Beat The Competition On Amazon and Ebay

Beat The Competition On Amazon and Ebay

Posted on 13. Oct, 2013 by in Archived Post

Becoming a seller on Amazon or Ebay can be exhilarating initially, but as competitors take notice of you, it can quickly become a hornets nest. Yes, both marketplaces can provide great exposure and a potentially high sales volume, but you will soon find that relentless discounting can shrink profit margins, take orders away, and possibly run you out of business.

Far too many new and existing sellers are in a “sticky” situation: we must either bend over and take the “price undercutting” of your competitors or leave Amazon and Ebay altogether and sale on your own website.

Hold on….there is another option: For you newbies, before you step into either marketplace, develop a profit strategy to help you stay in the game. For the rest of us, we need to take a step back, put a hold on all sales, and create a profit strategy.

An effective profit/pricing strategy is more than just about “how much profit you will make on each sale”. It’s about utilizing Amazon and Ebay as low-cost sales channels.

Let’s view Amazon and Ebay for what they really are….big-time discounters. In fact, the largest online discounters in the world. The best way to take advantage of these marketplaces is by leveraging their low cost ideology. Meaning, sell your most basic, lowest cost items on both marketplaces and shift your higher priced, higher profit items on your own website. Yes, if you don’t have a website, well, it’s time to have one built or buy one from Flippa, etc.

Look, with Amazon and Ebay, competitors can easily latch on to your item(s) and create a listing exactly like yours using the “Sell one like this” or “Sell on Amazon” feature. Nothing wrong with that….but, they can put some serious pressure on you by offering their item(s) at a lower cost than yours. You can see the sales start dwindling….

My guess is that you will not want to go down without a fight. You can certainly recover your sales volume and maintain your profitability by doing the following:

Start Grouping Your Items

Separate your items based on price and profit margin. High priced, high profit margin items belong in one group – low priced, low profit margin items in another. Stop putting all of your items in one group. Separating them into groups is the beginning of defining your sales channels. High priced, high profit margin items should be sold on your website while low-cost, low margin items belong on Amazon and Ebay.

Start Bundling

Separate yourself from your competitors by selling bundles on Amazon and Ebay. Instead of selling exactly what your competitors are selling, add another low cost (not cheap or low quality) item to the mix. If you are selling handbags, consider including a coin purse or something along those lines. The extra item does not have to be pricey, but it should have enough value to move a customer to paying more. Be careful with the wording in your Amazon bundled listing, though. If you decide to take the “bundled” route on Amazon, be sure that your listing has the word “includes”. For example, “Technician Toolkit also includes a Battery-powered Screwdriver” or “Handbag includes Coin Purse”….you get the idea. Stay away from using the words “Bonus”“Extra” or “Free”. Amazon does not take too kindly to the use of those words in any listing- according to Amazon Seller Support.

Measure Your Performance

You should definitely monitor your new strategy, track your sales, and make adjustments, as needed. Bundling can make or break your business, so identify your real cost before moving forward with your bundling strategy. Keep in mind, each strategy must be profitable, therefore, don’t let your cost get away from you. You are “right sizing” your operations to increase your profits. That’s all you are doing with the above techniques.

The moment you understand and separate your sales channels, I believe you will find that there are some solid ways to use Amazon and Ebay to your advantage.

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5 Responses to “Beat The Competition On Amazon and Ebay”

  1. ChrisSleckski

    14. Feb, 2014

    What types of items would recommend to sell on Amazon if you don’t live near wholesalers? Is there somewhere to find a list of wholesalers in different parts of the country? I’m looking into the niche site concept, but it seems from reading your articles you make the most from your Amazon sales. Just wondering how I can get in on that.

    Reply to this comment
    • Big Dave

      Big Dave

      16. Feb, 2014

      Hi Chris,

      Good question…you may have to do some good, old-fashioned research on the web to identify wholesalers. Main thing is to contact them via phone and, if possible, get some references.

      Reply to this comment
  2. Mia

    22. Feb, 2014

    I think better marketing strategy will also help besides competing with low price. Some customers are willing to spend more on a product if they like what they see so I think it will help if you’ll do a good job “selling” the product to them, that means better product descriptions, etc.

    Reply to this comment
  3. Gale

    22. Feb, 2014

    It’s a tough competition selling in these two huge websites. I think these strategies you mentioned should be done before starting to sell. I’d rather be the one who set up the competitive price, I don’t want to be the one having to bend over to the competitors’ prices. It’s better if they are the ones who have to keep up with my price than me with theirs.

    Reply to this comment
  4. Beatrice

    22. Feb, 2014

    I like what you said about pricing strategy is not just about making profit. You really must take into account your competition. On the other hand, it’s still a business and you really do have to make a profit. Your advices are really note-worthy. I hope you don’t get tired sharing your experiences and knowledge with us.

    Reply to this comment

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