We will be covering all the topics in these notes related to Amazon Business Analyst Interview Questions.
- 1 But first, Let’s Know What Is Amazon?
- 2 Why Amazon?
- 3 Issues With Sellers
- 4 Who Are Virtual Assistants?
- 5 How Does Amazon work?
- 6 What Are The Marketplaces?
- 7 How To Make An Account On Amazon? All Requirements
- 8 Types Of Amazon Accounts
- 9 Amazon Business Models
- 10 What Is FBM & FBA?
- 11 Product Research
- 12 What Is A Patent?
- 13 Difference Between A Patent & Trademark?
- 14 What Is Sourcing?
- 15 Which 3 We Use To Order Samples From?
- 16 What Is Listing?
- 17 How To Do Keyword Research? Detailed Below
- 18 Amazon Backend Search Terms Guidelines
- 19 What Is PPC?
- 20 Steps Of Ad On Amazon
- 21 What Are The Amazon Ads Pricing/Fees?
- 22 How Does The PPC Auction Work?
- 23 Does Amazon PPC Improve Organic Rankings For My FBA And FBM Products?
- 24 How Much Should I Spend On Amazon PPC?
- 25 How Do I Calculate My Profit Margin And Break-Even ACoS?
But first, Let’s Know What Is Amazon?
Amazon is the largest online retailer in the world (A big bazaar that invites investors to open a shop in it and sell whatever they want to sell to the audience who comes to Amazon and finds different things).
Below is the annual net revenue chart of Amazon that describes the 20% annual growth rate in this big market, so when the world is making millions of $$$$ then why can’t we??
The chart below indicates how rapidly businesses are moving towards eCommerce (especially Amazon).
But selling on Amazon is not the piece of cake as you will be required to a lot of strategies to apply to research and marketing to build a successful Empire.
Issues With Sellers
The issue is that either investors do not have time for it OR have no efficient skill to sell successfully on Amazon, so what they require is assistants who help them manage and grow their business successfully.
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Who Are Virtual Assistants?
Virtual assistants are the people who provide their services virtually as per their expertise.
As we are seeing rapid growth in the field of eCommerce (especially Amazon) so that’s why we suggest having a strong grip on the skill of an Ecommerce Expert and offering your services virtually to the people who are selling online on Amazon.
So we will be covering everything in our Notes/Blog that will help you to master this skill. So let’s start;
How Does Amazon work?
To do business on Amazon, you need to create a seller account on any of Amazon’s marketplaces.
What Are The Marketplaces?
Amazon has different branches in different countries given below;
So as per the budget or your desired market you may create the account.
That is something like you know people of the USA like Ceramic Plates and this is something you can easily source so you will go to sellercentral.amazon.com.
Create an account to start selling ceramic plates to people of the USA as all the citizens as they use amazon.com to search and purchase things.
People of the UK like Bamboo Glasses and you are willing to target an audience of the UK so you will create an account at sellercentral.amazon.co.uk and start selling there to people of the United Kingdom etc.
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How To Make An Account On Amazon? All Requirements
For Account Creation On Any Marketplace, You Require Your Own;
- Mobile Number
- Email Address
- Bank Account
- Debit/Credit Card
- Valid Passport
You do use these details to create a seller account on Amazon. There are two types of Amazon accounts;
Types Of Amazon Accounts
- Individual Account (On your personal details)
- Business Account (On your company details)
You may create any of them at your convenience.
Once you create an Amazon account either Individual or business, you have 2 options to choose from;
- Individual Selling Plan
- Professional Selling Plan
__ Individual Selling Plan
In the individual selling plan, you will be charged $0.99 per unit to sell and you’ll be allowed to sell just 40 units per month & will be restricted by Amazon in many things.
__ Professional Selling Plan
In a professional selling plan, you will be charged $39.99 monthly and can sell as many units as you can. Plus will be able to get the benefits of multiple Amazon selling features.
NOTE: YOU MAY SWITCH THESE SELLING PLANS ANYTIME YOU WANT BY GOING INTO SETTINGS UP YOUR SELLER ACCOUNTS.
So above are the details about account creation, if you get any client who is not aware of the account creation process, you may guide or assist him/her as a Virtual Assistant in the account creation process.
We recommend creating a business account as it helps you in TAX matters as well as it is a requirement if you’ll be doing WHOLESALE.
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Amazon Business Models
You have multiple methods of selling on Amazon as below;
- Private Label
__ Private Label
In a private Label, you chose a good-selling item, find its supplier or manufacturer and label your logo/brand name on it and start selling it on Amazon under your own name.
- You Chose The Design
- You Find The Source
- You Label Your Logo On It
- You Market/Advertise It
- It’s Totally Your Property
In Wholesale you find a branded item selling great –
You reach out to the brand via email/phone call and request them to allow you to sell their product on Amazon with the same branding (purchased by the same brand at a wholesale rate).
The issue in wholesale is that brand allows not just you, but many others as well so when multiple people start selling the same product of the same brand, it creates a war between the sellers so the one having the lowest price wins the war mostly.
Plus we are not selling our own brand as we are at risk whenever the brand wants he can kick us to stop selling their items on Amazon.
In Dropshipping you see a product selling at the lowest price than Amazon on other eCommerce stores.
You list it on Amazon and once the buyer orders your product on Amazon, you simply copy the details of that buyer and reach the other eCommerce store where you found that selling at a low price and purchase from there.
When they ask for the shipping details, you add the same you got from the Amazon buyer so that store delivers the product to the Amazon buyer on your behalf.
The issue here is that Amazon does not allow this kind of drop shipping so if any buyer complains to Amazon that I got the product in eBay or another store’s box or invoice.
Amazon will suspend your seller account for life.
- It definitely required more budget when doing PL as you are building your own brand.
- Lower in wholesale as you will be selling already well-selling branded items.
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What Is FBM & FBA?
Whether you are doing PL or Wholesale, you will be having two options FBM or FBA.
FBM stands for Fulfilment by Merchant: In which you list items on Amazon and when you get an order, Amazon notifies you along with the shipping details of the buyer whom you then deliver the product timely.
FBA stands for Fulfilment by Amazon: In which you list an item on Amazon and send your stock to Amazon WAREHOUSE where Amazon stores your stock.
Once you get an order, Amazon picks the product from your stock, packs it in the box, and delivers it to the customer.
NOTE: Amazon CHARGES YOU A STORAGE & SHIPMENT FEE FOR THIS THAT DEPENDS UPON THE DIMENSIONS OF YOUR PRODUCT, WE CALL IT FBA FEES.
I have 20,000 USD and want to do business on Amazon.
I am a Pakistani national living in Pakistan and have no experience regarding account creation or Amazon business. Can you please provide me with a clear road map??
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We cannot sell anything we like or want on Amazon as every business rotates around 2 things;
- How many people are searching for that product?
- How many people are purchasing the product?
- How much revenue is generated by the market by selling that product?
- Is there any big brand that we cannot beat in price or reviews?
- Is there already a price war?
Means sellers are selling at very low prices at which we cannot make a good profit?
Or that market is dominated by a few sellers? (Mean only a small number of sellers are covering huge sales while others are making a few bucks).
So keeping that in mind ENABLERS designed criteria that we call Product Research Criteria. That is given below for US and Europe Marketplaces; We use to check all the things given in the criteria but how can we?
Definitely, here tools will help us, there are many tools in the market that can be used to analyze the data of the market (sellers). 2 more famous and recommended are;
- Jungle Scout
- Helium 10
These tools have APIs connected with Amazon that pull out the data and show us on the screen to help us analyze the market. So let’s start hunting;
First, we must have to understand the KEYWORD SCIENCE as this is the game of keywords.
KEYWORDS are the phrases that describe your product or customer need.
Customers add the keyword in Amazon search box like ‘Laptop Stands’ to tell Amazon their needs and then amazon shows them the sellers selling the laptop stands.
So what we have to hunt are the keywords that buyers are using on Amazon to search for whatever they need.
There are a few categories that require approval if you want to sell products that relate to them;
- Health and Household
- Toys and Games
- Industrial & Scientific
Any Product in the above categories or related to these categories will be required certain invoices and certificates to sell on Amazon, so to avoid the hassle, we do recommend starting with Open Categories.
A few detailed videos on Product Research are given below that clear your concepts easily;
__ Competitor Picking
Once your product gets approved by management or your investor, the next step you do is Competitor pickup (choosing the design/offer you’re going to sell).
Because it is an old idea to copy the existing design and start selling at a lower price as everyone is doing this.
So we must add value to existing offers that can give a customer a solid reason the skip others and purchase from us.
There are a few steps involved in COMPETITOR PICKING;
- Checking the seller with low reviews and high revenue (More than our target revenue) on the first page.
- Read the negative reviews to make improvements to your product.
- Plan how you are going to add value to the existing offer (You may check other markets to get an idea).
- Hire a Patent Checker to confirm the product is not the PATENT.
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What Is A Patent?
A product patent provides an exclusive right to prevent third parties from making, using, offering for sale, or selling that specifically designed product.
Once you select the final design, first check the patent of the product.
Hire a third Party Patent Checker from Fiverr (Pro_usa) is recommended.
Difference Between A Patent & Trademark?
The patent refers to a specific design of a product while a trademark is the brand name or slogan that you register.
So in a trademark, no one can use any product on which your brand name or logo is mentioned however he can put his own logo or brand name on it to sell.
While in patent no one can sell the product design you registered whether there is your logo on it or not.
Benefits Of Patent
- No one can sell the design that you registered.
So you will be the only unique seller of that specific shape in the market that beats the competition.
Benefits Of Trademark
- No one can hijack your listing.
- No one can sell your product as you may report to Amazon that your registered logo/brand name is labeled on it.
- Amazon facilitates you by offering A+ Content Manager (Adding images in your product description for enhancement) as well as a video option.
- You may run a different kind of advertising on Amazon for your product.
So after competitor picking, we jump into the step of sourcing.
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What Is Sourcing?
Product sourcing is the process of finding products to sell. It means finding reputable suppliers to buy quality products at a good price.
We prefer to go with ALIBABA as it is very convenient and efficient as compared to others.
However, there are a lot of manufacturers and distributors on ALIBABA for millions of products so we cannot contact/trust each and every seller.
We have the criteria of BEST SUPPLIER on Alibaba as below;
- Alibaba Membership: 3+ years (Seller must be on Ali Baba for more than 3 years.
- Response Rate: Must reply within 6 hours.
- Trade Assurance (Alibaba will keep the dealt amount and will be a guarantor for both parties so things could be smooth and trustworthy. Ali Baba will charge 3% of the total dealt amount from the supplier).
- Verified Supplier (Means Alibaba has inspected and Verified the supplier by sending his team to his factory)
- Get Quotes On FOB OR DDP Terms (International Commercial Terms)
Free On Board (FOB) –The seller must load the goods on board the ship, nominated by the buyer. Cost and risk are divided when the goods are actually on board.
Delivered Duty Paid (DDP) –The seller is responsible for delivering the goods to the named place in the country of the buyer and pays all costs in bringing the goods to the destination.
- MOQ levels should be low (Minimum Order Quantity as we use to order 500 – 1000 pieces at the start while there could be a limitation for some suppliers to order at least 5000 units etc.)
- Should have relevant certifications related to that product or product category
- Payment terms: 30% advance and the rest before delivery
- Mode of payment: PayPal, Credit card, T/T, etc. via Alibaba Trade Assurance
For contacting the supplier we can use different templates available on the internet, however, the one I am using is below;
Upon contacting multiple suppliers we chose at least 3 suppliers and ordered the samples from them as well as ordered the product from the competitor to compare the quality with the samples.
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Which 3 We Use To Order Samples From?
The ones whose quotation gives us maximum profit margin. To calculate the profit margins we use Amazon FBA REVENUE CALCULATOR;
After comparing the samples we use to negotiate further with the supplier whose samples are the best and place the final order via ALI BABA trade assurance at 30% advance and the rest before delivery.
Once production is done, we hire INSPECTION COMPANY for quality assurance of our inventory.
There are many companies in china that charge $200 – $300 and visit the warehouse of your supplier to inspect the inventory and provide us a quality assurance report as below;
If inspection gets passed, you pay the rest amount and ask the supplier to send the inventory.
If failed then ask the supplier to revise the damaged units and the next inspection will be expensed by 50% by you (Fix this before placing the order so they will be careful as they will be getting penalties in case of any henki-phenki.)
What Is Listing?
Once all is done from the SOURCING, the next step is to do PRODUCT LISTING.
Product Listing is the process of creating the content of your product to display on Amazon and upload it on Amazon.
Elements of Product Listing;
- Brand Name
- Variations (If any)
Fulfillment Method Above is the things that customer can see when opening your product detail page on Amazon.
So to do product listing we will be required above things as well as UPC. UPC is the product ID that you require to list any product on Amazon.
So if you are using a product let’s say ‘ice cream scoop’ you will be required one UPC that you will add into the PRODUCT ID field while listing.
So first we arrange the all above-mentioned elements before doing product listing.
For the Title, Features, and Description we do LISTING CONTENT WRITING.
Writing the Title, Features (Bullet Points), and Description of a product is called Product Listing Content/Description Writing.
The purpose of a product description is to supply customers with important information about the features and benefits of the product as well as to feed Amazon’s algorithm.
Like what our product actually is (By adding High SV Relevant Keywords) An Amazon product listing performs several functions, but the two main ones are:
- Enables your products to be found in Amazon searches.
- Encourages shoppers to purchase your products.
To achieve both objectives, it is important to optimize your product listings on Amazon.
- Product Title
You can use between 150-200 characters for the title, depending on the listing.
This number has been higher before but there are changes on a regular basis, for now, this is the current guideline. However, Amazon recommends a length of max 80 characters.
So the title is displayed in full length on smartphones as well, further, this length is perfect for ensuring a better ranking.
EXAMPLE: XOGO Ice Cream Scoop – Premium Quality Stainless Steel Ice Cream Scooper with Nonslip Grip – Black
- Bullet Points
Last but not least, is the product description. It’s not that relevant in terms of ranking, however, not optimizing it won’t make sense.
Further, it’s the perfect place not only to provide additional information but also to embed long-tail keywords.
Here the character limitation is 2000 characters.
Naturally, using more or less all of them is recommended. However, keep the sentences rather short. The main features and benefits explained with long-tail keywords have turned out to work best.
Images are always a key factor.
High resolution, professional photos and showing the product in different positions that’s how it is supposed to be.
Displaying a product in use, with the package, with additional items, in detail, etc. is what a potential customer wants to see.
A Well Optimized Listing Example is given below;
So above things are required for listing a product on Amazon. However, we forgot to discuss UPC which is a necessary thing as well for listing your item on Amazon.
Amazon UPC is nothing but a unique code assigned to each product on the Amazon marketplace. …
UPCs make it easy to identify individual products sold on Amazon across the world. Think of it as Amazon’s system to separate each product in its database.
There are many websites that provide UPCs but make sure to choose the correct one as Amazon does not accept the UPCs of everyone.
We recommend purchasing from Nationwidebarcode.com as we have a better experience with this website’s UPCs.
UPC is product wise not quantity-wise, which Means If you are listing a product “ICE CREAM SCOOP” and sending its 500 pcs into the Amazon warehouse for FBA, you will need a single UPC that will be the identification of all 500 Units.
But if you are sending different colors or sizes of ICE CREAM SCOOP then each size and color will be required their own UPCs that will be the actual identification.
For example, 1 ice cream scoop with 2 color variations pink and blue will be needing 2 UPCs, 1 for Pink and 1 for Blue.
Once you make the above things ready, you start listing your product by going into your seller central “add a product’’ menu.
Below is the complete video about how to do product listing on Amazon.
- Keyword Research
We discussed the Keywords above many times but what are the KEYWORDS ACTUALLY? If I say Amazon is all about KEYWORDS, that won’t be wrong.
Keywords are the phrases that describe a product OR Keywords are the phrases that explain the customer’s need.
The buyer opens Amazon and adds whatever he needs in the Amazon search box like Laptop Stands for HP.
Amazon will see how many sellers have used Laptop stands for HP in the content of their listing (title, bullets, or description) and pick the relevant one for the buyer in search results.
So as a seller it is important for us to know all those keywords related to our product that is being used by buyers in the Amazon search box, so we can use them in our content of the listing to maximize the traffic.
For this purpose, we use to do KEYWORD RESEARCH. Keyword Research is the process of finding all the relevant high-search volume keywords by using different methods/tools.
Make sure to use always relevant keywords in your content to avoid irrelevant traffic, which means if you are selling plastic ice cream scoops then stainless steel ice cream scoop is not your keyword, so avoid it.
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How To Do Keyword Research? Detailed Below
Backend Search Terms: Backend Search terms are the hidden keywords you can use in the Search Terms field while doing product listing.
The purpose of the BACKEND SEARCH TERMS is to give Amazon all the ‘terms’ that you are sure can be used on Amazon with your keyword.
For i.e. you are selling ice cream scoops so people might be using the terms stainless steel, pink, large, nonslip, etc. with your product name so you may use all those words in the backend search terms field.
Amazon Backend Search Terms Guidelines
You have to learn the rules of the game so you can play better than any other seller in the marketplace. Here are a few of the important ones:
- Stay under the length of 250 bytes as specified by Amazon.
- Avoid repeating words within the Search Terms field. Amazon’s algorithm will index every keyword included in your product listing, so no duplicates are required.
- Avoid using ASINs, your brand, or other brand names in Search Terms.
- Use singular or plural. No need for both, as it is a waste of characters.
- Include keyword synonyms (i.e. nappy, diaper, etc.).
- Include abbreviations and alternate names.
- Avoid using punctuation. Just use single spaces.
Competitor Research is the method of finding all those keywords on which our competitors are ranked or getting sales from.
We can use different tools for this purpose, I suggest using CEREBRO. Below is the method of doing a competitor’s keywords analysis:
- Amazon FBA Shipping Plan
When you’re ready to send inventory to Amazon, you begin by creating a shipping plan. A shipping plan specifies:
- The products you want to send to Amazon.
- The quantity of each product.
- The shipping method and carrier details.
- Whether or not you want to prep and label your inventory yourself or have Amazon do it.
Steps To Do
- On the Manage Inventory page, select each product that you want to ship.
- Then select Send/Replenish Inventory from the Action on the Selected drop-down menu.
- On the Send/Replenish Inventory page, select one of the following:
- Create a new shipping plan to create a new shipping plan.
- Add to an Existing Shipping plan to add products to an open shipping plan. Select an open plan from the Add to shipping plan drop-down list.
- Confirm your ship-from address. Your ship-from address is the location where your shipment will be picked up. It may be your home or business. If you work with suppliers, it may be from their warehouse. To change the ship-from address, click Ship from another address.
- Confirm the packing type of the products you are shipping to Amazon.
Individual Products: These are single products of varying quantities and conditions.
Case-Packed Products: These are multiple of the same product packaged by the manufacturer, each case containing the same quantity in the same condition.
Product Launch & Rank
Once your product gets activated on Amazon, it means your launch has started.
Amazon takes your product into HONEY MOON PERIOD where it requires a little consistent sale on the keywords you want to rank and used in your content as compared to the existing sellers.
Because you do have the new release tag and Amazon realizes that so he gives you this favor.
So from the very first day, we must start working on getting sales on all the relevant keywords we want to rank on. For a successful launch, we recommend doing PPC.
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What Is PPC?
Amazon PPC is an advertising model in which advertisers pay a fee to Amazon when a shopper clicks on their ad (pay-per-click).
As we discussed Amazon ranks us on any keyword on the basis of sale on it, so when we are a new seller we definitely have zero sales hence no ranking.
By running PPC we give Amazon all the keywords we want to show in search results and Amazon displays our Ad in search results as SPONSORED against all those keywords.
The ranking of Amazon-sponsored Ads depends upon three factors.
- Bid on the Keyword
- Relevancy of that Keyword
- Conversion History on that Keyword
Bid means how much you are willing to pay to Amazon once a buyer clicks on your ad to view your product page, more you bid high more your chances will be to appear on top.
Relevancy means your product must be matching with the keyword you are targeting, i.e. your product is a laptop stand and the keyword you are targeting is ice cream scoop.
Amazon won’t display your ad as it’s totally irrelevant.
Sales History (conversion) means how many visitors converted into buyers after clicking the ad.
Amazon sums the score of all three factors and gives you a sponsored rank on the top of the page, mid or bottom, or even 2nd 3 rd page, and so on.
However, the number of sellers leveraging Amazon PPC’s potential continues to grow significantly year over year.
So, if you don’t have a defined plan in place, it may become difficult to achieve your PPC goals on Amazon.
Steps Of Ad On Amazon
There are 3 types of Ads on Amazon;
Sponsored Products – keyword – and ASIN-targeted ads similar to Google Ad words that enable you to promote individual products within Amazon search results and on product detail pages.
Sponsored Products are the most popular ads on Amazon.
Sponsored Brands – ads for brand building that allow brands to promote a custom headline, brand logo, and up to 3 products in their ad is in the top spot above Amazon search results (and other placements), with the ability to send shoppers to their Amazon Stores page or a custom landing page on Amazon.
Sponsored Display ads
– ads that send shoppers to Amazon product detail pages. They deliver relevant ads both on Amazon and on external websites to shoppers who are visiting or visiting (remarketing) specific products on Amazon.
What Are The Amazon Ads Pricing/Fees?
Sponsored Products, Sponsored Brands, and Sponsored Display ads are purchased on a cost-per-click basis and displayed at no charge – views or impressions are free.
You pay only when a potential customer clicks on the ad.
You’re in control of the amount that you’re willing to spend per click and hence the amount you spend on ads.
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How Does The PPC Auction Work?
The cost-per-click (CPC) for each ad on Amazon is determined in a so-called second-price auction. Each advertiser submits a default bid (the maximum they are willing to pay per click) for their ad.
The highest bidder wins the highest ad position (ad rank #1) and will also pay the highest CPC, but the highest bidder does not pay the amount they bid.
The highest bidder pays only $0.01 more than the second-highest bid.
Does Amazon PPC Improve Organic Rankings For My FBA And FBM Products?
Yes, it can. Amazon PPC sales have a direct influence on a product’s organic ranking on Amazon.
Therefore, more sales generated via Amazon PPC ads will have a positive effect on the organic ranking of your FBA or FBM product. This effect is especially important for new products.
New products generally lack a sales history, and therefore performance data, which in turn, negatively affects organic ranking.
Amazon PPC can change that by driving traffic to your FBA or FBM product listing and thereby boosting sales as well as generating reviews to drive further conversions.
How Much Should I Spend On Amazon PPC?
To understand how much you should spend on Amazon PPC, you need to first calculate your profit margin before ad spending (which is equal to your so-called ‘break-even ACoS’).
Regardless of the goal of your campaign, you will always need to calculate your product margin first to determine how much margin you can afford to spend on Amazon PPC.
How Do I Calculate My Profit Margin And Break-Even ACoS?
- Break-Even ACoS = Profit Margin before Ad Spend
Your break-even ACoS is equal to your profit margin before ad spending. Why? In the example below you can see that your profit margin before ad spending is 25%.
As long as you don’t spend over 25% on PPC to promote your product, you won’t lose money.