Increase Amazon Profit Margins By Doing Less

Increasing Amazon’s profit margins is a challenge for any entrepreneur, but particularly for resellers. If you’ve been selling on Amazon for some time, you may have noticed the steady escalation of competition. Given this pressure, what can you do to increase your Amazon profit margins?

First, remember that along with more competitors more customers are coming to Amazon. As Amazon’s revenue grows, so do the sales made by third-party sellers and this is where you can join in.

Despite this potential for increased profits, numerous FBA sellers let their businesses down through simple oversights. Poorly written product descriptions and low-quality images are some of the better-known pitfalls.

However, tactics like using specialized software and activating listings at strategic times are in the roster of more savvy sellers.

Ahead are ten straightforward methods to increase Amazon’s profit margins.

1. Make repricing software your friend

If you’ve sold or bought on Amazon, you know how much price impacts the choice to purchase.

Put yourself in your buyer’s shoes, and you can imagine the importance of getting the best deal. If it comes down to two similar or identical FBA products, the customer can let price be the deciding factor.

When pitted against other sellers, automated repricing software can keep you one step ahead. This tool allows you to hone your pricing to be competitive, without underpricing. This can put you in the sweet spot that makes your product the one that customers choose, increasing your Amazon profit margin.

Pricing your products too low can be costly to your business, especially when they could still be competitive at a higher price. You want to find the price point that beats the competition, without robbing yourself of the opportunity for more revenue.

Increase Amazon Profit Margins

2. Think product bundles

Explore bundling products to increase sales.

Customers love finding great deals on product bundles and may prefer them over making separate purchases. The risks to you as the seller are minimal since you can always separate unsuccessful bundles and put the items back up for sale individually.

Meanwhile, if the bundles do sell, you can benefit from increased sales — and increased profit margins — plus the potential to sell slower selling products. Think of the appeal an additional item can add to a bundle when on its own it might have held far less allure.

3. Try using credit cards for inventory

When Amazon sellers are just starting out, they might use PayPal or bank transfers to stock up on inventory. This can work perfectly well, but once you start streamlining your business to increase profit margins, this can be worth re-evaluating.

Using a credit card to make purchases from your supplier can get more to you via points, cashback, and other rewards. Top-notch accounting software can allow small business owners to benefit from the full potential of this tactic.

4. Keep an eye on supplier costs

Supplier catalogs can be intimidating given a large number of items available. This doesn’t have to be the case, though. You can automate the process of assessing the options by using a flexible profit analyzer.

Using this tool, you can track price changes and take advantage of price drops to make bulk purchases. This increases your profit margin once you sell the item on Amazon.

supplier costs

5. Clean-out your supplier

If you see that stock is low with your supplier, seize the opportunity by buying every item that is left. As an Amazon seller, this gives you the upper hand of snagging all remaining units so that your competitors will be left waiting for a restock.

For a small window, you will have the advantage of potentially being the only Amazon seller of a given product. This can be a great opportunity to keep your prices high until things have been restocked.

A side benefit may be reduced pricing from your supplier for bulk purchasing.

6. Take advantage of limited stock

Customers are disappointed by out-of-stock products, so this is a moment you can capitalize on. Buyers will make a beeline for you if you can be the first to get them the item they want.

Customers usually care more about getting an item than about who provides it. You can meet their needs by getting the product to them ASAP.

This is a win-win situation because you make more sales and more profits and they get the product they want.

7. Sell products that sell-out

Unlike some suggestions here, this strategy is a high risk, but also a high reward.

First, identify products that are often sold out, and buy a bulk supply. Rather than putting these products up right away though, wait for other sellers to run out. Then, seize the moment by making your supply available.

The key to this strategy is to put your price point high. When customers find your product, they’ll be more likely to buy it, despite the higher price.

Keep in mind that this strategy has downsides, for example when dealing with trendy items that may not remain popular or when finding an appropriate price point.

positive reviews

8. Make positive reviews a priority

Your reviews will impact your sales and in turn your profit margins. A Podium survey suggests that 93% of customers are influenced by online reviews when considering purchases.

This means keeping your customers happy is central to keeping your profit margins in good shape. This can be achieved most obviously by offering products of high quality. However, keeping product descriptions accurate is also essential to meeting customer expectations.

Finally, if something does go wrong, make sure you assist the customer promptly and kindly. Resolving issues before the customer is frustrated can prevent a bad review.

9. Short and sweet descriptions

When crafting a product description, ensure that the length fits the digital format, but the content is enticing. This means being brief, but still including the essential details.

Skip the jargon and keep sentences short for the best result.

If you are uneasy with copywriting, consider contacting a freelance professional. The increased sales curated by slick product descriptions can make this well worthwhile –and this will be reflected in your increased profits.

10. Keywords are, well, key

Keywords are a missed opportunity for many Amazon sellers. For those who know the value of keywords, it can feel intimidating to find them all.

However, keywords make all the difference when uniting customers with the products they want.

Familiarize yourself with “long-tail” keywords which usually include a string of words together. Though these combinations of words may be searched less, they can lead to greater sales thanks to their specificity.

Keyword software can be an invaluable tool when identifying keywords for your product. Remember, to include as many keywords as possible while still keeping your descriptions sales-focused.

Amazon profit

Going forward to increase Amazon profit margins

Although competition to increase Amazon’s profit margins might be steep, you can take the first steps by applying what you’ve learned here.

Keep in mind that using a variety of approaches in conjunction will give you the best chance. With these extra tools, you can go forward one step ahead of the competition as you increase your Amazon profit margins.

Achieve Amazon Success with Refunds

It’s your responsibility to audit your inventory and submit claims for error reimbursement. 

GETIDA auditing software keeps track of your Amazon FBA inventory transactions, refunds, seller data analytics, and FBA reimbursements easily and clearly. Equally important, dedicated case managers with Amazon experience follow up on FBA reimbursement claims on your behalf to help ensure you get back what you are owed.

GETIDA makes the process of claiming Amazon fee reimbursement easy. And it’s free, with no commitment. GETIDA charges only when a claim we file is successfully reimbursed. 

The more reimbursements you collect, the more available funding you have for your Amazon PPC strategies.

$400 in Free Amazon Seller Refunds with GETIDA.