People can't get enough of shopping online. It's easy, convenient, and for the most part, cheaper than shopping at brick-and-mortar stores. 

It comes as no surprise, then, that the industry expects global e-commerce to be a $48 trillion industry by 2025. And when you sell on Amazon, you're likely to have a good piece of that revenue pie.

Big Business, More Competition

Amazon is one of the biggest e-commerce companies in the world. It has 300 million customers in more than 180 countries, clocking in millions of unique visitors every month in the Middle East and North Africa. If you're an Amazon seller in the UAE, you can reach new markets and generate even more revenue. 

But along with the limitless opportunities in Amazon comes stiff competition. Other sellers like you are vying for shopper attention. Unless you're an established business, selling more than 50 or so products, you're going to need all the help you can get to meet sales targets. And a big part of sales is making sure you've got the resources to meet consumer needs. 

Forecasting Demand and Optimizing Inventory Levels

Price, quality, and availability drive shopper or consumer demand. Here, we focus first on availability, which means ensuring you have sufficient inventory to meet demand. 

Inventory includes the raw materials and components that allow you to sell what you sell and the finished goods you sell. Stock is what you have on hand that's ready to be sold, whether you're storing goods in a warehouse. In contrast, inventory is the broader term for stock. Your retail business, however, needs both to be at a specific level. 

If you run out of inventory, you might not be able to create the finished goods you're selling on Amazon. If you run out of stock, you won't be able to fulfill customer demand. Your business needs to implement an effective inventory management system to determine which and just how much stock you need to order at specific times. Inventory management ensures you're never out of stock or that you don't have excess inventory. 

As you know,  excess inventory ties up cash flow whereas the right level of inventory turns into revenue.

When you choose Fulfillment by Amazon (FBA) as your fulfillment method instead of Fulfillment by Merchant, you'll have access to a suite of inventory management tools from the e-commerce platform. 

FBA uses a machine learning-based inventory management system. With access to data, such as time to shipment, cost of goods sold, and other relevant information, the system can forecast demand for your products and optimize your inventory levels.

Amazon's Inventory Performance Dashboard sends an alert when your stocks are running low. It even suggests ideal shipment timelines and inventory levels. On the dashboard, you'll have access to critical data, like sell-through rates, aging stock alerts, and recommended actions to optimize storage.

Getting Your Prices Right

Product pricing can be tricky. You want to offer your goods at affordable prices, but you also want to make a profit (which is the prevailing goal of every entrepreneur). Price it too low, and you leave money on the table. Price it too high and you risk sending customers to the competition.

Cost-plus pricing is the simplest strategy. You calculate your cost plus a markup, which is typically 50% for most businesses. But this pricing method doesn't consider how your customers value your product.

In value-based pricing, you price products according to what customers believe it's worth. It's the ideal pricing strategy because it can convey the uniqueness of your product and it can bring in more profits.

How do you determine the value of your products?

Find a similar product on Amazon to know how much it's being sold. Differentiate your product from that product and place a financial value on that difference. Does it come in a more appealing packaging? Is the product eco-friendly compared to other products? Add up those positive characteristics about your product, and convey the value they'll provide your customers.

To bolster sales, whether you're using cost-plus or value-based pricing, apply the following strategies.

  • Use the no-cost promotions on Amazon to help your sales. Create coupons with the Amazon Coupons page. On the Amazon Deals page, try the Lighting and 7-Day Deals. On Featured Offer, consider a buy-one-get-one promo. 
  • Encourage customer reviews because shoppers take their cue from satisfied shoppers. If someone leaves a negative review, address their concerns. How you respond may persuade other customers to still try your product.
  • Run a contest to boost engagement and introduce your products to new customers.

Sustaining and Improving Quality

Quality products sell. When you offer customers durable, reliable, and well-made goods, selling will be easy and consistent. How do you ensure quality?

Every stage of your product development process (i.e., product design, process design, and manufacturing) must be flawless. Where and how you source your raw materials also contributes to the quality of your products. It pays to work with your suppliers.

When it comes to improving product quality, factor in customer feedback. A sale is never the end of customer engagement; your customers are the ultimate judge of quality, so their feedback matters to product improvement. 

Use surveys. Read reviews. And provide customer support after a sale to gain more information on whether customers are satisfied with their purchase.

Selling on Amazon can be profitable. But you must meet shopper demand to run a lucrative retail business. By providing what shoppers want in terms of availability, price, and quality, you can grow your online business.