The Ecommerce Strategy Amazon Uses To Make Money
What single sales strategy generates 35 percent of Amazon’s revenue?
In brick and mortar stores, upsells and cross-sells are two of the most common and effective sales strategies. And they work just as well in the realm of ecommerce – if you know what you’re doing and have the technology to support it.
The power of upselling lies in catching customers with their wallets out. It’s easier to convince someone who’s already planning to spend money to spend more money. In fact, research shows that product recommendations are responsible for 10-30 percent of average ecommerce revenue. And for cross-sell masters Amazon, that number is even higher, with 35 percent of their revenue being generated by these techniques.
What’s The Difference Between Upselling and Cross-Selling?
Upselling and cross-selling are sometimes used interchangeably but actually mean slightly different things.
Upselling means trying to get your customers to spend more on a single item – generally by pushing a bigger, newer, or more highly modified version of it. “Super-sizing” your fries at McDonald’s is the classic example of an upsell.
Cross-selling means trying to get your customers to buy more products in addition to what they’re already buying – either a related product or something else the customer might like. In the ecommerce world, Amazon’s “Frequently Bought Together” and “Customers Also Bought” features are the most famous examples of cross-selling.
The Surprising Psychological Effects of Upselling
Unlike many marketing strategies which feel intrusive, upselling and cross-selling techniques often leave customers with a positive impression of the retailer. When implemented correctly, upsell features make customers want to return to your site to purchase again, improving not only Average Order Value but Customer Lifetime Value as well.
In other words, customers actually like upselling. Here’s how it can increase customer satisfaction and create repeat customers.
- It relieves decision fatigue. Too many choices are overwhelming for consumers and are a major factor in ecommerce abandonment. Upselling and cross-selling offer the opportunity to spend more while only showing a select number of curated products or options, streamlining the decision process.
- It creates a sense of authority. Showcasing relevant or related products get customers’ eyes on more of your offerings and, specifically, offerings they’re interested in. Even if they don’t buy, they’re left with the impression that your site is worth a return visit.
- It makes their lives easier. Do you need batteries for that flashlight? If you’re a graphic designer, you might want to upgrade the RAM in that laptop. We noticed you just booked a flight to Cleveland – would you also like to rent a car? Smart sales techniques anticipate what customers actually need.
How To Incorporate Upselling and Cross-Selling Techniques Into Your BigCommerce Store
In the ecommerce realm, you need technology to support any upselling or cross-selling initiative. At IntuitSolutions, we’ve designed BigCommerce customizations exactly for this purpose.
- Frequently Bought Together: Easily bundle related products and accessories with this Amazon-inspired feature. This feature populates Product pages with a “Frequently Bought Together” box that lets customers select which products they want and add them directly to the cart. Perfect for selling related or bundled products.
- “You May Also Like” Upsell Feature: Show customers similar products to increase sales. Similar to Frequently Bought Together, this customization leverages BigCommerce’s Related Products field to showcase other Products customers may want to buy.
- Countdown to Same Day Shipping: More of an incentive than a true upsell, this real-time countdown timer pushes customers to “buy now” – a perfect addiiton for the busy holiday season.
Interested in one of these customizations? Want something similar with a few tweaks? Have an BigCommerce upsell need that isn’t being met? Contact us today – we’ll develop a solution that works for you.