5 Top Tips To Grow Your Business To $303 Billion [Amazon Cross-Section]

How do Amazon make money

So Amazon, the largest shop on the planet. If you haven’t heard of it, where the hell have you been? In this article, we are going to give you a cross-section or blueprint if you will to enable you to grow your business just like Amazon has.

QUICK DISCLAIMER: This article is NOT going to make your business the same size as Amazon but it will definitely help you grow your business if you actually do this stuff! Unlike 99.9% of the people that read these kinds of articles. (rolls eyes)

As a website, or an online asset I’d prefer to call it Amazon.Com generates roughly 2 BILLION visitors, yip TWO BILLION people visit this online shop EVERY MONTH! That’s just staggering isn’t?  And what do they do with those visitors? Turn them into sales and repeat customers of course, well most of them.

Amazons sales growth is nothing short of astounding.  It’s predicted to go from a measly $34M in sales in 2010 to a phenomenal $303M in the next year 2020.

How does Amazon make money

 Stats Provided By Sumo.com

So How Does Amazon Make Money?

Well, its sheer scale is an obvious reason that Amazon makes so much money. What we are going to highlight in this article is HOW Amazon makes money or at least some of them. The 8 Powerful Marketing Tactics in this article are exactly what Amazon uses to makes sales, get customers to come back and grow their business exponentially. So pay attention and plan to get this stuff done in your own business.

Growth Hack #1 – Master Pay Per Click Advertising

Pay Per Click advertising or PPC ads are a great way to grow your business quickly and the big wigs at Amazon know this. That’s why they are targeting 2.5 Million keywords on Google alone. Bear in mind there are other search engines available, and they run PPC ads on them too!

A quick bit of research reveals that Amazon is targeting a whopping 5.8 Million keywords on Google and Bing alone, utilising 6 Million ads. So how do they do this?

 

Amazon keyword tactics

 

 Amazons PPC ninja’s do this by using Google Adwords API to create DKI’s or Dynamic Keyword Insertions for each ad.

Here’s a quick example: 

Kenspeckle Marketing

1. Headline 1 with dynamic keyword insertion

  • [Product Name] at Amazon®
  • Shop [Product Name]
  • [Product Name]

2. Headline 2

  • Shop [Product Category Name]
  • Free 2-Day Shipping w/Prime
  • Amazon.com Official Site

3. Display URL

  • /[Main Category]
  • /[Main Category]
  • /[Sub Category]

4. Seller Rating Extensions

• Show when you have 150 unique reviews and rating of 3.5 stars or higher

5. Description line with dynamic keyword insertion

  • Big Savings on [Product Name]. Free Shipping on Qualified Orders.
  • Save on [Product Name]. Free 2-Day Shipping with Amazon Prime.
  • Find Deals on [Product Name] in [Category Name] on Amazon

6. Callout Extensions

  • Read Ratings & Reviews
  • Save with Our Low Prices
  • Shop Our Huge Selection
  • Try Prime Free
  • Stream Videos Instantly
  • Discover Prime Music
  • Explore Amazon Devices

7. Sitelink Extensions

  • Amazon Gift Cards
  • Amazon Prime
  • Prime Instant Video
  • Prime Photos
  • Amazon Prime Student
  • Shop by Room
  • [Product Category]

After a little more research into this brilliant way to run PPC ads, I found that Amazon would be rotating as many as 293 different ads for any one product meaning they are potentially blowing the competition out of the water. And you can too!

So How Can You Do This In Your Business

Now, this step is really quite technical so get your geek glasses on and let’s dive in.

Here’s an example of how you could set this up in your Adwords account.

Notice the dynamic keyword insertion in the headline and description.

Amazon marketing hacks

Amazon’s secret URL is a URL that forms based on a keyword someone hunts in Amazon’s search bar. To customise the landing page for someone arriving from Google, Amazon grabs the keyword you search on Google and dynamically adds it to the end of the URL.

This is what it looks like if you were to search for “Toe-Less Stockings” on Google and then click Amazon’s Google ad (Amazon dynamically changes the search query to the final URL):

Amazon manages this by using a clever Adwords API to create a unique landing page based on what is searched in Google. Pretty neat huh?

So How Can You Do This In Your Business

Obviously, Amazon has a massive advertising budget and some of the best developers the world has to offer but there is an easier and cheaper option you can use to get you started beating out your competitors on Google Ads.

  • Step 1 – Set Up SKAG (Single Keyword Ad Groups)
  • Step 2 – Put your product or service in that ad group
  • Step 3 – Create one ad targeted to that ad group
  • Step 4 – Create a landing page for that product/ keyword and send all traffic to it
  • Step 5 – Add negative keywords for the product or service

Growth Hack #2 – Lose Money To Make Money

It’s a little known fact that Amazon actually loses money selling Kindles and an even lesser known fact is that they make about 4X on the back-end when they sell one. No wonder the company is worth a Trillion Bucks right!?

Amazon Marketing Hacks

So How Can You Do This In Your Business 

  • Step 1 – List all your products and services
  • Step 2 – Give those services a rating from 1 to however many their are based on your profit
  • Step 3 – Pick one product or service to offer at a ridiculously low price
  • Step 4 – Set-up a sales funnel to promote that product and ‘upsell’ on the back end
  • Step 5 – Rinse and repeat

Growth Hack #3 – Philanthropy

Charity begins at home, or at least it should. Amazon uses charities to promote their business and you can too.

As of 2013 Amazon has donated $63M to charities through its charity affiliate programme, Amazon Smile.  Basically what they do is offer charities a 5% cut of anything sold via their unique link to Amazon.

How does Amazon make money

Any charity can sign up for an account and they are then provided with promotional material to promote to their audience. For example on their website, blog or even their social media channels. When someone makes a purchase through these channels the charity receives a 5% of purchase donation directly from Amazon and their followers not only receive the feeling of goodwill, but they also see Amazon a caring company that is dedicated to giving back. This goes a long way to:

  • Making customers feel better about their Amazon purchase
  • Encouraging more purchases from Amazon in the future
  • Customers viewing Amazon in a positive light

So How Can You Do This In Your Business

  • Creating one-day sales events where you donate a portion of all purchases for the day to a charity
  • Product donations to charities who will tell their audience about you
  • Host live events with local charities (such as a walkathon, charity bike ride, fundraising dinner, or a comedy night)
  • Partnering with charities that use (or could use) your products
  • Sponsoring a local youth sports team

Growth Hack # 4 – Increase Conversion Rates

On any given Amazon product page you will find several direct response marketing tactics designed specifically to increase conversions. They can include:

  • Social Proof
  • Perceived-Value
  • Pricing Scarcity and Urgency
  • 1-Click Buy Buttons
  • Upselling and Cross-selling

Amazon Growth Hack

Note: If you are going to try something like this, be very careful when including the original price. In the past, Amazon used to include the initial list price. However, after Amazon and other retailers faced a number of lawsuits over fake discounting, Amazon has stopped using list prices entirely.

Now, if they use this perceived-value pricing, their “original price” is just the price the item used to sell for on Amazon.

So How Can You Do This In Your Business

  • Use the 5 conversion hacks above
  • Research your competition
  • Research suppliers to find cheaper products of the same or better quality
  • Actively seek more reviews
  • Find more similar products to upsell and cross-sell

Growth Hack #5 – Viral Video

Video has been the go-to marketing medium for Amazon for years now and for good reason, it works!

This short, sharp ‘Show, Don’t Tell’ video has accumulated 13.5M views at the time of writing this. That’s just crazy, but we can all learn from this. Keep things short and sweet.

Allegedly, Amazon created 100 videos similar to this one and they used them in their YouTube advertising campaign and also in their T.V ads. It is also said that they used customer feedback and reviews to create these ads, which is genius!

It’s no secret that when selling something, anything, it helps to resonate with your customers and speak in their language.

You can do this by browsing:

  • Amazon reviews
  • Other review sites for your industry (Yelp, G2 Crowd, etc.)
  • Relevant forums or message boards
  • Facebook groups
  • Subreddits

For instance, if I sell biker jackets, here are three sites I might want to sift through.

  1. Amazon Reviews

Amazon Marketing Hacks

What I would do is search on Amazon for my target product then have a look at as many reviews as possible filtering my search to ‘Top Rated Products’ and 3-star reviews. I would then be taking notes of everyone’s pain points, common themes and anything else that caught my eye.

Kenspeckle Marketing

So here we can see Miles thinks this jacket is ‘too stiff’ so what I would do if I was selling a better, softer jacket, I would create a snappy 13-second video showcasing how my jacket is soft yet safe and promote it on social media targeting people who like motorcycling. Get the idea?

2. Forum Threads About Your Products

Kenspeckle Marketing

3. Reddit Discussion Boards 

How do Amazon make money

So How Can You Do This In Your Business

  • Research the language your customers use when making a purchase
  • Take notes of all the key phrases and pain points
  • Create content, blog posts, short (fun) videos, infographics etc
  • Build a marketing funnel
  • Promote the shit out of it!

 

Leave a Comment

Your e-mail address will not be published. Required fields are marked *