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Amazon Prime is Leading the Way for Online Shipping

Move over Super Saver, Amazon Prime is the new preferred shipping method. Amazon.com recently announced they ship more items using Amazon Prime than its alternative shipping method Super Saver. Since launching in 2005, Amazon Prime has embedded its self into the hearts of online shoppers giving them unlimited two-day shipping on all eligible items for a membership fee of $79 annually. The Super Saver Shipping program, which started in 2002, still offers free shipping on all orders over $25.

Although Amazon did not disclose how many orders are sent via Prime, they did however, announce that third-party sellers accounted for 40% of unit items sold. This marks the highest percentage ever recorded for third-party sellers, proving Fulfillment By Amazon is helping drive these numbers and offering a wider selection of inventory than Amazon could on their own.

So far this year, the top three items purchased through Amazon Prime are the Kindle Fire tablet, the Kindle e-reader and the Kindle Touch. The number of eligible items for Amazon Prime has blossomed from 1 million items in 2005 to over 15 million today.

“Since Amazon launched in 1995, we’ve been focused on growing selection for our customers. Following the introduction of Amazon Prime in 2005, we’ve worked hard to grow Prime selection as well. We’re incredibly proud to be able to offer more than 15 million Prime items today. We’ve also grown the Prime Instant Video library to more than 22,000 movies and TV episodes, all with unlimited streaming, and Prime members can borrow more than 180,000 books for free, with no due dates, using the Kindle Owners’ Lending Library – that’s up from roughly 5,000 when the program launched less than a year ago. Even seven years later, the price of Prime remains unchanged at $79 a year. Amazon Prime is the best bargain in the history of shopping, and it’s going to keep getting better.” 

-Amazon founder and CEO Jeff Bezos

Amazon Webstore Offers Two New Services for Sellers

November 13, 2012—Amazon.com is giving third-party sellers a helping hand. Earlier this week Amazon webstore announced they are offering two new services for sellers using both Fulfillment By Amazon and self-fulfillment. The news comes days after Amazon.co.uk launched a new seller rating system that will impact seller feedback and scores.

The first service pertains to Fulfillment By Amazon and allowing third-party sellers who use the service to choose whether or not their products are shipped using Amazon branded boxes or unbranded. The new service will permit sellers to use their own customized packing slips and contact information, as well as add their company name to the boxes. This is great news for third-party sellers as they now have more control to promote their storefronts and brands through Fulfillment By Amazon.

The second service immensely helps Amazon sellers as it offers discounted shipping rates for self-fulfilled orders. The new service, which is accessed through Seller Central, allows third-party sellers to pay for shipping services, print domestic and international shipping labels, and set default ship-from addresses. This is big news for Amazon sellers as USPS announced earlier this year they are increasing shipping rates at the first of the year.

Amazon Prime Launches in Canada

January 8, 2013—Today is a good day to be a Canadian. Amazon.ca today announced the launch of Amazon Prime, a membership program that provides free two-day shipping on eligible orders for $79 a year. Canadians can now register for Amazon Prime which allows shoppers to receive unlimited Free Two-Day shipping, One-Day shipping for as low as $3.99 per item, and Free Standard shipping to rural areas on almost all orders. Prime is available on items in categories like electronics, baby, kitchen, books, movies, music, watches, sporting goods, tools and more.

“We are proud to bring Amazon Prime to Canada,” said Steve Oliver, country manager for Amazon.ca. “Amazon Prime offers its members the convenience of fast, free shipping on millions of eligible items, whether the order is for a single DVD or a kitchen mixer. There is no minimum purchase amount and no need to consolidate orders, so Canadians from coast-to-coast can enjoy a simpler, faster shopping experience.”

Although Amazon customers in Canada can now enjoy the benefits of Amazon Prime, one thing they won’t be able to enjoy is Instant Video. Similar to Netflix, Amazon’s Instant Video service allows Prime users to enjoy video streaming straight from their television for free. Currently Amazon has no plans for the video service to join Prime in Canada any time soon.

Customers in Canada can try Amazon Prime for one month free, by visiting www.amazon.ca/prime.

Atandra.com

Managing Amazon Orders and Inventory has never been so Easy

Since 2004 Atandra.com has been creating integrated software exclusively for e-commerce sellers. Their highly-touted product, T-HUB, has revolutionized the way merchants sell and manage orders online, making it the #1 integrated software with QuickBooks and Amazon. With over 4500 merchants successfully operating and profiting from T-HUB, the time is now to find out how Atandra.com can help you!

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Dynamic Amazon Repricing – The Need to Embrace Variable Profit Margins

As an Amazon retailer, what should my target profit margins be? Should I be aiming for keystone retail margins on Amazon? Should I be setting prices to make the same profit margin on all of my products?

As any successful retailer in any market knows, performance is all about profit
margins – How much are you taking home after the customers have paid you for the goods? This bottom line question must be addressed to execute a successful merchandising strategy on Amazon. In this article, I will explain how Amazon retailers should recognize the shift of commodity trading at the core of their business and need to be focused on dynamic pricing to be successful.

In the world of e-commerce, where retailers have the potential of addressing very large demand from potentially millions of Amazon’s customers with low cost, optimally adjusting prices to match demand can have a tremendous return for even smaller retailers. In fact, in a commoditized market where customers focus on price and speed and cost of delivery, size truly doesn’t matter – Amazon enables any retailer to compete for the same customers as the likes of Best Buy, Toys-R-Us, or Macy’s.

As more vendors seize the online opportunity on Amazon, competition increases and as the basic laws of economics dictates, prices tend to decline. Unlike a traditional brick-and-mortar retail scenario, consumer demand is not limited by foot traffic and product pricing is not rigid. E-commerce retailers need to set prices fluidly often several times a day to be competitive on a national or global scale. It’s purer supply and demand economics – competition and efficient supply means many products are commoditized, a retailer who has the lowest price for a hot product on a marketplace shopping site such as Amazon may capture hundreds of sales for a single item. Pricing optimally can mean thousands of even millions of dollars a year from a single product.

The Amazon opportunity and its economics are revolutionizing retail. With only the cost of commission paid only when a customer purchases, any retailer can offer virtually any product to the world’s largest customer base. With extremely low barriers to entry, Amazon’s simple formula works, the Amazon ecosystem provides the customers and transaction platform whilst the retailer provides the commodity.

So, now you’re marketing your products on Amazon to millions of potential customers only to find you’re competing against a dozen people doing the exact same thing with the same products. Should you lower your prices?

With any rational customer naturally purchasing from the lowest priced merchant – the question relating to pricing is ‘How Low Should I Go?’

When selling on Amazon solving the puzzle of dynamic pricing and variable profit margins really matter. If I try and sell everything at a 50% Gross Margin, I might be missing a hundreds of sales as another retailer is will to go down to 40%. Should I go down to 40% too, or perhaps 20% of even 10%. After all, 10% Gross Margin from a $100 product selling 50 units a day is a far better for the bottom line than a $10 product selling at 50% Gross Margin selling 1 unit per day.

A savvy Amazon trader would recognize this opportunity and adapt rapidly. At Teikametrics we help clients with this process, we call this ‘Floor Analysis’. By analyzing the lowest Gross Margin thresholds, a.k.a. ‘the floor’s for each product, a vendor can balance volume versus margin. This is the key exercise required with the configuration of a successful Amazon Repricing strategy.

The end result is many variable margin sales which are aggregated to create one combined bottom line profit average across the catalog. This is a portfolio approach similar to an active trader of public stocks and shares. Individual stocks are traded at different velocities but performance is measured based on overall portfolio returns.

As technology evolves and marketplaces like Amazon become more competitive it’s the adaptive and dynamic retailers that will survive – a new approach to pricing is necessary and those who fail to recognize this will be left behind as the nimble and intelligent companies embrace the opportunity.

 

About Alasdair McLean-Foreman

As the Chief Executive Officer, Alasdair is responsible for Teikametrics’ overall business strategy and day-to-day operations. Alasdair founded an e-commerce company in his dorm-room which grew into a multi-million dollar company selling high-end sporting goods. He also founded the weight loss and fitness company Traineo and has built and provided e-commerce solutions to large organizations including Newscorp, The Times of London, L’Oreal, and The New York Marathon.

Alasdair earned a Bachelor of Arts in Economics at Harvard University where he was captain of the Track and Field Team and a member of the Great Britain and England national track teams.

Amazon still Beating Wal-Mart in Toy Prices

November 15, 2012—Holiday Alert–Amazon, Inc is still the main man when it comes to toy prices. Currently, Amazon.com is beating out major retailers like Target and defending champ, Wal-Mart, for cheapest priced toys as parents and buyers begin their holiday shopping. The battle between online and brick and mortar pricing has heated up in the last few months as Wal-Mart and other retailers attempt to contend with Amazon’s online pricing and shipping model.

In a recent survey with price comparisons on 125 selected toys, Amazon had lower prices than Wal-Mart on 44 percent of the items as Wal-Mart trailed with 13 percent of the items, beating out Target, Kmart, Sears and even Toys “R” Us. Because of the growth in third-party sellers on their marketplace, Amazon’s inventory levels have grew substantially than the previous year, making Amazon the #1 retailer for toys.

Since last year, out-of-stock levels have increased for brick and mortar retail stores like Wal-Mart, Target, and Kmart, as more than 40 percent of their toys were reported out-of-stock. Meanwhile, Amazon was only missing 1 percent of toys. Because toys are the top rated category during the holiday season, more and more retail giants are jumping on the bandwagon and trying to compete with Amazon.com for supremacy in the toy market.

The battle between Amazon and Wal-Mart heated up earlier this year when Wal-Mart and other major retailers started pulling the Amazon Kindle line from their shelves. Since then, Wal-Mart has launched various campaigns to overtake Amazon with advertisements claiming to beat or match any of Amazon’s prices.

Where are you shopping this holiday season for toys? We want to hear! Email us your story at Nick@e-commercegenius.com for our follow-up story. 

SumAll Adds Analytics Tool for Amazon Sellers

Amazon sellers rejoice. Now third-party Amazon sellers can gain “business intelligence” with insight into traffic statistics of their Amazon store. SumAll officially added integration with Amazon Marketplace and Webstore to provide sellers with real-time analytics to track a variety of data statistics.

SumAll’s new analytics tool for Amazon sellers can track new versus returning customers along with sale histories. Sellers can set goals and view trends from multiple channels including ecommerce stores and marketplace accounts. The platform can even send daily emails containing analytic information to users. SumAll already includes multiple data sources including PayPal, eBay, Shopify, Google Analytics, Facebook, Twitter, Instagram, YouTube, Magento, and Big Commerce. Amazon sellers can also use SumAll to track multiple amazon stores and a variety of different selling channels.

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WisePricer.com

Whether you’re a small, medium, or large sized seller, correctly pricing your products on Amazon is extremely important. That’s why most Amazon sellers are familiar with and started using auto-pricing software.

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Fulfillment By Amazon- The Advantages and Disadvantages

The introduction of Fulfillment By Amazon has made selling items online easier (and more profitable) than anyone thought possible. FBA is a system implemented with Amazon.com which allows merchants to store products in shipping centers until orders are placed. When orders are received, Amazon will professionally package and ship the product directly to your customer. This innovative system is designed to assist merchants in selling more products while eliminating tedious dirty work like customer service and shipping. Sound too good to be true? Read our compiled list of  the advantages and disadvantages of using Fulfillment by Amazon and make your own decision.

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Amazon Pages becoming a Reality

November 20, 2012—If Facebook and Pinterest had a baby, it would be Amazon Pages. Although Amazon hasn’t officially announced it, the marketplace behemoth has slowly started allowing third-party sellers to set up their own custom business pages on its marketplace. Amazon Pages, the newest feature from Amazon.com, comes complete with branded URLs, analytics and social-media integration to assist merchants better develop their online business using the marketplace.

Amazon Pages takes the best features from Facebook and Pinterest, and combines them into an Amazon merchandising design. Third-party sellers can choose from three different customizable storefront templates: All Products, Posts With Merchandising and Posts Only. The first two include a merchandising widget that allows brands to display products with an “Add to Cart” button or links to a particular product. Additional elements of Amazon Pages include marketing tools like Amazon Analytics, which measures the volume of traffic going to your page.

The top of an Amazon Page looks much like Facebook’s Timeline and the bottom feed looks very similar to Pinterest. Like any other social-media outlet, Amazon Pages lets brands act as publishers, posting images, content and product links. Similar to Twitter, posts are limited to 140 characters and can be cross-published to a brand’s Facebook page but not Twitter feed.

FAQs about Amazon Pages can be found here. A PDF guide to setting up Amazon Pages can be downloaded here.