How to succeed selling on Amazon in 2021

4 January, 2021
5 minute read
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The holidays are over and so is 2020. Initial figures estimate e-commerce growth caused by the global pandemic accelerated online shopping by nearly 30%. If you’re an Amazon seller, business may have boomed in Q4 even more than usual. Amazon announced on Seller Central: “Independent businesses … nearly all of which are small- and medium-sized businesses, have surpassed $4.8 billion in worldwide sales so far this holiday season. That’s an increase of over 60% from last year.” 

But how do you keep this momentum going? Read on for our top tips for Amazon success in 2021. 

Complete your 2020 and Q4 post-mortem

January is a great time to review your Q4 performance to assess what went right and what can be improved for next year. After all, Q4 2021 is less than 9 months away. Did you have any surprises or issues that need to be addressed? In addition to looking at your usual marketing activities and sales data, you should review some key areas particular to this year.

  • Ad and promotional performance: How did you drive traffic to your listings, and was it successful? What was your return on investment? Did you run coupons or deals for Prime Day, Black Friday, Cyber Monday Deals Week, or any new promotional activities? Consider the impact of the new Prime Day event date (in 2020, it took place in October) when looking at your overall marketing activities. 
  • Forecasting accuracy: 2020 may have been a wildcard year for your business. This will make it difficult to use sales numbers to accurately forecast or plan for 2021. Some businesses experienced record sales that might not be able to replicate in 2021 (for instance, puzzles, blue-light glasses, and cleaning products). 
  • Review your multi-channel approach: If you are selling on your own website, Amazon, and other e-commerce sites, take a close look at what is the most successful channel. It may make sense to focus your efforts on one channel where you’re seeing the best results.
  • Consider your competition: The backbone of success on the Amazon platform is getting SEO traction with the A10 algorithm. Now is a good time to review missed opportunities. Where are your competitors succeeding, what key search terms are shoppers using to identify products like yours? This is one area that can always be developed and improved further. 

Review Amazon FBA limits and policies

Due to a boom in online shopping, 2020 was an exceptionally unique year. Supply chain issues, bottlenecks, and delivery delays impacted Amazon and its sellers starting in March. Amazon then reactively implemented new policies, such as restricting sales of non-essential goods, such as household goods and medical supplies.

This summer, Amazon instituted quantity limits for product shipments from FBA sellers using U.S. warehouses. As a result, many sellers were unable to restock quickly enough as peak season approached. Many shoppers, hoping to avoid shipping delays also shopped earlier than in previous years, and holiday out-of-stocks for hot items may have been problematic. 

As the end of the year approached, Amazon lowered the Inventory Performance Index (IPI) threshold to 450. This means:

  • If your IPI is 450 or above in week 51 of 2020, starting January 1, 2021, you will not be subject to storage volume limits.
  • If your IPI is below 450 in week 51 of 2020, you will continue to be subject to storage volume limits. We will notify you of your next period limits, which will go into effect on February 1, 2021.

Because the limits will vary depending on the category, product, and individual performance, the best way to monitor this is by visiting your Inventory Performance dashboard in Seller Central. You can increase your IPI by reducing excess inventory, improving your sell-through rate, or fixing stranded listings.

As Amazon adjusts to a new normal, they have also absorbed some costs and are reacting to changes on behalf of sellers too. In a recent announcement, Amazon stated: “Logistics providers have already announced their annual fee increases for 2021. In a normal year, we’d be doing the same, but this isn’t a normal year and we’ve made the decision to postpone our annual fulfillment fee adjustments and continue to absorb the costs we are incurring on your behalf until June 1, 2021.”

Keep an eye out for additional fulfillment fees and changes as we approach spring.

Respond to customers and deal with returns

Because it’s January and because the gifting period just ended, it’s a good time to review  Amazon’s updated buyer-seller messaging guidelines. Amazon updated its direction on permitted message types, appropriate content, and style requirements in November 2020. Use the available templates in Seller Central and ensure your communication is in-line with Amazon’s latest policies to avoid account issues or suspensions.

Refresh, update, and test your Amazon pages and content

Now that the crucial selling period is over, it’s a good time to review your product detail pages, pricing, product info, and advertising setup. During Q4, we recommend leaving your pages alone and now launching major changes that could impact your sales or cause delays. Q1 is a much better time to test any changes and make updates. 

Use this time to ensure you have 100% detail page coverage, with accurate titles, descriptions, bullets, and optimised content. This also may include revamping your advertising, images, and backend SEO work. Start with a refreshed and updated keywords list and systematically make updates across your entire range. At eCommerce Nurse, we recommend that your top 20% (if not all your products) have A+ Content added. Utilise the A+ comparison chart widget to showcase your brand or business’ entire range. Read through customer reviews and answer FAQs in your content. Update or add to your Amazon Brand Store or revamp areas of the site where branding appears so that everything is consistent. 

If you’re launching products, enroll them in Amazon Vine or the Early Reviewer Program. Consider joining the Amazon Brand Registry if you are eligible. All of these programs can take a bit of time to get submitted, approved, and up and running. 

Q1 is a great time to focus on building your marketing plan for the rest of the year and getting all of the pieces in place. Testing coupons, promotions, virtual bundles, and other sales levers can all be beneficial. For example, you might want to check if customers respond better to a dollar-amount off vs a percentage-amount off when running a coupon. This kind of data can then be leveraged during Q4 2021. 

Get more help to reach your 2021 business goals

It can be hard to analyse, update, and implement plans across your business. The start of a new year is a great time to make changes, but if you’re a new seller, a bit lost, or reacting to less-than-stellar results from 2020, you may need additional assistance. If you need help with content optimisation or creation, images, A+ Content pages, Brand Stores, Amazon Ads, translation, expansion and international support, forecasts and planning, or an overall account audit, contact us for help.

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Katy Luxem

Katy Luxem

Katy Luxem is the senior content manager for eCommerce Nurse and Vendor Society. She has worked for Amazon in both Seattle and London, delivering results for multiple different teams and product lines across the U.S. and Europe. Katy's experience is centered on making sure customers have a best-in-class experience. She enjoys helping businesses and brands succeed and grow with next-level content.

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