SwiftStart launched Fomin during the height of the pandemic. The brand is now expanding its product lines after tripling revenue.
If you are looking for ways to increase your profitability on Amazon, then increasing the average selling price (ASP) of products may be one way.
The ASP is simply defined as "the total revenue divided by number sold." It can help improve overall profit margins and make sure that every sale brings in more money than before!
The balance between decreasing costs and increasing revenue can be tricky, but luckily there are ways for brands to make it work. If a company wants to increase its ASP without raising prices on existing products, it can do so by decreasing costs for sourcing and selling products.
Hard to believe? Let’s look at the 5 proven strategies below:
You can use these strategies to maximize your profit margins. Let's begin with the first one.
Launching a premium product is an excellent way for established brands to expand their customer base in the niche market and make more money. These high-end versions of top-selling items are typically sold at higher prices than regular ones.
It also complements your current inventory while also attracting new buyers who want something different from what you offer now.
A brand’s success is dependent upon having a strong value proposition that appeals so much to customers. And that’s the reason customers are ready to spend a lot more than what they would on other brands’ products.
Undoubtedly, when a company has an amazing value proposition, they are more likely to succeed in the long run.
Toothbrush heads are an excellent example of a product with premium features. Some brands have found creative ways to charge more for their products, such as by creating different varieties of colors. They create value propositions by introducing toothbrushes that can be tailored towards buyers’ personal tastes.
If you're not ready for the Premium Route just yet, consider implementing larger pack sizes in your existing range.
Why stop your customers at a single box when you can have them in bulk? When selling consumer goods, it's all about packaging. Make sure your top-selling products get larger packs of inventory so that customers can buy in bulk and more units can be sold.
For example, if your top-selling product is a 200ml shampoo bottle, you could introduce a 400ml shampoo bottle or even a bigger quantity.
Introducing larger pack sizes can help you make more money. The average price of your portfolio goes up while variable costs go down, thanks to economies of scale!
There's a reason why Amazon has such large pack sizes on their product catalog. It’s because people are shopping for everything!
To increase your average selling price on Amazon, you can create value bundles. Your created bundle conflates two or more items that are sold at a discounted rate and otherwise sold separately at higher prices.
It will help customers purchase multiple products in one go instead of just buying each item individually which increases their total spending as well!
Value bundles are a great way to upsell new and existing customers on your site. You can sell complementary or refillable products to upsell new customers. With this strategy, you can provide more value in one purchase.
The business world is becoming more competitive day by day. As a result, brands need to differentiate themselves not only with what they produce but also how it's sold and where customers can find them easily.
This means using different strategies in order for businesses' offerings to stand out from those around them!
To be successful, premium bundles need a strong value proposition that customers will appreciate. They should anticipate what they're needed and serve them right away with no fuss.
There are several ways to increase your brand’s ASP on Amazon, and to your surprise it can be done without launching a new product, creating bundles, or offering larger pack sizes. Luckily, you can increase your brand’s Amazon ASP by making some changes to your current portfolio mix.
It’s a simple process that begins by identifying products with above-average selling prices in the portfolio. Then, marketing and sales efforts will be focused on these high ticket items that can bring additional revenue for a company.
Remove products from the Amazon marketplace. Yes! You’ve read correctly. Although this might seem like a loss at first glance, there are some seriously good benefits to removing your product. It is suitable in the situation if you have listings of low ASP items.
Amazon has become the everything shop, but you don’t have to take it literally because you never want to sell at a loss.
Amazon's flywheel concept is rooted in providing customers with a wide selection of products, which ultimately drives growth and reduces costs.
It’s always a worry when Amazon removes permanently unprofitable items from their portfolio. The company's systems will initially request funds to keep them active, but if these products continue losing money then they'll eventually get taken away and deleted forever!
So you should consider de-listing products under £10 if they don’t return you a healthy profit margin and aren't key to attracting new or existing customers.
If you don’t want to delete your listings, you can also include a bundle option for customers that would add value to their purchases.
The journey of growing your ASP can be difficult, but it gets easier with time. I hope the tips above have helped you find some good advice on how to get started!
The average selling price may be the easiest and most effective way for you to increase your margins on Amazon, but that's not all there is. There are many ways you can increase your profit margins which we will discuss in our upcoming blog posts.
As an Amazon seller, you know how challenging it can be to stand out in a crowded marketplace. That's why it's important to take advantage of every opportunity to showcase your products and reach new customers. Amazon Lightning Deals are an exciting way to do just that! These limited-time promotions offer incredible discounts on your […]
)
If you're launching a product on Amazon, there's one thing that should be on top of your priority list: Amazon listing optimization. After all, it's the first thing potential customers will see, and how well you optimize your listing can make or break a sale. But with Amazon constantly changing its algorithm, it can take […]
)
Can you believe that Amazon offers a whopping 350 million products for sale? With such an enormous selection of products available, it would be nearly impossible to monitor each one individually. Luckily, Amazon has a fantastic solution: the Amazon ASIN. This nifty system helps organize and manage this vast array of products, making it much […]
)
There is no denying that Amazon is the world's largest online marketplace, with several billions of goods being sold on its platform. In 2019, estimates revealed that almost every individual in America possesses an Amazon Prime membership, and the numbers are bound to rise. The recent pandemic is a contributing factor to the rise of […]
)
Do you want to skyrocket your profits on Amazon this year? Selling on Amazon offers an incredible opportunity to reach a global audience and maximize your earnings. According to Statista's report, over 60% of the total sales on Amazon were orchestrated by independent third-party sellers. This group of sellers contributed a substantial $4.1 billion in […]
)
Amazon, the world's largest online retailer, has a business model that has disrupted traditional retail and changed the way people shop. At the core of Amazon's success lies its Flywheel, a powerful growth engine that has fueled the company's expansion into new markets and propelled it to become one of the most valuable companies in […]
)
Are you eager to get your hands on that jaw-dropping ensemble sported by your beloved fashion influencer? Perhaps you're searching for the same ergonomic chair used by a popular video game streamer. No matter what you're seeking, Amazon storefront offers a fantastic avenue to explore and uncover incredible deals on the latest must-have products. But, […]
)
There are a number of ways to make money on Amazon, but one way is by selling your products directly. You can also choose to sell your products directly to Amazon, which will then sell them for you. Both the options have their own benefits and challenges. An Amazon seller and an Amazon vendor are […]
)
Most brands that sell products on Amazon have probably heard of the importance of providing an inclusive shopping experience to increase their sales. By taking steps to make your shop more accessible to all customers, you can tap into a larger market and boost your bottom line. But what does Inclusive Shopping Experience mean, exactly? […]
)
Amazon partners with you no matter the way you choose to grow your brand on Amazon. There are various ways by which you can sell on this platform including Amazon 1P, 2P & 3P. In this blog we are discussing the two of them; Amazon 1p Vs 3p. 1P is handling everything on single and […]
)
