Over the past 5 years, Amazon’s third-party seller landscape has changed drastically. From just a couple thousand sellers to now almost 10 million sellers worldwide. All of these sellers are hungry for profitable, replenishable, and high-demand products to stock their inventories and meet the needs of Amazon’s 300 million-plus consumer market. With such a competitive market becoming increasingly more popular by each day how do sellers differentiate themselves from one another and find strategies to beat out the competition?
One of the drivers behind successful Amazon sellers is is the utilization of seller tools to streamline and optimize their business practices. From Fulfillment by Amazon (FBA) to Fulfillment by Merchant (FBM), arbitrage to dropshipping, private label to wholesale, seller tools are the answer to unlocking your business’ potential and maximizing sales.
While seller tools provide an endless well of benefits, we’ll be covering the 4 key advantages of using seller tools and why you should start using them today!
Calculating a product’s profitability is one of the most tedious tasks for Amazon sellers. Before you can start sourcing or selling any product, sellers have to conduct proper calculations on any potential product to determine its profit potential. While some products can be extremely profitable, you never truly know how much money you earn unless you account for the cost of the product, shipping costs, and other service fees. Once you calculate the cost of selling the product, you compare this figure to the potential selling price and see if you send up with a positive profit margin. In some cases, a once-profitable product could be costing you money to sell. Then, you have to reiterate this process for every product you want to sell.
The most common tool used for profitability calculations and profit margins are profit calculators, like Amazon Revenue Calculators. Amazon provides a calculator where sellers can input their products by the identifier (UPC, ASIN, etc) along with the packaging dimensions to determine the fees and output the profit margin. With the revenue calculator and other similar seller tools, sellers can calculate profits for tons of products in a fraction of the time. One by one, you can input a different product, calculate its profitability, then move on to the next product.
While a couple of calculations aren’t too meticulous, can you imagine doing hundreds or thousands of calculations at once? This is a common problem for Amazon wholesalers, who work with suppliers with large catalogs with thousands of products. Wholesalers have to manually calculate every single product to find enough profitable products to sell on Amazon.
If you have a large catalog to break down, we highly suggest using a tool like Sellgo’s Search Management tool. The Search Management tool is like the Revenue Calculator, but instead of analyzing one product at a time, the Search Management tool allows you to upload and break down entire catalogs at once. This means you can calculate the profit margins of thousands of products instantaneously.
After the Search Management tool analyzes a catalog, you’ll get a summary of each product’s profitability and even be able to compare suppliers to one another!. You never have to calculate profit margins again!
Forecast Sales and Inventory
A difficult obstacle that many sellers face is forecasting sales and building up enough inventory to maximize revenue. To sell anything on Amazon, you need to have stock, products, things to sell. But how do you know how much to order? If you order too little, you’ll run out of inventory and miss out on tons of potential sales. If you order too much, you’ll have excess inventory sitting in Amazon’s warehouses that just end up collecting dust and costing you storage fees.
This is where forecasting seller tools come in handy. Forecasting is all about finding the perfect amount of products to meet demand but also optimize storage costs. In the past, sellers would have to forecast sales through trial and error. They’ll order ‘x’ of the number of products, see how well it sells, and then reorder more inventory based on the past sales performance. A disadvantage of this outdated method is that you don’t account for changes that may impact sales performances and forecasting. Things like seasonality and time-sensitive products can drastically impact forecasting.
Many modern seller tools have incorporated sales estimations as a way to conduct proper forecasting. Sales estimations provide sellers with a daily sales tracker that captures the average sales of a product per day. With sales estimations, sellers can estimate how many products they will sell over a 30 period, then reorder enough stock to meet those estimations. A great sales estimation tool you can use is Sellgo’s Product Tracker. The Product Tracker not only captures the average daily units sold, but also incorporates daily revenue, profit margin, and stock forecasting. This empowers sellers with real data that they can use to optimize their inventories.
Finding profitable products can be a very long process. From finding suppliers, calculating profit margins, and sourcing products, sellers may take hours or even days to find a single profitable product. A new tactic that has emerged from Amazon sellers called “super targeting,” helps cut down the product research time significantly. Super targeting takes advantage of the competition to streamline product research. Instead of starting research from scratch, many sellers are analyzing each other’s inventory.
Imagine you need to find a profitable product but aren’t sure where to start. Instead of calculating hundreds of products, you find another seller on Amazon. You view their profiles and see all the products they are currently selling. Since they are selling the product, you can imply that this product is profitable, replenishable, and in high demand. Rather than find a new product, you decide to sell the same product. You find your competitor’s supplier, source the same product, and then start taking their sales. This is called super targeting. It takes advantage of the millions of sellers on Amazon to cut down product research time significantly.
The only problem with super targeting is the sheer brute force it takes to analyze your competitors. Not only do you have to find a seller to take their products, but you also need to calculate their profit margins, find suppliers, and source the same products.
Sellgo identified this problem and came up with the Seller Finder tool to maximize the competitive strategy. The Seller Finder allows any user to look up a competitor’s entire inventory in seconds. Not only does it reveal a seller’s products, but shows their product’s brands, ASINs, marketplaces, inventory, and more. With the Seller Finder, you can take super targeting to the next level. Save time, and quickly identify profitable and high-demand products you can source now.
Task Delegation and Reinvesting Into Your Business
Some Amazon businesses grow enough that sellers begin expanding their teams. They may incorporate new employees like virtual assistances and warehouse workers. With so many tasks at hand, seller tools provide a great way for Amazon sellers to delegate tasks and responsibilities to other employees. With tools, sellers can quickly train up new employees, show them how to operate tools, and jumpstart their onboarding time.
For business owners, the ability to delegate tasks is invaluable. No really, it is. As a business owner, your time should be dedicated to developing long-term strategies and lead your team. Any time spends elsewhere, especially on tasks that can be done by anyone else, wastes a ton of your company’s resources and in many cases is detrimental to your cause.
Think of smaller tasks such as product research, calculating profit margins, or even super targeting your competitors. These tasks, especially with seller tools, can be done quickly and effectively when delegated to another employee. Seller tools empower sellers to recapture their valuable time that you can now reinvest into growing and accelerating your business.
Optimizing Your Amazon Business
The 4 reasons why you should use seller tools come down to maximizing your business’ efficiency, productivity, and most importantly, potential. There’s nothing wrong with selling on Amazon using old methods and tricks, they work and they are proven. But, if you had the chance to make your business better, your sales better, your employees better, why wouldn’t you?
Using seller tools is not just about making your business better, but optimizing your true potential and success. Whenever you’re ready, head over to Sellgo.com and let’s get to work. We’ll be waiting.