Three Key Approaches To Improve Your Amazon Vendor Profitability

Arthia’s Amazon consultants do far more than just optimising your product listings. We regularly consult with Sellers and Vendors on proven strategies to make all aspects of their Amazon operations more profitable.

Below, we’ve outlined just a few ways in which Vendors can improve their margins.

Promote Your High-Margin Products Ahead of Fast-Moving Low-Margin Products

It might sound counterintuitive, but slowing the growth of your fast-moving, low-margin products by focusing your Amazon PPC advertising and promotions on your highest margin products can rapidly turn things around for you in terms of driving profitable sales.

By applying discounts and offers to your high-margin products, and taking full advantage of high-volume traffic days on Amazon (Prime Days, Black Friday, Cyber Monday) you can quickly influence your products’ sales rank which will have long-term benefits for product listing rankings. 

Carefully Consider Your Retail Partners and How You Incentivise their Orders

Being a Vendor means you have much less control over the price the consumer pays for your product. Amazon bases their pricing on your product’s availability and price from other retailers and will aim to match the price in the market.

This means that you, as a Vendor, can regain some control by reviewing what incentives (e.g. discounts) you’re giving to those you distribute to. If you’re regularly slashing unit prices in exchange for bulk orders, your retailers are likely moving large volumes, but squeezing their own margins to undercut and win sales from Amazon – who in turn will want to charge less too.

Choosing to restrict or carefully control the price at which other retailers can get your product has a knock-on effect, meaning Amazon can charge more (and buy from you at a higher price).

Remove Unprofitable Products Before it’s Too Late

Sometimes, products don’t sell on Amazon, despite them most often wanting to offer your entire catalogue. It is, therefore, your responsibility to keep a close on underperformers, especially those heading towards a state of unprofitability over time. When this happens, a situation can occur where Amazon demand that you make up the difference for poor sales. 

Not only is it undesirable to be in that position, but unprofitable products only serve to draw focus away from promoting your high-margin lines, so cutting them from Amazon’s catalogue sooner rather than later is normally your best course of action. 

Need Help?

There are many more ways to improve your margins as an Amazon Vendor. Get in touch with Arthia today to see how we can help.

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