Over the past decade, the Amazon marketplace has come to dominate online shopping in the United States, and has gained significant market share around the world. There are a wide range of reasons why Amazon has done so well. One reason that is often overlooked is their focus on developing comprehensive API keys which allow third parties to create integrations and plugins. This provides a financial incentive for entrepreneurs and programmers to address shortcomings with the Amazon platform. For example, A2X was created because sellers had trouble entering sales and transactional information from Seller Central into their cloud accounting software.
“Most businesses that sell physical products have a disconnected system. This means that the various apps and parts of the business don’t communicate and share information properly.”
– Jeri Wambeek, WhichAddOn
By connecting the disjointed components of your business operation together, it is possible to build a business that is easy to operate thanks to automation, and can scale without a proportional increase in workload.
Enter: the API Economy.
In this 4 step guide, we take a deeper look at the key considerations that you should make when deciding which addons are the best fit for your Amazon business. By choosing the right integrations, and implementing them properly, it is possible to remove information bottlenecks, provide better service to customers, and build a business that is more attractive to potential buyers.
1. Map out the structure and core functions of your business
Think about how information and inventory flows through your organization, and where human input is required. It can be helpful to use charting software to visually map out what is going on in your business. This will help you to get a better idea of which tasks are most suited to being automated or outsourced.
The following functions are carried out by almost every Amazon business:
- Finding products to sell.
- Product listing and optimization.
- Warehousing and logistics – often taken care of by FBA or another 3PL provider.
- Picking, packing and shipping orders.
- Customer service.
- Post-sale follow up – requesting feedback and reviews.
- Inventory management and ordering stock.
- Managing finances and cashflows, paying bills and monitoring bank accounts.
- Collecting sales tax and passing it on to the state (US market).
- Record keeping, preparing books for accountants and ensuring that the right information is being collected.
2. Think about which aspects of your business consume the most time
Looking back over the past 12 months, which tasks within your business have consumed the most time? Which activities do you enjoy doing the least?
Write down a list of the most time consuming and frustrating tasks within your business. This will help to clarify what kind of addons have the potential to provide the most value.
3. Search for apps, integrations and plugins that can make your life easier
Now that you have an idea of what can be improved, it’s time to find software to help. Most problems aren’t unique to your business. If you have an issue that needs to be addressed, it is highly likely that others have also had the same problem. The more common the issue, the more likely it is that an application has been built to remedy the situation.
App stores are a great place to begin searching for add-ons. Amazon is in the process of developing a marketplace app store that is currently in public beta mode at the time of writing. When this app store is launched to sellers at large, it will be very useful for finding high quality, accredited integrations. Take a look at your accounting platform’s app store for finance and compliance-related integrations – you can find Xero’s app store here, and the QuickBooks app store here.
The Amazon seller forums are a vibrant community of Amazon merchants, who share lots of valuable information related to integrations and much more. If you can’t find the right information here, try Google or speak to the experts about recommendations for which add ons are the best fit for your business.
Here are some integrations and service providers that we recommend considering to begin with:
- Fulfilment warehousing – rather than storing and shipping goods yourself, why not engage Fulfilment by Amazon (FBA) or another third party logistics (3PL) provider? This allows you to run your business from anywhere in the world.
- Prep warehousing – prep warehouses receive goods from your supplier, inspect them on your behalf, reject any damaged or faulty stock and package the items ready to be checked into FBA and received by the end user. Through using a combination of FBA and prep warehouses, it is possible to build a robust supply chain that doesn’t require you to physically handle goods at any point. This allows your business to scale without needing to worry about finding larger warehouses and employing logistics staff.
- A2X – simplifies Amazon accounting by feeding the right information from transactional activity in Seller Central into your cloud accounting system. When amazon creates a new settlement file, A2X automatically fetches it, crunches the data and generates a summary of the revenue, expenses and other transactions. This removes the hassle of manually entering information from Amazon into your accounts, and improves the integrity of your financial information by removing the potential for human error.
- Payability – Amazon pays sellers every 2 weeks based on what they have sold in the fortnight prior. Keeping FBA warehouses stocked with the best selling products can present cashflow issues, especially during peak seasons. Payability provides sellers with money from their sales the next day, which allows merchants to reorder stock quickly and remain in the buy box. Payability plugs directly into Seller Central, and automates the process of sending payment to seller bank accounts.
- Feedback Genius – customers often forget to leave reviews and feedback. Positive reviews help to improve seller rankings, which tends to result in more sales over time. Feedback Genius automates the process of contacting customers to solicit feedback and reviews. Proactive communication also helps to mitigate negative consequences in the unlikely event that a customer is not happy with their purchase.
- TaxJar – in the US market, navigating the complexities of sales tax obligations presents a challenge at the best of times. Sellers using FBA are required to register for sales tax in up to 26 states due to the issue of nexus (discussed here in more detail). TaxJar automates the process of calculating and reporting sales taxes, and filing returns.
- If you are selling through multiple channels or hold stock in several locations, inventory management software such as Cin7 simplifies the task of maintaining accurate records of stock levels throughout the business network and communicating this information to each sales channel in real time.
- Veeqo – for retailers trying to keep up with omnichannel trends, Veeqo helps automate the entire back end process – freeing up valuable time to focus on providing the best experience to customers. Connect your stores to Veeqo and all of your orders will pull in to one central platform, while stock updates Automatically across stores when you make a sale. Efficiently pick and pack orders so you can ship with your connected carriers.
If you are an international seller, or pay suppliers in foreign countries, it is important to consider how international payments are handled. Banks often take a large cut when sending money between countries. Low-cost remittance services such as Payoneer are very useful for saving money on overseas transfers.
To reduce exposure to fluctuations in exchange rates, some international sellers use the dollar cost averaging method to transfer money overseas. This involves splitting a lump sum payment into smaller payments that are made on a regular basis. For example, if you need send $100,000 from a US bank account to your personal account in the UK, you might split it up into 10 x $10,000 payments over a period of 2 months. This prevents large amounts of money being exchanged at unfavorable rates right before market corrections.
4. Compare selected addons to decide which ones to use
When comparing add-ons, make sure to consider how much work is required for implementation and if there are attentive support staff to help with any issues. Many apps can be set up with just a few clicks. However, more structural and complex systems such as inventory management software tends to take much more work to implement.
Read through reviews from current and previous users – are there any common themes, or issues that concern you? Apps that connect directly into Seller Central and accounting systems have access to sensitive company information. It is therefore important to consider the reputation of these service providers before progressing. Most apps offer a free trial to test the product before subscribing. This is a great way to see how well the integration fits with your business.
Ultimately, you need to set a criteria for what you expect out of each plugin, and use this to guide your decision making process. In our latest eBook, ‘how to sell your Amazon FBA business’, we take a deeper look into how embracing automation technology can simplify your business operations and make your company more attractive to potential buyers. Get your free copy here.