No matter what stage you're at with your Amazon FBA business, scaling is likely to be your objective. The problem is, with 9.7 million Amazon sellers worldwide, you've got a whole lot of sellers to compete with, all aiming for that highly-coveted business growth. This can make obtaining more customers tricky. You have to think outside the box to set your FBA business apart from other Amazon sellers.
Key Takeaways from this Post
We have nine tried-and-tested methods for scaling your Amazon FBA business (plus a bonus tip!) right here in this guide. Stick around and learn what you can do to optimise FBA business growth.
Manually Managing Your Whole Amazon Business Doesn't Work
Unfortunately, only 63% of Amazon businesses become profitable during their first year. Therefore, to successfully grow your existing business, you need to look at it objectively. What are the differentiators between those successful Amazon businesses and those unsuccessful ones? And, how can you incorporate the 'successful' strategies into your own FBA business to mimic their success?
One of the biggest factors that contributes towards success on Amazon is taking a step back and allowing technology to take over. Managing everything manually from start to finish just doesn't work.
Time won't allow it for one thing. And if you're trying to do everything yourself, from managing sales data and calculating taxes, to repricing your products and communicating with customers, you're not going to have much spare time to work on scaling your business.
Amazon FBA is useful for taking over lots of tasks associated with selling on Amazon. These include packing, shipping, and handling returns. But ideally, you want to push this further and adopt different software, like Amazon accounting software, along with automation tools to help manage your business.
The Biggest Problems for FBA Sellers Scaling
Here are some of the biggest problems Amazon sellers face when scaling their business:
Time is everything when it comes to business growth. And an Amazon business is no exception. With only 24 hours in a day and the human necessity for sleep, time is a precious commodity. Your task is to implement ways to increase the amount of time you can spend on your business.
Competition is fierce on Amazon. The pandemic made it even more so, with sellers cashing in on the online retail boom. However, there's no doubt that an Amazon FBA business can still be a very profitable venture. You need to place yourself above your competition and increase brand visibility to differentiate yourself from other brands. We'll be showing you how to do that in this guide.
The more sales you make, the more Amazon seller fees you'll generate. You need to take these into consideration when you're scaling your business. Selling with Amazon FBA comes with more costs than fulfilling sales yourself. But, you're ultimately more likely to sell your products using FBA because of the numerous benefits to sellers.
It's also worth noting that slow-selling products will cost you more in fees. Therefore, you need to be selective about which products you store in Amazon's warehouse.
A higher volume of sales comes with more complex bookkeeping. Consider if you make £30,000 in sales every month. You'll need to break this down each and every month to decipher what your profits are, what your expenditures are, and how much tax you owe.
A thorough understanding of your ins and outs will also help you produce accurate financial forecasts. These are essential for judging the trajectory of your business.
Consistently Sourcing Profitable Products
You might have trouble consistently sourcing profitable products when you're scaling your business. This is especially true if you have a retail arbitrage or online arbitrage business model.
You'll need to find bargains that'll generate a profit once fees and COGS are accounted for. It might also require keeping the products in the Amazon warehouse for some time before making a sale, thus incurring further fees.
Lack of Marketing Knowledge
To expand your business, you'll need to promote it and extend your reach. This ultimately requires marketing knowledge. Alternatively, you might decide to work with a marketing agency. However, this will, of course, cost you money. You need to learn various digital marketing tactics to help your business scale further. This is another area that automation software can help you with.
9 Ways to Scale Your Amazon Business
- Leverage software and automation tools
- Adopt a wholesale business model
- Branch out into new platforms and markets
- Build a blog
- Increase your Social Media presence
- Run ad campaigns
- Expand your product range
- Increase customer retention
- Optimise product listings
Way #1: Leverage Software and Automation Tools
Software and automation tools are the way forward when it comes to building a successful business online. There's a huge range of tasks that automation can do, and they very often do them better than humans.
Before you decide which tools to subscribe to, take a look at your financial forecasts and reports to determine your budget. Also see if there are any areas where you can cut costs. Once you start scaling, your budget should increase and you can build on your automation tech stack further.
Here are some ways in which automation technology can help your Amazon FBA business:
Automate Your Bookkeeping
Automated bookkeeping is a simple way to keep on top of your Amazon business's finances. Using a software like Link My Books, you can automatically transfer sales data to your eCommerce accounting software. Link My Books also calculates your taxes for you, and keeps track of your COGS.
Once all this accurate data is sent over to QuickBooks or Xero, you can generate a range of reports that will give you a clear view of your business's financial health. You will be able to make data-driven decisions without the need for manual data entry.
Manage Your PPC Ads
Automation software can manage your Amazon PPC ads by automatically adjusting your bids for optimum potential. Trellis and SellerApp are good examples of this. They look for keyword opportunities that will maximise your ROAS (return on ad spend) and help ensure you remain within your ACoS (advertising cost of sale) budget.
If you're stuck for product sourcing opportunities, consider adopting a marketing intelligence software to help you. Software like Jungle Scout or Viral Launch will assist with finding profitable products and niches. Tools like these analyse a multitude of data points to both validate decisions and discover new opportunities.
Gathering Feedback and Reviews
Amazon reviews are essential for social proof and building a positive online reputation. Automate the process of requesting and gathering feedback and reviews from your customers. There are powerful tools out there that automatically send out customised feedback requests. Some notable ones are Jungle Scout and Feedback Express, but there are many more solutions.
Social Media Scheduling
With social media scheduling tools, you can consistently post across all your social media channels at the time your audience is most active. Many tools also enable you to bulk upload your content.
Additionally, you can take advantage of a range of reporting tools to determine what type of content gets the most engagement. And, identify trends and content ideas for new posts. Social Sprout and Hootsuite are two reputable solutions.
If you're competing for the Buy Box, a product repricing software like Repricer and Informed can help you. They use intelligent technology to monitor other sellers. This includes inventory levels and historical pricing data. Repricing software automatically adjusts your product prices to give you the best chance of selling your products while remaining profitable.
Way #2: Adopt a wholesale Business Model
Wholesaling on Amazon has some significant advantages. For one thing, buying directly from a manufacturer will bring down your price per item. Not only are you cutting out the middleman who inevitably takes a share of the profits, but buying in bulk also directly reduces your costs.
This enables you to earn more money per product if you're selling individual items to consumers.
Another winning factor for running an Amazon wholesale business is the potential for attracting repeat custom. Merchants (whether online or offline) can purchase their stock from your Amazon store to sell on to their own customers.
If they're happy with the service you provide, they're likely to continue buying from you. In this situation, you become the middleman.
Potential Challenges of Amazon Wholesale
There are some things you need to consider before jumping into Amazon wholesale. Firstly, it requires more capital because you're buying in bulk. You also need to consider the potential increase in FBA fees.
Because of these higher costs, it's important to have a thorough understanding of your business's financial health before you begin. Use tools to generate financial reports and forecasts, and work out an accurate budget. You might also consider working with an accountant to determine whether selling wholesale is a viable option financially.
Another consideration is that you'll probably have a fair amount of competition on Amazon as a wholesaler. As such, continuously sharing the Buy Box is likely. The last thing you want is to get caught up in a price war with other wholesalers.
How Amazon Sellers can Make Wholesale Work
Begin by building relationships with suppliers and manufacturers. You want to ensure they're reputable and reliable, so take your time with this. Once you've built a relationship with your supplier, with time, you can try negotiating your costs.
Minimum order quantities might apply, so choose your products carefully. Conduct research into what sells on Amazon, how many other sellers there are of that particular product, and what your profit margin will be. Don't be afraid to use software to determine the potential of a product before buying large quantities.
You might want to onboard some of the tools we mentioned above that'll help you with winning the Buy Box whilst remaining profitable. Creating product and brand ads on Amazon can also give your store a significant boost.
Way #3: Branch Out into New Platforms and Markets
Selling on Amazon in your own country is a safe way to play it at first. But if you want to expand, you're going to have to push out of your sales comfort zone. With software like Link My Books, you can successfully manage selling across different countries while ensuring your remain tax-compliant.
Additionally, it's a good idea to branch out across different eCommerce platforms. Think about eBay, Etsy, Walmart, and social media stores. Learn where your target market is and place your products in front of them.
You can subscribe to software that allows you to manage orders from multiple platforms. These can help you keep a close eye on inventory levels across your stores. And, ensure that your inventory levels are accurate as they automatically change across all platforms when you make a sale.
Way #4: Build a Blog
If you're looking to scale your Amazon FBA, then building a blog on your own website can help. Blogging will allow you to communicate your expertise with your audience and build a loyal following.
Blogging Strategies for Amazon Sellers
Here are some blogging strategies to get your started:
- Post consistently: Consistency is key when it comes to communicating with your followers. Pick times and dates to post blogs each week, and stick to your schedule. This will present you as a dependable communicator. Your audience will get to know your blog posting routine and check in with you when you have something new to say.
- Research topics: Coming up with new and interesting topics for your blog can be challenging. Also, depending on your niche, you might feel your options are fairly limited. To research new topics, look at competitor blogs. You can also look at trending topics on social media platforms and Google Trends. Another option for generating content ideas is to take advantage of software. HubSpot, for example, has a free blog ideas generator.
- Go behind the scenes: Make your blog posts personal by posting behind the scenes content. Cover what goes into making your business work and what daily life is like for you and/or your team. Share personal, related stories about your business and your niche. For example, if you sell hardware tools, you can share details about personal DIY projects and include before and after pictures.
- Engage your audience: There are lots of ways to keep your audience engaged throughout your blog. You can ask questions, tell stories, and use humour. The thing to keep in mind is to know your audience. Talk about pain points and offer solutions to problems.
- Gather email addresses: Finally, gather email addresses by prompting sign ups. Include one or more call-to-actions in your blog posts. Offer something in return, such as notifications of new blog posts or a percentage off their first purchase. You can then begin your email marketing campaigns. FYI, ensure you remain GDPR-compliant and take necessary steps to keep data safe and secure.
Way #5: Increase Your Social Media Presence
Social media can play a big part in engaging with your audience. Additionally, it gives customers the opportunity to ask you questions about your store, products, and business.
Increasing your presence on social media means posting regularly and making the effort to interact with your followers. It's also another platform for customers to share reviews and acts as a form of social proof for prospective customers.
5 Social Media Top Tips for Amazon Sellers
- Be selective about your platforms: When it comes to social media platforms, it's not always the case of 'the more, the better'. It's actually far better to stick with two or three platforms that you know you can manage effectively rather than spreading your time and resources too thin. If your products are very visually-appealing, you might opt for a platform like Instagram or Snapchat, for example.
- Know where your audience is: Stats show that different demographics are more active on different platforms. TikTok and Snapchat are dominated by a younger audience. Facebook, on the other hand, is known for being a platform for older generations.
You might also consider the geographical location of your audience, and whether they're male or female. For example, 68.1 % of X (formerly Twitter) users are male, while Snapchat has a more equal split, with 51% of users being female.
- Boost customer loyalty: Use social media to boost customer loyalty by addressing any issues they may have. Ask questions, post polls and surveys, and discover the needs of your target customers. Engage with satisfied customers to learn what made their experience with your Amazon business positive and what you can do to improve.
- Create a strong brand identity: Use a consistent ToV and branding elements across all social media channels related to your Amazon FBA business. The important thing to remember when it comes to social media is to show the human behind the business. Personalise replies to comments and don't be afraid to be humorous and quirky where appropriate.
- Leverage user-generated content: UGC is content that your followers have created for your brand. This could be, for instance, a photo of someone using a product they bought through your Amazon FBA business. You can ask your followers to share experiences and even launch competitions for the best posts. Remember to specify rules for your UGC campaigns, including the use of hashtags to maximise their impact and reach.
Way #6: Run Ad Campaigns
We understand that Amazon sellers can be apprehensive about launching ad campaigns. They can be costly, after all. However, when planned strategically, Ad campaigns are really going to help you scale your Amazon FBA business.
Depending on the type of ad you go for, the Amazon ads algorithm uses keywords to match a product search with sponsored products related to that search. Ads can be tailored to different users, whether that involves targeting your existing customer base to encourage customer retention or targeting a broader audience to bring in new customers.
You can use software to manage your Amazon ad campaigns, like we described above. Alternatively, you might want to work with an Amazon ad expert to help you get the most ROAS (return on ad spend).
Options for Your Amazon Ads
There are lots of different Amazon ad options, with the recent inclusion of video and audio ads. The three most prominent ad types for Amazon sellers are:
Sponsored Products Ads
These PPC ads are displayed at the top of product listings pages after a user searches for a product. Or, on the pages which display product details. They can increase sales of specific products by being displayed prominently when someone is looking for that specific (or related) item.
Sponsored Brand Ads
These are similar to sponsored products ads but they display the details of brands whose existing offerings match those related to the product search.
So for example, if your Amazon business sells pet products, your sponsored brand ad might be placed in front of customers who've searched for pet care products. These ads will increase brand awareness and include elements like a logo and a small product range people might be interested in.
Sponsored Display Ads
These ads are displayed in different locations across Amazon's network, including third-party apps and websites. They are visually-appealing, with high quality images and informative text. And, they are available to utilise whether you want to advertise your Amazon FBA business or another type of eCommerce business, such as your Shopify store. You can even use them to advertise your offline business.
Way #7: Expand Your Product Range
At the end of the day, the more products you have listed across different marketplaces, the more sales you're likely to make. In many ways, selling on Amazon is a numbers game. One of the most popular growth strategies is to increase your range of products to cater to more potential customers. And ultimately, achieve more potential sales.
To do this effectively, you need to conduct product research and market research. This will help ensure you're not wasting time and money on products that no one wants to buy. Again, I direct you to the types of software I covered earlier, specifically the Market Intelligence section.
These tools can tell you information like sales history and profit margins of different products. They are the most accurate and reliable way of ensuring your Amazon business consistently offers profitable products. And, keeping your COGS on Amazon low.
But there are other ways of sourcing profitable products:
- Researching high-performing keywords related to products
- Looking at emerging trends and 'piggybacking' on their success
- Sourcing fast-selling products on Amazon and other sites
- Looking at discounts and deals on other websites, and using tools to assess product potential
4 Golden Rules for Amazon Product Selection
Keep these golden rules in mind during your product research and market research. They will help you hone in on the best products for your Amazon listings:
- Low competition: This results in a higher place in searches and more Buy Box opportunities.
- High demand: A general rule of thumb is to source products with around 300 sales per month.
- Keep it light: To minimise costs of storing and shipping, pick products that weigh under 5lb.
- Everyday products: Consider products that people use everyday for more potential sales.
Way #8: Increase Customer Retention
Existing customers are a valuable asset. It takes fewer resources and less money to achieve Amazon sales with an existing customer base than it does to market to new customers. Therefore, it makes the most sense to scale your Amazon FBA business by encouraging customer loyalty and retention.
Your social media channels can help hugely with customer retention. But moving away from that, there are lots of things you can do to keep customers worldwide coming back for more:
- Offer complementary products and discounts
- Ask for reviews and feedback
- Communicate regularly
- Answer questions promptly
- Follow up after sales
- Launch a referral program or loyalty program
- Personalise communication
- Minimise disruptions in your supply chain
Think about the entire customer journey. Every interaction they have with your Amazon business contributes towards their opinion of you. Therefore, you want every interaction to be positive.
You also want to ensure their experience is memorable. So opening their parcel and discovering a thank you note, along with small complementary products, will be more likely to stick in their minds.
Way #9: Optimise Product Listings
Optimising your product listings is a quick and easy way to scale your existing business. Just like Google, Amazon is user-oriented. As such, it has a listing optimization algorithm that ensures that customers always find what they're looking for.
Optimising each Amazon listing will help ensure it's displayed in the most relevant searches. And by extension, it'll get more traffic and exposure in organic search results.
Here are the steps you need to take to achieve this:
- Research keywords to include in your product listing titles and descriptions.
- Optimise your title with your brand name, keywords, and short product descriptions/benefits/features.
- Optimise your product description by addressing pain points, and highlighting specific features of the product and articulating how they help.
- Registered brands can take advantage of Amazon's Content+ which offers more customisation options for FBA sellers to showcase their products.
- Use high quality images in your Amazon listing that show your products from different angles. Also consider adding text to the images that describe different features and benefits.
- Add backend keywords to tell Amazon about your product. These are like tags and are not seen by customers. Select new keywords with a low-medium search volume.
Bonus Tip for Amazon Sellers: Diversify With Shopify
Shopify is a leading platform that is suitable for all types of eCommerce business. While you can achieve huge sales figures on Amazon due to its impressive number of global users, it comes with a few downfalls.
One being the possibility of your account being suspended. Not only that, but Amazon comes with restrictions on what you can sell. Not to mention the fees associated with Amazon FBA.
But even without looking at the negatives of selling on Amazon, building a Shopify store is still a great idea for expanding your business. It gives you a platform of your very own. You're essentially building your brand into something that you have complete control over. It also adds to professionalism and gives your customers another place to check out your offerings.
When you build a Shopify store, you can easily create an omni-channel experience. Direct customers to there from Google ads and social media platforms. Communicate with your customers via live chat and email marketing with none of the restrictions that Amazon imposes.
How Link My Books Can Help as you Scale
Link My Books is a valuable software that will take over many of the time-consuming tasks associated with bookkeeping. It takes your financial data from your Amazon business and any other e commerce store you own, consolidates it, and sends it across to your accounting software.
Furthermore, Link My Books works out your COGS, and tracks your fees, profits, and expenditures every single month.
Sell in Different Amazon Marketplaces
The complexities of tax is probably one of the reasons you might not have expanded your business into different marketplaces. Link My Books connects to multiple Amazon marketplaces, so you don't need to worry about keeping up with different tax rules and regulations across the other countries.
Simply answer a few short questions when you set up your account, and our Guided Tax Wizard will ensure you remain compliant. So whether you sell on Amazon Europe, America, Australia, or across other countries, your tax calculations will be accurate.
The automation technology of Link My Books means you need to spend just 10 minutes per month on your bookkeeping tasks. This will give you plenty of time to drive sales, market to new audiences, and optimise each product listing you create.
Excellent Customer Support
We pride ourselves on our excellent customer support. Our dedicated team are ready to help you and answer any questions you might have about managing your books when you're accessing new markets. Additionally, we offer all our customers a free 1-on-1 onboarding session. This will give you the confidence of knowing your account is set up correctly, no matter which Amazon markets you're selling in.
Link My Books gives you access to historical financial data. Use this data to analyse the direction your business is moving in and see which Amazon marketplaces generate the best results. Historical data will help you identify areas of opportunity as you scale your business. And, make it easier to keep working towards your business objectives.
Link My Books doesn't just consolidate data from different Amazon markets. It also connects to different platforms, including Shopify, eBay, and TikTok Shop. With our Pro plan, you can connect up to five e commerce channels. And with our Premium plan, you can connect up to ten.
This means you can scale your e commerce business and adopt different channels, without getting overwhelmed with data coming through from all different directions.
“Cutting time off unnecessary tasks is key to scaling in FBA”
Key Takeaways on Scaling Your FBA Business
In this article, we've covered 9 ways to scale your Amazon business. From leveraging social media and paid ads, to expanding your product range and optimising your listings. However, one of the most impactful ways to scale your Amazon business is by using software and automation tools. These will help you scale your business efficiently, and with minimum time constraints.
Save Hours on Your Amazon Bookkeeping
Automate your Amazon bookkeeping to reduce the stress of managing your financial data. Link My Books helps you to scale your Amazon FBA business by automatically transferring your data to your accounting software. Plus, it works out your taxes and COGS too! You'll save hours of time every month, leaving you free to expand your business.
Sign up for your free two week trial today.