How to Grow an Amazon Business- How Scott Needham Achieved a 50% Growth in Margins
In today’s blog post, we’re going to delve into how to grow an Amazon business, and specifically a reseller business. Scott Needham is a seasoned Amazon seller and software developer. Scott shares invaluable insights on how he managed to scale a reseller business, increase margins from 14% to 21%, and even built a cutting-edge software tool to revolutionize the reselling game. Join us as we uncover the key strategies and lessons that can help you grow your Amazon business.
The Journey to 50% Margin Growth
Scott Needham’s journey began in 2013 when he joined his brother’s already thriving Amazon reseller business, which had accumulated millions in sales but faced challenges in scaling. The pivotal moment came when Scott harnessed technology to automate critical business processes. This automation laid the foundation for substantial growth, taking their team from just a handful of employees to a formidable workforce of 80.
One of the critical components of their success was the development of custom software tools designed to streamline various aspects of the reselling process, from inventory management to order automation. These tools enabled them to efficiently scale their business, despite initial hiccups and pricing mistakes.
Scott emphasizes that reselling is one of the fastest ways to grow revenue, even if the profit margins can be lower than those in private label ventures. The real secret to their impressive 50% margin growth lay in how they managed their pricing strategies using a repricer tool. They strategically adjusted their pricing based on inventory levels and competition, allowing them to maximize profits.
Lessons Learned and Mistakes Made while growing an Amazon business
While Scott’s journey has been marked by remarkable achievements, he also candidly shares the challenges and mistakes they encountered along the way. Two key takeaways are particularly noteworthy:
Winning Over Big Brands
One of the significant lessons was the importance of building strong relationships with big brands. Scott acknowledges that they could have been more persuasive in their approach to convince larger brands to work with them. He believes investing in a more professional website to convey a sense of trustworthiness would have been beneficial. Simplifying their sales process and avoiding excessive Amazon-specific jargon could also have helped secure more partnerships.
The Power of the Repricer
Scott’s second valuable lesson revolves around the repricer tool. Resellers often focus on selling at the lowest price to win the buy box, but Scott and his team adopted a different approach. They used their repricer to float their prices higher when they restocked a product, aiming for a minimum gross margin. This strategic pricing approach, combined with automation, significantly boosted their margins.
Introducing Smart Scout
Scott Needham’s passion for technology and data analysis led him to create Smart Scout, a tool tailored for resellers. Smart Scout simplifies the process of identifying profitable products and brands on Amazon by providing a comprehensive overview of estimated revenue and in-stock rates. It allows resellers to filter and pinpoint brands that meet specific criteria, streamlining the sourcing process.
Smart Scout is a powerful resource for resellers looking to uncover hidden opportunities and make data-driven decisions. To explore this tool further, you can visit Smart Scout and use the coupon code “smartpodcast15” to enjoy a 15% discount.
Scott Needham’s journey from a family reselling business to creating powerful software tools for Amazon sellers is an inspiring story of growth and adaptation. His valuable insights and lessons can guide resellers on their path to success, and the Smart Scout tool offers a cutting-edge solution to enhance sourcing and decision-making.
To stay updated with Scott’s expertise, you can listen to his podcast, The Smartest Amazon Seller Podcast, where he shares more insights and talks with other professionals in the field.
Are you ready to scale your Amazon business and optimize your margins? Scott Needham’s journey is proof that with the right strategies and tools, remarkable growth is within reach.