Why should you sell on Amazon? A step-by-step guide
With over 200 million people using their services and over 12 million products listed, Amazon is one of the biggest online marketplaces ever. Selling here means getting access to a vast, international group of potential customers, no matter where you are or what types of products you sell. That’s why today, we’re going to tell you something more about selling on Amazon.
When you take a look at these numbers, the decision to start selling on Amazon is obvious:
- More than 50% of all Amazon sales come from third-party sellers
- Over 60% of consumers start their search for a new product on Amazon
- Over 6,000 sellers join Amazon… Every day!
- The most popular products sold on Amazon comprise electronics (44%), clothing (43%), home products (39%), beauty products (36%), books (33%).
However, before you decide to enter this marketplace and start selling there, you have to understand how this platform works. And you have to know; there are some significant differences compared to, e.g., Ebay [link]. There’s huge competition, and many customers visit this marketplace to check prices and find the best deals. So you need a well-thought-out strategy. This article will help you decide on the most important elements of your presence on Amazon.
What’s more, before you create an account and start selling on Amazon, it’s a good idea to do a deep research of the markets you are interested in, e.g. Amazon DE, or Amazon FR. Our price monitoring tool is a perfect tool for this purpose. Schedule a free consultation and start a free DEMO account for up to 500 products with EAN codes to test different marketplaces on Amazon and decide which one is best for you.
Setting a new account
There are two types of accounts on Amazon:
- An individual account
- A business account
The individual account is free, and it allows you to sell no more than 40 products monthly. Also, with this account, each product sold costs 0.99 USD (apart from the commission). With a professional account, there are no such limitations. Although you still have to pay commission and a monthly fee of 39.99 USD. We will cover costs related to selling on Amazon more thoroughly a bit later.
To open a professional account, you need to prepare some documents:
- Business email address or Amazon customer account
- Chargeable credit card
- Tax information
- Phone number
- A bank account
Read more about selling on Amazon.
Amazon’s sales system
Because of the fierce competition, you simply have to promote your products in order to gain sufficient visibility. Amazon offers several options here:
- Sponsored Products: Sponsored Products are ads for your product listings. They appear within shopping results and on product detail pages.
- Sponsored Brands: This feature showcases your brand and product portfolio. You can show your logo, a custom headline, and a selection of your products. These ads appear on shopping results pages.
- Sponsored Display: These ads help advertisers reach relevant audiences across the shopper journey, with ad placements that appear on and off Amazon.
- Amazon Stores: Finally, you can opt for custom-made multipage shopping destinations on Amazon for individual brands that let you showcase your brand and product offering.
You manage all your campaigns from the dashboard called Seller Central. Read more about advertising on Amazon.
SETTING A LISTING
Here, you hit the first bump in the road. You see, Amazon groups products of one type within one product card. This means that if there is a product card for the product that you want to sell, you can’t create a new product card; you have to integrate your offer with the already existing one. Thanks to that approach, customers can easily check how many similar goods are on sale and how many sellers offer them.
To add a new offer to an already existing product card, just go to your “Inventory” section and click “Add a Product”, search for an identical product, and click “Sell yours” to complete the listing and additional data (e.g., price, shipping options, etc.).
If you want to thrive on Amazon, you’ll need help. SellerApp is an excellent online platform built with Amazon in mind. They offer advanced research and analytics tools so that you can analyze over 35 million products to find potential bestsellers. With SellerApp, you can streamline the process of finding and selecting products in your offer.
When it comes to logistics, you have to offer stellar customer service. Amazon is known for quick delivery, and you have to live up to this standard. In general, there are two possibilities:
- FBS: Fulfillment by Seller (previously known as FBM – Fulfillment by Merchant)
- FBA:Fulfillment by Amazon
In the first option, you’re responsible for shipping orders. However, at least 90% of your orders need to be shipped within two working days tops. If that’s doable in your case, you can choose this option. If you can’t, you should opt for Fulfillment by Amazon. Sellers using Fulfilment by Amazon send their products to Amazon’s warehouse, not customers. As a result, Amazon is responsible for storing and shipping your orders. They even deal with returns and complaints for you! For obvious reasons, Amazon highly encourages sellers to pick this logistics model, and products sold with FBA get a better position in the product ranking. Plus, Amazon Prime members get a free delivery which is yet another reason to use this service. What about costs? They depend on the product category, parcel dimensions, and weight. Read more about fulfillment fees.
COSTS OF SELLING ON AMAZON
Partly, we’ve already covered that aspect. The personal account is free; the professional account costs 39.99USD/month. But you also have to pay category referral fees (usually 8%-17%), which work like a commission. And there is a whole list of additional costs applicable in specific situations. For example, Amazon imposes:
- High-volume listing fees
- Inventory fees
- Refund administration fees
Discover the whole Amazon pricing policy here.
Start selling on Amazon: Summary
Without a doubt, Amazon is a good place for your offer. However, you have to realize that selling there is costly and challenging. You have to be prepared to compete in this difficult market and think about:
- Implementing a well-thought-out marketing strategy
- Optimal logistics model
- Costs of operation
And several other elements. Amazon has made a specific website for potential sellers. There, you will find everything you need to know to win this market. If you need to know more before you create an account, that’s the place to go. Plus, there are many Amazon agencies out there that will help you with selecting and promoting products on this marketplace.
And don’t forget about pricing! As you already know, customers use Amazon to discover products but also prices. To get good exposure, you need great prices. And that’s why we’re here. We encourage you to see our tools for online stores, especially price monitoring and dynamic pricing. Dynamic pricing is an intelligent platform that enables you to set predefined rules to maintain optimal visibility and profit. For example, you can decide for your product to remain in TOP3 in a specific product category on Amazon. Our AI-fueled algorithms will do the rest.
Check our website for details, and start your adventure with Dealavo today!