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Amazon

How to Move the Amazon Flywheel (and Profit from Doing So)

by Guest Post

The Amazon Flywheel

This post is brought to you by our friends at Seller Labs

The Amazon Flywheel (AKA The Bezos Napkin Sketch)

Below is the now-famous visual of the Amazon Flywheel. We can understand the mechanics of it with just a little knowledge of Newton’s First Law of Motion, which, simply put, states that unless acted on by an external force, a body at rest tends to stay at rest and a body in motion tends to stay in motion.

Amazon flywheel Amazon sketch

We know this from our own experiences with momentum. Consider how much effort it takes to start a bicycle at a dead stop and get it moving on an upward incline. However, once you get it going and you are pedaling consistently, things become immensely easier. And after you’ve built momentum or leveled off to flat terrain, pedaling feels smooth and nearly effortless and as if your legs aren’t exerting force but just moving along with the wheels that are turning on their own. That part, when a wheel is turning and it’s fast and smooth and seemingly powering itself, can seem almost magical in its ease, flow, and both the use of energy and the conservation of it. It’s positively elegant in both simplicity and sophistication. That’s the optimal Amazon Flywheel zone and it’s totally achievable for Amazon sellers who have great products and who tend to the smaller wheels powering the bigger Amazon Flywheel.

As a seller, you turn some of the gears that are essential to the larger flywheel motion. And the better you do that, the more Amazon rewards you, and the more your business on Amazon will grow at the expense of your competitors. There is no trick to achieving this. Amazon wants you to succeed and it makes no secret about how sellers ought to go about that. If you understand the pieces of the machine and the way in which the machine works, you can run your business accordingly and you will prosper. The challenge is not so much in doing this and following the rules but in being better at it than your competitors, attending to all four seller gears simultaneously, and understanding that optimization is never complete and that it requires ongoing innovations, additions, experiments, and edits.

Understanding the Basic Tenets Guiding All Things Amazon

First you need to understand the tenets upon which the Amazon flywheel and Amazon success in general are based:

  1. Above all, the customer experience is everything. You know this, but just take a moment to remind yourself of it (the new policy changes to Amazon third-party seller returns and refunds serves as a great example). At the heart of everything that Amazon does is customer satisfaction and keeping customers happy and buying more and buying beyond what they thought they wanted, needed, or could even acquire through Amazon.
  2. Success begets success on Amazon . . . and that success is rewarded.
On Amazon’s side, this relates to efficiencies and costs (Lower Costs -> Lower Prices -> Growth -> Lower Costs . . . repeat). We see this with Amazon’s cutting-edge logistics in fulfillment and delivery and how that lowers costs and prices, allowing the company to invest more in technology and innovative products and exclusive offerings. To say that this has paid off for Amazon is an understatement. On the seller side, this relates to selection, speed, sales, and profits, the latter of which Amazon gets its share (More Sales -> Better Rankings -> Better Placements -> More Sales . . . repeat). Your success as a seller is integral to Amazon’s success as a marketplace and an organization. Amazon wants you to succeed because it is in their customers’ best interests and thus in Amazon’s best interests.

 

Wheels Turning Wheels: The Seller’s Role in the Larger Flywheel

With foundations in place, we can now explore the smaller parts at work and how when these things (the gears powering the larger flywheel) are in harmony and humming along, the result is smooth and fast and profitable.

The gist is as follows: If you provide compelling listings, you’ll get more conversions and sales. When you start selling more of a product, that product will rank better. When that product ranks better, it gets better placement. With better placement, a product sells more. When a product sells more, it ranks better . . . and the beat goes on. In the model, motion can be accelerated organically by good reviews and great customer service. It can also be accelerated artificially by a seller using things like Sponsored Products ads or Headline Search Ads or promotions. Feed the cycle and the cycle will repay you.

Below is a visual representation. For each component, I’ll add some brief info and resources.

Amazon gear

The Gears and How to Turn Them into Power and Profits

DISCOVERY: Simply put, this is the ability to show up in search results. Shoppers can’t buy what they can’t find. Help them find and buy your product by making it relevant to the Amazon A9 algorithm and thus search-friendly for shoppers. Remember that each required field is an opportunity to have your product found, and in turn, purchased.

  • Title: You only have 200 characters to use so use them wisely. Include brand name, what the product is and what it does and variations of those for which shoppers may be searching. Not sure you’re doing titles correctly, check out 5 Title Myths That Could Be Killing Your Amazon Traffic & Sales.
  • Bullet Points: Make them easy to read, formatted in a consistent fashion, and full of pertinent information. Go the extra mile and anticipate questions shoppers may have and answer those questions preemptively. If you stand by your product (and you should), include (and tout) a guarantee of some sort.
  • Keywords: Remember that you are peppering your entire listing with keywords that will be used throughout in the title, headline, bullets, description, and on the backend. Research which words matter to users and to Amazon’s algorithm and distribute those well and wisely.

TRAFFIC: Here we’re talking about clicks, plain and simple. You’re taking a shopper from having found your product and seen it to clicking on it for further info and possible purchase. Here’s how you drive traffic and cross that bridge from impression to click:

Note: The pages linked to in the above section arrive at different destinations due to the differences between Vendor Central, Vendor Express, and Seller Central. Please use the links relevant to your Amazon selling platform.

CONVERSION: Now it’s all about sealing the deal. You’ve got a potential buyer on your detail page and now you need to move that buyer to adding your product to his or her cart and checking out. Remember that completing the sale is the number-one way in which Amazon measures success. Did Amazon match the right product to the buyer? Did that buyer make the purchase? The answers to these questions are in large part how rankings shift and sales get rewarded with better placement that further increases the likelihood of subsequent sales. Getting in on the “More Sales -> Higher Rankings -> More Sales …” cycle is where every seller wants to be.

  • Detail Pages That Rock: A+ Content (for 1P vendors) and Enhanced Brand Content (for brand-owning 3P sellers) don’t just prettify product detail pages, they allow you to tell the story behind your brand and your product. These content-rich pages leave standard pages in the dust in terms of look and feel and delivering compelling communication.
  • Photos: Yes, yes, yes! Use them, and not just snaps of your product from various angles. Lifestyle snaps of people using your product speak volumes. Make sure that your images are clear, appropriate, and high-resolution.
  • Video: This is currently only available to vendors using A+ Content, but word on the street is that video will soon be available in Enhanced Brand Content. Now that would be a Q4 holiday gift to sellers.
  • Q&A: I already mentioned this as fodder for bullet points but I mention it in this section because answering questions (preemptively or in quick response as asked) not only provides crucial information to shoppers, it gives them the confidence to buy and it shows that you are an attentive seller).
  • Promotions: Run them well and you’ll sell more, in turn helping your ranking, which in turn helps your placement and turns the gear. Seller beware: promotions can go very wrong very quickly as Amazon itself found out.
  • Fulfillment by Amazon (FBA): FBA has changed the way Amazon sellers do business. Not only does it take some of the burden off of sellers in terms of packing and shipping, FBA comes with Prime, which means fast, free shipping from an Amazon fulfillment center. When you use FBA, you get “Fulfillment by Amazon” on your detail page as well as the Prime checkmark icon. This speaks volumes to customers who now see your product as Amazon endorsed and your business as a part of the Amazon family. So in addition to the practical benefits like fast shipping and easier returns, customers feel a comfort and confidence with these products. This does wonders for conversion rates. As well, because Amazon is extra invested in products that they represent via Prime inclusion, FBA items get a bump up in terms of Amazon rankings.

REVIEWS: What buyers (especially buyers who have made verified purchases) say about your product matters as much, if not more, than anything you can say about it. Product reviews are a must. A product without reviews is a turnoff to any buyer because no one wants to be the first to take a chance. And don’t disregard your competitors’ reviews, those can provide you with valuable information.

  • How to Get Positive Reviews:
  • Remember that it’s Amazon so everything is about providing a great customer experience. Provide an awesome product at an excellent price and get it delivered fast and make right any wrongs (even if the customer is at fault). When you do these things well, you not only get good reviews, you get shares and your customers recommend your product (and brand) to their friends. Without these basics, you’ll find yourself not just without reviews (and without sales) but with negative reviews instead, which will get you in hot water with Amazon.
  • Follow up using a feedback-generating tool such as Feedback Genius and listen to what buyers are saying. Address their concerns and make the appropriate changes to your listings and processes.
  • Go Beyond Your Product: Check competitors’ reviews and look for any trouble spots that customers have experienced. Turn your competitors’ negatives (e.g., “product has weird rubbery smell that never goes away”) into your own positives by addressing these issues in your product listing information (“guaranteed to be odorless”).

Do Not Confuse Inertia with Complacency

If this all seems like a lot to do and manage, remember your physics and the flywheel model and that the hard part is setting it in motion. Once you do the heavy lifting there and set yourself up for success by attending to the above gears, kinetic energy kicks in and the wheel will keep spinning (barring changes to the circumstances). This being e-commerce, however, changes will indeed take place (and Amazon will indeed make changes often and without notice). Sellers cannot anticipate all of these or how the changes will affect the marketplace. That said, do your part to keep the flywheel spinning smoothly—keep your gears clean and well oiled, stay informed, seize opportunities, and be nimble when changes do kick in—and you’ll be rewarded for it.

About the Author

Lena Liberman is the senior copywriter at Seller Labs. She has nearly 20 years of editorial experience, heavily concentrated in the fields of technology, publishing, and education. When not gathering information and writing about it, Lena can be found restoring vintage furniture or hiking with her dogs.

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