How to Run a Profitable Business on Amazon

How to Run a Profitable Business on Amazon

s lling on Amazon are often a particularly profitable business all on its own. Third-party sellers like small business owners and authors on Amazon's marketplace account for 58 percent of gross merchandise volume. This growing space provides an enormous opportunity for entrepreneurs to form a huge profit.

However, most entrepreneurs stop the method at only taking a purchase instead of scaling it into something great. It's seven times harder to require on a replacement customer than it's to urge a previous customer to shop for from you, and Amazon sellers are particularly bad at turning those sales into long-term customers.

Peter Drucker wont to say that there have been two functions of the business: getting customers and keeping customers. once you make a purchase on Amazon, which of the 2 functions does it fall under?

Most people answer that question by saying, "getting customers," but it is a trick question. It's neither. It's Amazon's customer. Until you get that person to settle on you over the competition, it isn't your customer, and you cannot follow up.

There are ethical ways in which allow you to scale to be quite an "Amazon business." When people say that they need an Amazon business, I hear that as, "I do not have a true business," because selling on Amazon may be a nice profit stream. it is a good place to start out , but it isn't a true business.

Pivoting to Profitability

To make the shift to making a profitable business from Amazon sales, we've to seem at the way to get ahead of consumers both before and after the Amazon purchase. If someone is supplying you with money within the sort of sales on Amazon, that somebody may be a hot lead for creation of a true customer relationship.

I put an incredible amount of your time and a spotlight into exposure ahead of individuals after they create purchases, through inserts in packaging, retargeting ads and fantastic customer service. We do everything we will to urge ahead of that person on an ongoing basis after a sale is formed .

The other factor is getting into front of them before purchases are made, which involves audience building. this suggests identifying who your core customers are and communicating with them during a way that builds goodwill and develops an audience before a sale is ever made.

We're putting a big amount of attention into content creation, chatting with our core audience, then sending them to Amazon. That's how we build and scale a true , profitable business. After the acquisition , we use things like inserts and packaging and retargeting ads and excellent customer service to urge them on an email list or a buyer's list, in order that we will send them follow-up offers and also send them content.

An excellent example for instance this is often Bulletproof Coffee. Bulletproof Coffee sells tons of products on Amazon, but it's not an Amazon business. it's a podcast and a blog, and it sells in retail stores. Amazon is one stop along the way.

If founder Dave Asprey wanted to create a coffee company, his second product would are a dark roast, but that's not what he did. He did an MCT oil before it had been cool to try to to MCT oil. supported that, Bulletproof pivoted into food and packaged drinks. It used its brand to make a community that has expanded far beyond Amazon.

Overcoming Hurdles

There are many hurdles entrepreneurs face when selling on Amazon. the primary is brooding about the second and third sale. The shift that entrepreneurs need to make is asking themselves, "What happens post-purchase?"

It's so easy to place a product up within the marketplace today that the temptation is to present as many products as possible, get the sale and advance -- but all the proper action happens after the acquisition . That's once you can turn one-time sales into recurring orders and follow-up purchases, which doesn't happen when you're just putting products up purchasable on Amazon.

It's a big challenge to urge entrepreneurs to think beyond the sale and believe what the customer needs after buying the merchandise . what's the journey the customer is on, and the way am i able to support and serve them on an ongoing basis? What am i able to do this doesn't just require me to seek out a replacement product to sell?

For those of you who are authors getting people to download your audio book or order a book from you, if you are not brooding about what the customer might need after the acquisition , you're missing all of the juice in your business -- all of the profit that exists in your business.

The other challenge that entrepreneurs make is that they tend to believe the merchandise versus the person. this is often very true in audience building. once I mention audience building, most of the people consider creating plenty of content, but that's not necessarily the case. Building the audience is simply having a clear grasp on who your core customers are and therefore the journey they're on.

As a business, it's one among your jobs to make great products, but that's only a bit of the general job of the business. Your job as a business owner is to serve your customers on the journey that they're already on, and you'll do this through a spread of various ways: within the way you create content, within the way you represent a message or a brand, within the products you create , and within the experiences you cultivate.

Another excellent example is Legion Athletics, a muscle building company that sells muscle building supplements and books. It got its start selling e-books, and since then has created blog content and an email list.

It really took off when it launched the Legion Athletics supplement line. It had the book purchasers and blog readers returning to shop for more books, products and training, and now it's a training program.

It isn't a book company, a supplement company, a training company, or a muscle and fitness company -- but it knows that its customers buy all of these things along the journey, and it's undertaken the work of providing those resources for them.

When you believe the person rather than just the merchandise , it exposes new opportunities for you to point out up ahead of your customers.