How to succeed when selling on Amazon

Less than a decade ago, selling directly to consumers was a non-starter for most manufacturers. The additional margin benefits were not sufficient to overcome the complexity of accessing and servicing consumers and of course the potential loss of sales, due to conflicts with existing distribution channels was something most manufacturers were not willing to risk. Today, many of those barriers are gone, and any manufacturer who ignores e-commerce does so at their own peril.

Nowadays, selling directly to consumers should be more than just another option to consider for manufacturers, it needs to be a major area of focus while developing a sound distribution strategy. B2C (Business to Consumer) sales deliver better margins by eliminating the “middle man” and allows manufacturers to enter new markets more quickly and to test products and product features with minimal risk.

That said, many manufacturers and brand owners have learned the hard way that while the barriers to entry to the online business are low, the barriers to success are not. You can list a product in most marketplaces in a matter of hours or even minutes, but getting meaningful, consistent sales and managing after-sales support takes time, know-how and technology. In this article, we explore what we have found to be the critical capabilities for e-commerce success.

The three pillars of e-commerce success.

Just like in traditional retail, the key to making a sale is to get the consumer to find and choose your product among competing options. However, what makes a product “jump” to the eyes of the online consumer is totally different from what happens in a brick and mortar store. To achieve and maintain strong e-commerce sales, manufacturers and brand owners must develop expertise and execute flawlessly in these three areas:

• Product development and brand management.

• Channel and listing management.

• Order fulfillment and customer service.

Product development and brand management.

Most manufacturers know this area well and it's where most of the company’s resources should be spent. Through thorough market research, they should have a clear idea of who their targeted customers are and their needs. Marketing and engineering teams working together would have developed a portfolio of products with features and price points that give the company a good chance to compete. Finally, through Marketing and promotional activities, the company must develop a brand image and reputation that makes consumers feel confident about purchasing the company’s products.

Good product development and brand management contribute directly to e-commerce because online customers look for products they can trust. When a consumer does not have the opportunity to touch and feel the product or to try it before they buy, they need other reassurances to make the purchase, and having a reputable brand goes a long way to provide confidence. Good products and brand management also translate into positive reviews which is a primary consideration to be presented to customers in a more favorable position in the product search results.

Having good products and a strong brand is a great starting point, and manufacturers that have these should be thinking about maximizing their B2C sales. If your products or brands are new to the market, it may take a little longer to maximize your potential but investing in R&D and developing brand equity is money well spent and will help you build reliable sales in the long run.

Channel and listing management.

If you have a good product, you must present it in the best possible light because nothing discourages buyers more than a shabby product listing. Poor quality pictures and scattered copy makes a product look cheap and does not give buyers a sense of confidence in the product or the seller. A good quality listing uses high-quality pictures to present relevant information in an attractive way. Close-ups of the product’s design details, dimensions, package content and the product in use are table stakes.

Additionally, the listing must have good copy that focuses the customer’s attention on the product’s benefits. A compelling listing will highlight competitive advantages that set the product clearly above the competition and provides all pertinent product specifications to ensure the customer gets exactly what is promised.

If a manufacturer is planning to list its products in multiple channels, then special attention needs to be given to consistently create good quality listings in all channels, and should use tools such as Salsify, EdgeNet or other similar solutions to manage product listing content in a centralized location and “broadcast” to the selected marketplaces.

However, an effective listing quality goes much further. Knowledgeable use of search keywords, smart titles and descriptions, product bundling, pricing, catalog and variance setup, store presentation and shipping options can be the difference between a solid sale and not even being in the running. Learning the intricacies that make or break a product listing in an online marketplace is paramount., Without this knowledge, the seller has no ability to give its products a fighting chance. Moreover, listing complexity varies from marketplace to marketplace, thus desire to succeed in multiple channels requires a commitment to meticulously learn every single channel.

A point on channel management:

Most, if not all, channels offer marketing tools to promote products and drive traffic to the seller’s listings. Extensive knowledge is also required to maximize the benefits of using (and paying) for these promotional tools, without it, a seller can waste valuable resources and get little to no benefit. There is no shortcut to acquiring the necessary knowledge, do the legwork; study your competition, research products in similar categories and use resources like Google keyword planning to understand what could work best for your products.

Finally, an effective seller must develop strong relationships with the channel. If you work well with your channel account manager, you can leverage this relationship to get preferred access to proven traffic builders managed by the channels like landing pages, daily deals, secret deals, etc. To be featured on this page takes a lot of trust between the seller and channel and the results can alter the course of your business.

Order fulfillment and customer service.

Order fulfillment is more than just getting the product ready for shipping. This is a process that starts the second the buyer finishes the order and doesn’t end until the customer gives the seller a rating for the transaction. Getting a good rating from a buyer makes the transaction exponentially better for the seller because it will help the next sale. Just like compound interest, each well-executed sale makes the next sale easier. Thus, the objective of order fulfillment is to complete and deliver an excellent experience for the buyer.

At a high level, this process can be divided into 3 distinct actions. While the most visible actions are typically performed by the seller’s warehouse team or a 3PL (Third Party Logistics) service, there are important issues that need to be considered in each step. Here are some highlights:

1.- Order retrieval, confirmation and acknowledgment.

Sellers should use electronic integration (API or EDI) with the marketplace shopping solutions so that orders flow automatically and avoid manual work errors.

Electronic integration is also key to maintain the channel informed of up-to-the-minute product availability. Inaccurate or untimely stock information can disable the listing or possibly even selling privileges unnecessarily and costly loss of sales.

Buyers need to be informed immediately if any problems arise with their order such as if the product is wrong or an item out of stock. It’s imperative that the customer is provided a quick resolution that keeps him happy and avoids a bad rating or review.

2.- Pick, pack and ship.

Few issues contribute more to buyer’s remorse and order cancellation than shipping delays. Having a computerized system that can quickly identify and quickly deal with exceptions is critical to ensure orders are picked and shipped before the FedEx or UPS truck does its last round of pickup. If you are planning to sell products to customers with shipping privileges like Amazon Prime, this is even more important as failing to meet their shipping standard will get your products dropped from their program and you will lose a significant number of potential customers.

3.- Transaction rating.

The importance of getting good ratings and reviews cannot be overstated. Your customer service team needs to be trained to quickly address any issues with orders, lost shipments and remorse returns. After the sale is made and the goods delivered, give your buyers the motivation to reward you with a good rating; offer a future discount, rate them so they feel compelled to rate you in return, and most importantly: never fail to ask for the feedback. Only a small percentage of buyers will rate or review a transaction and the few that you can get are worth gold.

About TechSense Consulting:

At TechSense, we support manufacturers looking to maximize their online sales but want the freedom to invest their resources in R&D and marketing and prefer to leave the intricacies of E-commerce to the experts.

TechSense's e-commerce assessment service is a comprehensive analysis of the ability of your company to succeed online. This is a must-do for any business that wants to make sure it is in the best position to succeed online without wasting money in the process.