#amazon profits

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Brian Olsavsky, Amazon’s chief financial officer

WHAT CAN I EXPECT IN SALES on Amazon When we started on Amazon, we had a product that no one else offered.  It took a while for people to find us.  Once they did--look out!   What can you expect?  It depends completely on what you have and what they want.  What works in your current marketplace might have little or no bearing on what works on Amazon.  With Amazon, your marketplace is “the planet.”  All you need is a little tiny slice of a little tiny sliver and you’ll have more orders than you know what to do with.   I’ve used a number of different strategies to maximize sales on Amazon.  The first and most important is:  List everything!   You absolutely want to get every product listed on Amazon.  There is no cost from Amazon to do this.  Having every product out there gives you maximum exposure and increases your chances of making a sale.  In addition, you will find some products that will really surprise you.  We have a couple of products that we can hardly keep in stock.  I would never have guessed that they’d sell as well as they do.   Along this same line, I try to get the smallest quantity of products that I can from each of our vendors.  If they’ll sell me one, that is all I want.  Even better, I always ask for samples.  If I have a sample, I can list it on Amazon.  If it sells, I’ll buy more.  If not, I don’t have much invested—just the time it took to list the product and find a place for it on the shelf.   Amazon has a wide array of promotions:          Free Shipping.  Example:       Spend $250 or more, get free priority shipping on all jewelry orders.     Money off.  Example:         Spend $25 or more and receive $5 off.   Save 30% on this item when you purchase one or more qualifying items. For every 5 pairs of socks purchased, save 20%.            Buy One, Get one.  Example:         Buy 2 lipsticks, and get 1 free. Buy a muffin pan, get a box of muffin cups free.     Bounceback.  Example:         Spend $500 and get 50 member loyalty points. Each of these options offers numerous ways for the customer to qualify.  The merchant can exercise many limits on which products are included or excluded. I am not aware of any other online option that allows you so many ways to promote your products.  I have used promotions to offer free shipping, free products and reduced pricing.  Although Amazon customers do not opt in very often for these promotions, we have some very loyal customers who watch our promotions.  We are now adding a flier in our shipments, showing customers what they missed.  Here is that filer: After three weeks, we are already seeing results.  We have tripled the number of customers who opt in for our promotions.   We have also increased our sales on Amazon by going to what we call the “Free Shipping” model for pricing.  Over and over, online buyers show that they don’t want to pay for “Shipping and Handling.”  I got the message several years ago.  Standard shipping is free on everything we sell.  Now that doesn’t mean that we are giving away the shipping costs and losing money on every sale.  Oh no.  We have increased the price of every product to include the shipping.   So, if my competitor charges $4 for the item, plus $1 shipping, I just charge $5.  Who wants to pay a $1 for shipping on a $4 item?  No one.  Buyers would much rather just pay $5 for it with FREE shipping.  This really pays off if you are selling products that people buy two or more in one sale.  I cannot overstate the impact this has had on our sales.  You should consider this strategy.  In order to implement this strategy, you must know your shipping costs.  Don’t guess because you’ll either lose money or price yourself out of the business.