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4 ways Amazon sellers can cut costs and make savings

Right from the start, you need to know the best ways to minimize costs and find significant savings as an Amazon seller.

amazon delivery boxes stacked on a porch
Image: Joe Rice-Jones / KnowTechie

There’s a lot to consider when you start up as a seller on Amazon. You need a business plan, a growth strategy, and a full inventory. You need to master a Search Engine Optimization (SEO) strategy and/or a pay-per-click campaign.

Learning all of this can get expensive. You may take some courses to learn the basics or decide you’ll learn on the job, but early mistakes can cost you money.

Right from the start, you need to know the best ways to minimize costs and find significant savings as an Amazon seller. We break down a few ways for you here. 

1. Keep an Eye Out For Deals and Coupons on Software

Coupons are an excellent way to save, especially if you don’t have much for initial operating costs. There are loads of tools and software out there that can make your business more efficient. The software can automate campaigns and SEO research, saving you time and money you can spend elsewhere.

You may incur costs in buying tools and software, but they can save and make you money in the long run. If you are unsure about splashing the cash when you are just starting, coupons and deals can make things more affordable in the first place. 

For instance, coupon code Helium 10 allows sellers to buy Helium 10 at a discount. Helium 10 is a product research and SEO software that sellers can use to optimize different elements of their business. 

Helium 10 won’t be the only package or tool offering deals, discounts, and coupons, so keep your eyes peeled for great opportunities. 

2. Manage Your Inventory Carefully 

Regularly analyze your inventory so that you know how much stock builds up and for how long. Look out for whether any particular products are building up over a long period.

If a product has been in an Amazon fulfillment center for more than a year, Amazon will start to charge you long-term storage fees. Inventory left more for than a year will then be subject to a monthly fee.

Stranded inventory — stock that has expired or been de-listed — can eat into your bottom line if you don’t manage it properly. So that you don’t risk escalating storage fees after a year, start monitoring your inventory regularly as soon as your Amazon business is up and running. 

3. Choose Product Categories Smartly

Amazon charges sellers a referral fee for products they sell on the platform. The percentage varies depending on the product, hence the product categories. Here are two examples of how it works.

Fashion items have a referral fee of 20%, but for beauty products and backpacks, Amazon charges 6% and 3% for each. Amazon charges 17% under the broad category of apparel accessories, but 13% for watches.

It depends on what you are selling, but think very carefully about your product categories when you are selling them. They may fit broadly under one category, but much more neatly elsewhere. Staying alert to these fees can save you paying sizable referral fees to Amazon. And as the examples above show, the difference in fee can be significant. 

4. Sell in Bundles

When you are selling one product, there are likely products customers often buy with them. Or you may sell complementary products that are difficult to sell on their own.

Consider bundling some goods together. This approach has a twofold benefit of enabling you to shift some stock that may otherwise be hard to sell and helps you to save on shipping fees by shipping as a single unit. 

Have any thoughts on this? Let us know down below in the comments or carry the discussion over to our Twitter or Facebook.

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