The Top 7 Strategies to Help You Do Better on Amazon

Amazon is one of the most successful e-commerce websites to have ever hit the virtual space. The eCommerce platform has garnered millions of customers across the world – in a short space of time.

However, if you are a seller on Amazon, be aware that it is heavily metrics-driven. The site uses seller performance metrics to ensure customer satisfaction. Amazon has set high standards that sellers must meet in order to have good metrics. If you manage to impress the e-commerce giant, you will be given better visibility which will lead to more conversations.

As an Amazon seller, we know it’s not easy. You need to keep trying to find ways you can improve your performance metrics. These following strategies are sure to work!

  1. Understand how metrics work:

If you focus on customer loyalty and can bring in more sales, Amazon will reward you with better rankings in search results. It, of course, will lead to better results for you.

Do remember that Amazon sees these three metrics all the time.

  • Your Order Defect rate, which it wants to be below 1%.

How many orders have you received a negative feedback to? Any order that receives a negative review, an A-to-Z service claim or a service chargeback goes against you. You should be able to address customer queries without them going to their card company to claim a chargeback against their transaction.

A low negative feedback profile is what Amazon expects from you. You need to work with the buyer to help avoid any unpleasant situations. So, refunds and returns should be welcoming if the product in question isn’t what the buyer expected.

If you failed to make it clear something in any way in the description, don’t hesitate to replace or refund. If the buyer initiates a A-to-Z buyer claim against you, it goes against your seller profile.

  • Your pre-fulfilment cancel rate, which needs to be below 2.5% at all times.

You shouldn’t really cancel any order after the buyer places an order and before you ship them.

  • Your late shipment rate, which needs to be below 4%.

How many orders do you have shipped on time? Orders that are confirmed to be shipped late goes against you. Additionally, at least 95% of your shipped packages need to have a valid shipment number. If the ratio gets below that, you may lose your selling privileges.

Do remember that if you are unable to meet these metrics, Amazon could suspend your selling rights.

Amazon demands that all the sellers should have a defect rate of less than 1%. The ODR is worked out on a lagging 30-day basis. If you have a high ODR, it might be because of poor reviews and customer-seller arguments.

Amazon also dictates that its sellers should not have a cancellation rate of over 2.5% which means that sellers’ should be very conscious about completing their orders. Last but not the least, Amazon wants the sellers to have a late shipment rate that is below 4%.

We will talk about these in detail below, when we talk about how these things can add up.

  1. A proper framework can help you sell better:

Once you have an idea about your metrics performance, you should establish a framework based on the data. Your main objective should be to not let your metrics go into the various “No-Go Zone”-s. If you do not meet the metric requirements, you will have a hard time getting the coveted Buy Box. Most metrics focus on shipping while the rest indicate seller performance. So, you know what your priorities should be when working out the plan.

A few metrics apart from the above, for instance, help separate one seller from the other. For instance, you could look at any of the following when selling:

– Your fulfillment method. You need to choose how you wish to ship the item to your customer. You can choose between FBA or SFP.

– How much your products would cost, which could be the total price you incur, plus any shipping fee.

– If your product’s available at all times. Amazon does look for sellers who can ensure better availability for products.

– How soon you can ship.

  1. Be careful when choosing your fulfilment method:

If you are joining Amazon as a seller, you should know that your fulfilment choice is likely to have a heavy bearing on your performance metrics.

Usually, sellers like to opt for FBA or Seller Fulfilled Prime so they can also reach out to Prime members. This can lead to an increase in the sales and prove to be convenient. On the other hand, some sellers might find the FBA to be reducing their profits instead because of the shipping costs. Your choice should be based on what will be good for the company.

  1. Do not ignore seller feedback:

Reviews and feedback can play a very important role in shaping your future as an Amazon seller. Usually, customers do not feel the need to leave a feedback if they are satisfied. You have to encourage positive feedback on your websites so that your customers feel the urge to take action instead.

Improving customer service and paying more attention to individual reviews is a good start. On the other hand, if you do have a negative review, you should focus on getting the problem solved so that you can ask the customer to remove the complaint afterwards.

– Preempt negative seller feedback when you can by taking a proactive approach to address customer queries.

– Ask customers to leave a good feedback, if they’re happy with what you’ve to offer.

– If a customer does leave a negative review, remain calm and try to address customer queries to help get the review removed.

  1. Allow incremental actions to add up:

As an Amazon seller, it’s not only sales that you should be looking for. Sure, every sale matters but you need to look at repeat customers and word of mouth to bring in more revenue.

Do remember that even small changes in specific metrics can make a big difference over time. Amazon creates thresholds that you need to climb in order to win the Buy Box.

For instance, research suggests that if you can ship your product to your customer in brackets of 0-2 days and 3-7 days, you’ve a better chance of winning the buy box than say is you ship in 14 plus days.

Similar is the customer response time thresholds. How soon do you respond to customer queries? Amazon expects you to get back to customers in as little as 12 hours. 24 hours is great too, but if you take more than it or never reply, it could be a significant roadblock on to your goal of reaching the Buy Box.

  1. Prioritise your metrics:

If you are business-minded, then you should work on the metrics which influence the Buy Box more intensely, sometimes at the expense of another. You should never ignore any metric completely, but figuring out your priorities will help you be more strategic when allocating resources.

We talked about the metrics above that you need to keep in mind. Keep a check on the success ratio for each at all times – it just makes your job easier. You can see your Account Health on Amazon Central to know what’s going for you – and what’s not.

  1. Focus on shipping times:

You must have understood by now that shipping is one of the primary determinants of seller metrics. Amazon likes to do a relative study between sellers who are competing for Buy Box. This means that if you shorten your shipping as compared to your competitor, you will stand a higher chance of getting that Buy Box. So, if you ship your product within a day or two, and your competitor takes as many as ten days, you are going to win!

Why You Need to Make Things Count

As an Amazon seller, focusing on the metrics count. Focus on customer loyalty, customer engagement and look to ensure that customers remain happy with what you’re offering. Be truthful in your product description page, and ensure all aspects of the product are covered.

At the end, do note that if you want to thrive in the Amazon marketplace, you cannot forget to play by their rules!

Delivery: How To Deal With Customers Who Are More Demanding Than Ever?

Demanding customers are never satisfied with anything and always want more. No matter how annoying they are, you have no choice but to talk to them politely and keep a constant smile on the face. If you think deeply, these demanding customers increase your expertise in the business because they are just like risks, which can be averted if analysed properly.

Customers tend to act demanding when they are making a big purchase, which is usually greater than their previous ones. Since they are putting in more money, they have huge expectations from you as an online retailer, which includes timely delivery and shipping costs.

According to a report that surveyed e-commerce websites in the United States, the United Kingdom, Australia, and Canada, 60 per cent of online buyers want free shipping. Around 25 per cent won’t buy the products if the shipping costs are more than $10.  80 percent of shoppers want to receive their purchases on the same day, and 61 percent want their orders within one to three hours of purchasing (Source: Internet Retailer, 2018)

Delivery has an emotional aspect to it because when the product reaches the customer, it is the first time they’ll be coming in contact with it. If the delivery isn’t on time or the shipping costs are too high, the experience won’t be as joyful.

The Top 5 Ways to Help You Manage Your Customers

As a new Amazon seller, you might find it a tad bit difficult to offer the customer service level your buyers would expect from you. To be a popular Amazon seller though, you need to know how to manage different customer expectations, to ensure that you are able to get the high reviews you need. Wondering how you can do that?

Here are five ways you can deal with demanding customers:

1. Offering different types of delivery

Offer your customers next-day, evening, and weekend deliveries to make them feel important. You can fix a certain threshold, above which all deliveries are free because the customer would rather prefer spending a few extra bucks and get something in return rather than just paying the fees for nothing.
Amazon is planning to start airborne delivery drones, so take advantage of that as well. Same day deliveries are a thing too, so if your customer is in a metropolitan area you can provide that service as well, but you will need to have a fulfilment center in big metropolitan areas like Madrid or Barcelona in Spain. Same day delivery was a service that Zara start to offer in 2017 in Madrid, and Amazon started this year in Madrid and Barcelona for prime members for free. There is new companies like Glovo or Deliveroo that can help us to delivery our orders before one hour in urban areas.

2. Choosing a delivery service

Always keep an eye for newer delivery services that provide faster delivery, so that the products reach your customers sooner. In Spain, most deliveries are made by Correos (including Correosexpress). Correos didn’t adjust according to demands of the Spanish population because of which its volume of business has decreased on the years. In the United Kingdom, most deliveries are made by Royal Mail and Parcelforce but there are many other good ones that have emerged lately.

3. Evaluate your business

It will take some time to come up with a shipping and delivery model that works for you business. Once you do, stick to it and evaluate the model regularly to make sure you are at par with the standards you’ve set for your business. Update the model as your company grows because better services mean more number of happy customers who’ll come back for more.

At the same time, don’t forget to experiment with newer services because the world is always evolving, so why not go along with it? Shipping suppliers come up with new offers now and then, so keep an eye on them too.

In return, you get two amazing rewards – better customer satisfaction and higher marketplace rankings. Also, have a plan for premium customers who are ready to pay a fee for quick delivery.

Your existing customers, who trust you for one product, have developed loyalty to you. They will be more likely to trust whatever product you diversify into. However, do note that diversification is by no means an easy affair. As an Amazon seller, you need to ensure that you can build on your loyal customers. You can do that by seeing that you can meet:

– The different customer preferences when it comes to shipping

– Ensure you keep any product regulations in mind

– Use multiple suppliers and shipping brokers to ensure a seamless experience for customers

4. Third-party fulfilment

Entering the international market has become easier than ever. All you have to do is simply hire a third-party fulfilment company that’ll store your products in their warehouse. When there’s an order placed, the company will make the delivery on your behalf. While you are saving a lot of money by entering a deal with the company, you also get tips on how to manage delivery and shipments that will help you in the long run.

5. Delayed delivery

Customers are going to be genuinely angry when the delivery is delayed, and you’ve got no choice but to handles the tantrums. So that you are prepared to handle the customers when they call or mail you, always keep an updated list of deliveries that are late. It is your responsibility to give them a quick reply and write or speak the reason in such a way that the customer isn’t angry anymore.

It’s a good idea to focus on new metrics like Same Day Delivery and out-of-hours delivery when you can, to better the customer experience.

Shipping and delivery is labour-intensive and time-consuming but also the very last part of the purchasing process. As a result, this makes it absolutely important to have a strategic plan for carrying out the delivery, so that is efficient and effective.

Comprehensive List of Amazon Seller Fees

If you are looking to sell on Amazon, you would have to take into account the different seller fees to ensure you aren’t in the red. Sure it can take a while to understand the most complex fees calculation that Amazon has, but if you know the different seller fees, you won’t have to worry.

If you are an amazon seller and download a payments report you will find 36 differents fees or more like A-to-z Guarantee Refund ItemFees RefundCommission, A-to-z Guarantee Refund Item Price Main Price, Chargeback Refund ItemFees Refund Commission, Chargeback Refund Item Price Principal, Lightning Deal Fee Lightning Deal Fee Lightning DealFee, Lightning Deal Fee Lightning Deal Fee Lightning Deal Fee Special, Order Item Fees Commission, Order Item Fees Cross-Border Fulfillment Fee, Order Item Fees FBA Per Unit Fulfillment Fee, Order ItemFees FBAWeight Based Fee, Order Item Fees Giftwrap Chargeback, Order Item Fees Giftwrap Commission, Order Item Fees Shipping Chargeback, Order Item Fees ShippingHB, Order Item Fees Variable Closing Fee, Order Promotion Main price, Order Promotion Shipping, Order Shipment Fees FBA transportation fee, other transaction ItemFees FBA Customer Return Per Unit Fee, BalanceAdjustment, BuyerRecharge, Current Reserve Amount, Disposal Complete, FBA Inbound Transportation Fee, FBA Inbound Transportation Program Fee, Non Subscription Fee Adj, Removal Complete, Storage Fee, Storage Renewal Billing, Subscription Fee, Refund Item Fees Refund Commission, Refund ItemPrice GiftWrap, Refund Item Price Goodwill, Refund ItemPrice Principal, Refund Item Price ReturnShipping, Refund Item Price Shipping.

We will take a look at all seller fees you may have to pay.

As a seller, you would receive your Amazon Payouts every two weeks. However, businesses which have an operating cost and supplier bills, receive a bi-monthly Amazon payout.

The Complete List of Amazon Seller Fees

Amazon has different codes for each of the seller fees. Here is a look at all the seller fees you may come across as an Amazon seller, and what they mean.

1.     A-to-z Guarantee Refund

The A to Z Guarantee Refund fees applies to any problems with the order, like the shipment getting delayed, where Amazon issues a refund to the customer and charges the same to you.

  • Refund Commission – The expenses for the refund are debited from seller account when refunding a customer.
  • Main price- The price of the item refunded to the buyer after filing a claim.

2.     Chargeback Refund

If the buyer makes a chargeback on his payment method, Amazon will charge you for it. Here is what can happen.

  • Refund Commission – The charges deducted by Amazon while refunding a customer.
  • Main Price- The refund of the principal amount to the buyer for an item in case of a chargeback.

3.     Lightning Deal Fee

Should you decide to feature your product on the Amazon Deals page, you will need to pay a fixed lightning deals fee.

Lightning Deal Fee Special – Apart from the usual lighting deal fee charges for featuring your product on Amazon Deals page, you will need to pay more when higher traffic is expected. Featuring your product then could, in turn, lead to higher sales for you.

4.     Order Related Fees

There can be a different order related fees, according to the situation. Here are some of the common order related fees.

  • Commission– It’s the commission charged by Amazon for the sale of products on Amazon.
  • Cross-Border Fulfillment Fee- The fees charged for orders to any of Amazon’s other markets, apart from your local home market.
  • FBA Per Unit Fulfillment Fee- It’s the FBA fulfilment fees charged by Amazon per unit of product.
  • FBA Weight Based Fee- Denotes the fulfilment fees charged to you based on the weight of the shipped item.
  • Gift wrap Chargeback- The reversal of gift wrapping fees paid to the seller by Amazon FBA.

4.6. Gift wrap Commission– The fee charged for gift wrapping by Amazon.

4.7. Shipping Chargeback– It is charged against Amazon fulfilled orders and equals to the amount charged to the customer. On Amazon orders for Prime members, Amazon still pays the shipping charges somewhere and has to mark it in accounting as such. Sometimes the customer does and this is what you are seeing: what the customer paid Amazon during the entire order.

But since you’re paying the weight fee and other fees for FBA, you don’t get that credit. Amazon needs to cancel it out from your payment so they do what is called a shipping chargeback.

There is a bit of anger to this as Amazon is essentially “double dipping” on shipping when it comes to sales because you can sell 100 orders for the same product and 50 will have no shipping charges and the other 50 Amazon will have Amazon rolling in shipping cash but you will always see the same amount for all of them.

4.8. Shipping HB- Fees charged by Amazon for handling and shipping of products.

4.9. Variable Closing Fee- Charges per item applied on media products like video games.

5. Promotion fees

Amazon sells your products on promotions and charges you some fees-

  • 5.1. Main price– The amount of promotional discount charged on the principal of the product.
  • 5.2. Shipping– The amount of promotional discount on your product is charged back from your account.

6. Shipment Fees

These include fees charged for shipment of products.

  • 6.1 FBA transportation fee– Charges incurred by Amazon per order towards FBA Multi-Channel Fulfillment.

7. Refund

You have to pay these charges related to refund of products to the customer.

  • 7.1. Refund Commission- Charges incurred for refunding the product to the customer.
  • 7.2. Gift wrap– Refund of gift wrapping fees charged by you.
  • 7.3. Goodwill– Sometimes, Amazon reimburses you for any refund costs related refund to the customer. The amount is generally credited back within 45 days, and you don’t have to pay for the refund costs.
  • 7.4. Principal– Refund of the principal amount of the product to the customer.
  • 7.5. Return Shipping– Refund of return shipping fees to the customer which is charged from your account.
  • 7.6. Shipping– It’s the refund of shipping charges to customer debited from your account.

When can you get a credit of a refund?
While somewhat unlikely, you might also get credit from Amazon if a customer tries to return an item that is not eligible for a full refund. In that case, the amount the customer pays as the restocking fee gets added to your account.

You can also get a refund credit if your product gets lost or damaged in the Amazon warehouse during transit.

There is situations where you can request a credit but we will cover in another article.

8. Other Transactions

You have to pay the following miscellaneous fees depending on your situation-

  • 8.1. FBA Customer Return Per Unit Fee– Fees for products returned by the customer under free shipping.
  • 8.2. Balance Adjustment- Adjustments for overpayment. Review settlement report for more details on the specific transaction.
  • 8.3. Buyer Recharge– Amount charged from a customer for the refunded product.
  • 8.4. Current Reserve Amount– Standard reserve amount debited for 6 months in case of new sellers to protect buyers.
  • 8.5. Disposal Complete– Fees applicable when you dispose any item from FBA inventory.
  • 8.6. FBA Inbound Transportation Fee– Fees charged for shipping your item to FBA.
  • 8.7. FBA Inbound Transportation Program Fee– Chargeable in case of Amazon accounts for shipping products to fulfilment centers through UPS service.
  • 8.8. Non-Subscription Fee Adjustment- Chargeback of double payments made by Amazon from your account.
  • 8.9. Removal Complete– Fees for removing your products from FBA inventory.
  • 8.10. Storage Fee-Storage fees for your products which have been sitting in FBA center for more than 365 days.
  • 8.11. Storage Renewal Billing- Fees for renewing your product storage in FBA centers.
  • 8.12. Subscription Fee– Amount of fees for your preferred selling plan on Amazon. You can go for either professional or individual selling plan.

The Costs You Don’t Need to Worry About

There are a lot of Amazon seller transactions. The more you engage yourself in the Amazon online selling business, you will realize how significant it is to manage your business operations, starting with storing, packaging, shipping, uploading to selling.

There is also a Goodwill customer refund, where Amazon refunds a payment for an item to the customer on their own, without you having to pay for it.
If you found a fee not listed here let me know commenting this article.

The Top list of Amazon seller fees You Need to Know

Here are the top Amazon seller fees you would need to take care.

1.   Amazon sale related transaction fees:

As a seller, you have to pay three different fees.

  1. i) Referral Fee, ii). Minimum Referral Fee, iii) Variable Closing Fee.

Referral Fee

Amazon puts referral fee on every product it sells. Depending on the product category, there is a different referral fee.

The fee generally depends on the item you are selling because of the referral fee dependent upon the price of the product itself.

Referral fees range from 6% to 20% (45% for Amazon devices); most Amazon sellers pay a 15% referral fee.

Minimum referral fee

If you are selling a low-cost product, instead of paying a large percentage value, you will be charged a flat $1 or $2 depending on the category. For instance, you may have to shell out $2 if you’re selling products in the Jewelry and watches category.

Variable Closing Fee

If you want to sell anything under the Media category – which can include anything from books, music to games – you have to pay an additional fee, known as the Variable Closing Fee. This fee varies based on the category, type of shipping service availed and destination.

2.   Amazon Seller Account Fees:

Your Amazon Seller account would be either of the following:

  1. i) Individual Seller Account, ii) Pro Merchant Account

Depending on the type of account, your fees would vary.

i)               Individual seller accounts

If you are starting out with a low volume of products as a new seller, it’s the option you need. The account set up won’t cost you any fees, but it has its limitation too –

  • You won’t be able to sell more than 40 products each month.
  • There is no bulk upload feature; expect to list all your products manually.
  • No inventory management feature available, and you won’t be able to gift wrap as well.

ii. Pro Merchant Account

Referral fee and variable closing fee are what you would be paying if you are a pro seller with a large volume of sales. As a pro seller, you may have to pay a fee of nearly $40 a month, but it comes with features you would need when it comes to managing large sales volume, like inventory management, bulk uploads, and gift wrapping options.

3. FBA Fees

FBA, known as Fulfillment by Amazon fees, helps track your stocking, shipping, and packaging of Amazon order. Both individual and pro – sellers, can have access to FBA. FBA fees depend upon product weight and size. It will charge you to use the logistics management service.

  1. FBA fees include two services:
  2. i) Pick, Pack and weight handling fees, ii) Monthly Storage Fee

i)   Pick, Pack and weight handling fees

It’s what covers your entire shipping cost.

ii)   Monthly Storage Fee –

It’s what you pay to store any products in the Amazon’s inventory you have to pay a monthly storage fee.

FBA fees also depend on the product’s weight and size –

Amazon divides FBA product category into two sizes.

Standard size products –

If your item weighs less than 20 pounds and has dimensions lesser than 18”*14”*8, you qualify.

Oversize Products –

Products exceeding the above parameters are considered as oversize products.

The Other Fees You Need to Take Into Account

Apart from the usual Amazon seller fees, there are other

1.    Amazon Shipping Credit and Cost

Amazon provides you a shipping credit if you ship your Amazon products yourself. It helps you to compensate for your shipping expenses. Shipping Credit cost depends upon the destination, total size, the weight of each package and time taken to ship your Amazon order. However, do note that most often the shipping credit you receive is less than what you would pay

2.    Bank Fees

Amazon deposits your cash directly into your bank account. If your money is transferred across the international borders, your bank will charge a fee for per transaction. It’s advisable for you to keep track of this fee.

If you make $500 a month as profit through sales and your bank charges $50 per deposit, you would only make a profit of $450.

3.    The Real Costs

If you are an Amazon seller and pay tax, the sales tax cost is directed to customers after all the Amazon fees have been calculated.

Do factor in the real costs. The real costs can include –

  • The cost of producing or buying the product.
  • The logistics management cost.
  • Per the transaction cost of the product.
  • Any overhead expense such as selling plan fee, transaction fee, storage fee and others.
  • Your own business set up costs, such as government permit expenses, salary payments to your freelancers and employees.

4.    Other Amazon Commission Fees

There are several Amazon commission fees to note. There can be an adjustment fee, an order item fee, or even a refund fee. For instance, when a customer asks for a refund, you would be charged a corresponding amount to the original fee.

There are also fees like Gift wrap charges. Should a customer need a gift wrap, Amazon first notifies it to you as income and then makes a chargeback equal to the value charged to the customer.

This is an introduction to the amazon seller fees, but there is other fees that amazon can charge, I have wrote a Comprehensive List of Amazon Seller Fees of all amazon transactions where you can find a complete list of fees, if you have any doubt or found a fee not listed let me know commenting this article.