The demand for eCommerce surged in the wake of covid 19. According to UNCTAD, the online share of the total retail sales increased from 16% in 2019 to 19% in 2020. Buyers are willing to pay more for Amazon stores due to the shift in consumer behavior and the increasing number of aggregators. For Amazon FBA sellers, how do you maximize your brand valuation to get the most from this important deal?
Here are the top ten tips to maximize your brand valuation:
- Optimize Your Amazon Store
Amazon uses the A9 algorithm to determine product ranking in a way how Google’s search engine works. Google Search considers keywords while Amazon’s A9 algorithm focuses on sales conversions. The A9 algorithm improves the ranking of products with high conversion rates and sales history. High-ranking products validates your business proposition and in return, receives high-quality traffic. To maximize your brand valuation, optimize your Amazon store.
Optimization is essential for success whether you’re selling your Amazon FBA business now or later. But how do you optimize your store for the A9 algorithm? Enhance your product listing page by providing relevant content to drive traffic and conversion.
- Optimize your product listing using the relevant keywords.
- Add high-definition images, videos, and benefit illustration to your product listing pages. You can use third-party software to implement these multimedia features in your store.
- Enhance content visibility and readability using concise bullet points.
- Use an optimized product title for the A9 algorithm to crawl and index it.
- Use informative descriptions to differentiate your products from the competition.
- A/B testing
The idea is to optimize your content and pages to convey your unique brand story and influence shoppers’ buying decisions. Focus on demonstrating your products’ selling points and benefits over your competitors. Optimizing your listings for conversion is an effective way to boost traffic into your store, drive sales, and increase the overall value of your Amazon FBA business.
- Fine-tune Your Inventory for SKUs
Aggregators tend to look for businesses that generate revenues from a handful of ASINs. Non-performing ASINs reduce your cashflow and undermine your overall business performance. To optimize your inventory, apply the 80-20 Pareto Principle. This principle asserts that 20% of all causes deliver 80% of outcomes.
The idea is to identify and prioritize best-selling products in your inventory. Review your catalog and drop non-performing items. You can sell slow moving products at a discount to entice buyers. Streamlining your inventory can improve your business performance and boost brand valuation.
- Off-Amazon Branding
Building a community outside Amazon can boost brand equity. You can leverage social media platforms to drive traffic to your Amazon store. Focus your off-Amazon branding efforts on social media platforms that improve the credibility of your brand. Posting value-added content and social proof will go a long way.
Off-Amazon channel is also about diversifying your business profile and sales channels. If your business is primarily dependent on Amazon, there represents concentration risk. Events such as hero products being delisted, change in amazon inventory policy and downward price pressure can have an oversized impact on your business. The adage “Don’t put all your eggs in one basket” comes to mind. Establishing sales channels outside Amazon can improve the resilience of your business.
Here are a few strategies to diversify your sales channels:
- Run Google ads with a discount for your product. Then link it to a landing page with an opt-in discount code for a sales funnel.
- Leverage Amazon’s Multi-Channel Fulfillment (MCF) to sell through other sales channels.
- Sell your products via social media.
Diversifying your sales channels can increase your sales and improve your brand valuation. You can rely on an aggregator like Rainforest to take your Amazon brand to the next level.
- Amazon Reviews
Reviews are essential for your store’s reputation and the popularity of your products. Seeking safety and comfort in the mass is ingrained in our DNA. This form of validation applies to both Amazon shoppers and aggregators. Most Amazon shoppers will consider other customers’ reviews before they make their purchase. Amazon businesses with positive feedback can attract and convert customers, which is important for buyers. So, how do you get more reviews? Offer excellent service and leverage automated software to request reviews from customers. Most aggregators require product rating of at least 4.5 stars.
- Simplify Operation
The value of a business increases when it attains a structure and culture of its own, allowing it to operate seamlessly without much work from its owner. Aggregators are looking to acquire an asset that provides either cashflow or growth potential, not a job.
According to Jungle Scout, 57% of Amazon sellers work for less than 20 hours per week. To increase brand valuation, reduce the number of hours required per week. In today’s digital age, you can utilize several innovative options to attain hands-off operations. For example, you can outsource time-consuming business operations like social media scheduling to freelance virtual assistants or various automation software to free up your precious time.
- Social Media
Although Amazon provides order fulfillment updates, it does not allow store owners to contact customers directly. These are Amazon’s customers after all. Expanding your audience beyond Amazon can help your business to connect and nurture long-lasting relationships with customers. The ability to interact with potential buyers can boost your brand valuation.
You can expand your audience by building your email subscriber list. Growing an email list allows you to run marketing campaigns outside Amazon PPC, FB advertisement or Google Ads. Social media and online communities can connect you to potential customers in your niche. An example: Mighty Patch leveraged on various social media handles to promote its acne patches. Within a span of 5 months, Mighty Patch acquired 2 million followers on TikTok and reached 4 million audience via social media. An engaged community is a validation of the brand equity.
- Amazon Brand Registry
If you are selling your own private label products, Amazon Brand Registry is essential. This program provides greater control over Amazon storefront and product listing. It increases your sales and offers you better intellectual protection.
As a trusted seller, Amazon will unlock other functions, including:
- The A+ Content Manager for testing product listing structure.
- Robust analytics feature for easy access to data on customer search and purchase trends.
- An easy-to-use store builder and templates for creating custom Amazon storefronts.
All these advanced capabilities can improve product listing and sales, leading to an increase in brand valuation. According to statistics, Amazon’s Brand Registry program surpassed 100,000 enrolled brands in 2020. Amazon brand registry is an essential part for brand building purpose.
- Robust Supply Chain
Supply chain is an understated yet essential for any business. Its importance for Amazon FBA businesses has been realized in the past year due to COVID19. Stock out = No Sales!
Having a reliable and efficient supply chain can reduce stock out. This way, your listing will not be penalized by Amazon. So, how do you establish a secure supply chain?
- Helpful to have two or more suppliers for any product.
- Look for suppliers based in different countries.
Diversifying your supply chain builds resilience in your business. A strong relationship with suppliers is an asset. It can increase the value of your Amazon business and attract buyers.
- Proper documentation
Aggregators like Thrasio, Berlin Brands Group and Rainforest will require proper documentation and financial records to assess your business valuation. Financial statements, receipts, trademark registration and patent certificate are essential.
- Scaling your business
Expanding your target market increases your store’s growth potential and value. If you’re only selling on Amazon.com, leverage on Amazon’s Global Selling program or North America program. With Amazon Global Selling, you can leverage on existing ratings to grow your sales.
With the increasing vibrancy of the eCommerce sector, this inevitably creates a stronger interest in e-commerce brands. The best strategy is to utilize the most appropriate tactics based on your brand’s unique proposition and business model. Choosing the right buyer is paramount to the long-term success of your brand.
This is a guest post from Rainforest. Rainforest buys e-commerce brands and build on its success. They believe in improving the brands’ longevity and financial returns. And typically take 7 – 8 weeks to finalize the whole acquisition process. To maximize your payout, get a valuation today!