Launching a new product on Amazon is hard because there are so many products already on there. In fact, there are over 260 million products on the Amazon UK marketplace and over 440 million on Amazon US.
What does this mean? Well, it means it’s difficult to get eyeballs on your product and drive sales. But not impossible. The best way to describe introducing a new product on Amazon is to use the old-age “You have to spend money to make money” saying.
My first attempt at private labelling didn’t go to plan. I made a lot of rookie mistakes and ended up with product that failed.
Although it was hard to take, I didn’t give up. Soon after I developed and launched another product, which was successful.
I used a combination of the following techniques:
- Promotional giveaways. This is when you give away a proportion of your products at a steep discount to drive awareness and sales.
- Amazon PPC (Pay Per Click). As the name suggests, you only pay when your product gets clicked and viewed. This is a great way to get your product in front of potential buyers and get sales.
I got my product to the top half of the search results for my preferred keywords in less than a month. Which boosted my product’s visibility and sales.
You can check out the maths behind my private label product here.
In this post, I’m going to go through the steps I followed to rank this product for my preferred keywords. But before I do, let’s go discuss Amazon’s search algorithm and how it works.
Amazon’s A9 search algorithm
Amazon is a search-driven platform. You enter a search term, Amazon shows you products relevant to your search query. Then you pick and purchase the item you like.
When I searched ‘leather bifold wallet,’ Amazon found and returned over 40,000 products related to my search query. That’s one huge catalogue.
But to make it easier for shoppers, Amazon doesn’t just return random products, it returns products in the order that it thinks you’re likely to find desirable and purchase.
The products after the ‘sponsored ads’ products are organically ranked for the keyword ‘leather bifold wallet’ and sales generated through this keyword are referred to as organic sales.
Products that appear in the ‘sponsored’ area are the because the sellers are paying Amazon. This is referred to Amazon PPC, we’ll get to this later.
The goal
As sellers on Amazon, our goal is to appear on page one of search results for search queries most relevant to our product. It is therefore important to conduct keyword research, to gather all keywords that people might use to find your product.
The sellers on the first page, especially those in the top five positions, for a high volume search term are likely to get most of the sales. Why? Because most shoppers don’t look beyond page one when browsing. In fact, listings on page one for a search term account for over 80% of the transactions.
Here’s Jungle Scout Extension showing the estimated monthly sales of the top products for ‘leather bifold wallet.’
As you can see, the top ten sellers make the majority of the sales. They sell just over 2,500 of wallets per month between them.
The aim is to get your product to appear on page one for relevent and high-search-volume keywords so that you can capture a proportion of the total sales.
But how would you go about this? Before we discuss this, we first need to understand how the Amazon’s algorithm sorts products.
How does the A9 algorithm sort products?
The A9 algorithm is mysterious and it’s unknown how it ranks products for a search term. But the main factors that influence it uses to sort products for any particular search term are:
- Sales velocity. This describes the number of sales a product makes in a particular time period. For instance, if a product sells 10 a day, then it has a sales velocity of 10 sales per day.
- Conversion. The conversation rate of a product describes the ratio of purchases to clicks. In other words, if a product is clicked on 10 times and it only makes one sale, then it has a 10% (1/10) conversion rate.
- Positive reviews count. This is number of positive reviews (4 and 5 stars) a product has. The higher this number, the better, of course.
If your product has a high sales velocity, conversation rate and a lot of positive reviews, Amazon will push it up in search results. This is good for you and Amazon. You will sell more while Amazon will make more money in fees.
Sales velocity and conversion are closely related. If a product has a high conversion rate, it’s likely that it will also have a high sales velocity and vice versa. Let’s, therefore, look at how to increase conversion.
How to increase conversion
It should go without saying, the key factor that drives conversion is your product. It should have a market, be desirable and it should be different to some extent. If this is the case, the following factors will help increase the proportion of people click and buy your product:
- Professional photos
- An Optimised listing
- Lot’s of positive reviews
- Right pricing
Doing these things right will give your product a good chance of succeeding.
Promotional giveaways
Giving away a proportion of your inventory at a steep discount is the fastest way to boost sales and increase conversion rate.
You would have thought giving away products for almost free would be easy, right? It ain’t. I actually found it tricky. Not because it wasn’t good but because I didn’t know where to find the people to give them away to.
Thankfully I found JumpSend, which is an Amazon deal site that boasts over 100k of active bargain hunters.
How does it work?
You create a promotion in Seller Central. Post it on JumpSend. And then just wait for ready-to-buy shoppers to pounce. It’s that simple.
On JumpSend marketplace, customers can filter products by price, discount and more.
Most sellers offer discounts of at least 50% but, in general, the higher the better. Why? Because most shoppers on Amazon deal sites are on there for deeply discounted products.
How to create a promotion on JumpSend
Making your deeply discounted product available and visible to eager buyers on JumpSend involves:
- Creating a promotion on Amazon
- Uploading your offer on JumpSend
Creating a promotion on Amazon
Note. In order to create a promotion on Amazon, you’ll need an Amazon professional account.
Here are the steps to creating a promotion on Amazon.
Step 1. Click ‘Inventory’ in your Seller Central account and then Select ‘Manage Promotions’ from the drop-down menu.
Step 2. On the promotions page, click ‘Manage Product Select.’
Step 3. Choose ‘Asin List’ from the drop-down and hit ‘Create Product Selection.’
Step 4. On the Create Product Selection page, fill in the details including the ASIN of the product you want to create a promotion for. Then hit ‘Submit.’
Step 5. Go back to the Promotions page but select ‘Create a Promotion’ this time and then ‘Money Off.’
Step 6. Finally, select the product you created using the steps outlined earlier and fill in the details of your offer.
Important. In the third step, ‘Addition Options,’ click ‘Customise messaging’ and ensure that ‘Detail page display text’ is unchecked. Why? Well, if it’s checked, customers will be able to get the same discount on all your inventory.
Finally, click ‘Review’ and continue.
There you have it. That’s how you create a promotion on Amazon. Let’s now make our offer available on JumpSend.
Uploading your offer on JumpSend
Step 1. To upload your promotion, click ‘Promotions’ and then ‘Create new.’
Step 2. Enter your product’s ASIN
Step 3. Next JumpSend will pull your listing and you’ll have to complete the rest of the listing.
Step 4. Turn on inventory protection to make prevent shoppers from buying your entire inventory. And make sure that the start and end dates match that you’ve set on Amazon.
Step 5. In the next section requires you to give coupon codes for the promotion.
To get create coupon codes for your promotion, go the ‘Promotions,’ click ‘Manage Your Promotions’ and choose the promotion you created earlier.
Then ‘Manage Claim Codes’
Now simply enter the number of coupons you want to create.
Then just download, copy and paste the coupon codes on JumpSend.
Step 6. Next, choose whether you want to approve shoppers automatically or manually. Then review your offer and start promotion.
There you have it. That’s how I gave away products on Amazon at a steep discount.
Amazon PPC
I also used Amazon PPC, Amazon’s advertising programme, to get visibility and amplify sales. Pay-per-click (PPC) advertising is simple: you only pay when people click and view your advertisment.
If you don’t like the idea of giving products away for free, then this is a great alternative. The caveat, however, is that every click costs money. How much? That depends on the keyword you are targeting. The more popular the keyword, the higher the cost.
Since I had never done any online advertising before, my strategy was simple. The idea was to run an automatic campaign first, then collate all the relevent keywords and run a manual one later.
- Automatic Campaign. In an automatic campaign, Amazon is in control. It chooses the keywords to advertise for based on the product’s listing. All we have to do is let Amazon know our budget.
- Manual Campaign. Running a manual campaign is good beause it gives us more control. We choose the keywords to target and how much we want to spend per click.
I would prefer to run a manual campaign right off the bat but doing so wouldn’t be wise. Why? Because automatic campaign is more objective and lets us discover new information.
Through an automatic campaign we can differentiate between high and low converting keywords. And then we could target the former through a manual campaign while discarding the latter.
Here’s how I ran an Amazon PPC automatic campaign to find effective keywords.
How to run an Amazon PPC automatic campaign
To run an automatic PPC campaign on Amazon, scroll over ‘Advertising’ in Seller Central and select ‘Campaign Manager’ from the drop-down menu.
Then, on the ‘Manage Campaigns’ page, select ‘Create campaign.’
Then select ‘Sponsored Products.’
In this section:
- Enter a Campaign name
- Choose the advertising period
- Select a daily budget (I would recommend £40)
Importantly choose ‘Automatic targeting’ under ‘Targeting.’
The rest is straightforward. Once done, hit ‘Launch campaign.’
Now sit tight and let Amazon advertise your product — be patient as it does take time. I ran an automatic campaign for about two weeks and then switched to a manual campaign.
Analysing automatic campaign
After a few weeks, I analysed the data of the automatic campaign I ran and isolated all the effective keywords. To do the same, to download your automatic campaign’s data:
- Scroll over on ‘Advertising’ in Seller Central
- Click on ‘Campaign Manager’ from the drop-down menu
- Select ‘Advertising reports’ on the ‘All campaigns’ page
- Select the date range within which you advertised under ‘Report period’
- Then click ‘Create report’
Finally, download the report produced. How do you filter the profitable keywords? Well, I base that one metric: the ACoS.
- ACoS (Advertising Cost of Sale). This is the total cost of advertising that generated a sale. For example, if you spent a total of £10 on advertising and those adds generated a total of £50 in sales, then your ACoS would be 10/50, or 20%.
To keep things simple, I collated all the good keywords and targeted them in a manual campaign. What’s good? I considered anything with an ACoS of 100% or lower.
How to run a manual PPC campaign on Amazon
Follow the same process as running an automatic campaign shown above to run a manual campaign, but check ‘Manual targeting’ instead in the ‘Targeting’ section.
Then you will be presented with a ‘Keywords’ section.
I usually use a ‘Phrase’ match type. Then enter all the keywords you want to target. I used the keywords produced in my automatic campaign.
As you can see, you also have to enter an amount for ‘Keyword bid.’ Of course, the higher this bid, the higher the chance of your product appearing in the search results.
As I was new to all this, I simply applied Amazon’s suggested bid for every of my keyword.
How to get product reviews Amazon
Another important factor that influences conversion is the number of positive reviews your product has. Why? It shows social proof.
But getting reviews is hard. Do you know the proportion of people who review products after purchase? About 1.5% or lower. But we can bump it up to 2% or 3%, which doesn’t sound like a lot but significant.
The easiest way to do this is to send your customers a follow-up emails by setting up an email campaign. The aim of the campaign is to check on your customers and make sure they are happy.
You can set up an email campaign using JumpSend.
Disclaimer: due to recent changes to Amazon’s customer review policy, you cannot offer compensation, free or deep discount in exchange for a review. But you are allowed to:
- Run promotions. As long as you don’t offer a discount in exchange for a review, you can give away products for free or at a deep discount.
- Build email campaigns. Amazon is strict when it comes to interacting with customers but you can send follow-up emails to customers.
- Ask for honest reviews. You can contact customers and ask for honest reviews.
Click here to read more about Amazon guidelines.
Conclusion
Although difficult, I really enjoyed the process of launching this product on Amazon — from sourcing to marketing.
Here are the key lessons I have learned:
- Make sure there is a market for your product
- Ensure competition is not too high
- Find all the possible keywords related to your product
Finally, before you start searching for a manufacturer to produce your product, differentiate your product. You need to consider why Amazon should recommend your product to its customers over existing ones.
Once you have developed a strong enough product, I would recommend launching it using giveaways and Amazon PPC.