CPC Strategy: FBA Assortment Allocation Strategy

Refining Your FBA Allocation

Strategy

Are You Sending the Right Products to FBA?

D A Y 1 : A M A Z O N F U L F I L L M E N T S T R A T E G Y C O U R S E S E R I E S

Before We Get Started

Session Recordings Will Be Sent Next Week

Q&A Following the Presentation

Submit Questions In the Chat Box to the Right

Logistics Speakers

Rick Backus

CEO

CPC Strategy

Pat Petriello

Head of Marketplace Strategy

CPC Strategy

For my business, Amazon Prime Day…

Poll For The Audience

A. Had zero impact on my sales

B. Had minimal impact on my sales

C. Significantly increased my sales

D. Other

• Founded in 2007

• Over 300 active retail clients

• Top 50 fastest growing company in San Diego 3 years running

• Recognized as an Official Google Shopping Partner

• Custom-built retail search technology platform, CAPx

Solutions

Retail-focused Paid Search (PPC)

Google Shopping Management

Shopping Channel Management

Amazon Sales Acceleration

CPC STRATEGY HAS BEEN FEATURED ON

DELIVERING LASTING RESULTS FOR OUR CLIENTS

VISIT CPCSTRATEGY.COM

Pat Petriello

Head of Marketplace Strategy

Former member of Amazon Seller Services Team

Former professional seller on Amazon.co.uk, eBay, Buy.com

Lead architect for CPC Strategy’s Amazon Sales Acceleration Program (ASAP)

Engineered & directed million dollar revenue stream on Amazon

Course Overview

• The Role of FBA in Overall Amazon Strategy

• Misconceptions About FBA Allocation

• Following ASIN-level Performance Metrics to Allocate FBA

• Incorporating Fees in Profitability Assessments

• Long Term Storage Fees

• Takeaways

• Q&A

The Role of FBA in Overall Amazon Strategy

www.CPCStrategy.com | 619.501.6138 | [email protected]

Fulfillment by Amazon (FBA)

The single most influential lever third-party sellers can pull to improve Marketplace performance

The benefits of FBA are well-known:

• Warehouse units

• Pack and ship orders to customers

• Provide customer service for those orders

• Influence role on Buy Box ownership

• Safeguard fulfillment latency & seller rating

• Access to Amazon Prime user base

• Increase sales performance

Misconceptions About FBA Allocation


Sellers find FBA to be an intimidating program

• You’ve experienced some success with FBA but don’t know where to push forward with it

• You’ve increased sales velocity but can’t quantify how profitable it is

• Some of the operational elements are painful for you and your team (labeling, inbound shipments, etc.)

Misconceptions about FBA

• FBA is Binary

• Emotional Connection to Product(s)

• FBA Assortment Allocation

• Calculating Profitability

• Non-transparent Fees

• Short-term vs. Long-term Planning

A New Strategy for FBA Allocation


A Shift in Mindset

• The growing sophistication and technicality of the Amazon Marketplace

• Sellers can no longer throw products in FBA and expect success

• The Hybrid approach

• The products you want to FBA vs. The products you should FBA

Complexity around FBA can actually create opportunity.

Following ASIN-level Performance Metrics to Allocate FBA


FBA Assortment Allocation

• Product Dimensions

• Competitive Landscape

• Profit Margin

• Average Selling Price

• Sales Performance History

Incorporating Fees in Profitability Assessment


Calculating Profitability

• FBA fees are not calculated off the price of the item

• If you are over 30% in fees, be aware of margins

• Fee is unit based (will differ across catalog), so an ASIN-level approach is required

Long Term Storage Fees


• FC clean up twice every year (Feb. & Aug.)

How can you improve now?

• Discover which products are at risk for fees – How?

• How to approach long-term storage fees?

• Increase sales velocity

• Sponsored Products

• Pricing Strategy

• Request a removal order

• Sellers pay fee per cubic foot

• Storage limits

Short-term vs. Long-term Planning


Constant Evaluation is Required

An FBA allocation decision today may not be qualified in the future

Factors that can change:

• Landscape

• Margin

• Catalog

• Seasonality

Takeaways from today

Key Takeaways


• Always opportunities to optimize FBA assortment allocation

• Analyzing profitability at the ASIN-level

• Comprehensive understanding of fees

• Be aware of long term fees - A choice to do nothing – is a choice to pay

• Reassess FBA in preparation for Q4

Evaluate Your Approach to the Amazon Marketplace

Questions for Pat or Rick?

Submit your questions in the chat box on the right

CPCStrategy.com


Date post:	13-Aug-2015
Category:	Marketing
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CPC Strategy: FBA Assortment Allocation Strategy

Marketing