Amazon is often referred to as a cash cow for online businesses, and yet, only one percent of U.S. Amazon sellers achieve $1 million in sales each year. For many sellers, success also comes as fast as it goes. One operational slip-up, one sudden marketplace change or one unscrupulous competitor can bring even the largest of Amazon empires down.
Despite this harsh reality, there are proven ways to fortify your business and set yourself up for success in the upper echelons of Amazon royalty.
We asked seven experts with first-hand Amazon experience two questions:
- What does it take to be a top 1% seller on Amazon?
- What does it take to sustain that growth and go from your first million to millions?
Here’s what they had to say.
Track the Right KPIs & Sell Exclusive Products
“To be a top seller, you need to have a clear grasp of the economics of every SKU you sell, so you can avoid selling unprofitable products for too long, which is sadly a common problem among most smaller Amazon sellers.
When I look at the many multimillion-dollar sellers that I am fortunate to know, they look at their financials nearly daily, and manage their business by operational KPIs (like traffic, conversions and buy box percentages on a per-ASIN level) that enable them to course correct quickly.
While smaller sellers may also be disciplined this way, a multimillion-dollar seller usually needs to be selling its own brand or selling someone else's brand exclusively. And that seller adapts its catalog regularly, recognizing that if it doesn't make its own products obsolete, some other competitor will likely undercut them and aim to steal share.” - James Thomson, partner at Buy Box Experts
Diversify Your Catalog & Audit Your Operations
“To succeed on Amazon, you need to sell a variety of products—not just one or two hot-selling items. The more products you have, the less reliant you are on just a few SKUs for your revenue. This will help you scale and spread cost out as well. Scaling growth also requires you to:
- Broaden your product portfolio
- Perform a deep-dive of your operations, with the goal of reducing costs and increasing efficiency
- Use FBA to help scale up your operations
- Make sure your warehouse, software and staff are equipped to handle additional volume
- Figure out how to drive more traffic to your listings, whether that's through external sources or running advertising
Sales can spike 100% to 200% overnight, so you need to be prepared for anything.” - Nelson Yan, founder of Caravan Group
Sell High-Quality Products & Test Often
“The number one key to success—in any business—is product quality. If you sell bad products, you are going to get found out quickly, either through a suspension, high number of returns, negative reviews or something else. Any of these will prevent your listings from achieving better success, especially on Amazon, where higher quality products and positive customer experiences always prevail.
The key to continued growth is constant innovation, testing and product adoption while building your Amazon brand. Amazon is constantly rolling out new advertising features, marketing tools and/or listing enhancements. You can stay a step ahead of the competition by testing new features often and early. Keep in mind that there are also limitless ways to build brand awareness off Amazon or drive more traffic to your listings. Failure to adopt or test new strategies is how most sellers become stuck.” - Mike Begg, co-founder of AMZ Advisers
Invest in Your Upper Funnel
“One major tip to becoming a top 1% seller on Amazon is to invest heavily in new customer acquisition and to understand that these upper-funnel tactics are not going to generate immediate revenue, but will, in the long term, help you move customers down the funnel faster.
Think of it this way: when buyers log onto Amazon.com, they’ve entered the ‘grocery store.’ But they’re not necessarily at your shelf yet—let alone your aisle—so you need to create signage (like ads) that will draw attention to your brand and lead them down the aisle, plus help them recognize it the next time they come around.
Once these upper-funnel strategies have been deployed, it’s important to think of ways to capture the demand that’s still left in the market. You can do this by diversifying your catalog. For example, you can build on the success of a top-selling SKU that’s already in your catalog by creating variations that complement the product. Some of the most successful brands we’ve worked with are excellent at expanding and appealing to lookalike customers in that way.”- Aaron Gooden, associate director at Tinuiti
Take a Leadership Mindset & Invest in Software
“Don't try to do everything yourself. Ask for help, hire more hands and surround yourself with smart people. Strive to become a great leader and to grow a team that can make you successful.
To remain a top 1% seller, you’ll also need to build the best software stack for your business. This will require lots of research and a willingness to pivot. But with the right software, you can automate and enhance business processes so that you’re always operating at your finest. Remember to evaluate your tech stack regularly, tap into the resources that are offered to you by these systems (their people) and to make sure you are using every feature that makes sense for your business.” - Kim Wren, director of business development at SkuVault
Set Ambitious Goals & Target New Niches
“All successful Amazon sellers should clearly define their short- and long-term goals. Ambitious short-term goals (like tripling sales year-over-year or earning twice as many product reviews) can help you achieve your long-term goals and drive rapid growth.
Make sure to define regular checkpoints too for measuring your progress and adjusting as needed. An Amazon seller software can streamline this part by automatically tracking KPIs, providing a framework for campaigns and communicating when or how things need to improve.
The truth is, getting to the top 1% is hard but staying there and continuing to grow is even harder. It's possible to reach the top 1% by dominating in one or two particular niches. But to grow further, you'll need to diversify your range of products. If you reach the top 1% in one niche, the prospect of doing it all over again may seem daunting, but the lessons you learned while building your Amazon business will serve you well.” - Henson Wu, co-founder of FeedbackWhiz
Prioritize Listing Quality to Activate a Flywheel
“Unless they simply got lucky, every top Amazon seller knows the importance of a high-quality listing. Sellers live and die by their listings on the marketplace every day. The trouble is, most sellers only have a partial understanding of what makes up a strong listing. They’ll sprinkle in some keywords here and there or update their images and call it a day.
While those things are important, there’s a whole science behind listing on Amazon. For example, you need to have complete, accurate data (not just the required fields) that’s specifically formatted for Amazon. Then, whenever Amazon decides to change their requirements overnight, you need a way to track those changes and quickly implement them, so you’re not also losing sales overnight.
Once you nail down the art and science of Amazon listing, reaching $1 million or more becomes much more feasible. You’ve got high-quality listings that yield higher search rankings, which lead to more sales, fewer returns and positive customer reviews: the perfect flywheel.” - Dan Sugarman, CEO at Zentail
Protect Your Brand & Your Profits
"Don’t overlook the importance of IP protection and Amazon’s Brand Registry features, which help you identify counterfeiters, unauthorized resellers and misrepresentations of your brand.
It's also very important to analyze your pricing structure regularly and address all possible ‘holes’ that are causing you to lose money. Two frequently neglected reasons are (1) preventable returns and refunds, and (2) dead stock as a result of poor product-market fit and dried-up demand." - Žydrūnas Stankevičius, co-founder of Ennovatti (top 1% Amazon seller)