Table Of Contents
- 1 How to Start an Amazon Business | Amazon Rankings Guide
- 2 How to Create an Amazon Business
- 2.1 Step 1 – The Product(s)
- 2.2 Step 2 – Product Design & Manufacturing
- 2.3 Step 3 – Shipping, Legal & FBA Fees
- 2.4 Step 4 – Optimising Your Listing
- 2.5 Step 5 – Coordinating a Launch
- 2.6 Step 5 – Sales Rank & Reviews
- 2.7 Step 6 – Creating an Amazon Pay Per Click / Amazon Product ads Campaign
- 2.8 Step 7 – The Timeline
- 2.9 Step 8 – Building to £1,000,000+ a year
- 2.10 What’s Your Real Goal?
- 2.11 Conclusion & Closing Thoughts
How to Start an Amazon Business | Amazon Rankings Guide
Last Updated 14th January 2017: This post is pretty long and as a result I might have skipped over steps that beginners may not understand, so if you have any questions regarding the article or the process itself feel free to get in touch with me directly, or if you think there is something I should add to the post then let me know as I’d like to keep this updated regularly – [email protected] Hope you enjoy!
I think you will agree when I say ranking on Amazon is hard! It takes time, knowledge and capital!
Designing and manufacturing a product is hard enough, but it is only a tiny part of the amazon business model battle. When you get your product on Amazon and come up against competition that is already ranking at the top of the Amazon search engine, with hundreds of reviews, it can be rather daunting. In this post I’m going to outline the strategies I use to promote both personal products & client’s products in the Amazon search engine and how you can do the same.
The Basics of the Business
Amazon is not Google.
Alongside Amazon optimisation, I work as an SEO consultant. One of the first things you learn is that Google loves relevancy (on-page, links, all that good stuff.) Google ranks the most relevant site 1st and they hate SEOs who try to “game the system.” Amazon is completely different.
Amazon does not care about links, they care about 1 single thing…..
How much money YOU can make THEM!
The #1 ranking factor for the Amazon algorithm is…. SALES.
Not reviews. (Although it counts.)
Not On-page optimisation. (Although it counts.)
The main issue people run into when launching products in Amazon is they cannot make enough sales, because they can’t rank high enough in the search engine…. And because they cannot rank high enough in the search engine, they cannot make enough sales…. And so the cycle continues until you eventually give up….
This is how 90% of Amazon businesses end up, the individual then decides to go back to Ecommerce or simply selling through a physical location as Amazon is “too competitive.”
Although Amazon is highly competitive, especially nowadays compared to 2-3 years ago, its still full of opportunities, you simply have to select them correctly. For example if you have a small budget, don’t try to go after extremely competitive products. Any product that has over 1000+ reviews will generally be very difficult to outrank as Amazon now sees them as the authority in that niche or sector. For example if you check the image below the top result has over 3000 reviews and has the “best seller” sticker on too. These types of products are very difficult to outrank even if your product is better. The only time I would recommend this is if you have a large marketing budget (£20,000+) then it is possible to get very close to their position, if you don’t though, simply select a less competitive product.
Below I’m going to outline the exact strategy I use to rank products in Amazon, this is going to be a no BS guide you can follow step by step and implement for new or existing products. If you already have a product/business and don’t need to read step 1, skip to step 2 here.
How to Create an Amazon Business
Step 1 – The Product(s)
The product you are going to promote is the number 1 most important aspect to your entire business (as you probably already know.) But, when it comes to Amazon there are a few key elements to keep in mind. The first is competition. If you have a small budget to rank your product in Amazon, then targeting a niche such as “laptops” would be a terrible idea. Instead you would be better served to target a smaller market with less competition. Although the profit will be lower, you can rank your products faster and hence get a higher and faster ROI as a result.
The next element is audience – If you have a business that sells highly specific equipment to a targeted niche market, then chances are there will be no market through the Amazon search engine itself. Instead you would be better served looking at promoting directly to your audience through Adwords or ranking in Google.
Below is a quick guide I’ve put together which outlines how to select profitable products to sell (or re-sell) through Amazon. This is for individuals who do not already have a business in a specific industry. If you already own a business that sells physical items, I would simply recommend shipping these to Amazon and signing up for the FBA programme.
How to Select Profitable Products
As I mentioned above, product selection is the key to short-term success. Too competitive and you won’t see a return on your investment for months, not enough competition and you won’t sell your products quick enough to make any good money. Below is the strategy I use. [At the end of this section will be 5 elements that MUST be present before I take that product further.]
Start by going to the Amazon departments section. Depending on where you are searching from will depend on how this section looks, but it should look something similar to the below screenshot.
From here you want to select a broad category that interests you.
This is key. You want to build a long term business and doing that in an area that interests you will make this a lot more enjoyable. Saying this, a phrase that rings true is:
Boring Businesses Make Billionaires. – DarwinsMoney.com
So if you have an idea that is utterly boring but has the potential to make a lot of money, then add this to your ideas list.
Once you have your broad niche, you want to follow the categories through to something you like the look of. I recommend simply going through the sub category links on the primary category pages themselves. In this example we will look at lighting (throughout the entire article.)
Don’t worry about picking a specific product just yet, although by this stage you should have a specific sub-category in mind that you would like to promote. In this example I will be using the “outdoor lighting” niche.
BE A BRAND NOT A PRODUCT
This is an important element to understand. You want to build an Amazon business. Not just a product, so when you sign up to Amazon Merchant’s Account and get started, don’t chose a business name that has no scope (LightBulbCo for example.) Chose something that is brandable and could be developed into a large business. For example continuing with the lighting example – “LightLove”, “Lighto” – The business name seriously doesn’t matter all that much, the only place consumers will see it is below the product title on your listing [below.]
5 Elements that MUST be present (For Me)
Below are 5 features or filters that a product must pass before I consider going in for this product. If these are not present, it doesn’t matter how good a product looks I won’t be continuing with it.
- Less than 500 Reviews on the 1st Position
- Cost over £15/$20 to consumers.
- Not a Brand Driven Product.
- Something People buy more than once.
Once I have a few product ideas that all have the 5 elements present in a niche I would like to get into, I will use a tool called Junglescout (non-aff) to complete my research. JS is a tool that calculates (accurate estimates based on sales rank and pricing) what a competitor is making per month from their product. This is a chrome extension that makes seeing how profitable a product is painfully easy! Below is a screenshot of what you get. This is a screenshot from patio lighting category in Amazon.co.uk. This lets you quickly see exactly how many reviews competitors have too.
In the estimated revenue field I like to see between £1,000-£20,000. Anything less than £1,000 and the product doesn’t have enough market (yet), and anything over £20,000 will usually be too competitive, especially for someone starting up. Remember if you have 5-10 products making £5k-£15k a month in revenue you have a million pound/dollar a year business.
Why I set these filters
A few reasons but 2 primary ones. The first is: I do not have the time or budget to outrank huge brands such as apple, Philips and others that have 1,000s of reviews and have been on Amazon for years. The amount of capital it would take to make an inroad into these products is extremely high and I’m looking for a faster ROI on my money than these products offer. The second reason is once I’m in the 1st position for a few keywords related to my product I don’t want to have under £1,000 a month in earnings. This means the sales volume for these products are very low, although this might be an additional £300 a month on semi-autopilot, these margins are very slim and again the ROI just isn’t there for these products and hence they get removed from the list!
Step 2 – Product Design & Manufacturing
Although product design is extremely important, you should not try to re-invent the wheel here. We are looking for products that already sell well. All we are doing is adding a benefit (create the value) and then getting this product selling. The biggest killer of businesses is lack of cash flow which usually happens when people are trying to create “the perfect product.”
There are hundreds of ways to design and manufacture a product. Initially I would recommend finding a supplier near your location. If you are looking to get into a specific industry, chances are you can find a supplier within 50 miles of you! Although you don’t need to ever meet this people, its good to know that if something does go wrong, you can just drive for an hour instead of a 8 hour flight to Asia!
Long term I would recommend getting the products produced in Asia as the production costs are a lot lower, but in some cases you might never even need too, so try to stay in the country initially.
My Personal Product Manufacturing Process
I use a website called Alibaba which is a website that connects suppliers to individuals or business owners. It’s essentially the Amazon for businesses. It also makes 4 times as much revenue as Amazon… Yes you read that right.
Alibaba is very similar to Amazon when searching for products, simply search your product keywords in the search bar, and begin “shopping.” They have almost everything legal on this website so if it sells on Amazon it will be on Alibaba.
The suppliers will have a basic price breakdown on their individual listings, these listings will have a lot of information but I always recommend contacting the supplier directly to get an up to date quote including shipping, turn around time and minimum order quantities.
Contact as many suppliers as you see relevant (at least 5.) – You want to work with someone who 1.) Speaks fluent English. 2.) Has produced the product previously. 3.) Gets back to you within 48 hours. Sure these aren’t 100% necessary but you want your first product launch to be as smooth as possible, without these elements you will have more problems.
The next step is down to you, once you have your quotes in, it’s time to get some samples. Always always get samples. These will be expensive as shipping from Asia will cost at least $40 in most cases.
Once you have your samples then you simply select a supplier – The payment process is all done through alibaba and they even protect your investment too. Ensure the supplier you are working with is reliable as there is a small amount of scammy suppliers on Alibaba, although I have personally never had an issue.
Once the order is placed you will have a “lag time”, generally this is around 2 months where the product needs to be manufactured and then shipped to your target country (more on this later.) This lag time is frustrating as you essentially have money tied up in stock, but during this time you can begin your marketing and pre-launches. If you can’t do this then simply sit tight.
Small Batches – This is something I learnt from the lean start-up. When you get quotes from your suppliers you will be looking to get bigger orders as this reduces your unit price. For example if I have an order of 100 units, my unit price will be around £9.50. If I order 500 units, including shipping this unit cost goes down to £7.80. That is a big chunk that would all go into our profits! BUT you don’t want to fully commit to this yet. If the product is a flop you don’t want 480 additional units that you can’t sell, instead always purchase small batches and test the waters.
Step 3 – Shipping, Legal & FBA Fees
Step 3 is all about connecting your product to Amazon. To start you will need to create an Amazon Merchant account, also known as seller central. Once you’ve done this then you can get started on the listing (I’m going to give this an entirely separate step as this is one of the key elements.)
Before you can get the shipping information for your product, you are going to have to set-up a listing, but for now just put the basic information in this section and we will optimise it in the next step.
The “create shipment” option is the single worst part of the Amazon seller central and something they have yet to perfect, but if you have basic knowledge of your product you should be able to set-up a shipment. You will need the following:
- Supplier Address.
- Box dimensions & Weights.
- Number of Units per box.
- SKU of the product.
Once you input all these details, Amazon will give you the labelling stickers to go on the boxes themselves. This is the warehouse they want you to send your items too, this also changes on a regular basis, so make sure your suppliers gets these labels each time you create a shipment, even if it is re-stocking an already existing product.
LABELLING – As you can imagine Amazon owns a number of huge warehouses worldwide and they run a very efficient labelling system. When you are creating a shipment you will get the option on whether you would like Amazon to label your items for you, or if you would like to do it yourself. Personally I want to make the process as easy as possible, so I simply let Amazon take care of this. The prices are 0.15 per product so its doesn’t make much of an impact on higher ticket items, but if you are selling something cheap then remember to factor this into your costs.
Once the labelling option is completed and you have passed the shipment information onto your supplier, there isn’t a lot more you can do between now and when your product actually arrives in an Amazon FBA warehouse. But one thing you can and I highly recommend you do go ahead and do is to optimise your listing (for both Amazon and Google.)
Legal – Depending on the niche you are in will depend on wheather or not you need to have any insurance for the items. Although you are selling through Amazon itself the products are still yours and should be treated as such. If you are selling Toys there are a number of regulations that you need to look into. Simply check Amazon’s ToS before sending your item.
FBA Fees – The FBA fees themselves vary from product to product but are generally based on a fixed fee + a certain percentage of the price. They have a FBA Calculator you can use to give you semi-accurate figures on what these fees will be.
Step 4 – Optimising Your Listing
Step 4 is going to talk about the best ways to optimise your product listing itself. If you have any experience in the seo industry this is essentially the same as keyword research and on-page optimisation for a website. The only difference is keyword research doesn’t play as big a role (as most of the time even if a listing doesn’t aim to rank for a specific keyword they will rank for it if they generate enough sales in the specific sub-category of Amazon.) There is also less emphasis on any over-optimisation too.
I like to start my Amazon keyword research the same way I start any keyword research campaign, and that is to simply think of all of the phrases and target keywords related to a specific product. Usually if you simply have a think for 10-15 minutes you can pick up all of the major ones. For example if we are continuing with our lighting example, this would be how I start: outdoor lighting, outdoor lights, garden lighting, garden lights, garden lamp ect. Once you get to a point where you can’t think of anymore then its time to move onto keyword research step 2.
As we are looking to target all keywords for our Amazon listing, don’t worry if the list you have gets into the hundreds, most of the time these keywords will be highly related to each other and hence we won’t need to input them all into the listing itself, but for the moment we want a nice long list.
Step 2 – Go to SEMrush or the keyword planner and type in the keywords you already have and check the “related keywords” section. Then sort by search volume. If you have a broad keyword you can also check out the phrase match keywords section. In this section you want to pick up any keyword that is different and add it to the list. If for example you see colours or variations that would be relevant to your product then include these in your list too.
Most of the time this will be enough keywords, but if you want to take this a step further I have 2 additional methods I like to use. The first is going to the amazon category directly, and then opening up the Jungle Scout tool to see all of the titles of the products ranking on page 1. The title is the biggest on-page element, meaning the primary keywords will be in the title tags. This can give you a few ideas on keywords you might have missed.
Finally (or to start in some cases) I like to use the MerchantWords software to calculate the Amazon search volumes. I’ve found this tool to be semi-effective when it comes to estimating search volumes (the Amazon version of the keyword planner.) This can be sorted by search volume again to double check if you have missed any high search volume keywords that you will need to input into your listing. The full tool is $30 a month.
On-page optimisation is what you actually write and put in your listing that helps it rank in Amazon. What you include in the listing will also help it rank in Google too, but in most cases the product that ranks #1 in Amazon for a specific keyword will also rank #1 in Google. For example in Google.co.uk “outdoor lighting” – Amazon is 2nd with the main category page ranking.
When you look to add a product to Amazon initially it can look quite daunting. There are hundreds of options but for 95% of people the process is the same. When you first “add a product” you will get the below screen. Essentially this is saying if you are re-selling an item (aka a branded product) then you would need to search Amazon first (you don’t have to but it makes listing it a lot easier.) If its a brand new product then click the “create a new product listing option.”
From here you will need to classify your product. This is pretty self explanatory, but you must ensure you have the correct sub-category and final category. If you get it wrong its a bit of a pain to change later on so just double check to see what the competition is doing.
Once you’ve got this sorted you will be greeted by a scary looking screen with 7 tabs and hundreds of options….
But have no fear this isn’t as scary as is looks just go through these step by step. The only complicated part is if you have any legal elements, such as the “EU Toys Safety Directive Age-specific warning.” If you don’t need to include anything like this (most of the time you won’t) then just start filling out the listing with the following information.
This is obviously important. In the item title section you want to include your primary keywords, the most competitive ones, as well as the ones that get searched the most. But you want to also ensure you have what your product actually is (colour, size, type if relevant) and you need to ensure the title looks good so a potential customer will actually click on the listing! Writing a title can take quite a while but (aside from the images and reviews) it is the most important part of the listing. If you are struggling to write one have a look at the competition and see how they have worded their titles and what keywords they have selected.
Brand name is what will appear just under your product title “by XYZ company.” Manufacturer name depends on if you create your own product or if its created for you, this doesn’t appear at the top of the listing so don’t worry too much. The rest of the information is pretty obvious except the product ID section right at the bottom of the listing. In this section (if you don’t have a specific plan already) you want to select ASIN and then simply create an ASIN number, not knowing what the heck these were at the time I purchased a bunch. If you are NOT using FBA, you will need to look into the product ID section further and contact Amazon support or check out this article if you have any questions.
Variations tab – This is simply where you include any information on product variances. For example sizes, colours, shapes ect. These will have different SKUs so track these individually too.
Offer Tab – SKU This can be anything, usually similar to the ASIN number. This is more important if you have a number of variations on the product. From here the only essential elements are; condition, price and fulfilment channel, all of which you should have already decided. – This can all be changed later on (although it can affect rankings so I recommend not changing condition or fulfilment channel.)
You can have 9 images per listing with the featured image being the most important as this is what individuals see in the Amazon search results. Don’t over-complicate this section. Input all images that make your product look good, and most importantly, copy what the best selling competition is doing. If they have a product with models featured, go and get those photos created, if they have generic looking shots, then get better looking generic shots! “Images must be 1,000 by 500 pixels” – Now they don’t HAVE to be this size but otherwise the zoom in feature won’t work and hence hurt your conversions. Listings that have clear zoom-able images convert 40% better than poorly photographed products.
The “product description” is the text that appears at the bottom of a listing. This is where you should write a long keyword rich description, putting any secondary keywords that you haven’t already included in the title. You can make this section extremely long, and over-optimised (but you didn’t hear that from me.) More important than the description is the “Key product features” – These are the bullet points that appear next to the primary image of a listing and just under the pricing. You can include up to 5 bullet points and I recommend utilising all of this space. Here you should include your primary keywords as well as any “connectors” – Such as what the listing below has (materials, weather, battery) – Anything that relates to a secondary keyword.
The keywords section is simply where you place any remaining keywords you haven’t already listed in the title/bullet points. Personally I like to put my primary keywords in this section with slight variations. For example: “waterproof outdoor lights” might already be in my listing title, so in the keywords section I would simply put “waterproof garden lighting” – This is different enough that it will still give you more scope for your keywords but similar enough that you won’t be ranking for any unrelated terms. If you’re not sure about this section simply put your most competitive/highest search volume keywords in this section.
Step 5 – Coordinating a Launch
If you’ve taken in all of the above information you are probably thinking something along the lines of: “If Amazon’s search engine is based on sales, then surely the products already ranking 1st for their keywords aren’t going to drop in the rankings” And you would be 100% right.
Out-ranking product listings with a lot of reviews and getting a high volume of regular sales is very difficult, but luckily there is a way we can kick-start the entire ranking process, as simply “leaving” a product to rank is the quickest way to wasting a lot of time and money.
The strategy revolves around creating a “launch” for the particular product. There are 2 main ways to do this, the first is what should happen in an ideal situation (but most of the time isn’t possible) and the second is what I’ve personally done with good success.
Coordinating a real launch
When a large company is going to launch a new product there is a huge flood of pre-sales or sales the second the product is launched. For example when Tesla made $14 billion in pre-sales in 3 days or when a new apple product launches their are mile long ques. Now obviously your business isn’t going to be Tesla or Apple but we can do this on a small scale and the knock-on effect will drastically help the rankings and review process.
About 3-6 months before the product is going to launch you want to create “buzz”, this is easier said than done, but the primary goal is to get a list of people (usually an email list) that are ready to purchase your product (even at a discounted rate) as soon as it goes live. Once the product arrives in Amazon you email this list stating the product is live and you can now get it from Amazon. The result is 100s of sales for your product. Good stuff. And remember Amazon is based on sales, so if you get 100s of REAL sales (even if the product is slightly discounted 20-50%) your product will fly from page 20 for your keywords to page 2/3 or even page 1 in some cases.
At the same time you should ask these individuals to review the product on Amazon once they have tried it out. This is great not only because you get potentially 50+ reviews but also you get some great customer feedback about your product too. Once the reviews come in you can create an Amazon pay per click (step 6) campaign which will help you get from page 2 onto page 1 of Amazon. **For highly competitive products you may have to do multiple “launches” and “relaunches.” Note: You cannot ask individuals to leave positive reviews as this is against Amazon’s ToS, but you can ask people to leave a review.
Coordinating a “real” launch
I say “real” as we want this to look as real as possible and some of what I am about to outline is “against” Amazon’s ToS, so…. Continue at your own risk.
If, like me you have a product that isn’t particularly interesting (sticking with the lightning example.) It is going to be very very difficult, if not impossible to get a list of 200+ people who are willing to purchase your product as soon as it goes live, even if you are offering a 50% discount.
Instead we have to ask friends and family to purchase our products and explain why it will help us, if the product is relatively cheap, chances are these individuals will be able to give you full sales (without a discount.) These sales are worth a lot more (from a ranking point of view) than sales that are heavily discounted. Again remember what we talked about with Amazon ranking products that make THEM the most money. Hence lower the price, lower the profit for Amazon, lower the ranking for your product.
If the product is expensive then you may have to a.) Lower the price of the product for a limited time. b.) Offer these friends and family a discount code, or c.) Pay them directly to purchase the product, now the final option is against Amazon’s T&C so if there is any chance that someone is going to report you, then don’t even risk it.
So that is what I would recommend to get the initial sales and rankings. At the same time you want to ask these individuals to leave a review about a week after they have received the product. Remember it all has to look natural so 10 sales = 10 reviews is not natural. Instead try to generate 20 sales for your initial 10 reviews, at least this looks semi-natural to Amazon.
Chances are that once you have exhausted your friendship network you will still need sales to continue to rank the product. What I would recommend is to set up an Amazon PPC campaign as well as continuing to manually product the product, there are hundreds of ways to do this, you can also pay services for reviews and sales but this can get pricey (and also require a 100% discount code which I personally think Amazon are going to cut down on.)
The hustle – You really want to hustle through this process. Knock on neighbours doors, explain the situation and try to make the sale. Get on the phone, old friends, family, recruit your friends and family too. One post that goes semi-viral through your friends of friends networks will lead to enough sales to rank and enough reviews to set up the PPC campaign and start to get real, full price sales.
Remember – Although having a 50% or even 90% discount on your product might mean you lose money on each sale, you will be improving your rankings where you will eventually be making real sales on a consistent and automatic basis.
Step 5 – Sales Rank & Reviews
Sales rank or best sellers rank is a metric Amazon uses to calculate how well a product is selling. Below is the official definition of the best sellers rank from the Amazon site itself.
Essentially all you need to know about the seller rank is the higher the number of sales you receive in a short period, the higher (lower number) your sales rank will be. This translates directly to rankings, as we already know that Amazon bases their algorithm on SALES!
One of the most important factors for both conversions and rankings. The number of reviews you have helps your rankings, and the number of positive (4/5 star reviews) helps your conversions. As you probably already know products with good rating will generate more sales than products with bad ratings, that’s just human nature. But what you didn’t know is around 90% of individuals who purchase from Amazon state they would not have purchased the product if the item didn’t have any reviews (that’s any at all.)
Another interesting stat is that roughly 3 out of 4 people who purchase a product on Amazon don’t read the reviews themselves they simply check the star rating and the actual number of reviews. Now I’m not saying what’s in the review themselves doesn’t matter, because of course you want the best reviews possible and those 1/4 people who do go on to check the individual reviews will convert a lot better if these are long, detailed reviews including pictures. But for the most part the overall rating and overall number of reviews are the most important element.
So – How do we get Reviews?
As we touched on earlier in the article, one of the easiest ways to to create a launch with or without a discount. Explain to the potential consumers the situation and how much a review would mean. Remember you aren’t allowed to ask for a positive review as this is against Amazon’s T&Cs, but what you can do is remind people to leave a review once they have purchased the item.
Another method that is seen as against Amazon’s ToS but something I know 99% of Amazon sellers do, is to ask your friends and family to purchase a product for you and to leave a review. These reviews must appear natural and it also helps if the individual with an Amazon account has reviewed previous purchases in the past – This helps the review seem natural and has less chance of getting hidden. If Amazon believe you have reviewed the product yourself or someone close to you has given a bias review, they will “hide” this review and it will never appear on your listing.
The final method is to (I have to word this carefully) pay for individuals to test your product in return for an unbiased review…. I think that should cover it. These services can be spammy, such as what used to happen with Fiverr (until Amazon sued them) or they can actually be semi-natural. Personally I haven’t yet found a service I 100% trust on this front so I am unwilling to recommend any in this post, but if you search around then you can find these. Although remember that you will have to give a huge discount code (95-100%) and pay for a review through these services too, which means you will be losing a lot of money/product per review.
Step 6 – Creating an Amazon Pay Per Click / Amazon Product ads Campaign
This is one of the key elements to the entire Amazon business. If you’ve created a PPC campaign in the past you should easily be able to create one inside the Amazon sponsored products section. If you’re new to Paid ads then it might take you a bit longer to integrate but the general interface is one of the simplest across all paid platforms.
To start you will want to login to your Amazon seller central account and go to Advertising->Campaign Manager. Once inside you will see any active campaigns you have and the information associated with this. Before explaining how to set-up a campaign I’m going to go over the key metrics inside the sponsored products section as these can sometimes be difficult to understand.
Below is a screenshot from my personal Amazon seller central account, I’ve hidden the campaign name as this is one of the keywords we target. The most important elements are highlighted.
As with most advertising accounts you have the campaign name, status and type. This just lets you create multiple campaigns for different products. I would recommend splitting up campaigns by individual products, or even by product variations. The start/end date is pretty self explanatory. The daily budget is important. I’ve set my daily budget to £50/day, but as you can see by the spent figure of £193.21 (since January 2016) this has never even been close. You want to set your daily budget extremely high. Unlike Google and Facebook, Amazon won’t aim to spend your entire budget, but if you set it too low they will stop showing your ads before you reach that cap (a long way before.)
Spent is self explanatory and the sales figure is the total number of sales you have made through that campaign’s clicks. ACoS is the #1 metric you need to track on a daily/weekly basis. This is a percentage of your sales which has been spent on advertising. For example in my case I have spent £193.21 / £668.94 (x100) = 28.88% or 29%.
The ACoS figure needs to take into account the price of manufacturing your product, the FBA fees per sale and how much profit you are willing to lose per sale. If for example my ACoS is 30% and my product costs £10, this means I’m paying £3 to make £10 in sales. If the FBA fees are £3 and the manufacturing & shipping price per product itself is £3, this means I am profiting £1 per sale through sponsored product ads. Which sounds poor, but stay with me.
If your profit margins are low, then you are not going to want to run Amazon paid ads for a long time but you will need to run them until you hit page 1, otherwise you won’t be generating any nature sales through the Amazon search engine and hence will just be floating on page 2/3 anyway (which long term is more expensive than losing £3 per product now.) – Hope that made sense. If you have higher profit margins then I would recommend keeping the campaigns running continuously, and only pausing them when you hit #1 position for your primary keywords.
Inside the individual product campaigns you will have your ad groups, here you can add as many ad groups as you like, but again if it is a single product then you will only need 1. Once you click through to the ad group, you will get into your specific product feature details. In the screenshot below there are 3 variations of the same product with the only difference being colour.
Again you can see all of the impressions, clicks, spent, sales and the ACoS figure. But the most important data is inside the keyword tab. This shows the exact page 1 bid and your current keyword bid. These figures should be checked every few days as your competitors will out-bid you and you should do the same, which means these figures fluctuate rapidly. You can get an idea of the data below, if the product you are promoting has poor profit margins then you can remove the keywords which have an ACoS above 20-25%, but I would recommend keeping as many keywords as possible. In the next section I will explain exactly how to set-up a campaign from start to finish.
How to Create an Amazon PPC Campaign
As I previously mentioned, if you have created an adwords campaign, or have any experience in PPC marketing at all, creating an Amazon sponsored products campaign will be straight forward. Login to your seller central account and select Advertising->Campaign Manager. Select the yellow “Create Campaign” button and you will see the below options.
Campaign name I personally just recommend inputting the product you are promoting. Dates should be kept open and the budget should be about triple what you actually want to spend per day. Remember you can always change the budget later on if you are spending too much. I also recommend selecting manual keywords as in this section we can input the keywords from the keyword research section.
In the next section you will need to select the product(s) you want to target in this ad group. A default bid, this can be edited per keyword later on so personally I just select £0.50 and come back to this section. There are 2 options here, you can either use the suggested keywords, or click the “provide your own keywords” tab and enter your keywords you discovered in the keyword research element. I like to use a mixture of both initially.
You will also have the broad and exact options. Personally I want as many clicks and sales as possible, especially at the start of the product launch, so I will select broad for all. If you have a tighter budget then you can look at only selecting Exact match.
Once you’ve input your keywords and your campaign is live, you can come back and have specific keyword bids, I’d recommend at first just looking at the “Est page 1 bid” and placing your bid 0.01 above this.
Editing and Tweaking Campaigns
After initially setting up a campaign you will want to come back and re-check your keyword bids. Chances are the prices have changed and your keywords will no longer be shown on page 1. For example the screenshot below shows only 2 days of difference and 2 keywords are now below page 1 bid price. You have the option to hit the “match bid” button, but I like to go slightly above this price. You should also check your keywords to see if any are above 35-40% Acos, although we are looking to get as many sales as possible, you should slowly begin to reduce the number of keywords that aren’t converting very well.
The Amazon App
Didn’t know exactly where to put this part but its something I have to mention. The Amazon seller’s app is freckin awesome! This allows you to track instantly how many sales you have made per day and the total sales revenue for the day. You can also see your weekly sales figures and the next payment. As well as being able to create shipments, reply to customer queries/questions and just about anything you can do on the seller central itself. It’s free and it’s a must for anyone who has an Amazon SC account. Apple link, android link.
Step 7 – The Timeline
The amazon business timeline is quite long. There’s a lot of research and optimising up-front but there is also a lot of waiting and times where there is not a lot you can do. As a result its important you get your timeline right, both from a personal point of view (to avoid being busy at unnecessary times) and also from a cash flow point of view (having the cash tied up in stock for the least amount of time possible.) Below is the timeline and process I would recommend to entrepreneurs looking to get started with an amazon business but who have limited time and/or capital.
Research & Samples – There is no reason why you can’t do all of your research, product selection and sample ordering inside 1 week. This costs nothing but your time and getting this all done at once will save you a lot of time and hassle in the long run. Select a single product to start with and conduct your research. If this product is good to go, then go to Alibaba and find a supplier. Again I recommend getting samples from at least 2 companies with 3-4 being optimal. These will cost you $40 in shipping alone and depending on what your product is, you may also have to pay a custom sample charge too. This is the first large chunk of capital, but there is a week delay once the samples have been ordered. – This is when you cannot do anything, you simply have to wait for the samples to come, and then select your supplier based on quality and pricing.
Production & Shipping Delay – The production delay for your products is going to seem like forever. It is likely you have laid a large chunk of capital on the products manufacturing process and shipping, but now there isn’t a lot you can do. You should have your product listing fully optimised with the images you are going to use, but apart from this there really isn’t much you can do until the product arrives in your target country.
Product arrives – Anywhere from 5-15 weeks later your product will arrive in the Amazon warehouse. From there it takes them usually 24 hours to process and label your items individually. Then you can get started on your initial sales and reviews. You should do this as quickly as possible and it should all be planned out during the manufacturing stage.
That is pretty much it. Once you have your product generating reviews and sales you should set up the PPC campaign for your target keywords and keep this running until you reach page 1 / top 5 results. Once this is complete you should generate natural sales through the amazon search engine and as a result shouldn’t need to do anything else to the listing or promotion of the product, simply keep an eye on stock levels and order early so you don’t run out of stock during the production lag time.
Step 8 – Building to £1,000,000+ a year
For most small business start-ups £1 million in profit is the ultimate goal. I know personally this is the figure I would like to get to. But at the end of the day it is just a figure, whether you want to earn 10m a year or 50 thousand, you should have a couple of monetary goals in mind before starting your business, this will help you push through during the tough times and also remind you to reinvest the profit you have instead of taking it out of the business!
Using this 1 million figure we can actually calculate with a relative amount of accuracy how many products and what profit margins you would need to reach this. Breaking this down to a monthly goal = £83,334. For ease we will just round this up to £84,000. – £84,000 in profit is almost impossible from a single product on Amazon. Even some of the most competitive markets in the world (laptops, smartphones ect) don’t reach this (profit) figure on Amazon every month. Instead your aim should be to set-up multiple profitable products in semi-competitive niches.
Going back to the lightning example, if (once ranked on page 1 for all of our primary keywords) we earnt £3,000 per month profit. Now although this doesn’t sound like alot we can rinse and repeat the same process to launch the next product (you can even use the cash flow from product 1 if needed.) This means that in a 6 month period you might have 2 products making £3,000 per month each. [No prizes for seeing where I’m going here.]
Launching 2 products every 6 months @ an average of £3,000 per month gives you a million pound/dollar business in……. 7 years. (4 products per year, for 7 years = 28 products @ £3k per month = EXACTLY £84,000. Profit per month.)
Obviously this is ambitious to think you will have zero product flops and all these products to make exactly the same amount per month. But the reality is, if you have a tried and tested product selection and ranking technique and you scale your business as quickly as possible (automating along the way) there is no reason why you can’t have a million pound/dollar business in 7 years. Probably less.
What’s Your Real Goal?
I wanted to put this section in as its something I’m very passionate about. Although my end goal is to reach a million in profit per year, I have goals I deem much much more important. These aren’t just happiness or health related goals, they are lifestyle goals. Earning a million a year and working 100 hours a week isn’t much of a life, all you are essentially doing is building your business for the exit. You will build it to a certain level, and then sell it for the “f*ck you” money. If this is your goal then go ahead, but there is an easier and (in my opinion) better way!
Build your business to work when your “gone”. One of my
many few skills is systematising businesses. Putting everything into a process, the more automated and systematised your business is, the less time you actually have to put into it. Especially once a product is set-up and ranking. Allowing you to spend time researching new profitable products, getting samples and quotes from suppliers and doing things that will grow your business, rather than doing the things that will keep you in business.
Also automating your business not only means you can spend more time growing than “staying”, but it also gives you more time to do the things you enjoy doing. And more than this it allows you the freedom to travel, stay anywhere in the world for as long as you want and essentially spend time away from your computer.
I titled this section – What’s your real goal. Maybe if you live in central London £100,000 a year isn’t going to go very far. But £100,000 working 5 hours a week living in Asia or travelling the world – That goes a lot further. So before you set your monetary goals, take a look at what you actually want to do over the next 5 years…. To put this into perspective below is the average price for a 1 month trip living in an “entire house” in London vs Prague (which is currently in the top 5 places to live in the world on Nomadlist.
That’s £1404 average per month (for 2 people) in Prague vs £3755 (for 2 people) in London. That’s 2.5 times more on a very generic search, the cost of living vs the UK or USA against Eastern Europe or Asia is probably closer to 5 times less! Don’t be afraid to re-evaluate your aims. £5,000 a month living outside of a busy city location is enough to live like a King! But enough of that, back on track!
Conclusion & Closing Thoughts
If I could give one piece of advice to people who are thinking about getting started with an Amazon business, it would be to just go for it. This article alone is all you need to get started, and chances are if you got here you know more than this anyway. Things are going to go wrong, I’ve had products lost, fees I completely forgot to account for and all sorts of random F*ck ups, but once you get your products ranking and selling the scale-ability of the business model is very easy. All you need is capital (not even much time) so instead of trying to find the perfect way to do XYZ, instead just get started, get a few samples and get a small quantity with a product listed and learn through doing.