After implementing ArgoMetrix e-commerce strategy – Phase 1, South Florida based eTailer selling all things related to Pressure Washers was ready to leverage their strong supplier relationships. Increasing Amazon Sales on the newly setup FBA business account. After identifying profitable high demand items to sell on Amazon, they rolled out their operations. In the meantime, the new pricing model was put into effect with web sales.
Even though the Company was eager to start selling on Amazon, the timing of the launch was critical. The category of products Ultimate Washer carried did not have seasonality, but they attracted more buyers than usual during the second quarter due to the warmer weather temperature. Such high activity shortly after starting an Amazon business would present challenges as it would not leave much time to deal with the learning curve. In addition, new sellers aren’t usually allowed to capture the Amazon Buy Box until the new seller establishes itself with seller ratings acceptable to Amazon’s requirements over a period of no less than six (6) to eight (8) weeks. The “Capturing the Amazon Buy Box” concept had to be learned thoroughly as it required interpretation of the data on the Product Detail Page of every item sold on Amazon Marketplace.
Having limited storage was one of the determining factors that defined the overall e-commerce strategy of how to sell on Amazon Marketplace and use their fulfillment services (Amazon FBA). Nonetheless Ultimate Washer still needed space to process their shipments to prepare them for FBA. Amazon refers to such process as FBA Prep and it includes affixing stickers with identifying data on individual items and packing them in materials based on the item type and its category. In addition, the space allocated by the company to run the Amazon operations needed optimum configuration to manage the Amazon FBA Shipments.
As the Company was receiving orders through its website on daily basis, though they were mainly drop shipped by their vendors, they needed well defined processes to manage customer service operations. Part of the plan was to leverage the new pricing model and scale their web sales while building up their Amazon FBA Business Channel.
Finally, another important factor that had to be resolved was the capability to process Amazon Settlement Reports. These are issued bi-weekly with every Amazon deposit for the selling activity during the two week-settlement period. This report included not only the SKU sales but also the Amazon commissions, FBA fees, refunds and any other fees that would be deducted from the Company’s payment.
After completing the launch prep, we selected the appropriate time to launch the Amazon FBA business account considering the busy season and the learning curve the team needed. This was essential to ensure that the Company had enough time to adjust their internal operations, specifically with inventory shipments. We selected the launch to take place in late September or no later than early October. We also arranged with the category manager at Amazon to enable the company to be Buy Box eligible immediately after launch, thus eliminating the need for the long qualifying period ordinarily applied to new Amazon Sellers.
We optimized their warehouse configuration for Amazon FBA Business Operations allowing the appropriate flow for incoming and outgoing inventory, FBA Prepping and outgoing FBA shipments.
For more efficient inventory management, we decided to set up the Amazon based selling operation as a separate entity. This enabled us to isolate the Amazon operation’s financial performance from the Company’s existing web site-based activity. We could then accurately monitor profitability and inventory levels. This required us to create a new set of Chart of Accounts suitable for e-commerce business.
We then integrated our proprietary reporting system to process the raw settlement report data with every Amazon Settlement Report and post it to the newly set up accounting system.
We provided close oversight on every aspect of the Company’s operations as Ultimate Washer rapidly ramped up its revenues during the shopping season and beyond.
Our actions ultimately resulted in:
- A new e-commerce strategy and a modified business model re-invented the Company’s revenue model
- Full analysis and implementation of Amazon strategy with sustainable growth rate and expanding product lines
- Achieved almost 100% Amazon sales growth in Year 2 with significant order volume and growing revenues.