What would it take to continue increasing your sales, especially after a strong season and almost 50% growth that at the same time ended with less Net Profit than before? How can you get out of the unforgiving game of “the race to the bottom” and differentiate yourself enough to enable the brand to raise prices?
Our client, who sells non-consumable, physical products in the outdoor sports equipment industry, was dealing with such a situation. Their busy season was about to end, and the typically slow months of August and September were just around the corner…
We had to address the problem of losing sales and even more profits. The Advertisement Cost of Sales (ACoS) by itself looked fine but that can be tricky in a situation like this.
Our Amazon PPC Experts got to work immediately, reviewing as much of the historical advertisement data, the previous strategies and major changes (pricing, inventory, even personnel changes) as they could get. Then the decision was made to walk away from certain ad types, certain campaigns and pull back on advertising of certain product variations while working with the remaining ads in Amazon Campaign Manager to optimize them the best way possible.
First the ACoS as well as the Organic Sales Percentage showed improvement while Total Sales remained at a similar level. Then we began incrementally increasing the prices while applying coupons here and there to dial in the best sales velocity moving the right number of units per day based on the Inventory schedule.
Maximizing on profits this way yielded another 1% improvement on TACoS (Total Advertisement Cost of Sales) that also translated to Organic Sales being 7% up, and Net Profit improvement by more than over 10% since prices on average could be raised by 11% across the different product lines!
Year over year, we still managed to get almost 15% more sales. Although this was slower than the hot season of July, it was in fact just enough to sell out the inventory. At the same time providing the very much needed cash flow and Net Profit to the brand to get out of the red, out of the “race to the bottom” and back into the black and viability.
No matter what phase your business is in, no matter what your biggest issue around Amazon Advertisement is currently, a tailor made approach starting with a proper consultation to understand your needs and goals can always produce a better outcome than any strategy coming from even the best advertising experts that tends to provide blanket advice missing out on the benefits of a custom, wholesome approach.
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If you're seeking ways to enhance your sales, boost profits, and optimize your advertising efforts, we're here to help. Our team offers a free consultation service where we can analyze your current account(s), provide tailored recommendations, and chart a path to success for your brand.