7 Things You Need To Know Before You Start Selling on Amazon
Amazon is the largest eCommerce site in the world. Its unique business model allows any seller to participate on their website. Sellers can sell either their own unique products or become one of many merchants that sell existing products on the site. This presents a massive opportunity, as anyone can start selling on Amazon for a profit. However, there are many things that you need to know before getting started with this popular eCommerce site.
1. You Have a Choice Between Shipping Products Yourself or Using Amazon's FBA Service
The most basic way to start selling on Amazon is to list a product you want to sell on the site and ship the product from your location when an order comes through. While this is relatively standard eCommerce shipping model if you are using a drop shipping service, it's far from the ideal. It's a better idea to use the FBA (Fulfillment by Amazon) service for several reasons.
First, it usually delivers products to customers faster than shipping it yourself or with a drop shipper. Second, it allows customers to bundle in multiple orders and take advantage of Amazon's free shipping offer for orders over $25. This will lead to more customers making purchases as they won't have to pay an additional shipping fee. Finally, it allows you to focus on running your business, because Amazon will take care of all the order processing, warehousing, fulfillment, and customer support details for you.
2. What Fulfillment By Amazon (FBA) Is And Why You Should Be Using It
Fulfillment by Amazon is a program where sellers can send their products to one of many Amazon fulfillment centers. Amazon will act as the drop shipper and take care of all the details regarding the customer orders. Like any other drop shipper, Amazon takes a fee for each sale generated. The only thing you'll have to do as a merchant is to provide support if there are any problems with your products.
Aside from what was already mentioned, FBA gives you many more advantage as a seller. If you're selling a product that many others merchants are selling, you'll be given a higher priority in the buy box (more on that below). Your product will also be available to Amazon Prime members, which are customers that pay a monthly fee to get free expedited shipping for their orders.
3. What Is the Buy Box and Why Is It So Important?
It's important to study how product listings on Amazon work. The buy box is one of the most critical components of a product page. When customers are shopping on Amazon and click through to a product page, they're presented with a list of various purchase options from new, used, to refurbished products. This is listed below the main product description at the top.
However, there is an offer on the top right to Add to Cart or Buy Now. This is called the buy box, and it's important if you're selling a product that's being sold by many other sellers. To be the featured merchant in the buy box, you'll need to have a competitive price, have a decent history as an Amazon seller, and have strong seller reviews. It's often advised that you sell less competitive products to build up your history and reviews before trying to compete with popular products. No matter how tempting it is, never buy reviews. They are easy to notice and just like with Google, they will punish you for it.
4. Your Listing Title, Description, and Images are Vital to Generating Sales
If you're selling your own unique product, you still have to put in a lot of effort to make sure your listing is attractive. You'll need to start with a listing title that gets to the point and conveys the benefits of your product. It's important to mention that the title cannot be superfluous or full of hype as Amazon wants their sellers to stay within the company's listing guidelines and general standards. Remember to use keywords so people will find your listing.
Then you'll need a strong description that lists the best features and benefits of your product. It will often help to see what your competitors are doing and take the time to study their copy. This will give you some idea as to how you can make your product descriptions stand out. You'll be able to see what selling points are hitting the mark while also identifying what selling points they're failing to communicate.
The other important aspect of your listing is your product image. On Amazon, the users will generally skip over the listings and will only stop and look at a particular offer when the image attracts them. That's why you need to make sure that put strong emphasis on your product design, product packaging, photography, and graphic design. It also helps to have multiple images that showcase various aspects of the product to make it easier for shoppers to make a purchase decision.
5. You Must Be Aware of All of Amazon's Guidelines and Policies
Amazon takes their business very seriously and expects their sellers to uphold the company's standards. So before you start selling on Amazon, it's imperative that you review all of their guidelines and policies. Failure to do so may result in your account being terminated. What's more, it may be difficult or impossible to create a new account if Amazon has deemed you as a serious violator.
Here are some of the things that you need to look out for:
- Restricted products: Some products are categorized as unsafe, available only by prescription, an infringement on intellectual property, or simply illegal.
- Prohibited seller activities: Sellers are not allowed to sell products if they have been recalled or are counterfeit products.
- Product listing guidelines: Amazon has strict product listing guidelines that need to be followed if you want to list a product on their site.
- Shipping policies: Sellers need to handle shipping in a certain way to ensure Amazon's customers are satisfied.
To read up on the rest of the guidelines and policies, you can visit Amazon's Seller Central Site which is their resource center for sellers.
6. What's the Best Way to Sell on Amazon?
This may be the most crucial question for people that are relatively new to Amazon and want to figure out the best way to get started quickly. Fundamentally, there are two schools of thought. The first is to work with wholesalers and liquidators to find products that you can buy for rock-bottom prices to sell on Amazon for a profit. The second is to sell your own products or using private labeling services.
For beginners, it's a good idea to start with the former as it gives them the experience necessary to become a great merchant on Amazon. However, most of the merchants that do well on Amazon typically sell their own products. The reason this works is that it helps them build their brand, eliminates the obstacle of having to compete in the buy box, and gives them a bigger profit margin.
The only downside to this is the fact that creating your own product can be expensive and time-consuming. There is a lot of market research that needs to be done. You'll need start with a decent upfront investment. You'll also incur marketing expenses for testing the product with your target market. Of course, many companies offer private labeling services, allowing sellers to avoid these risks.
At the end of the day, there are successful sellers from both sides of the spectrum. It's really up to you how you want to approach the business.
7. How Do You Know You'll Be Profitable on Amazon?
This is another common question that is asked, especially for sellers that want to get started with purchasing products at wholesale or buying up liquidation packages. To get an idea of whether or not you'll make a profit from your product, start by logging into Amazon's Seller Central. Then locate the Amazon FBA calculator to see if you'll be able to make a decent profit from your product.
Amazon's seller app has a scanning app that you can use to calculate this quickly. Sometimes, you'll have to search for the product manually for less popular products. Using the calculator, you want to figure out your discounted purchase combined with the cost of shipping the products to Amazon and their FBA fees. Then you want to see what the product is selling for on Amazon and see if you can realize a profit. Be sure to look at the average price rather than the top price.
These are the core fundamentals that you need to know before starting on Amazon. There are many other things that you'll need to learn along the way, but this should give you everything you need to get started as a seller. Be sure to refer back to Amazon's Seller Central as a resource and reach out to their seller support team if you have any other pressing questions. The process of getting started may be overwhelming at first, but you'll eventually get the hang of being a seller and start generating sales before you know it.