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Amazon is the world’s biggest online retailer and with the Amazon Seller and Amazon Vendor programs, you can tap into that and benefit from its immense reach.
In this guide, penned with the help of a leading Amazon expert, you’ll learn how to master the platform and use it to grow your business. You will discover insights such as:
Types of Seller Accounts: There are several different ways to sell on Amazon, including Amazon Vendor and Amazon Seller. Being a vendor takes a lot of the pressure off your shoulders, but it also takes away some of the control and it’s not the best option for everyone.
Is Amazon Right For You?: Amazon is huge and far-reaching and that’s something that all brands can benefit from. However, it might not be the right platform for you. It all depends on how big your margins are and how much control you have over the product and its scalability.
Brand Protection: Many sellers will try to undercut you, even when they’re selling your products. Amazon doesn’t always help you here but it does allow you to help yourself using Brand Registry. Figure this out and you’ll be able to protect your brand when selling on Amazon.
Amazon Fees: Selling on Amazon isn’t free and the fees can vary. They range from $0.99 per sale or $39.99 a month to varying fulfillment fees, referral costs, and more. Will you have any margins left after all of these fees have been taken? Keep reading to find out.
Tips and Tricks: Anderson Salgado describes his unique 4-step process for establishing yourself on the Amazon platform. He has used it to help countless other brands and to sell millions of products, and it’s included in full within this guide.
And that’s just the tip of the iceberg!
I also asked Anderson Salgado for his most valuable piece of advice, a recommendation that could help you to generate over $100,000 in value using the Amazon platform. He was more than happy to provide me with this information and you can find it at the bottom of this extensive guide.
There is a lot more to cover before then, though, and if you implement all of the strategies and methodologies in this guide, you could generate much more than those 6-figures.
A Complete Guide to Selling on Amazon
Amazon is the largest product search engine in the world. The majority of Americans are familiar with the site and most households use Amazon Prime, purchasing everything from clothes and electronics to groceries and more.
As a business, you have the opportunity to tap into those searches and that popularity. Amazon gives companies of all sizes the ability to list their products on its site. It will even pick, pack, and ship those items for you.
Sounds too good to be true, right? That’s because selling on Amazon isn’t easy. You can’t just plug into the ecosystem and then hope that Bezos and Co. will do all of the work for you. It’s important to know what you’re doing, and that’s where this guide comes in.
The information below was gleaned from a discussion I had with Anderson Salgado, an expert in growth hacking Amazon sales. I have also been selling on Amazon for a number of years and was delighted for the opportunity to engage in a thoughtful, insightful, and potentially invaluable discussion with Anderson.
You can watch the full discussion in the embedded video below. This guide will serve as an accompaniment, going into greater detail on topics like Amazon advertising, authorized sellers vs unauthorized sellers, and more.
By the end of this review, you’ll understand everything you need to know about growth hacking Amazon sales and will be primed for some 6-figure Amazon growth.
Before we get into the meat of the subject, we need to cover the different ways of selling on Amazon.
There are a few things to note here:
Amazon Seller Central
It is often said that over half of all Amazon sales come from third-party sellers. It’s the most popular way to sell through the site and for many brands, it’s also the best way.
With an Amazon Seller account (accessed through Amazon Seller Central) you essentially treat Amazon as a marketplace, not unlike eBay.
You can create an Amazon page for your products and sell these on the Amazon website. When someone searches for relevant keywords, your products will appear, and when they place an order, you can fulfill them just like you would through your own website.
You can also opt for something known as Fulfillment by Amazon (FBA), whereby you send batches of your product to Amazon and they will be stored in warehouses until the customer places an order.
Once the order comes through, Amazon will pick and pack it for you.
Everyone can create an Amazon Seller account providing they pay the fees and agree to the terms.
Amazon Vendor Central
As a vendor using the Amazon Vendor Central interface, you still have control over what your customers see and can design your page and brand accordingly. The difference is that Amazon will treat you like a wholesaler and will raise purchase orders to buy your products so they can be sold on the Amazon website.
Using the Amazon Vendor Central platform, you can tap into additional Amazon advertising opportunities but you have less control over how your products are priced.
The Amazon Vendor program is by invitation only and is best suited for large volume sellers and established brands.
Brand Registry is a program that you can use to protect your brand when selling on Amazon.
It gives you control over the narrative and ensures that none of your distributors are undercutting you or taking all of your customers.
Let’s imagine, for instance, that you have created a type of luxury energy drink that is sold out of your online store and is also sold in bulk to brick-and-mortar locations throughout the United States.
After a few successful years, you decide to start selling on Amazon, but you notice that a few of your wholesale customers have already beaten you to it.
They are using their content (pictures, descriptions, videos) to build Amazon pages, but they are selling your product.
As you are the manufacturer, you could just undercut all of them, but that might mean selling for a price that you’re not comfortable with. And once you add seller fees, shipping costs, and other charges to the mix, you may discover that you’ve lost all of your profits.
You could also see who the wholesalers are and refuse to sell them products in the future. But that hurts your business and your reputation. It also doesn’t stop the average Joe from buying your product at regular bulk discounts and then selling through Amazon.
Brand Registry was designed to eliminate this problem. It puts you in control and lets Amazon know that you are the main one and should get all of the attention and sales.
The other sellers can still do their thing, but as with Google searches, you’ll be the one that customers see first.
Think of it in the context of social media verification.
If you’re a public figure, there will be a lot of fans, trolls, and scammers pretending to be you. If you get the blue tick, you’re showing everyone which account is genuine and limiting the damage caused by all of the others.
The scammers and the spammers will still be there, but they change from a massive problem into a minor irritation as most customers will know which account is the main one.
Authorized Sellers vs Unauthorized Sellers
An authorized seller is one that you know and one that you have permitted to sell your products. An unauthorized seller is one that is selling without your permission.
Of course, if you’re a reseller, none of this matters. You can’t just buy a product from a wholesaler and then expect to be the only one who sells it. Even if you are the only one to begin with, that doesn’t matter—it’s not your product and you can’t stamp your authority on it.
The same goes for anything that you buy on Alibaba that isn’t branded, and for things that are similar to your product but with different branding. Unless you have a trademarked product and are being directly copied, you don’t have a case.
But if you have a brand with distinctive products and those products are being sold without permission, the seller falls under the bracket of an unauthorized seller.
You can find more information on removing unauthorized sellers in your Amazon Vendor Central account. Generally, you will need to do all of the work and it often begins with cease and desist letters.
You can also track the products down, see where they are being listed and sold, and speak with the sellers directly.
In some cases, customers might start dropshipping your products.
They will take orders from the customers and then place those orders with you or with a wholesaler, asking you to ship directly. You just need to find out who is placing these orders and stop them.
It might not seem like a problem when you consider that you’re still selling products, but you don’t have control over those pages and those resellers, and that’s where the problem lies.
What happens when a customer has a really bad experience with the seller and takes it out on you? Most Amazon shoppers don’t know if they are buying directly from a brand, from Amazon, or from a dropshipper or reseller. If they buy an Apple MacBook and get a terrible product and service, they will take it out on Apple.
That’s a massive problem for you and your brand, and that’s why it’s important to separate authorized sellers and unauthorized sellers.
Is Amazon Right for You?
There are several things to consider before you determine if Amazon is right for you or not.
The first is your chain of command.
If you are the manufacturer/wholesaler or you have control over the manufacturing process, Amazon is usually a good option. You have control over the brand and the products, your margins are higher, and you can generally do what needs to be done.
If you are a distributor, someone who buys from the manufacturer/wholesaler and sells retail, it’s a little harder. You have much smaller margins to work with and if the brand decides to sell, they will likely take priority over you.
You’re also at the mercy of bigger brands that can and probably will undercut you.
For example, let’s think about the two coffee businesses:
Business 1: Buys coffee from a wholesaler, packages it as a premium product, adds its own brand, and sells at a substantial margin. Pays $2 per unit and sells for $6 wholesale and $10 retail.
Business 2: Buys from Business 1 to sell coffee across its chain of brick-and-mortar locations. Has no influence on the manufacturing process and does not have any contact with the wholesaler. Pays $6 per unit and sells for $10 retail.
In the first example, the business is not making the product and it is not the wholesaler, but as a brand that repackages the product and adds value, it’s still the first line and it can still make a lot of money on Amazon.
Business 2, however, is constantly at the mercy of Business 1, and even if it is an authorized seller, what happens when Business 3, 4, 5, and 6 come along and sell a similar product for $6? Business 1 could counteract that issue by adjusting prices and sizes. For Business 2, that just isn’t an option.
It’s not just about margins and control, either.
The price and quality of your product also play a role.
Anderson describes the perfect Amazon products as being between $25 and $75 and suggests that anything under $15 will struggle to turn a profit. At that level, it’s all about scale, and it can be harder to scale up and deal with the numbers needed to profit.
Anything over $100 may also struggle with regard to customer acquisition and retention.
That’s not to say that you will fail if you’re outside of these ideal price ranges, but that you might need to work a little harder if you want to succeed.
On the luxury side of things, it’s worth remembering that Amazon is often seen as a commodity marketplace, somewhere you can find decent products for cheap prices.
If you have a super-luxury brand, one that sells for much more than competing brands within the same space, it’s usually not a good fit. Not only will it be harder to convince people to buy your product over another company’s product, but you’re also devaluing that product by listing it on Amazon.
Selling on Amazon is Not Straightforward
Selling on Amazon is not as easy as you might think.
Some inexperienced business owners seem to think that getting an Amazon store is akin to getting shelf space in a major department store. They think that as soon as their store goes live, the sales will come and they only have to worry about the fees.
But there are thousands of stores and millions of products—it’s not that easy.
If your page isn’t strong enough, you don’t have many reviews, and your advertising is weak, no one will see your products, let alone buy them.
In that way, selling on Amazon is less like getting shelf space in a retail store and more like publishing a book.
Every year, major book stores purchase countless books from little-known authors and those books go straight to storage.
If there is a demand for them, whether in the form of customer requests or a lot of media attention, the books will be given pride of place on the shelves. If not, they will gather dust in the storeroom and will eventually be returned to the published for a refund.
(And the way that they process those refunds will horrify any bibliophile, as they just rip off the front covers, send them back as proof, and then destroy the actual book.)
It’s bad news for the small authors without any media attention or marketing budgets, but it’s great news for the ones who spend big and get lucky.
The same is true for selling on Amazon because when you get things right, you go from a little shelf space to the entire bookstore. You’re like Stephen King rocking up to announce the release of a new book—there are posters everywhere, your books are given pride of place, and everyone buys them.
That’s the beauty of selling on this platform. On the one hand, it’s hard to get noticed and if you don’t utilize Amazon advertising and offsite advertising effectively, you won’t sell anything. But if you get it right, the sales will flood in, your business will boom, and it’ll feel like you can’t put a foot wrong.
Cost of Working with Amazon
Selling on Amazon isn’t free and there are several fees involved.
The exact amount that you pay will depend on a number of factors, including whether you have an Amazon Vendor Central account or an Amazon Seller Central account.
On the seller side of things, which is where most brands focus their attention, you will be expected to pay either $0.99 per sale or a flat $39.99 per month.
If you’re a brand thinking about Amazon advertising and looking at growth hacking Amazon sales, you should stick with the $39.99 monthly option. Not only is it the cheaper option when you sell more than 40 units, but it comes with some added benefits in your Amazon Seller Central account, including the ability to add additional categories, create bulk listings, integrate APIs, and set your own shipping fees.
Referral fees will also be charged for every sale and these change depending on the product, with the average being around 8% to 15%.
If you want Amazon to fulfill your order, that comes at a cost as well, and it differs by product type and size, as well as how much storage you will need.
You can learn more about Amazon fees on this official page. It even includes a fulfillment calculator to estimate how much you will pay.
That’s not all, either.
If you’re shipping products to Amazon so that they can be fulfilled, you’ll need to calculate those initial shipping costs into the equation.
And then there are returns, order problems, and other extraneous costs.
It harks back to what I mentioned earlier about Amazon not being the best place for distributors. When your margins are low, these fees will eat into your profits and leave you with very little room for maneuver.
Tools for Amazon Sellers
Helium 10 positions itself as having “everything you need to sell on Amazon and more” and it’s a statement that Anderson would probably agree with, as it’s one of the few tools that he uses when helping his clients to sell on the Amazon platform.
There are a few other programs that can help you as well, from tools that focus on keywords and content to ones that help you with Amazon advertising.
You don’t need these tools and if they are out of your price range, you can afford to skip them for now, but if you have the budget for it and want to perfect every last inch of your Amazon page, it’s worth looking into them.
In addition to Helium 10, which I would definitely recommend as your first port of call, some other helpful Amazon seller tools include:
Amazon Seller App
You can also find a lot of useful tools and tips in some other episodes of This Week With Sabir.
In this episode with Jason Beauregard, for instance, we speak about brand recognition and the things that you can do to increase your exposure in even the most saturated marketplace.
The Magic Spoon journey may also teach you a lot about building a brand. The episode first aired back in September 2020 and the healthy cereal brand has been on the ascent ever since. It’s now bigger than ever, and the brand’s story is even more poignant as a result.
The Importance of Reviews
You can’t growth hack Amazon sales without reviews.
Reviews are the lifeblood of every Amazon page. Not only do they serve as social proof, convincing customers to buy, but they will show Amazon that you have a worthy product, which helps to bump you up in the rankings.
You need to get the reviews and manage them—your reputation is at stake.
There are a few things worth noting, here:
1. Don’t Fake Them
I discussed customer reviews at length with Bernadette Butler, and noted just some of the problems associated with fake reviews.
The first issue is that most customers know how to tell a genuine review from a fake review and they will lose respect for you if they discover that all of your reviews are fake.
The second is that Amazon can spot fake reviews as well, and it will remove them. If they keep appearing, your account may be removed, as well.
The final issue is that fake reviews don’t tell you anything about your product.
If you’re just launching a product and all of your initial reviews are fake, it means you could be missing out on some valuable information. Customers don’t just praise or criticize mindlessly—they tell you things about your products that you need to know.
2. Monitor Them
During our interview, Anderson Salgado noted that he focuses a lot of his time and effort on monitoring review pages and making sure they are up to scratch.
If you have an Amazon Seller Central account, for instance, you can respond to negative reviews and try to appease the customers, just like you can on sites like Trustpilot, BBB, and other user review sites.
There is no guarantee that the customers will actually remove or improve their reviews once you deal with their problems, but that’s usually the case.
If there are negative reviews that go against Amazon policies, you can remove them.
For instance, it’s not uncommon to see terrible reviews that refer to entirely different products or brands, as well as reviews that complain about irrelevant things or slander your brand. You can report these and have them removed.
Don’t start reporting all negative reviews, though. If a customer genuinely doesn’t like your product and there’s nothing that you can do to appease them, you just have to accept it and take the hit.
3. Don’t Ask Leading Questions
Amazon takes a very dim view of sellers who use leading questions to request reviews.
You’re encouraged to say things like, “Please review our product”. But if you repeatedly say things like, “If you like our product, please leave us a 5-star review”, you’ll be in trouble!
4. How to Get Reviews
There is no quick fix for getting reviews. That’s not the answer that you wanted to see, I know, but that’s the truth of the matter.
You just have to encourage customers to buy your products and leave a review, and the only way to do that is to take things slowly.
Reduce the price of your product to encourage more sales, give some products away to reviewers and influencers, and speak to your fans, followers, subscribers, or loyal customers, if you have them.
Anderson’s 4 Step Process
Everyone has their own magic formula; everyone does things their own way. For Anderson, there is no single recipe but a combination.
During our discussion, he described his process in more detail:
Step 1: Brand Authority
The first step is to make that you have your brand authority dealt with.
Even if you’re a small brand selling only a handful of products, there will come a time when others try to copy you, dropship from you, and generally take some of your profits.
You can protect against this by getting trademarks, copyrights, and Brand Registry dealt with from day one.
Step 2: Content
Your Amazon page is your shelf space, your storefront. It needs to be perfect and it should perfectly represent your product and your brand.
You need multiple images that show the product and its benefits; content that describes it; FAQs that answer the questions people are asking; bullet points to make everything clear.
It’s not just about your Amazon page, either.
You need to think about offsite content that you can use to direct people to Amazon and boost your brand recognition.
Step 3: Reviews and Advertising
Only focus on Amazon advertising when reviews are strong, otherwise, you could be throwing your money away.
Anderson suggests that over 23 reviews is key, but just get as many as you can and grow from there.
Once you generate that interest, you need to invest heavily in the products that have earned the most reviews, as they’ll be the easiest to push.
Step 4: Path of Least Resistance
When you have completed the steps above, the final thing to do is to put everything together and take the path of least resistance.
Spend most of your time focusing on the cash cows, the ones that are earning the most sales and have the most reviews.
The rest of your time should be split between the rising stars—products that are gaining in popularity—and the dogs, a category that covers low-selling complementary items.
When you make it to the end of these steps, just go back to the beginning and start again. It’s an Amazon growth hacking strategy that just keeps getting applied every step of the way, from step 1 to 4 and then back to 1, creating a cycle that leads to success.
Don’t Expect to be Profitable from Day One
The problem with Amazon, like many profitable platforms, is that it’s a hotbed of so-called “gurus” whose only job is to profit from your need or greed. The fact that you’re watching this video right now means that you’re probably going to be bombarded with YouTube ads from these gurus, and for that, I apologize.
They’re usually very young, loud, and confident. They claim to have the secret to success and they’re so nice that they’re willing to sell it to you!
They know (as do you) that all of this information is available for free on the internet. People like myself and Anderson Salgado—as well as the many other experts I’ve had on this show—are more than willing to give away advice for free.
They don’t need your $50 or $100 because they’re making plenty of money practicing what they preach.
They’ll tell you what their process is and how they make their money, but they’ll also remind you that if you don’t have the time or desire to do any of that, you can hire them to do it instead.
That’s how things should work.
For the gurus who sell courses, all of their tips are behind a paywall and because they want to stand out from the crowd—the people who are giving it away for free—they start making bold claims.
They’ll tell you that you can make thousands of dollars a day just from buying and reselling some junk found on Alibaba. And the more you see these ads and these claims, the more you start to believe them.
Even educated and reasonable people start to think that Amazon is a cash cow for their business, and so when they set up a shop and get the ball rolling, they expect the sales to come.
When those sales don’t immediately arrive, they’re disappointed. More often than not, they throw money at it, believing that they’re doing something wrong, and eventually, they quit.
But real success doesn’t come that easily or that quickly. Sure, there are people out there who have genuinely gotten lucky and a lot of the gurus probably are telling the truth about their success, but that doesn’t mean they can replicate it for you.
If every single person who bought those courses went on to make $10,000 a week as claimed, there would be no sales left for anyone else!
Anderson was very candid about profitability and noted that you shouldn’t expect to be profitable from day one.
He said that profits will be realized between 6 and 9 months, and that every cent you earn until (and even after) that point should be invested back into the business.
In that sense, you’re following in the footsteps of Jeff Bezos himself because instead of taking the money and running, you’re sinking every last cent back into your business.
If you can do that for a year or two, you’ll eventually grow to a point where those guru claims start to look a little more realistic.
In the first couple of years, your goal is not to make a few bucks here and there. Your goal is to grow your brand as quickly as you can and for that, you need to keep investing in your business.
Searching vs Finding
Anderson called Amazon a “searching” engine as opposed to a “finding” one.
What does he mean by this?
Well, for example, let’s assume that you sell the highest quality coffee at a very reasonable price. You use only environmentally-friendly packaging and a large percentage of your profits go toward improving the lives of coffee growers and their communities.
You don’t have much money for Amazon advertising and there isn’t much left over to pay branding agencies, either.
When someone looks for “eco-friendly Fairtrade organic coffee” your product should be near the top, and in an ideal world, it would be.
But you’re going up against rich and established brands. They can afford offsite and onsite advertising. They have spent the big bucks on SEO and have even factored smart voice searches into the equation.
They might not have the best product or even the one most suited to that specific search, but theirs is the product that everyone will see.
In that sense, Amazon is not the perfect solution for brands who can’t make themselves seen or heard. It’s just a traditional retailer where everyone is fighting for visibility, and unless you put the work in, you won’t be seen.
The $100,000 Question
As always, I ended the latest episode of This Week With Sabir by asking Anderson the $100,000 question. It’s the advice that he would give to everyone trying to make money by selling on Amazon.
His advice actually comes in three parts and touches upon some of the subjects mentioned above:
Step one is to not expect profitability from day one.
As noted above, a little profit might come in those early days, but it should be invested back in the brand. And if it doesn’t come, don’t let it worry you, as it’s to be expected.
Anderson estimates that most brands will realize a profit between 6 and 9 months, after which time it gets a little easier.
Step two is to create content with brand authority.
Your content is how you position yourself in front of your customers. It is the message that you put out there and it governs the reception that you receive in return.
Think about Google, as well as Amazon. And it’s not just about Google Ads, either. You have Amazon Advertising to deal with that—what you need to focus on is social media, SEO, and a presence that exists away from Amazon for the purpose of directing to Amazon.
The final part of Anderson’s $100,000 insight was not to be afraid of investing in your brand.
Spend the money you make here and elsewhere on influencer advertising, Facebook ads, and anything that can direct traffic to your products and increase brand awareness.
It’s a simple process but it is one that has helped Anderson to launch many successful products on Amazon and it’s the reason he’s one of the biggest names in this space.
About Anderson Salgado
Anderson Salgado is an accomplished e-Commerce expert who in the past five years has made a name for himself for having keen knowledge of the Amazon Marketplace. This U.S. Marine Corps Veteran who served in Operations Enduring Freedom in 2011-12 is also a University of Miami MBA Graduate, former Amazon Senior Vendor/General Manager for the Beauty and Professional Beauty Categories, former Head of Amazon for VaynerMedia, and has been featured in Bloomberg and Business Insider magazines as a Subject Matter Expert (SME) in Amazon advertising, optimization, and growth hacking after being instrumental in developing the Pro and Luxury Beauty category at Amazon (one of the fastest-growing categories of the platform since 2016) and later launching his own agency to help other brands to do the same.
Anderson Salgado, a Venezuelan immigrant, husband, and father of two is now working on a new platform that promises to simplify e-Commerce through revolutionary finding technology.