Cross-selling and upselling are common strategies used in shops and restaurants worldwide. If you’ve ever been offered a complementary item after making a purchase, that’s cross-selling. If you’ve ever been asked to upgrade your medium fries to a large version, that’s upselling. You may think of implementing these strategies in your Amazon store to sell more products.
The good news is, you can indeed apply cross-selling and upselling on Amazon. Keep reading to learn how to implement these two tactics and improve your profit margin.
The Basics of Cross-Selling and Upselling on Amazon
Before we delve deeper, let’s examine the basics of cross-selling and upselling to understand how these two strategies can enhance your business.
Cross-Selling
Cross-selling occurs when you encourage a buyer to purchase complementary products that enhance their experience with the product they have just purchased from you. For instance, if you sell smartphones, you can cross-sell screen guards and phone cases.
You can check the “Frequently Bought Together” or “Customers Who Bought This Item Also Bought” sections that often show complementary products to identify products that you can potentially cross-sell.
Upselling
Upselling is a sales strategy where you offer an upgraded version of an item that a customer is about to buy. Let’s say your customer is about to purchase a $500 TV at your store. To upsell, you can offer them a newer model of that TV at $650, meaning you can get $150 more on the sale. Upselling leverages the fact that the customer has already decided to buy a product, which means there’s a chance that you can get them to purchase a more expensive version of the product.
If you have access to A+ content, you can increase your potential for upselling products by creating a comparison table of your product variants, allowing customers to read the details and choose a version that fits their needs.
Why Cross-Sell or Upsell on Amazon?
The primary reason to cross-sell or upsell on Amazon is to increase your Average Order Value (AOV), essentially increasing the money you earn with each sale. Upselling improves AOV by increasing the value of a single purchase, while cross-selling enhances AOV by increasing the number of items purchased with each transaction.
In addition to increased AOV, here are other benefits of cross-selling and upselling:
- Improve customer satisfaction by providing a higher-quality product or providing complementary products that enhance their experience.
- Enhance customer retention by delivering a superior purchasing experience.
- Showcase items that may not necessarily be popular by recommending them as upgrade options or complementary products.
Who Should Cross-Sell and Upsell on Amazon?
Generally, you should consider cross-selling and upselling on Amazon if you have a large enough inventory and have decent experience selling on Amazon.
A large inventory is crucial for cross-selling and upselling because it provides a sufficient variety of items to implement those strategies effectively.
Meanwhile, having Amazon selling experience means that you’ve learned about your customers’ behavior and know which products to recommend as upgrades or complementary purchases that are perfect matches for what the customer wants to buy.
The 25% Rule for Cross-Selling and Upselling
Setting cross-selling and upselling prices requires a balancing act. If the prices are too low, you risk losing money; however, if they’re too high, customers won’t perceive it as a good deal. To maintain balance, you can apply the 25% rule.
The 25% rule means that any item you offer for upselling or cross-selling cannot cost more than 25% more than the original item. In most cases, a 25% price increase for extra value is a reasonable suggestion that most customers are likely to consider, keeping your odds of closing the sale reasonably high.
Preparing Your Amazon Cross-Selling and Upselling Strategy
Building your Amazon cross-selling and upselling strategy is an essential part of ensuring its success. Here’s a step-by-step guide to strategizing your cross-selling and upselling efforts:
Step 1: Understand Your Customers’ Behavior
A good cross-selling and upselling strategy starts with a good understanding of your customer base. Check your Amazon Seller Central reports for data on customer behavior, purchase history, and preferences. You can also check customer reviews and seller feedback to get a good feel of your customer base’s preferences.
Step 2: Create Buyer Personas
To help you determine which products to upsell or cross-sell, you can use customer behavior data to create buyer personas. Each persona represents a typical customer of your Amazon store, with their own preferences, behaviors, and favorite products.
Step 3: Identify Customer Pain Points and How to Address Them
From those buyer personas, you can then identify potential pain points your customers may have, and come up with ways to address them. For instance, if you sell smartphones, you can pre-emptively offer them phone cases and screen protectors through cross-selling so they don’t have to go to another store for them. You can also use customer pain points to improve your products, potentially opening up opportunities for upselling.
Step 4: Personalize Recommendations
Now that you’ve identified your customer base’s pain points, you can personalize your product recommendations. The “Frequently Bought Together” and “Customers Who Bought This Item Also Bought” columns are automatically populated, so you can’t manually insert your products there, but there’s an alternative.
You can use Amazon Product Targeting to run targeted campaigns that promote products you want to cross-sell or upsell. So, taking the smartphone example, you can target customers who have bought smartphones with ads featuring your phone cases and screen protectors, increasing the likelihood that they will add those items to their cart.
Amazon Cross-Selling and Upselling Best Practices
Rather than focusing solely on pushing more products, successful cross-selling and upselling on Amazon is about offering helpful, relevant options that enhance the shopper’s experience. When done right, these tactics not only boost revenue but also build trust and loyalty with your customers.
Here are four best practices to help you make the most of your cross-selling and upselling opportunities on Amazon:
Sell Product Bundles
Bundling complementary products into a single package is an effective way to sell multiple products simultaneously. Bundles usually offer cheaper prices than buying each featured product individually, which means customers are more likely to perceive them as great deals. Additionally, bundles can help cross-sell products that don’t necessarily sell well on their own.
Limit Recommended Products for Upselling
The more decisions a customer needs to make, the harder it is for them, and the harder it is to close a sale. Confused customers often leave without making a purchase; attempting to sell multiple products at once can be counterproductive.
Instead of offering three upgrade options for the customer’s purchase, narrow the choice down to just one, or at most two. This way, the decision is less “Should I stay with what I bought, or upgrade to A, B, or C?” and more “Should I stay with what I bought, or upgrade it?” It’s a simple either-or question that may boost your odds of landing the upsell.
Highlight the Extra Benefits
An important part of cross-selling and upselling is to make the customer feel like they’re getting their money’s worth. Instead of approaching it as trying to land a bigger sales figure, you need to approach cross-selling and upselling from a helpful mindset of offering extra value to the customer.
Highlight the additional benefits and advantages that customers can obtain by purchasing related items or upgrading to a higher-quality product. This way, they can understand what they’re getting for paying more, enabling better informed purchase decisions.
Use Social Proof to Reinforce Choices
Customer reviews, ratings, and “frequently bought together” data can play a powerful role in encouraging upsells and cross-sells. When customers see that others have purchased a recommended add-on or upgraded item and left positive feedback, it builds trust and reduces hesitation.
Leverage social proof by including well-reviewed items in your cross-sell or upsell strategies, and make sure those reviews are easy to find on the product page. Social validation can tip the scales for customers who are on the fence about spending a bit more.
Conclusion
Cross-selling and upselling are great ways to get more value out of each sale. Additionally, it’s an effective tactic to move products that don’t necessarily sell well on their own. Great upselling and cross-selling can also improve customer satisfaction since they feel like they’re getting a better deal.
Being a trustworthy Amazon seller can support your cross-selling and upselling efforts because people are more likely to buy extra items from a trusted seller. While genuine and insightful reviews go a long way to improving customer trust, fake reviews are the opposite since they can damage your store’s reputation. If you have a fake review problem, TraceFuse is here to help. Our AI-powered tools can seek out and get those fake reviews removed within days. Schedule a demo with us today to learn more about how we work.
