"Build" Guide - how to Build your Private Label Business
This 2nd way of increasing sales is so neglected, you can get ahead simply by implementing anything in this area!
The simple idea is to increase the AOV=Average Order Value.
It can be more difficult to implement on Amazon than just getting new customers but is potentially much more profitable.
If someone usually buys a $10 widget at 50% margin, you get $5 profit per sale. If you usually sell say 10 orders of 1 $10 widget a day, your profit per month=$5X10X30=$1500
If you can increase the AOV by say just $1, you would end up with $11X50%X10X30 profit=$1650. $150 extra ie 10% extra.
Multiply such effects across several products and it can add to your bottom line quickly.
The simplest way to increase your AOV is simply to increase price! But you have to weigh up against conversion rate changes etc. to see whether that increases or decreases your price.
Another way is to bundle together products physically eg a 3-pack, 4-pack, 6-pack etc etc. Easy and very very easy to sell on Amazon.
Another way that is even easier is to offer a discount via a promotion code. Eg BOGOF (Buy One, Get One Free) or buy 3, get 10% etc etc.
If you set things up wrongly, you’ll make less profit, not more, so know your numbers going into this! Done right, this is a simple way to edge up your profit margin.
A harder way but possible on Amazon, is to do cross-sells eg “this is also bought with X” (spatula with slotted spoon for example). It’s possible to influence this again using promo codes – you can offer a 25% discount off a slotted spoon, for example, when you buy a silicone spatula etc.
Another way that is hard to do on Amazon but possible, is to upsell eg from a $5 spatula to a $25 frying pan. Same kinds of methods.
Increasingly, we are looking at strategies that will work best when you have control – in other words, you start to build your own email lists (and other assets like social media subscribers/followers etc.).
There is one more basic way to increase sales that is used least of all by Amazon sellers but could be the most powerful of all…read on…to the next episode…
To find out more about the Amazing FBA London Mastermind mentioned in the episode, click here
Master Marketing Principles Mini Series:
SUMMARY SO FAR
2nd PRINCIPLE: DIFFERENTIATE!
Problem: Same as everyone else
Result: No sales, or shopped on price