Prime Your Profits

Prime Your ProfitsHow Amazon merchants can learn from Prime Day and prep for the holidays

It’s no secret that Amazon Prime Day 2017 set new records for both Amazon and its merchants. In fact, sales soared over 60% compared with last year’s Prime Day. Granted, all that exposure is great, but when merchants forfeit such significant portions of their margins to Amazon in fees alone, what other ROI can they glean from selling on the world’s largest marketplace on its biggest day of the year? At the very least, merchants can learn from their Prime Day data and adjust their strategies to fully maximize sales during the upcoming holiday season. Here’s a 5-step plan for priming those profits:

1. Get a sense for overall profit:

  • After deducting marketplace fees, shipping costs, and promotions, calculate the profits (or loss) of your top-selling items

2. Learn what the optimums were:

  • For each SKU you sold, plot out all your final selling prices and units sold at each price — the results should look like a cloudy curve.
  • Now, take those sales prices and remove all the costs associated with each product (cost of the product, shipping, marketplace fees, etc.) and you’ll get a new curve that shows profit per item and units sold.
  • Multiply the units by the price for each of the curves and you’ll be able to find price points that drove maximum revenue (first curve) and maximum profit (second curve). These should be your book-ends for future pricing of the SKU.

3. Fix issues before the holidays:

  • Check in with your logistics team or provider to figure out where things broke. Were there late shipments? Out of stock items? False alarms because data wasn’t updated between systems?
  • Understand what caused those problems. Maybe a disorganized warehouse, orders got lost, technical difficulties, system delays, under-staffing.
  • Find a solution and a backup before the holiday rush.

4. Be better prepared for the Holidays:

  • Take results from steps 1 and 2 and use them to update your projections for the 2017 holiday season.

5. Once you’ve optimized the third step, update again and enjoy feeling prepared for a great holiday season!

Originally published in eCommerceBytes. Learn how Webgility’s Unify platform can simplify your retail operations.

Tao te cha-ching

Tao te cha-ching

6 simple principles for achieving inner peace while running a profitable business

Who among us would argue that harmony in one’s work life comes from earning? Shallow as it may seem, fulfillment is about satisfying a need, and a sustainable business needs profits. In my experience supporting owners of small-to-medium-sized businesses, I’ve learned that much of what it takes to build and grow a business comes not from an MBA, but from wisdom hard-fought through trial and error on the battlefield of the balance sheet. Read Tao te cha-ching by @ParagMamnani to protect both sanity and profits. Click To TweetUnfortunately few soldiers make it past the front lines to drink from the overflowing chalice of accounts receivable. For those who need a faster path to enlightenment, I give you the way of the profitable warrior. No nunchucks required.

Be transparent, not translucent. In other words, speak the truth and don’t color the message based on how you want your audience to perceive it. Remind yourself that the perception of others is none of your business, your only job is to report the news. Whether you’re sharing quarterly earnings with the board or selling software over the phone, know your truth and stick by it. A word of warning, Grasshopper: Managing with transparency is not for the faint of heart or the small of balls, but it does wonders for taking the drama out of most any business situation and building trust with those who work with you. As a wise TV character once said, “Fear is the only darkness.” Continue reading