Amazon's Brilliant Secret to Selling More Products Is Free-And It's Hiding In Plain Sight - Inc.

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But because they see everyone else's experience going into it, there's a great deal of social proof with products that have high ratings from a high number of people.
Social proof drives value A product with a high rating from a high number of reviews inherently has a high amount of social proof.
A high amount of social proof signifies value.
It lends to more qualified purchases, confidence in products, fewer returns, and not just a higher revenue, but a higher profit margin.
Qualified purchases mean fewer returns With a large number of reviews, buyers can better understand what they are purchasing and have a realistic expectation of what they will receive.

Amazon's Brilliant Secret to Selling More Products Is Free-And It's Hiding In Plain Sight - Inc.

Amazon is the largest e-commerce company in the world with over $469 billion in net sales last year and over 200 million Prime members. While it doesn't have the cheapest prices, the most intuitive platform or even the only convenient membership (as it once did), there's one thing it does have that keeps consumers buying over and over-oftentimes at higher prices. Even with higher prices and competition from Walmart and Target-each with their own membership programs to rival Amazon Prime, Amazon has created a very strong unique value proposition. One that competitors can't compete with. And it's hiding in plain sight. What Amazon has that others don't is tons and tons of product reviews. As obvious as reviews may seem, Amazon doesn't just have any old review. It has just about any and every review. Its catalog of reviews comes with many benefits. It lends to more qualified purchases, confidence in products, fewer returns, and not just a higher revenue, but a higher profit margin. And even if you're not in the business of selling online, nearly any business can use Amazon's selling secrets to sell more products or services-without reviews. Here's why Amazon's vast array of reviews is a highly effective sales strategy: Reviews qualify purchases People aren't just buying things knowing whether or not they will likely be happy with their purchase. But because they see everyone else's experience going into it, there's a great deal of social proof with products that have high ratings from a high number of people. What this does is increase shoppers' confidence, leading to more purchases. This is because there are a number of products we, as consumers, may want, but are skeptical of. As marketing claims get bigger and more dramatic, consumers know that such claims often fall flat in reality, leaving consumers weary of sales messaging. But when paired with a large number of user reviews, seemingly bold assertions can be confirmed. On the flip side, waning confidence slows sales. Qualified purchases mean fewer returns With a large number of reviews, buyers can better understand what they are purchasing and have a realistic expectation of what they will receive. So when that protein powder tastes chalky or the bookshelf requires assembly, it's expected. Any pitfalls are expected, and because the item is still purchased regardless of them, the consumer has weighed the cost-benefit and decided it was still worth it. When people have a good idea of what they're getting into (good and bad), they're less likely to want to return a product-a large expense for retailers. In fact, studies have found that the average cost for a returned item is two-thirds of its sales price. Meanwhile, returns at stores like Walmart happen to be commonplace. So while you can buy just about anything at Walmart, you can also return just about anything-and for any reason. And when you buy things you don't really know much about, you're more likely to be dissatisfied and return the products. Social proof drives value A product with a high rating from a high number of reviews inherently has a high amount of social proof. A high amount of social proof signifies value. And high value warrants high price. In the instances where a high price mirrors high value, consumers are not repelled by the cost. Instead, they're drawn to the value and the confidence they have in their purchasing decision. In other words, it's the price we pay for a safe bet. Putting it all together, more qualified purchases and fewer returns mean more purchases, higher profit margins and happier customers. Businesses in nearly any industry can apply the principles of Amazon's selling strategy. And That doesn't mean you need to amass a large library of reviews. The key to increasing sales and profit margins without large marketing budgets is to find ways to increase consumer confidence and satisfaction. For example, a business can build confidence in consumers by providing a lot of insights and information. The value of reviews is that they're honest. Most marketing materials fail to mention the realities of using a product or service. Instead they only include the benefits-and often upsell said benefits. Whereas, honest marketing is more effective because including realistic insights effectively sets customer expectations accurately. In return, customers are not left disappointed with their purchase, but satisfied.
The Original Article can be found on Inc.

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