll invest less capital on these necessities.
Outsourcing tasks is an excellent approach to improving your organization’s productivity. When you rely on a small in-house team to handle all processes, you’ll typically experience less productivity. Outsourcing allows you to work with a larger team. The team handles customer needs and achieves company goals on time. You can also keep up with your competition without hiring more employees.
Offer Flexible Hiring Processes
In-house employees usually have long-term contracts. However, outsourcing tasks offers a flexible hiring process because you can find employees based on need and project type. For example, if you’re working on a three-month project, you can outsource short-term contractors without long-term obligations.
Keep up with New Technology
The eCommerce sector is growing rapidly, thanks to regular tech advancements. Outsourcing allows you to find skilled individuals in different areas, like web design, programming, data analytics, and artificial intelligence (AI). As a result, your company will maintain high standards in technology.
Five Types of Work You Can Outsource
Selecting which tasks to outsource can be challenging because you must safeguard company data. You must consider several factors and work with the right contractors. However, despite the seriousness of the process, the tasks below are perfect for outsourcing.
1. Content Creation
Blogging, social media posts, videos, infographics, and podcasts are pivotal in taking your company to the next level. However, you don’t need a full content creation department within your organization. Instead, outsourcing these duties to content creators and influencers on different platforms creates extensive brand awareness for your company.
Content creation is part of marketing because it tackles an array of social media platforms like Instagram, Facebook, TikTok, and blogs. However, the marketing team also handles merchandising, email marketing, Pay-Per-Click services, analytics and reporting, brand management, and research. You can outsource all of the marketing duties of the organization to skilled contractors.
3. Order Fulfillment
You may outsource your order fulfillment duties to an experienced fulfillment partner. Usually, the contractor will store your products in their warehouse, packing and shipping them upon request.
For example, MyFBAPrep monitors inventory and handles logistics. In fact, outsourcing order fulfillment allows you to manufacture more while eliminating the stress of meeting deadlines and handling large consignments or international shipping.
4. Web Design and Maintenance
You may feel apprehensive about opening your platform to a total stranger. However, unless you’re highly skilled in web design and development, you should outsource this task. The increase in coding boot camps allows more people to sharpen their programming and web design skills, opting for freelance gigs. You can take advantage of these professionals to tackle these duties while you focus on growing the business.
5. Administrative Tasks
Virtual assistants (VAs) are becoming popular as companies seek to outsource various administrative tasks. You can hire a virtual assistant to manage your schedule, create reports, prepare travel arrangements, manage files, and organize presentations. A VA should be available around the clock and meet all of your administrative needs, despite the distance.
Factors to Consider When Outsourcing for an eCommerce Business
While outsourcing is cost-effective and productive, you must consider the following factors before opening your business to a third party:
- The resources and technology that are available to the third party.
- The third-party’s rates should be within your budget to avoid spending more than you use for in-house services.
- It’s important that you find someone fluent in your language.
- Your contractor should be able to meet company deadlines with minimal supervision.
- The outsourced contractor should be trustworthy and maintain good communication skills.
Benefits of Insourcing in eCommerce
Insourcing enhances your ability to safeguard company data, such as tech developments, sensitive passwords, trade secrets, and confidential documents. Employees can’t access or distribute this data to other computers when all company information is in one location.
Insourcing makes it easier for you to manage your team in one location. For example, you can access performance, assign employees to different projects, and manage employee development. In addition, insourcing will create stronger employee relationships, leading to better teamwork and retention.
When all employees are in one location or linked to the same system, communication becomes easier between the management and employees. Furthermore, everyone is in the same time zone, meaning you don’t have to worry about late responses and separate meetings. You can quickly call your employee to the office in an emergency.
Insourcing allows you to maintain the company’s quality through direct supervision and one-on-one management. You can work with the in-house team to identify loopholes as well as correct shortcomings immediately. For example, if everyone working on a project is at the office, it’s easier to identify who dropped the ball and how to fix problems onsite.
Four Types of Work You Shouldn’t Outsource
Outsourcing is a brilliant move for your eCommerce business. Nonetheless, not every task is up for outsourcing. Below are four vital tasks that you should delegate to your in-house team.
1. Executive and Leadership Positions
You should never outsource executive roles and leadership positions that significantly impact your company’s success. The CEO and management staff should include professionals who are invested in the company and understand the vision. In addition, company leaders should have physical access to the company location and team.
2. Human Resources (HR)
Many companies work with third-party hiring companies to find competent employees. However, you should never outsource full HR responsibilities to a third-party firm. Your management team should always have the final say regarding hiring and firing your employees.
In addition, you should handle all HR responsibilities in-house, including payroll processing, disciplinary actions, benefits analysis, and employee conduct analysis. Remember, you can always invest in employee training at top management boot camps like Flatiron School, Simplilearn, and Thinkful.
3. Core Company Competencies
Your core company competencies should never be available to third-party contractors. If you value your company resources and strategies training, using a third party may not be the best fit for you. Moreover, an external contractor may provide training that doesn’t align with your vision. It will help if you use your in-house team to handle duties related to your core competencies.
4. Company Finances
You can outsource specific accounting tasks like bookkeeping, tax accounting, and financial data analytics. However, you should not give a third-party contractor access to your finances. In addition, you should only work with reputable and trustworthy external contractors when dealing with company finances.
Outsourcing is becoming the norm in various industries, and you can outsource various tasks to ensure company productivity. In addition, tech advancements are improving eCommerce businesses, so in turn, outsourcing opportunities are also rising. You may see this trend become more prevalent as more and more companies adopt hybrid and remote work setups.
However, you should always prioritize the company vision, whether outsourcing or using in-house staff. MyFBAPrep is ahead of the game in eCommerce outsourcing services. They offer high-quality inventory management services to ensure efficient order fulfillment.
How to Prep Your Amazon Listing for a Sold-out Launch: Your Go-To Guide
This is a guest post from Omar, the eCommerce-obsessed Co-founder and CEO of OJ Digital Solutions, an agency that helps Amazon sellers 2X their conversion rate by optimizing their Amazon listings.
Are you looking to launch a new product on Amazon? If so, you need to make sure that your listing is ready for prime time.
A successful launch can help jumpstart your product’s success on the platform and set the tone for your entire product lifecycle.
It’s, therefore, crucial to take the time to plan and prepare properly.
This article will show you exactly how to set up your Amazon listing for a sold-out launch.
By following these tips, you can increase your chances of success and generate more sales in the process.
Let’s get started!
Preparing Your Amazon Listing For A Launch On Amazon
Before you launch your product on Amazon, it is essential to take the time to prepare your listing.
This will ensure that potential customers can find your product and make a purchase.
Here are some tips for preparing your Amazon listing for a successful launch:
Ensure all details on your listing are accurate
Inaccurate information can lead to customer confusion and may result in them not making a purchase.
This includes things like your product title, description, pricing, and availability.
Make sure you double-check all of the product information on your listing before you launch.
This will help you avoid any potential problems down the road.
Optimize your product title for high CTR
Your title is one of the first things potential customers will see when they find your listing.
As such, it is crucial to ensure that your title is catchy and attention-grabbing.
A catchy title will help improve your listing’s visibility and increase your chances of making a sale.
Here are more tips for creating an attractive title that also follows Amazon title guidelines:
- Include your primary keyword at the start of your title: This will help potential customers find your listing while searching for your product on Amazon.
- Make it attention-grabbing: Use strong adjectives to describe your product. This will help make your listing stand out from the competition.
- Keep it short and sweet: A long, rambling title will likely turn potential customers away. Keep your title concise and to the point.
Here is an example of a great title:
Add Instagram-worthy product photos
Low-quality amateur images can make or break your success on Amazon.
Images affect literally everything, from your click-through rate to your conversion rate, your sales, and even your customer reviews.
They are often the first thing potential customers will see when they find your product.
As such, it is vital to ensure that your photos are high-quality and compelling.
Your photos should show your product in the best light possible and help convince potential customers to make a purchase.
Be sure to take the time to select the right photos for your listing before you launch.
PS: High-quality photos can justify a higher price, meaning you can price your product higher if your images are on point.
Here are some standard Amazon guidelines for product images:
- The image must be the product’s cover art or a qualified photograph. It is not permitted to create illustrations or drawings of the product.
- The image must not include extraneous or unclear objects.
- The image must have realistic color, smooth edges, and be in focus. It also needs to be professionally lit, scanned, or photographed.
- The front cover art for music, books, and video/DVD releases should completely fill the image frame. Cellophane, jewelry cases, and advertising stickers are not permitted.
- All other items should occupy at least 85% of the image space.
- The entire product needs to be visible.
- White background is required for the main image(RGB 255,255,255).
- No additional graphics, text, or inset images may be present in the picture.
Choose the right keywords
Keywords are another critical element of your Amazon listing.
They help potential customers find your product when searching for something on the platform, making them essential for amazon content optimization.
Consider the terms potential customers might use when searching for a product like yours.
Then, include these keywords in your listing title, description, and bullet points.
This will help improve your visibility on Amazon and increase your chances of making a sale.
You can also look at what your competitors are ranking for to get an idea of what keywords you should be targeting or get the help of amazon listing tools to speed up your search.
Set a competitive price
Pricing is an important consideration when preparing your Amazon listing for launch.
You want to ensure that you are setting a competitive price with other similar products on the market.
At the same time, you also need to ensure that your price is profitable. Be sure to research and set a price to help you reach your goals.
Find a balance between being competitive and making a profit.
Use bullet points
Bullet points are a great way to highlight the key features of your product.
They help potential customers quickly and easily see what your product has to offer and why they should buy it.
As such, it is vital to include bullet points in your listing.
Be sure to make your bullet points concise and easy to read.
Use them to highlight the most important features of your product.
This will help convince potential customers to make a purchase.
Also, use keywords in your bullet points to improve your listing’s visibility.
Here is an example of how to follow amazon bullet points guidelines in your listing:
Take advantage of A+ content
If you are enrolled in the Amazon Brand Registry program, you may be eligible to add A+ content to your listing.
This is one of the most powerful ways to turbo-boost your listing conversion rate and make your listing stand out from the competition.
A+ content includes things like additional photos, videos, and detailed descriptions.
If you are eligible, be sure to take advantage of this feature and add A+ content to your listing before you launch. Follow all A+ content guidelines to get the most out of it.
Amazon also just introduced the Amazon brand story feature, allowing brands to create a human connection with their customers by telling their stories and sharing their brand’s values with customers.
Use-easy to understand language for your product description
Your product description is where you can really sell your product to potential customers.
As such, it is important to use language that is easy to understand and persuasive.
Be sure to avoid using technical jargon or terms that might be confusing to potential customers. Instead, use language that anyone would be able to understand.
This will help convince potential customers to buy your product.
Include a call to action
A call to action (CTA) is the final push potential customers need to make a purchase decision.
It is a statement or phrase that urges the reader to take some kind of action.
Your CTA should be included in the last sentence of your product description, your bullet points (ideally the 3rd bullet point), and in the last image of your gallery images.
It should be short, concise, and easy to understand.
For example, you might use a CTA like “Buy now”, “Order today.”, “Buy 1 get 1 for Free”.
This will help encourage potential customers to make a purchase.
How To Make Your Product Launch On Amazon A Success
Here are measures you can take to make sure your product launch on Amazon is a success:
Have a marketing strategy in place
A successful product launch on Amazon requires more than just a great product.
You also need to have a solid marketing strategy in place to generate interest and drive sales.
Be sure to plan ahead and allocate the necessary resources to ensure a successful launch.
Generate buzz around your product before and during the launch
This can be done through social media, online ads, PR campaigns, or other marketing initiatives.
Getting people talking about your product before they even see it on Amazon will help create a sense of excitement and increase the likelihood of a successful launch.
Social media is a great way to generate interest in your product and drive traffic to your Amazon listing.
Be sure to create eye-catching posts and include links to your listing.
You can also run ads on social media platforms like Facebook and Instagram.
Ensure that your product is high quality and well-packaged
This will help reduce the number of returns and negative reviews, which can hurt your chances of success on Amazon.
Make sure that your product is something customers will be happy with when they receive it.
Generate positive reviews and social proof
You can do this by sending your product to influencers, bloggers, and media outlets.
If they write positive reviews or mention your product on social media, it will help create a buzz and convince potential customers to buy it.
Take advantage of ads and promotions
Amazon PPC ads and promotions are the best ways to increase visibility for your product and generate sales.
Amazon offers a variety of advertising options that can be customized to fit your budget and goals.
Be sure to take advantage of these tools to help ensure a successful launch and boost your Amazon conversion rate.
Create a sense of urgency and scarcity around your product
This can be done by offering limited-time discounts or promotions or setting a finite number of units available for purchase.
Customers are more likely to buy a product that they feel is in high demand and may not be available for long, so this is a great way to increase sales.
The Bottom Line
If you were wondering how to prep your Amazon listing for a sold-out launch, I hope this article was helpful.
Make sure to start planning well in advance and to keep track of your inventory levels so that you don’t run out of stock during this crucial time.
With some preparation and careful management, you can ensure that your Amazon listing optimization is primed for success!
Shopify vs Magento: eCommerce Platform Migration Basics
This is a guest post from Kate Parish, chief marketing officer at Onilab, who has 8+ years of experience in digital marketing and eCommerce web development promotion.
One of the unexpected downsides of managing a successful eCommerce store is outgrowing the platform it launched on. Your business, like a living being, transforms along the way; what covered your needs earlier may no longer be reliable, flexible, and scalable.
Take Shopify and Magento as an example: They make frequent appearances on lists of the most popular eCommerce platforms for thousands of stores. However, they’re very different.
Shopify is the better option for small and medium-sized stores. It lets you set up an eCommerce website without having to think about hosting or hiring an IT team. Magento, in turn, outperforms Shopify in power, customization, and functionality, which is crucial for bigger and fast-growing companies. So, if you’ve been a Shopify client for a while but need to take your store to the next level, consider a platform migration to Magento.
The migration process may seem complicated, so we’ve divided it into digestible pieces for you to understand and make it easier to decide. This article will examine the two competing platforms, the reasons to switch from Shopify to Magento, and the step-by-step migration process.
Magento vs. Shopify
Magento is an open-source website builder based on the PHP scripting language. Its customers include Christian Louboutin, Agent Provocateur, Land Rover, Ahmad Tea, Nestle Nespresso, and more big names.
Magento ensures its clients receive the best functionality and security for every dollar spent. In keeping with this philosophy, the company recently released the Magento 2 upgrade and stopped supporting M1, encouraging merchants to follow their Magento migration steps for the most up-to-date experience. The Magento 2.3 version supports a headless commerce approach to build progressive web apps with an impeccable UI/UX on mobiles and desktops.
Creating an online store on Magento is challenging if you have no IT team or lack the means (or desire) to hire one. But once your store launches on the platform, you can enjoy the limitless capabilities that surpass Shopify’s offerings.
The platform has its downsides, however. Although free to use, most extensions will cost you $60–$600. You’ll also need to pay for hosting, third-party services, and developers. If you require more functionalities and tools, Magento offers a Commerce edition, which starts from $22,000 per year and may rise due to increased customer Gross Sales Revenue (GSR).
Shopify is one of the most popular solutions for eCommerce businesses. Apart from SMBs, major brands like Heinz, Nestle, Rebecca Minkoff, and KKW Beauty also use it. Its popularity is attributed to the ease of setting up a store on the platform.
Shopify charges $29–$299 per month, plus transaction fees for 24/7 support, hosting services, and seamless themes. It provides indispensable elements for stores, including:
- A payment processor
- A blog
- Email marketing tools
The platform’s multi-tenant architecture can slow website performance during traffic spikes though, so an expanding store may struggle to provide a polished user experience.
Although you can use custom code in the back end to change your store, if you need to go beyond Shopify’s basic functionalities and features, you’ll have to leave Shopify for adaptable solutions like Magento.
Why migrate from Shopify to Magento 2
Magento is a free (to use) and customizable constructor, while Shopify is a paid, ready-to-use eCommerce platform.
This difference gives Shopify various limitations, while Magento offers expanded capabilities. Below, we’ll outline the reasons to migrate from Shopify to Magento.
1. Website performance
Fast loading speed is a prerequisite for an eCommerce store’s success. It ensures a better user experience and higher rankings on search, improves online store metrics, and prevents visitors from leaving the website in irritation due to long loading times.
While Shopify has a better overall performance than Magento, it may not handle the needs of a growing business. The bottom line is, you can’t improve the speed of a Shopify store. You operate on what the company offers to you. It’s also impossible to reach the perfect mobile or desktop Google PageSpeed scores.
The self-hosted Magento option provides the opportunity to choose the most suitable hosting provider and boost your store’s performance. It’s especially relevant for huge loads when the proper hosting can save you from other websites affecting your resource. Shopify, however, is unable to provide hosting controls. So, even though Shopify’s performance is initially better than Magento, you have more chances to fix the latter’s issues.
2. Full customization
A Magento store requires solid technical skills, but is customizable. As a self-hosted platform, it gives you complete control over the server and hosting environment. On the other hand, Shopify only needs beginner-level development knowledge for hosting configuration, but it limits access to fundamental performance and customization opportunities. For example, it requires merchants to use its own payment gateway, has a basic category structure, and lacks advanced search functionality.
A point in Magento’s favor is its flexibility and high customization as you gain access to the code. The layered architecture, which separates business logic from presentation logic, lets you tweak the look of your storefront without changing the core business logic.
Magento enables you to configure numerous languages and currencies, as well as different prices for various customer groups. Furthermore, the store owner can manage several stores from a single admin panel.
3. Available features
Magento boasts many extensions, giving it the upper hand in this comparison. The most popular ones (to name a few) are:
- Facebook Business Extension
- Google Shopping by Magenest
- SimiCart Mobile App Builder
- Follow Up Email by Amasty
The extensions allow users to add features to their stores right out of the box. A case in point is Follow Up Email by Amasty: This add-on streamlines sending email notifications, launching campaigns, and specifying coupon rules. Shopify also has various add-ons, but not to the same extent. For example, Magento provides more than 5,000 extensions as opposed to less than 4,000 in Shopify. Plus, Shopify’s are less adaptable, have fewer features, and are more constrained.
4. Options for international trade
The multi-site capability with Magento allows store owners to maintain a single codebase for several websites. As a result, you can have a separate domain for each country and localize websites according to local regulations, taxation, shipping partners, and payment methods.
Magento is also beneficial for running many online stores, which is crucial for taking country-specific localization to the next level, including:
- Local currencies
- Translated text
- Local SEO
- And more
Magento’s multi-warehouse capability assists in managing scattered warehouses from a single source. It boosts operational efficiency, enhances global inventory management, and streamlines resource allocation.
Before opting for Magento, determine if you plan to grow your company. Should the store cover a considerable turnover? Will you need to launch the store at the international level? If you have no intention to scale, you’ll pay extra costs for unnecessary functionalities.
How to migrate from Shopify to Magento
Magento is the upgrade you need to help your growing business continue to flourish. You can migrate from Shopify to Magento manually, with automation tools, or by hiring specialists to do the job for you.
Manual migration is possible for stores with fewer data arrays. However, if each CSV file contains more than 9,000 rows, you’ll need to employ automated tools like LitExtension or Cart2Cart.
Preparing to migrate
Whether you choose to migrate manually or through automation, you have to set up the environment and build a Magento store:
- Install the software, including MySQL, PHP, and Apache, and review the system requirements.
- Install the Magento program on your computer.
- View your storefront and the Magento Admin to confirm the installation and see if you installed the Magento software correctly.
Before changing Shopify, back up crucial files and export data from your back end to CSV files. A CSV file stores data in a table-structured format, which you can use to import and export product, customer, and order information to and from the store.
1. Manual migration from Shopify to Magento
It’s relatively easy to migrate from Shopify to Magento manually: Determine the data to move from the Shopify store, download it, and transfer the Shopify CSV files to the Magento store. Navigate to the Magento admin panel and select “System” => “Import/Export profiles.” It supports data such as:
- Customer main files
- Advanced pricing
- Customers and addresses
Unfortunately, exporting themes is impossible; the only option for moving unsupported data is copying and pasting it from your old website. Be aware, though, you may lose the relationships between the data tables after importing.
2. Automating the Shopify to Magento migration
Automation tools ensure a smoother transfer. We’ll illustrate this migration method using LitExtension. This is a Magento add-on to move your data from one platform to another without the need for coding experience. Its price depends on your store’s number of customers, products, and orders and starts from $29 (the tool conveniently provides a cost estimator on its website).
Set up an account or sign in with Facebook or Gmail, then click “Create New Migration” on the admin board.
Specify the source (Shopify) and target (Magento) stores. Then, insert the store’s URL and API password in the lines shown below.
Download LitExtension Connector to receive a zip file named “le_connector.” You’ll need to upload this to Magento’s root folder and insert the store’s URL as in the source cart step.
The next stage involves selecting entities to migrate, such as products, customers, coupons, pages, etc. You can choose to move all elements or only the necessary ones, and there are extra options to configure the store and map the language or order status as well.
Click the “Next: Start Free Demo Migration” button or skip it and proceed to the “Start Full Migration” button.
After the full migration, you’ll receive an email notification. Hit the “Check result” button to see if everything moved successfully. You can go to the Catalog section to review the imported products.
Dealing with the transferred data
Clear the cache and reindex the data through the following CLI commands:
- php bin/magento indexer:reindex
- php bin/magento cache:clean
Check whether the out-of-stock products are activated and visible from the front end. Install a free or paid Magento theme or develop a new one to restore your storefront’s previous design.
On a regular basis, migrate recent data while the store operates after the full migration. New orders and customers will arrive, which you’ll need to transfer to your new resource. Take advantage of LitExtension Recent Data Migration to update data three months after the complete migration.
Purchase and customize one of the Magento templates for higher quality design and functionality to make your store stand out. Lastly, finalize the migration by changing DNS and switching the domain to your new Magento 2 store.
3. Hiring specialists to handle the migration
Because Magento is a knowledge-intensive platform, you may need experienced programmers to transmit the files to a new platform and obtain the best results from the migration. Budget roughly $18 to $40 per hour for each team member needed for your migration.
Migration specialists will study your needs and budget to determine how best to help you. The team will eliminate issues while keeping you up to date, customize the design, and ensure smooth operations so customers have a seamless shopping experience.
Programmers will also take care of your website’s marketing. This includes configuring the proper redirects, optimizing the home page, and notifying existing customers about the new store.
Platform migration is about transferring an online store and its data, content, and systems from one platform to another. The reasons to change the platform vary as you’re forced to adapt to customer needs, trends, and an expanding product range.
A migration opens up opportunities to manage more orders, customize your store to changing needs, and download advanced features. We focused on comparing Shopify and Magento, examining their pros and cons, why you should switch to Magento, and the migration options.
If your store is rapidly scaling up and requires more customization, Magento is an excellent choice. It’ll boost your website performance, allow you to deal with large, complex orders, and make the store an international selling point.
5 Amazon Listing Quality KPIs to Focus on For Growth
This is a guest post from Tina, a a marketplace specialist at BellaVix. She’s a passionate and experienced Amazon marketer with five years of experience. Driven by challenges, Tina is a people person who gains energy from social encounters. You can bribe Tina with good music taste, delicious baking recipes, or discovering a hidden tourist gem.
Globally, there are nearly two million small and midsize third-party businesses selling on Amazon, with roughly 3,700 new sellers joining the platform every day. If you want your products to rank above the dozens of other businesses in your niche, it’s crucial to understand Amazon’s ranking factors. Once you know which ones contribute to improved rankings (and how), you can optimize your listings to rank higher and earn better results.
Although there are many factors essential to your brand’s success on Amazon — conversions, CTR, relevant keywords, product listing completeness, etc. — some of these should be tackled before others (for example, you need traffic to your listings to improve conversion rates).
This post will focus on KPIs we’ve found to be the most important to track to rank and sell better on Amazon.
5 KPIs to focus on to boost Amazon sales
Key performance indicators, or KPIs, provide valuable insights sellers can leverage to improve their online businesses. They’re a crucial part of your growth strategy on Amazon because they reveal what’s working well with customers and how people interact within the system.
Let’s break down five main KPIs that significantly impact your sales growth as an Amazon seller.
1) Content quality
High-quality product detail pages (PDPs), including images and videos, are the first thing you should consider when differentiating your products and improving your positioning on Amazon. First impressions matter, so your product needs to stand out to generate traffic and growing sales.
Invest more of your time creating unique, high-quality, interesting, and relevant content, and stay up to date with the latest opportunities to enrich your Amazon content.
Here are some concrete ways to maximize your optimized listings:
- Employ the most relevant keywords to product titles and bullet points.
- Your product title is the first thing customers see and makes a huge impact on how your product ranks in search results. As such, optimizing your listing (through SEO) should be the first thing you improve to draw more traffic to your product listing.
- Amazon uses the A9 Search Algorithm to best match customer searches to the desired product, and content is an important factor that influences your search ranking results in it.
- Publish up-to-date pictures.
- Quality images support sales and help build your brand’s perception.
- Aside from general product images, spotlight its critical features, the product in use, and lifestyle images.
- Include award badges to provide additional value for potential customers.
- Showcase videos
- Videos help you build relationships with potential customers by putting a face and voice to your brand.
- Effective videos highlight product features and benefits and show their various uses.
- You can add up to six videos to each product page, so you can combine “how to use” and influencer videos with general product videos.
- Add A+ content to present your brand and products as premium and professional.
- Amazon asserts sellers can increase sales 10% by educating your customers about your product with A+ content.
- Each section of your landing page sells the next, and all the creatives need to entice the visitor to keep scrolling. A+ content does this best.
To calculate the quality of your content, you can take advantage of numerous tools that’ll review the status of your titles, key points, images, and other elements of the product page to determine which parts of your content should be improved.
Once you know you have a rich listing and valuable content for your brand, consider your reviews strategy. Amazon reviews are a critical factor of your store’s success; they directly impact conversion rate, rankings, and your sales.
From Amazon Vine to the “Request a review” feature, there are many opportunities to enrich your product pages with customer opinions. We also recommend searching competitors’ reviews to look for common complaints or issues. Avoid the same mistakes and refine your on-page content to surpass customer expectations.
Follow Amazon’s Review Policy to avoid negative repercussions for your store. Some restrictions to be aware of include:
- Posting a review of your own product or a competitor’s product
- Offering a financial reward, discount, free products, or other compensation to a third party in exchange for a review of your or your competitor’s product
- Providing a refund or reimbursement after the buyer writes a negative review and asking them to change or remove the review before or after the reimbursement
- Creating a variation relationship between products to manipulate reviews and boost an item’s star rating via review aggregation
As mentioned earlier, there are two Amazon initiatives sellers can use to increase their reviews:
a) Amazon Vine
This program invites Amazon’s most trusted reviewers to post opinions about new products to help their fellow customers make informed purchase decisions. Amazon invites buyers to become Vine reviewers (also known as Vine Voices) based on the insightfulness of their Amazon purchase reviews.
To be eligible for this program, you need to meet the following criteria:
- Be a Professional Selling Partner
- Register your brand in the Amazon Brand Registry
- Be identified as a brand owner
- Have eligible FBA offers
b) Request a review
- This is an optional way to request reviews from your buyers, found on the Order Details page.
- Sellers can use this feature once per order between five and 30 days after the order delivery date. This ensures customers receive relevant, recent review requests.
When you receive a negative product review, you can contact the customer directly to remedy the issue. Navigate to the Customer Review section on your store’s dashboard. After clicking “Contact Customer,” you’ll be presented with two options:
- Courtesy Refund – Offer a full refund
- Customer Support – Ask the customer for additional details on the order to try and fix the problem
When communicating with customers, always maintain a positive, understanding, and friendly tone.
Once you start collecting customer reviews, you can leverage in various ways them to drive new sales, including:
- Display reviews on your website
- Share them on social media channels
- Familiarize yourself with customer needs and update listings accordingly
- Incorporate your best reviews in your PPC campaigns
To keep an eye on your ratings, you can check your Amazon account or have a review tracking tool manage them for you.
3) Inventory Performance Index
Although Amazon keeps secret the math behind their Inventory Performance Index (IPI), the company does suggest sellers pay special attention to three factors to boost their number:
- In-stock inventory – Avoid stockouts and lost sales
- Excess inventory – Minimize inventory carrying and storage costs
- Stranded inventory – Ensure your products are available for purchase and delivery
If your IPI falls below 350, Amazon will limit your ability to send more inventory and impose a penalty on any excess inventory sitting in Amazon warehouses. You can review your IPI in the Manage Inventory tab.
4) Buy Box percentage
A whopping 83% of Amazon sales go through the Buy Box, so knowing how to win the Buy Box for your products is critical to earn more conversions. Numerous factors affect your chances of winning the Buy Box, including your chosen fulfillment method, total product price, and delivery speed. Check these regularly and make improvements on the most critical variables to increase your Buy Box win rate and, in turn, your sales.
You can find Buy Box metrics on your Seller home page and in Amazon Business reports on the ASIN level or as the average rate of all your listings in a chosen period.
5) Unit session percentage rate
The unit session percentage rate is the number of units ordered divided by the total number of sessions. So, the greater the percentage, the more sales you’re making.
This metric indicates the quality of your product page and your advertising strategy. You can improve your conversion rate by taking the following steps:
- Include product videos
- Split test to find the perfect product photos and phrasing
- Improve SEO (pay special attention to keywords in your product title and page copy)
- Upgrade your A+ page branding
- Increase the number of reviews and their ratings
- Revise and optimize your PPC activities
Wrapping up — Choose your Amazon KPIs wisely
Simply put, there’s no shortcut to improve your Amazon performance. However, focusing on the KPIs mentioned above will boost your rankings in the Amazon product search algorithm and consequently lead to sales growth.
How to Start Selling on Amazon Canada
This is a guest post from Forrest. Blair is the Chief Marketing Officer and Founder of AMZ Prep, one of Canada’s fastest-growing startups in the fulfillment space that helps businesses and brands with their warehousing & logistics needs. From flipping items at garage sales to becoming a global entrepreneur, eCommerce is in Blair’s DNA. Starting as an Amazon seller, Blair has used his experience to build AMZ Prep with a focus on addressing the pain points he experienced as a seller to ensure your Amazon FBA business reaches its full potential.
Expansion is a positive sign of booming business, and with Amazon, you can expand into other marketplaces to grow your reach. By launching a store on Amazon Canada, you’ll be able to target a wider audience with markedly less competition, as well as more room for growth.
Read our guide below on the benefits and potential long-term success of expanding into Amazon Canada.
Why sell on Amazon Canada
Selling on Amazon Canada offers many advantages, no matter where your business is based. Below, we highlight some of the top benefits of expanding into this marketplace to show you how this move can take your brand to new heights.
1) More opportunities
Amazon.ca garners a noteworthy 15.9 million unique visitors each month. This provides a new opportunity to showcase your products to a fresh market of buyers. Plus, with a lower number of sellers than Amazon.com, you have a higher chance of gaining more listing views and conversions.
Amazon Canada is also showing signs of rapid growth in the market, which makes jumping in early all the more important. With a smaller market size (and therefore less competition within Canada), this is a unique opportunity to grow your brand.
2) Diversify your revenue streams
One of the obvious benefits of expanding your sales to Canada is that it diversifies your revenue streams, but with less risk since you stay on the North American continent rather than going overseas.
Additionally, Canadians share many of the same consumer needs and interests as their southern neighbors, so it’s easier to break into their market.
The significant market and cultural overlap between Canada and the U.S. simplifies marketing and advertising efforts in Canada since you can employ many of the same methods you do at home. In addition, geographic proximity is a major bonus, as it reduces delivery times and saves on fulfillment costs.
3) Increase revenue
Tapping into a new market all but guarantees more revenue for your business. Also, if you use the North American Remote Fulfillment (NARF) program, you already have an idea of your demand in the Canadian market.
By transitioning to Canadian FBA, you can reduce your business expenses and increase listing conversions.
4) Optimize ad spend
We have noticed sellers who use NARF alone see lower conversion rates when advertising in Canada and Mexico. This results in a higher advertising cost of sales (ACOS) and a lower return on advertising spend (ROAS).
By selling on Amazon.ca and having inventory within Canada, you can help boost your ROAS thanks to domestic inventory that’s eligible for Prime-speed shipping. This helps your ad dollars go further while also boosting your customer experience.
5) Open inventory limits
Amazon U.S. and Amazon Canada have separate, unrelated FBA inventory limits. Therefore, expanding to Canada allows you to have more inventory on hand that’s ready to sell. You can also optimize inventory allocation in each region independent of one another.
6) Greater brand valuation
Establishing and growing an international presence will boost your brand’s value in the long term.
One of the factors that Amazon aggregators should consider when buying a brand is expansion opportunities. Having an international footprint shows that a brand does well across different markets and has a flexible supply chain.
Expanding to Canada and beyond will help your brand become a global name, and thus drive more sales from multiple markets.
7) Less competition
Depending on your niche, you may have few competitors in Canada, or the competition may fail to take full advantage of the Canadian market.
For those competitors who are already in Canada and enjoy a market share, use their presence to your advantage: You can analyze their success to gauge how high demand is for your niche. Then you can begin to carve out your own market share by introducing your products so Canadians have greater choice.
How to launch your store on Amazon Canada
If you’re on the southern side of the border, it may seem daunting to get started in Canada. Below, we outline some simple steps to make the process as seamless as possible.
1) Establish your business
As an international seller, you can make your life significantly easier by creating an Amazon North American Unified account. This account allows you to switch smoothly between amazon.com, amazon.ca, and amazon.mx in the seller central. This will simplify your processes for listing products and managing orders in each country.
A Unified account lets you do the following in each North American market:
- Share listing info and manage inventory
- Track orders
- Access tools
- Manage single monthly subscriptions
- Accept local currency payments
You should also consider hiring an Amazon Canada consultant to ensure your northward expansion goes smoothly. Amazon Canada consultants and agencies are experts in selling and marketing in Canada and have the best tools and tricks to help you establish your business in this market.
2) Canadian taxes
When you sell products in Canada, you’re responsible for paying taxes, duties, and customs clearance fees when applicable. This includes federal and provincial sales taxes, which vary for each province and territory (as outlined in the table below).
Provincial and territorial tax rates in Canada
Make sure you understand the non-resident importer (NRI) requirements as well. These are legal requirements for sellers located outside of Canada who import goods for sale in the country.
The first importer requirement you should obtain (and one of the most significant) is a business number from the Canada Revenue Agency.
This is what allows you to operate as a business within Canada. Without it, you risk being shut down and fined, and you may lose out on the inventory and processes you’ve already set up in the country.
3) Inventory management
To simplify inventory management, make sure you use the right SKUs for your needs.
You should employ a global SKU if you ship your own orders to a variety of countries. Use marketplace-specific SKUs if you have distinct inventory pools in each country.
4) Importing inventory to Canada
Importing inventory to Canada from the U.S. can be costly since you have to pay customs for inbound transportation to the U.S., then pay Canadian customs when you export to Canada. To cut down on expenses, see if you can ship your products directly to Amazon FBA fulfillment centers in Canada from your own warehouse in the U.S. or China. This will help you avoid an assortment of intermediate shipping fees.
However, you can only ship to an FBA center if you meet all FBA labeling compliances. This may cause difficulties if you don’t have a Canadian return address in case the shipment is rejected. A workaround for this is either to establish a Canadian address by leasing space or use a Canadian fulfillment partner’s address.
5) Fulfillment and returns
As mentioned previously, you can ship inventory directly to FBA fulfillment centers in Canada. If you opt for this route, it’s helpful to use a Canadian third-party logistics (3PL) partner to receive your inventory and forward it to these centers. When you first get started in Canada, you’ll have small inventory limits, so it’s best to use a 3PL to drip-feed inventory to Amazon.
3PLs within Canada can handle FBM there if you prefer having more control over your fulfillment processes. Read this comprehensive guide to learn more about FBM in Canada.
Returns from Canadian customers will need to be routed to a Canadian address. If you partner with a Canadian Amazon 3PL, they’ll be able to receive and process returns for you. If not, you’ll need a Canadian address such as a warehouse leased directly or with a partner.
6) Advertising in Canada
Another area that has far less competition in Canada than the American market is advertising. Fortunately, setting up your Amazon Canada ads is simple, since all ad placements are the same in the Canadian market.
It’s worth noting that ROAS is generally higher in Canada, and CPC is lower than it is in the U.S. Despite the similarities though, Canadians are fundamentally a different breed of customer than their American counterparts. Make sure your marketing efforts reflect this by taking into consideration their differences in culture, tastes, and values.
An important example is your use of spelling differences, such as “color” versus “colour” and “gray” versus “grey.” Implementing American spelling will mark you as foreign and may annoy potential customers. Consider hiring a local agency to help optimize your advertisements for the Canadian market.
Canada’s larger variance in weather is another important factor to keep in mind, as it impacts product and advertising needs. For example, unlike countries with mild climates, many parts of Canada see cold snowy winters. That means it’s not the time to advertise light jackets or patio furniture.
By expanding to Amazon Canada, you’ll diversify your revenue streams, experience less market and advertising competition, and establish a global presence for your brand. Although you may face some hurdles at the beginning, the process can go much more smoothly by partnering with Canadian 3PLs and Amazon advertising agencies. By sharing your products across borders and beyond, you’ll show off your quality offerings and promote your business’s growth.
How to Lower Your ACoS by Optimizing CPC
This is a guest post from Rick Wong. Rick is the founder of SellerMetrics, an Amazon PPC Software. Having worked in some of the world’s largest financial institutions in Canada, he ventured into Amazon selling in 2017 and sold his Amazon business four years later.
The term “ACoS” has become a catchphrase among Amazon sellers, and it stands for the Advertising Cost of Sale. This metric is an Amazon performance indicator specifically for ad campaigns in the Amazon Advertising interface.
More than 75% of Amazon sellers utilized Pay-per-Click (PPC) advertising in 2021, which means your competition is likely using it.
In this article, we will go over the essential performance measures, how to calculate ROI, and how to lower your costs by focusing on cost per click (CPC).
What is Amazon PPC ACoS?
What does Advertising Cost of Sale (ACoS) stand for? Simply put, ACoS is the proportion of total ad spend to total sales income. In other words, it informs you how much money you made for every dollar you spent on advertisements.
How to calculate ACoS
The formula for calculating Amazon ACoS is as easy as a ratio of spend to sales.
ACoS = (Total ad spend / Total sales revenue) x 100
Example: If you paid $1.20 on a keyword and got $6 in sales, your ACoS is (1.20/6) x 100 = 20%.
This calculation implies that a smaller proportion of ACoS is optimal. When your ACoS is low, it signifies your numerator – your total ad expenditure – is lower than the number of sales you’re getting.
However, keep in mind that Amazon PPC also allows you to increase exposure organically, even without clicks. That means the straight objective of lowering ACoS just by lowering budget may not provide the best ROI.
How to calculate your best Amazon bid
Optimizing your Amazon PPC bid is one of the main ways to minimize overbidding and underbidding. You can optimize your bids by using the following formula:
Optimal Bid = (Target ACoS%/Current ACoS%) x CPC
- Target ACoS% → 30%
- Current ACoS% → 45%
- CPC → $1.25
They’re using the above data, your most optimal Amazon PPC bid would be $0.83 (30%/45%)*$1.25
The most important Amazon PPC metric to track: CPC
There are a lot of data on your Amazon advertising dashboard, but if there is one that you should keep an eye on and monitor, it’s your cost per click.
This is a critical metric because of the following reasons:
- CPC is a direct proxy for market competitiveness; as CPC rises, so does marketplace competitiveness. If this is the case, you must be extremely cautious.
- Manipulating your CPC will directly change your ACoS%. This allows you to either optimize for ROI or increase ACoS% to boost sales. (Higher ACoS% = Higher Visibility)
- You may utilize your CPC to calculate your CPA (cost per acquisition) and, as a result, your realistic goal ACoS percentage.
- CPA = CPC/Conversion Rate ➡️ realistic target ACoS % = CPA/AOV
As an example:
- Average order value (AOV) = [Sales/Orders] = 840.44/55 = $15.28
- CPA = 1.56/0.1698 = $9.10
- Realistic Target ACoS % = $9.10/$15.28 = 59.55%
If your CPC is $1.56 and your AOV is $15.28, your ACoS % will be in the example above. If you find this ACoS acceptable, it will be determined by your break-even ACoS, which we will discuss later.
Calculate your realistic objective ACoS % in the meanwhile and have it in your back pocket.
Lowering your ACoS% means lower CPC
If you have experience with Amazon PPC I think you can see where I am going with this. The next actionable step is to make changes to your bids according to your attributed cost per click (CPC).
If you want to keep your impressions at its current levels than your current bid should match your current CPC, but if you want to increase impressions from your current levels than you increase your bid from your CPC.
Lastly, since CPC is a key component to the bid optimization formula, if you change your bid lower than your current CPC, you would in effect lower your ACoS%.
How to optimize your Amazon PPC campaigns
With this knowledge, we can now go to your Amazon Advertising console and start making bid adjustments based on your CPC (Cost Per Click).
Step 1 ➡️ Down Bid High ACoS (>100%)
- Last 60 days – 3 (Amazon PPC sales attributions)
- Clicks ≥ 8
- Orders > 0
- ACoS > 100%
- Decrease Bid to ➡️ CPC * 50%
Step 2 ➡️ Down bid Above Target ACoS (40%)
Let just say my target ACoS% is 40%, you can replace this number to whatever your target ACoS% is.
- Last 60 days – 3 (Amazon PPC sales attributions)
- Clicks ≥ 8
- Orders > 0
- ACoS ≥ 40% and ≤ 100%
- Decrease Bid to ➡️ CPC * 75%
Step 3 ➡️ Up bid Over Optimized Keywords
The idea for this is to make sure the keywords that are really driving sales at a low cost gets a bid that closer to the market. This will ensure that you are winning the keyword bid auction.
- Last 60 days – 3 (Amazon PPC sales attributions)
- Clicks ≥ 8
- Orders > 0
- ACoS ≤ 20% (half of target ACoS of 40%)
- Decrease Bid to ➡️ CPC * 125%
Lowering your ACoS% without affecting your sales is a difficult but crucial indicator for Amazon PPC effectiveness. But this can be done incrementally using your CPC as your keystone metric.
Every seller should establish a unique CPC/ACoS% levels for their most comfortable sales levels. We hope you find our information to be useful in planning your future advertising initiatives!