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You’ve probably already considered selling on Amazon but its way easier than you think.
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Amazon is one of the most profitable companies in the world. According to statistics, Amazon's ecommerce sales hit 638 billion U.S. dollars in net sales in 2024 worldwide.
One strategy that has helped Amazon achieve tremendous growth and success is what is called the Amazon Flywheel.
Amazon also refers to the Flywheel as a Virtuous Cycle. The Flywheel is a business strategy that works together to generate traffic to the Amazon marketplace. But what is the Amazon Flywheel, and how can you use it to grow your Amazon FBA business?
In this ePlaybooks guide, we will explore the concept of the Amazon Flywheel and how you can use it to increase sales and Amazon profit.
The Amazon Flywheel is a business growth strategy that focuses on customer satisfaction over profits.
This strategy is based on the concept of a mechanical flywheel. The idea is to apply pressure to get the flywheel moving enough to start rotating on its own. The strategy, which was created by Jeff Bezos as far back as 2001, focuses on creating a win-win situation for both Amazon and its customers.
By providing great customer satisfaction and lower-priced products, customers are happy to come back, which leads to a higher influx of customers and more profits.
From day one, Amazon has focused on being the most customer-centric company in the world, and so started with what the customers want and walked its way backward.
The Amazon Flywheel focuses on these major aspects:
The more each aspect improves, the faster and more powerful the whole system grows.
So, how does Amazon use this strategy? It all starts with customer experience. Amazon’s obsession with customer experience is the secret sauce. From fast delivery to easy returns, personalized recommendations, and competitive pricing, making customers come back repeatedly.
Ultimately, this repeat purchase increases traffic to the site. This traffic doesn't only include customers but third-party sellers as well. The growing traffic attracts more third-party sellers to join Amazon. They want access to the millions of visitors on the platform.
This means more brands from all over the world can sell on Amazon which increases the Amazon market and supply of products.
With this diversity, Amazon's price continues to go down, increasing conversions.
As more profits trickle in, Amazon reinvests them in structures that help lower prices and increase customer satisfaction. Some of these structures include FBA Amazon warehouses, Amazon Prime services, and other services to improve Amazon marketing and customer experience.
When customers are happy, they share their experiences and keep returning. Amazon’s traffic grows organically through word-of-mouth, reviews, SEO, and advertising.
As Amazon scales, it reduces its cost structure through automation, logistics, and scale. Amazon products are offered at low prices, which makes them appealing to customers, spinning the Amazon flywheel faster.
With the Amazon Flywheel strategy, Amazon has become the largest online marketplace in the world. Amazon has grown multiple times in the last few years, expanding its store to countries like Mexico, India, Australia, etc. The company also has almost a million employees, millions of customers all over the world, and hundreds of Amazon FBA warehouses.
At ePlaybooks, we had one customer ask us how to use the Amazon Flywheel strategy to build a successful Amazon business.
Well, one thing we were able to extract from the Amazon Flywheel is that you can use it to build long-term customer relationships and increase sales on Amazon.
We have put together 10 practical ways you can improve your Amazon business using the Amazon Flywheel strategy:
There's no customer service or Amazon marketing that can substitute for a low-quality product. One thing Amazon excels at is providing a wide range of quality products.
To find quality products, the first thing you want to do is pick a niche and do your research to find some of the best-selling products on Amazon. You can go through the Amazon Best Sellers list and invest in a product research tool to find out the top-selling products on Amazon.
As you do your research, consider factors like the keyword search volume, number of competitors, customer demand, and so on.
Once you pick a profitable product, you can then go ahead to find the right supplier to meet those quality standards.
One way to improve your customer service experience, which is an essential component of the Amazon Flywheel, is to provide a high-converting listing.
What this means is that your listing should give customers all the information they need to make an informed decision.
Practically, this means providing accurate product information and high-quality images.
Ensure your product content accurately outlines the features and benefits of your product. Your product images should also look appealing. You can leverage Amazon A+ content to provide high-definition images and unique content.
To drive traffic to your listing and increase your conversion rate, you need to optimize your listing with the right keywords. You want to start with keyword research. Create a list of high-converting keywords and include them throughout your product listing. You can invest in keyword tools like Jungle Scout to find both short and long-tail keywords and include them in your product title, bullet point section, product description, and the backend of your Amazon Seller account.
Nine out of ten customers will look at Amazon reviews before making a purchase. Customer reviews are major tools for building loyalty and increasing sales.
Ensure you provide excellent products and services to ensure that your customers are happy to leave a positive review.
You can use emails, product packaging, or invest in customer review software to encourage customers to leave a review on your product page.
To increase your visibility and drive traffic to your product listing, you can invest in Amazon advertising.
With Amazon advertising, you can target specific keywords to improve your ranking on search results and attract customers. You can invest in three Amazon Ad types - Sponsored Product Ads, Sponsored Brand Ads, and Sponsored Display Ads.
With more than half the world on social media, it is no surprise that it has become an effective medium to drive business goals. You can use social media platforms like Facebook, Instagram, TikTok, and Twitter to share content about your product, drive traffic to your Amazon product page, and grow an online community.
You can also take advantage of social media ads for more targeted advertising.
Amazon FBA is a service that allows sellers to outsource their shipping to Amazon. With FBA, Amazon will take care of everything from packing to shipping, delivery, and customer service. With this, you can improve your customer experience and encourage customers to buy from you again.
By improving your brand, you can captivate your customers and provide them with a unique brand experience.
Create and optimize your Amazon storefront with quality product images, a product catalog, and detailed descriptions. With your Amazon storefront, you can keep customers on your page for longer which can help boost your conversion rates.
One major component of the Amazon Flywheel is lower prices. As an Amazon seller, you want to ensure your prices stay competitive while remaining profitable. You want to ensure you find a sweet spot for your prices. Not too high or too low. You can invest in repricing tools to help you automate the process. These tools will ensure your prices stay competitive.
Inventory management is crucial to your performance on Amazon. You want to ensure that your products are always in stock to avoid losing out on an Amazon sale. You also don't want to overstock on products to avoid incurring extra costs. Here's a guide to help you manage your inventory effectively.
The Amazon Flywheel is a business growth strategy that has made Amazon one of the most successful ecommerce companies in the world.
As a business owner, you can use this strategy to fuel your business growth. However, keep in mind that just like with Amazon, this won't move you into an overnight success. You need to put in the dedication and hard work to keep the flywheel in motion.
As you put in various elements that generate more sales and improve customer experience, your business continues to grow and succeed.
If you're ready to build a thriving business using the Amazon Flywheel strategy, you can partner with us at ePlaybooks.
At the core, the Amazon flywheel concept is improving customer experience which leads to more traffic, which attracts more sellers, resulting in a wider product selection.
This increased product selection improves the customer experience even further, creating a positive feedback loop that drives continuous growth.
It is a business strategy developed by Jeff Bezos, also known as the “Virtuous Cycle.”
The Amazon revenue flywheel is a business growth model that drives Amazon’s revenue.
The flywheel starts with delivering a great customer experience, which leads to increased traffic. More traffic attracts more sellers, expanding product selection, which further improves the customer experience. The more the flywheel spins, the faster Amazon grows.
The AWS Flywheel is a growth strategy where one good thing leads to another, like a wheel that spins faster the more you push it. So, better customer experience leads to more traffic which leads to more sellers and more products, better prices and even better experience.
In AWS (Amazon Web Services), this will mean continuously improving its cloud infrastructure and services to deliver better performance, lower costs, and greater customer satisfaction, which attracts more customers.
The flywheel theory is a business concept that describes how small, consistent actions build momentum over time, eventually driving sustainable growth. So, consistent effort in key areas like customer service, product quality, or marketing gradually builds momentum that leads to increased growth, efficiency, and success. Ultimately, this creates a cycle of success in one area leading to success in other areas.
You’ve probably already considered selling on Amazon but its way easier than you think.
Call Us Now