Prime Day is one of the biggest revenue generators for Amazon businesses and a driving force for many goals or milestones. If you’re not already considering your profitability during this heavy selling period, now is the time to start.
Last week, we put together a workshop with two of the top minds in Amazon ecommerce: Brandon Young, CEO of Seller Systems, and Tim Jordan, CSO of Carbon6. Their years of combined Amazon experience, coupled with their insights from other enterprises such as sourcing, Private Label consultancy, and more, gave valuable insights into how to drive profitable growth.
In this workshop, Young and Jordan covered many topics that will be essential to achieving and maintaining profitability for Prime Day and other peak sales periods, including:
In this post, we’ll recap some of the key themes and insights from the workshop, but if you want to get the full experience, you can watch the replay here.
TACoS is one of the key calculations that many businesses forget about when exploring the launch economics of new products.
During the workshop, Young broke down that there are four phases to a product launch that all have very different TACoS goals:
TACoS at initial launch can be quite high because you’re driving rank and sales from nothing. As time passes and rank improves, the TACoS will come down.
“Profitability is a long-term investment: it might not happen today.” – Tim Jordan
Having a solid understanding of how TACoS affects your profitability will help you manage your capital and plan future growth more accurately.
Keyword research isn’t just to discover which keywords you should use for your listings. As Young noted, good keyword research will also help you make better business decisions.
The data you get from in-depth keyword research will help you understand everything about your potential competitors and inform your own orders by detailing:
According to Young, all of the data will help you decide whether or not to launch a product:
“If all of your competitors are ranked well on all the keywords that drive sales, that's a supersaturated product to rank against, and you're going to be competing against not just one or two really good sellers, but ten.” – Brandon Young
One of the biggest, if most obvious, benefits of keyword research is making sure you are aware of and using the best SEO for your listing.
Once you know you have everything where it needs to be in the title, bullets, and beyond, you are ready to spend money on marketing.
Knowing when to spend the money on marketing is another key insight in this workshop. Running more PPC (Pay-Per-Click) ads on Prime Day, or on other heavy selling periods like Black Friday, will help reduce ad costs.
Turning on more or all of your campaigns, even the broader ones, will help you capture the most clicks for the sale period. Consider increasing keyword bids, exploring new keywords, and turning on Top Of Search to maximize sale-day results.
The best way to ensure success with ads is with live tracking and monitoring of the PPC. During the workshop, Young suggested if clicks aren’t turning into sales, try turning things off again – because in order to boost long-term ranking, you need to see improved conversion in the short term.
Increased customer purchase intent during a sale, combined with heavier traffic, will put the cost down because of a higher average of converting clicks. This higher conversion will help your ranking since conversion is one of the performance metrics that Amazon uses to determine rank.
“If you only run one deal every three months, it's really hard to get that weighted average up.” – Tim Jordan
Running deals might hurt the BSR (Best Seller Rank) in the short term but can increase it as time passes. Sellers must be consistent with running deals, since the BSR uses data from the previous 30 or 60 days. After three deals, the ranking will hold, but running a deal within every 30 days will have the most impact.
To get the most out of Prime Day sales, Young said you need to get the Prime Day Deal badge on your listing.
In order to get the Prime Day Deal badge, you need to wade through some tricky math to make sure you’re staying profitable. The hardest part is getting the details of the eligibility since the amounts change all the time.
You can work out eligibility with a minimum discount amount and a minimum percentage below the last 30 or 60 days’ selling price.
Once you have that information, you can do the math to work out how much you have to raise the price by, and then apply the minimum discount you can to stay eligible.
For all the trouble this badge is worth, Young promised it would be beneficial, especially to conversion:
“Amazon started funneling shoppers into deal-only funnels. During Prime Day, they would click on “Shop our Prime Day Deals” and after that, they would only see the people participating in the deal that had this badge.” – Brandon Young
During this workshop, Young and Jordan offered detailed and practical advice for sellers with businesses of all sizes, teaching them how to plan for profitable growth using keyword research, and careful PPC management.
Selling on Amazon in 2023 is worlds beyond 2015 – it’s not a get-rich-quick scheme, but it can still be profitable for the dedicated and determined seller.
Learn more about how to simplify your success by exploring Carbon6's full suite of marketplace tools.