Price Points by Omnia Retail

Here you can read more about Omnichannel Retail, Direct-to-Consumer Strategies and Retail Trends. Learn about the Implementation of Dynamic Pricing and Pricing Strategies.

13.07.2022

An Introduction to Amazon Pricing in 2022

It’s no secret that pricing on Amazon is complex, and both Sellers and consumers can get lost quickly in the world of Amazon pricing. To help, we created a short guide that has all the essential information about pricing on Amazon. In this post, we’ll explain how pricing on Amazon works and give some tips on how to get the most out of the platform. To learn more about how Amazon uses pricing as part of its overall strategy, check out the Complete Guide to Selling on Amazon in 2020. How does Amazon pricing work? Amazon pricing is tricky on all fronts, from how it charges Sellers to how product pricing works on the platform. Amazon Seller pricing There is an Amazon pricing structure for any Seller, regardless of how many products you have in your shop. Whether big or small, you can find an affordable way to sell items through the marketplace. Amazon pricing structure There are two ways to sell on Amazon: as a Professional or as an Individual. The Professional plan lets you sell an unlimited number of products for a $39.99 monthly fee. Individuals can sell on Amazon for $0.99 per item sold. If you plan to sell more than 40 items each month, it makes more sense to purchase the Professional Seller plan. The Professional plan also makes sense if your items have low price points; $1 per product sold is an outrageous fee if you sell a product for $3. The Professional plan also unlocks new categories for sales and has additional features that help you sell more products. Amazon seller fees If you think the costs of different selling plans on Amazon sound inexpensive, you’re not alone. Unfortunately, besides a monthly payment for your store (or payment per product for Individual Sellers), Amazon charges fees per product sold. There are several fees that individuals and professionals must pay per item sold. These include: Referral fees on each item sold: a percentage of the final price of a product sold Shipping fees (which apply regardless of fulfillment method) Closing fees Amazon’s fee structure can get complicated, so it’s worth examining the Selling on Amazon Fee Schedule. If you are an FBA Seller, Amazon will charge you additional storage and fulfillment fees. Amazon also has a calculator that can help you estimate your revenue, even with fees. Just enter the product name, UPC, ASIN, ISBN, or ASIN number and product details and you’ll get an estimate of how much revenue you can expect to earn. Amazon price changes Besides having a complicated pricing structure, Amazon also has a complicated pricing model. The company is a pioneer in dynamic pricing and makes over 250 million price changes every day. The average product’s price will change once every 10 minutes, making it difficult for Sellers and consumers to keep up. Amazon price match Amazon doesn’t have any price-match guarantee. If consumers find a product they’ve bought for a cheaper price online, there’s no way for them to ask Amazon to pay the difference in price. This is mostly for practical reasons. Amazon used to have a policy like this, but as the market became more fluid, the policy became impossible to honor. Amazon recognized that a dynamic market meant price match policies would become obsolete. With this knowledge, the company eliminated the policy in 2016. Amazon price protection 2020 Amazon also doesn’t have any price protection policy. Consumers just have to trust that the company offers the lowest price on the market. Amazon’s reputation for offering lowest prices isn’t unfounded though, and a 2018 study by Profitero found that Amazon was 13% cheaper than other major online retailers in the US. So even without this policy, consumers likely do receive some of the best deals on the platform. Amazon tools Regardless of whether you’re a Seller or a consumer, Amazon becomes overwhelming fast. Luckily, technology can help both Sellers and consumers get a better understanding of Amazon and reap the best benefits of the marketplace. Whether you want to find the best deals or prices, or understand the landscape of Amazon, there’s a tool out there for you. Amazon best Seller tools If you’re a Professional Seller on Amazon, there are several types of tools that will make your job easier. In this section we’ll cover a few of the more important tools to have. Amazon repricer tools Repricing tools are for Amazon Sellers who want their products’ selling prices to update with the flow of the market. In other words, repricer tools are dynamic pricing tools built specifically for Amazon. Since Amazon updates prices so frequently, this tool helps Sellers keep products relevant. A repricer will also help keep products in the Buy Box — the coveted space on any Amazon product listing page that’s responsible for an estimated 82% of Amazon sales. Free repricer tools Amazon doesn’t change prices for third-party sellers, but it has a free proprietary repricer that can adjust prices for you. This tool is called “Automate Pricing.” You can find it under the Pricing tab in your Seller Central account. Automate Pricing is easy to set up in just four steps. All you need to do is define the parameters of a rule, choose the SKUs where the rule applies, set minimum and maximum prices, then start repricing. Amazon’s repricer has both pros and cons. Some pros include: Free as long as you’re a professional seller Helps increase sales (but at the expense of profits) Does a great job of lowering prices, but not the best job at raising prices Easy to use and set up The cons of the repricer far outweigh the benefits, though. According to users, Amazon’s repricer tool is frustrating to use and limited in its capabilities. Some major cons are: Only allows you to set up repricing rules on active SKUs Limited customization on rules Doesn’t account for fees and doesn’t help you calculate for fees Doesn’t increase your price Once you get the Buy Box, it stops repricing The Automate Pricing tool is notoriously fickle. The video below is an honest review of Automate Pricing, and the overall sentiment is that Automate Pricing is more trouble than it’s worth. Paid Amazon repricing tools The best way for serious sellers to keep prices constantly fresh is to invest in a paid repricing tool. Prices for a repricing service depend on several factors, including the number of products to be repriced and how frequently a Seller wants to reprice products. All the rules of what to look for in a dynamic pricing solution apply when looking for repricing tools, and there are some services that are not worth the money. Some reputable market-leading paid repricing tools include: RepricerExpress (prices range from €55 per month for 2,500 listings to €249 per month for 50,000+ listings) Bqool (prices range from $25 per month for 1,000 listings to $100 per month for 10,000 listings and a faster repricing speed of 5 minutes) Repricer (prices range from €69 per month for 2,500 products repriced hourly to €1,049 for 1,000,000 products repriced instantly) Amazon competitive intelligence tools: How to find price drops on Amazon Competitive intelligence is the backbone of any repricing tool because without intelligence your prices have no basis on the market. Competitive intelligence tools gather the prices of your competitors on Amazon, showing you where there are dramatic price drops in the market. It should then deliver this information directly to you. With this information, you can make more thoughtful, data-driven decisions when you choose prices for your products in the store. Many repricers will automatically gather competitive intelligence for you, but it’s worth asking different vendors if this feature is available. Amazon best consumer tools If you’re a consumer who wants to make sure that you always get the lowest price on Amazon, there are several tools you can use. One of the best is CamelCamelCamel.com, which is a free price-watching tool for Amazon. This tool is available for consumers in Australia, Canada, China, France, Germany, Italy, Japan, Spain, the United Kingdom, and the United States. Amazon eBay price comparison software Want to compare prices across the world’s two largest marketplaces? You can easily do that with sites like PricePirates. Search for the product you want to buy, and PricePirates will show you competing prices across platforms. PricePirates is available in the US, Germany, Austria, Switzerland, and the UK. How to hack Amazon pricing For Sellers, creating an Amazon pricing strategy and hacking your way into the Buy Box is no easy feat. But with hard work and effort, you can get your product into the Buy Box and keep it there. There are tons of different strategies you can adopt to reprice on Amazon. One popular one is the high runner strategy, and it’s the approach that Amazon uses itself. In this strategy, you focus your efforts on the products that drive the most traffic (which are usually highly elastic), and offer a competitive price on those items to pull people to your page. Once a consumer is on your product listing, as long as the product is legitimate and matches their need, they will probably purchase it. Additionally, once someone arrives on your listing, you can engage another pricing hack: bundling. Bundling helps increase the perceived value of your products, makes consumers more likely to purchase them, and helps move items through your store faster. If you’re just starting as a Seller though and want to get into the Buy Box, the best strategy is to start small and slowly raise your prices by small increments. The goal is to attract buyers to your listing through a competitive price, earn reviews and good credit in the eyes of Amazon, then raise your price. This is a key part of the pricing-marketing mix. Amazon repricing strategy Developing a strategy comes down to your company goals. Here are 5 tips to build a successful repricing strategy: Define your commercial objective Build a pricing strategy (such as a charm pricing strategy) Choose your pricing method Establish pricing rules Implement, test, and evaluate the strategy Besides thinking of your own store’s strategy, consider Amazon’s strategy. The company strives to be the world’s most customer-centric company, and this philosophy dictates every strategic move the marketplace makes. If you factor this philosophy into your overall Amazon strategy, it will pay off. So in addition to offering a competitive price, you should also work for quality products, fast shipment, and excellent customer service. You should also build a marketing strategy that sets you up for success and optimize your listing for Amazon's search algorithm. Final thoughts Pricing on Amazon is important, but it’s not the end-all-be-all. Prices on Amazon constantly change, and it’s better to think of a product’s price as temporary rather than a fixed feature. For Sellers, this means price is an important part of your overall strategy. It’s not the only thing Amazon considers when determining the winner of the Buy Box, but it’s a good way to tip the scales in your favor.

Technology, Retail Trends & Research, Amazon

14.06.2022

How robotics and AI are improving supply chains

If only Henry Ford, the founder of Ford Motors who invented the assembly line that revolutionised how cars are made, could see how corporations have advanced the logistics of supply chains in 2022. Approximately 109 years later, modern supply chains are including engineering and scientific developments like never before, seeing robotics and artificial intelligence (AI) brought to the forefront to increase productivity, decrease overheads, and improve the customer’s experience. With the rapid development of e-commerce and the changing landscape of consumer spending habits, it has become vital for retailers and brands in many industries to rethink and modernise how they bring a product through the process of production, manufacturing, shipment and delivery to the consumer. We have taken a look at how robotics and AI are affecting and improving global supply chains, the companies that run them and their employees. Robotics in retail and e-commerce One of the biggest issues within retail and e-commerce is delivery - and fast delivery at that. Using robotics, AI and automation (RAIA) has shown to significantly improve delivery schedules and times. According to a 2021 McKinsey & Company survey, 75% of retail supply chain leaders have made 2-day delivery a priority and 42% are aiming for same-day delivery in 2022. Alongside these consumer demands, 64% of retailers cited digitalisation and automation investments as being critical. A key area in speeding up deliveries and creating seamless supply chains is warehouse automation, and one such retailer that’s taken on the challenge is Ochama in the Netherlands. The Chinese e-commerce giant JD.com launched robotic grocery stores in four Dutch cities, namely Leiden, Amsterdam, Utrecht and Rotterdam. Groceries and non-food items are collected throughout the store by mobile robots, packaged and presented to shoppers. Customers can order their parcels via the Ochama app and then collect it at the store by scanning a barcode that specifies your order, after which a conveyor belt and robotic arms hand-deliver the order. This is only one part of the machine that has utilised robotics: A warehouse of 20,000-square metres is equipped with automated systems that can process up to 15,000 parcels a day. Because of the technological advancements used in the supply chain, Ochama has brought down the overall costs of food and non-food items by 10%, making the omni-channel retailer one of the first to be able to reduce some of the consumer living costs using robotics and AI. From groceries to clothing, AI is showing its exponential value. Finesse, a US clothing company, is using AI to determine future fashion trends for potential markets and moving away from fast fashion. When you visit their website, the clothing doesn’t actually exist yet. What you see is 3D-rendered items of clothing where shoppers can vote for an item they’d like to buy. The items with the most votes get made, resulting in reduced overstocking and lower production costs. In this case, we see AI being used as an integral part of the business model instead of being a background assistant to supply chain problems. AI has shown to be helpful with returns This particular business model, where votes determine production, doesn’t mean returns and refunds aren’t still an option - or a problem, depending which side of the e-commerce street you’re sitting on. Nonetheless, AI has also shown to be helpful with e-commerce’s biggest headache: Returns. Global e-commerce’s returns problem is estimated to cost €111 billion just over the festive season after December. Approximately 30% of all online orders are returned by customers, making it a very large and expensive problem. In fact, although a customer may experience the ease of “free and easy returns”, a typical return actually costs a retailer between €19 - €41 each time when they factor in transport, processing (receiving, inspecting, then sorting), and reselling efforts. Berkshire Grey found that processing time could be reduced by 25% and processing costs by 35% if employees could make use of automation and robots. How may employees view the incorporation of robotics and AI? A 2021 study published in the Journal of Technology in Behavioural Science conducted multiple interviews with employees of different seniority levels across multiple industries to quantify their understanding and perception of RAIA in the workplace. Firstly, the study found that employees feel that “human touch” and “soft skills” could never be replaced or replicated; secondly, it found that employees should view RAIA as an opportunity and not a threat; thirdly, employees may experience a job satisfaction dilemma; and lastly, employees feel that companies should be extremely prepared before and after RAIA is implemented for whatever the impact may be. There is no doubt that jobs, workplaces, employee-to-customer or employee-to-employee relationships will change, but it is important for companies and team members alike to start viewing RAIA as a way to upskill, revolutionise and grow. There seems to be a common misunderstanding that by including robotics and AI into the workplace it will automatically result in retrenchments, firings and an exodus of employees. Although we can’t speak for the intentions of all companies, robotics has shown in many cases to improve the work environment for employees. If employees have been spending valuable time on mundane or time-consuming tasks that are part of their job, they can now spend that time on strategy; the very thing that results in better productivity and more profit. With our fully or partially automated dynamic pricing software solutions, Omnia takes a similar stance. Users require less time on repetitive, high-volume tasks and have more time planning and managing the strategic direction of prices. Looking toward the future Warehousing, final assembly and production are three main areas where autonomous robots will be the most beneficial. Deloitte predicts that including robotics in these areas can increase productivity; improve the collection of data; and decrease the risk of hazardous tasks while working alongside humans for improved efficiency and safer work environments. McKinsey & Company conducted a study that surmised that 20-30% of the time can be freed up for other important tasks if repetitive tasks are automated or robotised. Deloitte suggests that using autonomous robots within the supply chain will dramatically increase over the next five years and the more companies start to incorporate robotics into their processes, the more fluid and seamless supply chains will become.

Technology

09.03.2020

The Strategies Behind Amazon’s Success

Amazon is built around one thing: customer happiness. Amazon was founded in 1994, and since 1995, the company has set out to be “Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” Its mission statement is clear: do whatever it takes to make the customer happy. In this article we'll examine the strategies behind Amazon's success. Why is Amazon so successful? So what are Amazon’s strengths? The answer is a relentless commitment to the customer experience. Everything that Amazon does — every strategic move, every investment — is guided by its goal to be the most customer-centric company in the world. Every step along the way is designed to serve customers as best as humanly possible. Amazon has largely succeeded in this mission, as you can read about in our Complete Guide to Selling on Amazon in 2020. Over the last 25 years the company has introduced a wide variety of innovations to the market that have forever changed e-commerce. From a consumer perspective, these innovations ensure that Amazon is the place to shop for anything and everything. What is Amazon’s business promotion strategy? A SWOT analysis Amazon’s business promotion strategy is complex, especially since the company competes in three major industries. What are Amazon’s strengths? Amazon has a culture of testing ideas rigorously and then doubling down on the things that are effective. And as a company that’s not afraid to fail, and will put money on the line to develop a product or service, even if the product poses some risk of failing. Data: The sheer amount of data that Amazon has on consumers is mind-boggling. Amazon not only uses that data to improve its own operations and product offering, but also sells that data to advertisers through the Amazon DSP program. Prime membership: Consumers know and love Amazon, and there is a high loyalty to the company among Prime members. A recent survey by Consumer Intelligence Research Partners (CIRP) suggests that over 100 million people in the United States have an Amazon Prime account. CIRP estimates that 58% of Prime Members pay the full $119 yearly fee, 36% pay on a monthly basis, and the remaining 6% are on a free trial. CIRP also estimates that Prime members spend double the amount of non-prime members on Amazon — an average of $1,400 every year. Worldwide recognition: Amazon has a powerful influence on any new market it enters. Amazon has been able to leverage its brand recognition globally, which makes it such a threat to new markets. Amazon now has 31% of the market share in Germany and 47% market share in the UK. Logistics: Amazon has a logistics system that is far superior compared to other global retailers, and this is one of the key ways Amazon is able to deliver on its goal of being the earth’s most customer-centric company. From distribution centers near large cities to an advanced robotics system for improved efficiency, Amazon invests deeply in its logistical systems. Learn more about the history of Amazon’s logistics strategy and warehouses in this fascinating episode of Land of the Giants. Agility: Despite its size, Amazon can make decisions quickly that enable it to stay ahead of the game. The company has several built-in systems that keep teams and decision-making flexible and fast. One famous system is the “two-pizza rule,” which keeps problem-solving teams small and forces decision making. What are Amazon’s weaknesses? Just because Amazon is so big doesn’t mean it’s untouchable. The company also has several weaknesses that make it vulnerable. Fragmentation: Amazon is an “everything” company. It runs a media operation that produces top-quality television series and movies, a cloud-based web provider, and an online retailer, all wrapped into one. This could be a strength as Amazon can dominate multiple industries, but it also limits the company’s ability to focus on one strategic goal. Not brand friendly: There are some categories where brand value is more important than others. Amazon has traditionally done poorly in these categories where brand is important, such as fashion and home goods. Limited brick-and-mortar presence: Amazon has a more limited brick-and-mortar presence compared to competitors like Target and Walmart. But this is changing as Amazon adopts a strategy to move from pure-player to omnichannel giant. Amazon started this journey with its acquisition of Whole Foods grocery stores in August 2017 as its first foray into the world of grocery shopping. The company also recently announced it would open its own line of grocery stores that are separate from the Whole Foods chain. But Amazon doesn’t just have grocery stores; it also has four other types of physical shops around the United States: Amazon Books, Amazon 4-Star, Amazon Go, and Amazon Pop Up. Amazon Go is an especially interesting retail location. Consumers must have the Amazon Go app to enter the store, but once in, there are “no lines, no checkout.” Consumers can just pick the items they’d like off the shelf, then upon leaving the store Amazon will charge the customer’s Amazon account. What are opportunities for Amazon? Growth of voice: Alexa has been a strategic move for Amazon to get consumers even further locked into the Amazon system. While Alexa and the Amazon Echo both further the company’s mission of providing a great experience, the ultimate motivation for these products is to make the ordering process seamless. Amazon Basics brand: Amazon’s ultimate goal is consumer data, but it’s not some Doctor Evil plan to take over the world. Amazon sees consumer data as the key to providing more value to its customers. This is partially the motivation behind the growth of Amazon Basics, Amazon’s private label. What started out as the Amazon alternative for charging cables and batteries has exploded into all kinds of products, including kitchen accessories Right now, Amazon understands the whole customer journey from the moment they sign up for an Amazon account, place an order, all the way up until they receive a product. But as soon as the product enters the customer’s house, the company loses track of how customers use the products. The closest they can get is reviews. Technology and gadgets, notably the Amazon Echo and Amazon Alexa, let Amazon understand customers inside the home. Alexa began as a standalone voice assistant to answer questions, but Amazon has evolved the technology to be more useful, both for consumers and Amazon as a company. You can now connect Alexa to a number of Amazon Basics items, such as a voice-controlled microwave. Connecting voice with these products makes the product easier for consumers to use. But it also gives Amazon more insights into how you use the product. With the microwave, for example, Amazon knows how often you say “pop this popcorn.” It can then calculate how many times you’ve said “pop this popcorn,” compare that number to the number of popcorn bags in your last purchase via Amazon, and automatically reorder popcorn for you at a 10% discount. This isn’t necessarily a bad thing, and it does give consumers freedom to do other things. And, more importantly for Amazon, these products make it easy to order something new through the marketplace. What are threats to Amazon? Data and online privacy: One of the biggest threats Amazon will face in the future is the continued debate over what is private data versus what is public data. Legislation and regulations: Despite its power, Amazon is still subject to the laws and regulations of any country in which it operates. If any sweeping legislative changes are introduced in these countries, it could damage the company’s ability to operate as it does. An example might be a new data privacy regulation. If major reform meant that Amazon could not collect as much consumer data as it does, it could harm the business. At the more extreme end of the spectrum are antitrust laws that could force the company to break up its operations for the sake of competition. What is Amazon’s markup strategy? Amazon itself does not have a markup strategy. It’s up to Sellers to determine how much markup they want to add to their online products and set healthy margins. For low margin products, consider raising the price or strategically bundling the product with a high-margin product. You can also try to cut production costs. For high-margin products, it may be worth it to increase your marketing spend, shoot for cross- and up-sells, and devoting more time to the product. What is Amazon’s positioning strategy? Amazon’s brand is built on customer satisfaction. It wants to be known as the most customer-friendly company on the entire planet. This means Amazon wants to position itself as the most convenient company with the lowest prices and the best customer service out there. Amazon largely achieves this goal, and it’s developed a strong brand as a result. A 2019 survey of 2,000 US shoppers found that 89% were more likely to buy products from Amazon than other e-commerce sites. The same survey found that Amazon was indispensable through the customer journey, especially when it came to reviews. As Kiri Masters writes in Forbes, Two-thirds of respondents (66%) typically start their search for new products on Amazon, compared with one-fifth (20%) who start on a search engine such as Google…and when consumers are ready to buy a specific product, 74% go directly to Amazon. Amazon repricing strategies A successful repricing strategy should help you achieve your company goals. Here are 5 tips to build a successful repricing strategy: Define your commercial objective Build a pricing strategy (such as a charm pricing strategy) Choose your pricing method Establish pricing rules Implement, test, and evaluate the strategy To learn more about Amazon pricing strategies, check out the Amazon pricing article. Amazon sales strategies Being successful on Amazon comes down to working hard and thinking about the customer. The company rewards Sellers who put the customer first and offer a consistently great experience. But what does that look like in real life? If you want to sell on Amazon, you should have one goal: getting your listing into the so-called “Buy Box.” The Buy Box is the box on the right side of any product listing. It has two major calls-to-action: Add to Cart and Buy Now. If there are several third parties selling the same product, the Seller who “wins” the Buy Box is the Seller whose item gets added to shoppers’ carts when a customer clicks on either of these CTAs. Statista estimates that 82% of Amazon sales go to the winner of the Buy Box. This number is higher for purchases on Amazon’s mobile platforms, whether that’s the app or web browser. Winning the Buy Box is a complicated dance, and it requires work across all aspects of your Amazon business. Much like Amazon considers customer satisfaction in its every move, so to do its Sellers. To win the Buy Box, delivering an excellent experience should be at the top of your priorities. Amazon takes a holistic view of Sellers when considering who to feature in the Buy Box. If you craft your strategy carefully, you can create listings that consistently land in the Buy Box. So, how do you build a sales strategy for Amazon? There are four steps. 1. Define your commercial objective on Amazon What do you want to achieve out of selling on Amazon, and what do you want consumers to think of your Amazon store? Do you want to be seen as a luxury brand? Or do you want to have rock bottom prices? These are all questions that you’ll answer when you define your commercial objective: the explanation of why your company exists and what its goals are. 2. Create a harmonious strategy based on the commercial objective After defining your goals, you need to figure out how to make them actionable. This is where you’ll create a more traditional “sales” strategy. Some factors to consider include: Pricing Promotions and marketing Packaging Fulfillment method Delivery and handling time There are countless other choices to make for your sales strategy, but these are a good place to start. Use your commercial objective as a compass for making decisions around your strategy; everything you do should strive to deliver on those overarching goals. 3. Put yourself in the customer’s shoes Amazon is all about giving customers the best experience possible. In fact, Amazon wants to be the “world’s most customer-centric company.” And, if you can optimize your sales strategy to provide a great experience, Amazon will notice. This means you may need to lower prices or adjust your promotions to meet the specific desires of Amazon’s audience. 4. Use tools Finally, staying current with Amazon requires a lot of work. The only way to make it truly possible to stay up-to-date is to use automation tools. For advertising, you may want to consider using optimizing your listings for Amazon’s search algorithm and using Amazon marketing tools like the DSP platform. This service can automatically create ads for you and test the effectiveness of each. For pricing, consider using a competitive intelligence and Amazon repricing tool. These will help keep your store listed as the Buy Box option. Who are Amazon's competitors? Amazon is a tech company, media kingdom, and omnichannel retailer wrapped into one large conglomerate. Because of the varied types of products and services, Amazon has numerous competitors from different industries. In retail, some of Amazon’s biggest competitors include Target, Walmart, Best Buy, and Alibaba. For tech, IBM, Google, Salesforce, and Accenture all stand as competition. In the media arm of the company, competition comes from Netflix, Hulu, Disney, and Time Warner. Conclusion Amazon is a highly strategic company, and it has been since its inception. It will continue to use its customer-centric philosophy as a compass in the future. If you’re a Seller who wants to succeed on Amazon, it behooves you to remember Amazon’s overarching goals. If you can incorporate Amazon’s strategy into your own, you’ll be able to succeed on the platform as well.

Technology, Retail Trends & Research, Amazon, Featured

09.03.2020

How Does Amazon's Search Algorithm Work?

Amazon’s search algorithm is a sophisticated system that has one goal: connect shoppers with relevant products as quickly as possible. If you can engineer your way to the top through organic search, it’s a free way to improve sales and support brand visibility. And the good news is that this is possible through Search Engine Optimization (SEO). With some work and critical thinking, you can get your listings to appear favorably in Amazon’s search results. This article details everything you need to know about Amazon’s search algorithm: how it works, what’s important to consider, and how to boost your overall visibility. To learn even more about Amazon, check out our Complete Guide to Selling on Amazon in 2020. How does Amazon's search algorithm work? At its core, Amazon’s ranking algorithm is similar to Google’s search algorithm. It analyzes search queries for keywords, then tries to match customer desires with relevant products. Every day, Amazon tries to find relevant, informative, and trustworthy content to deliver to its customers. Amazon’s relationship with consumers is different than Google’s though, and as a self-contained platform it has access to a huge amount of data to use for search engine results. Amazon A9 ranking algorithm Designed by A9, a subsidiary company of Amazon, Amazon’s search algorithm’s sole purpose is to connect shoppers with the product they’re looking for in as little time as possible. It’s built around the same philosophy as Amazon itself: deliver the best customer experience possible. Since Amazon’s goal is first and foremost to deliver a spectacular customer experience, it analyzes several different pieces of information to determine which products appear at the top of search results. The information the algorithm considers when determining product ranking include: Keywords: does your listing have the search terms consumers look for? Sales conversions: do your products sell well? Customer reviews: are customers happy with your products and service? Performance history: do you have a record of sustainable sales? Delivery time: do customers receive their products quickly? Price: are your products priced competitively? Amazon’s ranking algorithm evaluates a broad amount of criteria to determine who appears on the first page of a search, which is a lucrative place to be. Your products will be seen by more people, and you’ll be more likely to win the Buy Box. How do I find my Amazon ranking? To find your sales rank, search for the product on Amazon.com, locate your listing, scroll down to the “Product Details” section, and find the information for “Amazon Best Seller’s Rank.” This number is the ranking of the product in the category in which it is listed. How do you increase visibility on Amazon? There are three fundamental parts to your overall strategy that will help increase your visibility on Amazon. 1. Optimize your listings for SEO Optimizing your listing for keywords is the easiest way to get started increasing your visibility across the marketplace. One of the main things Amazon considers when deciding which products to display for a search result is keywords. This is for the obvious reason that consumers will type certain keywords into the search bar and want to be connected with relevant products immediately. You should learn what those keywords are for your products so you can start getting your listings in front of the right consumers. There are two ways to do keyword research. The first way to do keyword research is completely free: it’s to think logically about what keywords your target market might use to find a product like yours. If you’re selling a camera, for example, a logical place might be to start with “camera” or your brand’s name. The second way to do keyword research is more scientific. It involves using tools that tell you exactly what consumers search for in Amazon. These tools, like KeywordTool.io, MerchantWords, Viral Launch, and others can give you detailed information like search volume, frequent words, and related products. Some keyword tools are free. Some keyword tools have costs associated with them. You’ll be able to find one at any price point. Once you’ve determined which keywords you want to use, integrate them into your product title and listing in a way that’s organic and informative. Don’t be spammy though, because it quickly makes consumers suspicious of products. Keep your writing natural, and user-focused. Always follow best practices for SEO writing. Take some time to dive into what your target market searches for on the platform, what your competitors do to capture sales, and where there are opportunities for your product to shine. 2. Build better pages for increased sales conversions Optimization doesn’t end with keywords. After driving people to your listing through keyword research, it’s time to convince them to buy from you. You can do this by creating better product pages that clearly explain the features and benefits of your product. One of the variables that the A9 algorithm evaluates when deciding who to list in the top results for a search query is sales conversions. It does this for two reasons. First, the listings with best sales conversions are the listings that customers seem to deem the best solution to whatever it is they search for. Second, listings with high sales conversions also make Amazon the most money, whether that’s through fees or advertising sales. This gives Amazon even more incentive to push these articles to the top to drive even more sales. How can I increase my online sales on Amazon? There are several ways to increase your sales on Amazon. One of the easiest is to make sure your product listings provide enough information for consumers to make informed buying choices. To do this, evaluate your product description. Does it have keywords tactfully incorporated? Is it interesting to read and compelling? Does it answer questions consumers may have about your products? Make sure that all these components are included in the product description, and add bullet points, if possible. Additionally, look at the photos in your listing. Are they bright, clear, and inviting? The best photos on Amazon show all the details of a product and how it should be used. You can also include video in your listing to showcase your product even more. When you create a listing on Amazon, you can add a maximum of eight product photos to the page. You can add more engaging content though by paying for Amazon A+ Content, a service that lets you add more images, video and other multimedia content to your page. 3. Get great reviews Reviews are another logical way to improve your visibility across the platform (and increase your online sales on Amazon). If you have a high number of reviews, it’s a signal to Amazon that people enjoy your product and find it useful. If it’s useful for customers, Amazon will favor your product over others. Reviews help with more than just visibility though. When you get honest reviews, you can learn what customers like about your product or what they don’t like about the product, all feedback you can incorporate into the next iteration of your product. Are Amazon reviews important? Reviews are important for ranking well in Amazon’s search algorithm. In many cases, they’re more important than the actual brand of a product, as Fred Dimyan, CEO of Potoo Solutions (an e-commerce consultancy), explained in an interview with Wired . In the interview he points out the rise of direct-to-consumer or direct-to-Amazon brands like Cali White toothpaste that crush industry giants like Crest and Colgate. But Amazon’s rating system is not as straightforward as it appears. The search algorithm doesn’t just take a simple average of the available ratings. Instead, Amazon uses advanced machine learning to look for relevancy of ratings. It looks at the average star rating, of course, but also considers (among other criteria): How recently reviews were posted How frequently people post reviews Whether the reviews are from “verified” purchasers The algorithm calculates a star rating based on all this information and displays it on your listing. Surprisingly though, reviews are not as important as you may think. Skubana analyzed the top 3,000 organically-ranked Amazon pages and found that the number of reviews varied dramatically among top-performers. The company found that quality of reviews was significantly more important than the quantity of reviews, and that all the top items had overwhelmingly positive reviews regardless of the absolute number of reviews. The lesson: don’t focus your energy on getting a huge number of reviews. Focus instead on getting the best reviews you possibly can by providing a great product experience. Authenticity Amazon’s A9 algorithm tries to verify the authenticity of reviews. It’s easy enough for sellers to hire a clickfarm or freelancers to go and leave false reviews on products to boost visibility. Amazon recognizes this, and tries to prevent it with sophisticated detection methods. To combat this, Amazon launched the Amazon Vine program where Sellers can give products away for free in exchange for unbiased reviews from verified users. To enroll in this program, you will need to contact Amazon directly. Amazon SEO is only part of your marketing mix SEO for Amazon is an incredibly powerful tool in your marketing mix, but if you rely exclusively on SEO, you might be disappointed with your results. The sad reality is that keywords can only take you so far. The importance of advertisements has skyrocketed in the last three years. Even big brands have increased their Amazon ad spend to stay at the top of search results. Check out our Introduction to Amazon Pricing article for more information on this. This doesn’t mean that SEO isn’t a worthy investment. It just means that it’s only a part of marketing on amazon.

Technology, Retail Trends & Research, Amazon, Popular

13.06.2018

Doing ETL Process with Azure Technologies

Introduction Omnia processes millions of retailer’s products information each day to deliver the best prices according to their needs. To gain advantage from machine learning techniques Omnia began a new project to backup and utilize its data to improve its business analytics and explore machine learning. The project has two main objectives: Backup data (about 38 GB per day, with expected growth in the coming months); Ability to create multiple ETL (Extract, transform, load) processes to make data available for diverse purposes a. This project ETL process is to transform unstructured data into business report data. Alongside that, we add the following technical requirements: Progress traceability and monitor the backup and the ETL; Facility to recover if something goes wrong in the process; Ability to scale the speed linearly to the amount of data; Flexibility to create multiple distinct ETL processes. As for constraints: Internet speed from our datacenter to Azure (about 50 MB/s); Couchbase version (3.0.0), cluster size and specs – to retrieve that for backup. Development The first step was to choose the technology stack and since Omnia is primarily a .NET shop we investigated Azure. This seemed reasonable due to the current offers and easy team adoption. To satisfy the backup requirement, Azure Data Lake Store (ADLS) seemed the appropriate choice, due to the facts: Unlimited storage capability; Backups with redundancy on the fly; Created based on HDFS and supports big files (talking hundreds of gigs). Omnia currently has its infrastructure designed around Hangfire to allow easy scheduling and monitoring of background jobs, so the backup to ADLS was created as another Hangfire job. We used the Dataflow library to be able to have a good degree of parallelism when inserting documents into ADLS. We decided to zip them (with a 4 MB size cap) because text documents have a good compression rate, we use less bandwidth between our datacenter and azure and file sizes have an impact of Azure Function processing time (this is constraint since Azure functions have short lifespans). For the ability to create multiple ETL processes with ease, Azure Functions seemed the best fit due to their serverless characteristic. Azure Functions are implementations of serverless architecture. The serverless architecture allows one to execute a business logic function without thinking about the underlying infrastructure, i.e., the functions run and live in stateless compute containers that are event-triggered. Moreover, Azure functions scale on demand, have automatic failover and business logic written in C# which promotes flexibility for business requirements. To trigger Azure functions, we selected Azure Storage Queue as it provides a reliable way to transmit information between applications. These characteristics met the non-functional requirements of scaling and availability to allow the transformation of hundreds of gigabytes of Omnia data. As for the business reports requirement, Azure has SQL Data warehouse (SQL DW) seemed a possible fit due to: Ability to manage large volumes (terabytes) of information; It distributes data across 60 databases (by default) and enables more partitions; Has column store indexes – enabling fast returns for every database column; T-SQL has aggregation function to summarize data; Ability to connect with Azure Analysis services; Combability with other Azure components is easy to establish - SQL DW also has a tool to connect ADLS called PolyBase. PolyBase parses files from ADLS and map them into SQL tables. Complete Process The process to perform the backup and the ETL process is represented by the sequence diagram in Figure 1. Figure 1 Backup and ETL (simplified process) The process starts with a Hangfire job batch that inserts data into ADLS. Every time a file is added onto ADLS, a message is inserted into unzip message queue and the Unzip function is triggered. After the file is extracted into ADLS another message is inserted on transform message queue to trigger the Transform function that splits the file into several CSV files. When all files are converted to CSV, PolyBase is then manually triggered to insert data into SQL DW. This process has a central information point, ADLS, and a good scalability due to the use of Azure functions. Traceability is achieved by using the paths as the file name of the file. An important aspect to organize the ETL’s information was folder structure. Each ETL phase has a specific folder identified by a date folder structure and the file unique name. The folder structure is: Backups Year/Month/Day/Guid_N_Total.zip Unzip Etl/Unzip/Year/Month/Day/Guid_N_Total.json Final Files Etl/Csv/Year/Month/Day/BusinessFolder/Guid_N_Total.csv Etl/Csv/Year/Month/Day/BusinessFolder2/Guid_N_Total.csv ... To monitor all these functions, we used Azure’s application insights and found it easy to understand if something went wrong. Although, a single monitoring system needs to be set up to enable an overall monitor of the three different resources, and an automatic verification system to assure if all the backup files were transformed and inserted. Tips from our development process Don’t build Azure functions with more than one objective. Keep them short and precise, otherwise, they will fail and terminate midway through; Keep in mind that if the same message might be caught by multiple azure functions and your process must predict that same behaviour; Think about the process with monitoring in mind and the ability to execute specific parts; Have a correlation identifier to represent the entire ETL process. That will allow you to aggregate all the data regarding that specific run and monitor it; Use PolyBase to upload data to SQL DW instead of SISS. PolyBase was made to work with ADLS, and Microsoft as a lot of documentation on how to use it; When adding data to SQL DW, use CTAS (Create table as select) – it makes the data insertion faster and you can it to merge two tables without duplicates; To fully achieve the full SQL DW potential you need at least 60 million rows evenly distributed across all the 60 databases that it provides. Be aware of it, when developing your solutions. When creating SQL DW database study the data carefully; think how you are going to use, how you are going to partition and distributed across the database. Conclusion This project is still underway, but so far, we are happy with the results achieved. This process allowed us to backup and transform, 38 GB - about 10 Million Couchbase documents, in 1 hour and 40 minutes. Our prominent bottleneck lies on our on-premise infrastructure where hang fire batch jobs run. However, this runtime suits fits our current need, and it can be scalable by increasing the number of job slots available to perform the batch. The Azure functions occurred in parallel with the backup and that time is encapsulated by our thought-put into ADLS. PolyBase’s ingestion time to SQL DW is another project itself because it’s related with other factors such as the process units chosen for the database, the data model designed and the amount of information already stored. The next steps will be achieving a way to monitor all 3 components and assure that all backed-up data was indeed transformed and automate the PolyBase ingestion.

Technology, About Omnia, Omnia Tech