Through your online store, you can showcase your brand, connect with your audience, and sell your products. However, there are many ways to reach both established and new audiences and sell to them through an e-commerce marketplace like Amazon.
Why Should You Sell on Amazon?
If you are a beginner in the e-commerce field, you may have some questions, including: Why should I sell on Amazon? How can I manage pricing between my Shopify store and Amazon? What does it take to grow a business on Amazon, and how can I maintain its growth over the long term? What are the options and programs available on Amazon that I should use?
The goal of this guide is to address these questions and help you understand how to create and grow a profitable and sustainable business on Amazon. You will learn how to get started selling on Amazon, how to optimize your time, and the things you can control to build a business on Amazon.
How to Sell on Amazon for Beginners
Determine What You Will Sell: Your Amazon business strategy should include the types of products you will sell and how you will acquire them. There are some common methods of selling on Amazon:
Retail Arbitrage: If you buy something for less than the market price and sell it for a higher price to profit from the difference, that is retail arbitrage. Amazon sellers can search various markets for items being sold or discounted, such as Target, Best Buy, or Big Lots, and then sell them on Amazon at a higher price.
White Labeling: Generic products that have your brand name or logo added are known as white label products. You can order white label products wholesale, drop ship them, or print on demand. Amazon sellers find it easier to sell white labeled products because they can skip product research and start selling. You don’t need any manufacturing experience or product design skills to sell white label products.
Private Labeling: Private labeling is the process of creating branded products using a third-party manufacturer. Amazon already has a targeted audience, making private label products an attractive option for Amazon sellers. Common categories include clothing, skincare, cosmetics, food, hair care, and dietary supplements. You can find private label products through marketplaces like Alibaba or ThomasNet.
Affiliate Marketing: If you don’t want to deal with researching products to sell, you can start an affiliate marketing business on Amazon. You only need to choose products you want to promote to your audience – either on your website or your Instagram or TikTok accounts. Amazon will provide you with a unique link to include in your content. When someone buys a product using your link, you’ll earn a commission from the sale.
Drop Shipping: When drop shipping on Amazon, you do not hold products in inventory. When someone buys a product, the order is sent to a third party. The third party fulfills the order and ships the products directly to the customer.
There is a slim profit margin for Amazon sellers who engage in drop shipping. The average profit margin ranges between 10% and 30%, with Amazon taking about 15% of the total revenue. So, you will have a profit margin of around 15% for each product sold.
Although drop shipping on Amazon is popular, there are many rules to follow for compliance. Read more about Amazon’s drop shipping policy.
Selling Your Own Products: Another way to sell on Amazon is by selling your own products. Many Shopify store owners will use a free Shopify app to sync inventory and sell their products from their own stores on Amazon. This way, you won’t need to create separate selling plans and can control inventory management in one place.
Tips
To Research Amazon Products for Sale
It takes time and research to find the right products to sell on Amazon. Look for products that are popular and have a good profit margin in a less competitive space.
Amazon Best Sellers List
The Amazon Best Sellers page is a great place to find product ideas based on what is selling well right now on the site. Pay attention to any ideas you find worth considering. Top-selling categories on Amazon include books, clothing, electronics, toys, and games.
Keyword Research Tool
Jungle Scout is a popular keyword research tool that can help identify the perfect products. When using a tool like Jungle Scout, you make decisions based on data. The product search volume helps determine whether it’s worth buying and selling yourself.
Amazon Reviews
Any market can be profitable if you provide customers with something they are lacking. There is always some kind of gap in every category. You should examine Amazon product reviews to identify what customers like and dislike about your brand or product. You may be able to determine whether it’s appropriate for you to try selling it yourself based on that.
Selecting a Plan
One of the first decisions you will make when selling on Amazon is what type of seller plan you will use. Amazon offers two seller plans: individual and professional. The main difference between the two plans is based on the expected sales volume.
The individual plan is a pay-as-you-go plan that gives you access to basic listing tools and order management tools. Individual sellers pay $0.99 each time they sell a product. You don’t pay any fees unless you sell a product on Amazon.
The professional seller plan is a monthly subscription service that provides a range of tools and benefits, including access to the Amazon Marketplace API, advanced business reports, customizable shipping options and pricing, and eligibility for top placement on detail pages. The price is $39.99 per month, but it may vary depending on whether you are selling in multiple countries or not.
Amazon also takes a referral fee on each sale. This fee is a percentage of the total transaction and varies by product category.
Which one is best for you? If you plan to sell more than 40 products a month, you might want to choose the professional plan. If you sell fewer than 40 products a month or experience seasonal sales fluctuations, the individual plan may be better for you.
Creating an Amazon Seller Account
The next step is to create a new seller account on Amazon. Before registering, keep the following handy: a business email address, bank account number or routing number, active credit card, government-issued ID, tax information, phone number.
Next, go to sellercentral.amazon.com to register. Amazon will ask for details about your business, such as address and tax information, as well as your bank and identity information.
Amazon requires sellers to obtain approval for certain types of products. Fashion, grocery, music, and jewelry are common categories that require approval before setting up an Amazon seller account. Read an overview of the product categories you can sell.
Once your Amazon seller account is approved, you are ready to list your products and start selling.
Understanding Amazon’s Cost Structure
You can start selling on Amazon with little money. However, there are some fees you should be aware of because they are charged frequently and can affect the ROI of your Amazon channel. The following fees are not the only fees, but they are common ones.
Fees
Referral: Amazon charges a commission to sellers when selling on the platform. The percentage varies by product category. The average referral fee is 15%, but it can range from 8% to 45%.
Closing Fees: This is a fee of $1.80 taken from each unit sold for products in media categories (books, video discs, music, software, computer games, video game consoles, and video game accessories).
FBA Fees: If you use Fulfillment by Amazon (known as Amazon FBA), it covers the shipping and handling costs for the sale. These fees are charged for fulfilling items for Amazon purchases and depend on the product category, size, and weight. Standard packages may cost between $2.41 and $4.71.
Additional Amazon Fees: Amazon will also charge storage fees for inventory in its fulfillment center. You may incur monthly fees or long-term storage fees, along with disposal order fees, return fees, and advertising costs.
For a comprehensive overview of all possible fees, read the fee guide on Amazon.
Learn Amazon Seller Center
While this guide aims to summarize the key strategies and initiatives you can use to grow your business on Amazon, let’s discuss some basics, starting with the difference between selling on Amazon (seller, 3P, or marketplace seller) and selling to Amazon (vendor). The Amazon Seller Central with fulfillment options.
When you are a seller in the Amazon marketplace, you own the inventory until the customer receives it. You can choose to allow Amazon to facilitate order fulfillment and customer support or do it yourself.
In most cases, being a third-party seller is considered the easiest and most cost-effective way to start selling on Amazon. Sellers use Amazon Seller Central, with some different features available compared to Vendor Central. Amazon Seller Central
Being a vendor for Amazon means that you can sell products wholesale directly to Amazon. However, Amazon owns the product once it is received. Amazon Vendor Central is a program that sellers are invited to join and can be a good option for businesses that do not want to sell their products directly to Amazon customers.
Benefits of being a vendor: Building customer trust, simple selling process, marketing placement on category pages and company emails, access to additional category initiatives such as gift guides and holiday collections, access to programs like Prime Now, Fresh, and Pantry, and a lower chance of account suspension for unknown reasons.
Disadvantages of being a vendor: Less direct control over pricing, more complicated fulfillment with less control, slower payment terms, typically a more expensive model, and increased reliance on Amazon’s manager and retail teams.
While there is some overlap between the features available in Seller Central vs. Vendor Central, we will primarily focus on the features available in Seller Central for the remainder of this post, as it is the most accessible for you.
Amazon Seller App
Amazon also offers sellers a mobile app to manage their businesses on the go. The Amazon Seller App is an easy way to analyze sales, fulfill orders, manage returns, and respond to customer inquiries on-the-go. You can even create product listings on your phone.
The Amazon Seller App is available for both Android and iOS and is free for sellers.
Choosing Your Fulfillment Options
As a seller, you have two options for fulfilling orders: the first option is to do it yourself or use FBA, where Amazon is responsible for receiving, packing, and shipping the orders. Fulfilled by Merchant (FBM): you fulfill orders directly to customers and manage shipping, returns, and customer service. This is a good option for custom-made products or products that require longer processing times. Fulfilled by Amazon (FBA): you send inventory to Amazon’s warehouse, known as Amazon Fulfillment Center, and the products are shipped and returns are managed by customers. You control inventory levels and pay storage fees for the product, along with fulfillment fees for each unit sold to customers. You must own the inventory until the customer receives it.
Listing
Your First Product
The product detail page is where sales happen on Amazon. The information you place on this page helps sell your product and encourages shoppers to buy. The target brand label for the product is essential for an Amazon listing for two reasons. First, it grabs shoppers’ attention and tells them they are in the right place. Second, it can improve your search click-through rate and enhance your SEO ranking.
Target Product Title: The product title is crucial for an Amazon listing for two reasons. First, it captures the shoppers’ attention and informs them they are in the right place. Second, it can improve your search click-through rate and boost your SEO ranking.
The product title has a maximum of 200 characters, but you should keep your title between 60 and 80 characters. Why? A Skubana study of over 3,000 top-rated Amazon listings found that 33% of them fall between 60 and 80 characters. It is recommended by Amazon’s Seller Central guidelines. Amazon may truncate product titles that exceed 112 characters.
Every word in your product title is searchable. Place the most relevant search terms at the beginning of your product title. You will notice that Homesick uses its brand name (Homesick), product line (Scented Candle), style (Hawaii), features (Scents of Pineapple, Coconut), and container size.
This gives shoppers a clear and concise description of your product. They can then decide whether to stay on your page or go find the product elsewhere.
Clear product images: The main image should clearly show what the product is before zooming in. Additional images should provide extra angles of the product and lifestyle images if applicable.
You can also add a video to give shoppers a deeper look at your products. Shoppers can scroll through your media to help them decide if the product is right for them. Note: Ensure your images are high quality. Shoppers can also zoom in to see fine details of the product. You don’t want to present a low-resolution image.
How many images should you include? According to Skubana’s study, 62% of the top-rated Amazon listings had between five and eight images for customers to view. Try to add at least five images to your product listing page.
Bullet Point Summaries: Bullet points help shoppers get the information they need quickly. They are descriptive texts on your product detail page that showcase the benefits of your product. Homesick keeps bullet points short and sweet, highlighting only the key information buyers look for in candles, such as burn time, scent notes, wax type, and candle care.
Make sure to cover all the main areas that customers need answers to before scrolling down on desktop or to additional sections on mobile. Mention key facts, such as the existence of a warranty or customer service available to resolve issues. Avoid having bullet points that exceed several long lines, as most customers will skim through this section.
Concise Product Description: Remember that shoppers read quickly, so a long paragraph of 20 lines might not be effective. Use your brand voice here and reiterate your main selling points while mentioning any supporting facts that can help customers understand why they should buy now.
Brand-registered sellers can use Enhanced Brand Content (EBC) to enhance the product page.
Source: https://www.shopify.com/blog/sell-on-amazon
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