Katie Roberts / 6 Mins Read
Updated: June 27, 2023
Amazon’s dominance over the eCommerce market is quite a deal. And if you are a third-party seller on Amazon, know the tips small sellers should follow to compete on Amazon.
Selling on Amazon can be a challenge, to put it mildly. Not only are you competing against other third-party sellers, but you're often contending with Amazon itself. And you can't count on everyone playing nice.
Consider an April 2020 report from The Wall Street Journal, which uncovered that Amazon employees have applied data about third-party sellers to come up with competing products, despite the practice not being part of the company's stated policies.
The going can be especially rough when you're a smaller fish in the Amazon pond, so you need to apply smart strategies to win sales and visibility. Read on for nine tips that small sellers can use to compete on Amazon.
9 Ways That Small Sellers Can Compete on Amazon
Advertising your products via Google, social media, and Amazon itself can certainly help you score sales, but they aren't your only options. Why not look at others that may align with your offerings?
"Create a partnership strategy with blog owners, Facebook group owners, and websites that have subject matter that is a good fit for your product," advises Tim Mueller, head of business development at DealNews. "Many will charge a fee to post your product, and some will not if you are able to give them a feature or discount that is exclusive to them."
While some of these sites may be a good match in terms of products and interests, others may simply have users who are ready to buy.
"Deal sites like DealNews are able to create conversions because they have created trust with their readers as a source for best-of-web pricing," Mueller says. "So even though a deal site may not be specifically talking about your product niche, they only publish best-of-web prices, so readers are looking for that content and more apt to convert to a sale."
The visibility coupons provide can make them ideal for smaller sellers who want their products to stand out. For one thing, items with coupons get an extra pop of color on Amazon search results pages. Perhaps you've seen "Save 40% with coupon" or "Save $6.00 with coupon" below an item's price on these pages, with "Save" and the discount amount appearing in a green box. That's certainly one way to attract attention.
Consumers who are particularly coupon-hungry can also find these promotions on the Amazon Coupons page. Coupons are divided up by category, as well as searchable by brand. What's more, shoppers who aren't signed into their Amazon account get taken to a unique page for each coupon when they click on the product. For those who are signed in, the coupon will be clipped when they click on the "Clip Coupon" box, and they'll be redirected to the product listing page if they click on the item's image or description.
Want to make the most of these coupons? StartupBros notes that "Coupon pages have their own independent sales rank," adding that "if you’re a new seller or trying to compete in a tough niche, you may be able to get more eyes on your product by promoting a coupon for it instead of the listing itself." The site also suggests offering a coupon that's a bit better than your competition's, in order to increase your chances of getting featured on the Amazon Coupons page. And they recommend promoting coupons on third-party deal sites to bring in more traffic.
Just remember that coupons aren't free for sellers. For every redemption, Amazon requires that you pay 60 cents, plus the discount amount.
Hiring influencers to post about your product on social media can be tempting, but Mueller notes that you need to be careful paying high fees to them. "From my experience, there is not much in terms of conversions," Mueller says. "Some influencers, if you meet their ask for a fee, will always post your product."
Mueller also suggests taking a hard look at whether an influencer actually has any "influence" at all. "Look at their followers and how they are interacting with their content," he suggests. "Does it seem genuine to you? Or is it just influencers following influencers to make their numbers look good?"
When you're selling on Amazon, it can be worth putting in extra effort to find a good market niche for your products — perhaps one where Amazon doesn't sell its own items yet. This will likely require keyword research, but the payoff can be less competition.
In an interview with SupplyChainBrain, Avionos CEO Scott Webb said, "Where niche retailers can still compete… is vertically within a segment. Typically we see that smaller retailers are able to find unique categories in which they can outperform Amazon in depth of product availability or value pricing."
That may come in the form of personalized or customized products. "It's an area where, while Amazon has certainly enhanced [its] personalized experience, its personalized product selection is still nascent. It’s where niche retailers still can thrive," Webb told SupplyChainBrain.
If you do decide to sell personalized apparel, jewelry, or other products, consider registering with Amazon Custom. Note that while the feature set is free, you'll need to have a Professional selling plan and fulfill your own orders.
Other types of products that could give you a competitive edge are bundles and multipacks. An example of a bundle might be a few related products, such as a soccer ball, sports-ball pump, and portable soccer goal. A multipack, meanwhile, could be a 3-pack of soccer socks.
According to Buy Box Experts, "Since a bundled product is considered a different item and has its own ASIN on amazon, many sellers utilize bundles to avoid competing with other sellers on a popular product." Another perk of bundles is that they could reduce your Amazon seller fees. Amazon's referral fees are charged by the unit, so if you're selling three items as one bundled unit, that's fewer referral fees to worry about.
Be aware that Amazon treats bundles and multipacks separately. You can find guidelines for selling both on Amazon Seller Central.
You wouldn't expect pool toys to be big sellers in January, or that holiday ornaments would fly off the shelves in August. So you may have more success by listing products when they tend to be popular. For example, the shopping trends of DealNews readers showed that household and cleaning supplies tend to resonate in March, home improvement items are big in May, and lawn and garden products trend in June. For an extra boost, make sure your product listings are optimized when products are popular — more on that below.
Optimizing Amazon product listings may be a basic tip for Marketplace sellers, but it's important if you want people to find your products and buy them! Amazon offers a bevy of best practices for optimization, whether you want to improve a product's title, search terms, bullet points, or images.
Amazon shoppers can't hold an item they're considering in their hands, like they can at a brick-and-mortar store, so photos are important to get right. You may want to hire a professional photographer, especially one with experience photographing products.
Videos can help, too. "For shoppers, videos let them receive a large amount of information quickly," WebRetailer states. "They inform them about how they are supposed to feel about a product, striking an emotional chord. It’s information they want, so they’re more likely to stay on your listing and keep watching if the video is providing value."
Amazon does have to approve uploaded product videos, but notes that reviewing tends to take less than a day.
Software and other tools can assist sellers with everything from keyword research to inventory management. They can use data to help set you up for success and save time by automating certain processes. And some tools are even free! Here's a sampling of what's available:
Reviews are a big deal in the world of e-commerce. According to research from Northwestern University, "as products begin displaying reviews, conversion rates escalate rapidly. The purchase likelihood for a product with five reviews is 270% greater than the purchase likelihood of a product with no reviews."
Amazon reviews are key to many customers' purchasing decisions, and it's worth familiarizing yourself with the company's customer review policies. For example, you can ask people who buy your products to leave a review, though you can't ask for a positive review or offer any compensation for leaving one, such as money or gift cards.
You can get a competitive boost not only by receiving reviews but by looking through them. "Scan through the negative and positive reviews of competitors with similar products," SellerApp suggests. "This will give insights in the long-run allowing you to improve your product features and functionality based on customer reviews." You may be able to pinpoint the issues people have with competitors' products, too, and see how your own items can solve those problems.
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Katie is an unabashed word nerd and detail hound with more than a decade of editorial experience. Her work has appeared in publications such as Dogster Magazine, DOG FANCY, and Milwaukee Magazine. A graduate of Indiana University, she enjoys trivia, playing soccer, and cheering on the Hoosiers.
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