By Michael Keenan
Introduction
Your online store is your headquarters, where you showcase your brand, connect with your audience, and sell your products. However, there are many ways to reach both existing and new audiences and sell products through online marketplaces like 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 that growth over the long term? What options and programs are available on Amazon that I should use?
The aim 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 start selling products 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
Identifying the Product You Will Sell
Your business strategy on Amazon should include the types of products you will sell and how to source them. There are several common ways to sell on Amazon:
Retail Arbitrage. If you buy something for less than its market value and sell it at a higher price, making a profit on the difference, that is retail arbitrage. Amazon sellers can search various markets for items that are on sale or clearance, such as Target, Best Buy, or Big Lots, and then sell them on Amazon for a higher price.
Retail arbitrage is a good way to make money quickly, but it can be time-consuming. Sellers are always competing with others selling the same products. If you can’t sell a product quickly enough, you will be stuck with it unless you sell it at a loss.
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, dropship, or print on demand. Amazon sellers find it easier to sell white label products because they can skip product research and start selling right away. You don’t need any manufacturing or product design experience 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 appealing option for Amazon sellers. Common categories include clothing, skin care, 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 sourcing products to sell, you can start an affiliate marketing business on Amazon. You just need to choose the products you want to sell and promote them to your audience — whether 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 earn a commission on the sale.
Dropshipping. With dropshipping on Amazon, you do not hold products in stock. When someone buys a product, the order is sent to a third party. The third party fulfills and ships the products to the customer.
There is a slim profit margin for Amazon sellers who use dropshipping. The average profit margin for dropshipping ranges from 10% to 30%, and Amazon takes about 15% of the total revenue. So you will have a profit margin of about 15% for each product sold.
On
shipping on Amazon is common, there are several rules that must be followed for compliance. Read more about Amazon’s dropshipping policy.
Sell 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 products from their own stores on Amazon. This way, you won’t need to create separate selling plans and you can manage inventory in one place.
Tips for Researching Amazon Products to Sell
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 low-competition space.
Amazon Best Sellers Lists
The Amazon Best Sellers page is a great place to find product ideas based on what is currently selling well on the site. Pay attention to any ideas that you find deserve consideration. Categories include books, clothing, electronics, children’s toys, and games among Amazon’s best-selling categories.
Keyword Research Tool
Jungle Scout is a popular keyword research tool that can help you identify the perfect products. When using a tool like Jungle Scout, you make decisions based on data. The search volume for the product helps you determine whether it’s worth purchasing and selling yourself. Image provided by: Jungle Scout
Amazon Reviews
Any marketplace can be profitable if you offer customers something they lack. There’s always some sort of gap in every category. You need to identify that gap. Look at Amazon product reviews to identify what customers love and dislike about a particular brand or product. You may be able to determine whether it’s suitable for you to try to sell it yourself based on that.
Choosing a Plan
One of the first decisions you’ll make when selling on Amazon is what type of seller plan you’ll use. Amazon offers two seller plans: Individual and Professional. The key 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. 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 Amazon Marketplace API service, advanced business reports, customizable shipping options and rates, and eligibility for higher ranking on detail pages. The price is $39.99 per month, but it may vary based on whether you are selling in multiple countries or not.
Amazon also charges referral fees on each sale. This fee is a percentage of the total transaction and varies by product category.
Which is best for you? If you plan to sell more than 40 products a month, you may want to choose the Professional seller plan. If you’re selling fewer than 40 products a month or experiencing 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 information handy: 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 bank and identification information.
It requires
Amazon requires sellers to obtain approval for certain product categories. 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 need to be aware of as they are charged frequently and can affect your return on investment in your Amazon channel. The following fees are not the only fees, but they are common.
Referral Fees. Amazon charges sellers a commission 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. These are fees of $1.80 on 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 Fulfilled by Amazon (known as the Amazon FBA program), it will cover the shipping and handling costs for sales. These fees are charged for fulfilling items for Amazon purchases and depend on the product category, size, and weight. A standard package may cost between $2.41 and $4.71.
Additional Amazon Fees. Amazon will also charge inventory storage fees for products in its distribution center. You may pay monthly fees or long-term storage fees, in addition to disposal request fees, return fees, and advertising costs.
For a comprehensive overview of all possible fees, read the Amazon Selling Fees Guide.
Learn About the Amazon Seller Center
While this guide aims to summarize key strategies and initiatives you can use to grow your business on Amazon, let’s review some basics, starting with the difference between selling on Amazon (seller, 3P, or marketplace seller) and selling to Amazon (vendor). Amazon Seller Center with Fulfillment options
When you are a seller on the Amazon marketplace, you own the inventory until the customer receives the product. You can subscribe to Amazon’s service to facilitate order fulfillment and customer support or do it yourself.
In most cases, being a third-party seller is the easiest and least expensive way to start selling on Amazon. Sellers use the Amazon Seller Center, with some different features available compared to the Amazon Vendor Center. Amazon Seller Center
Becoming a vendor for Amazon means you can sell wholesale products directly to Amazon. However, once received, Amazon becomes the owner of the product. The Amazon Vendor Center is a program that invites sellers 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 include: building customer trust, a simple selling process, marketing placement on category pages and official 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 include: less direct control over pricing, greater difficulty in fulfillment and less control over it, slower payment terms, usually a more expensive model, and increased dependence on Amazon’s vendor manager and retail teams.
While there is overlap between the features available in the Seller Center versus the Vendor Center, we will focus in the rest of this post mainly on the features available in the Seller Center, as it is the most accessible to you.
Amazon Seller Application
Amazon offers
Amazon also provides sellers with 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 within the app. You can even create product listings on your mobile phone.
The Amazon Seller App is available for both Android and iOS and is free for sellers.
Choosing Fulfillment Options
As a seller, you have two fulfillment options: do it yourself or use FBA, where Amazon is responsible for receiving, packing, and shipping orders. Fulfillment by Merchant (FBM)
You handle shipping directly to customers and manage returns and customer service. This is a good option for made-to-order products or products that require longer processing times. Fulfillment by Amazon (FBA)
You send inventory to an Amazon warehouse, known as an Amazon Distribution Center, and Amazon ships the products and manages returns from customers. You retain the inventory and pay storage fees for the product, plus fulfillment fees for each unit sold to customers. You also keep the inventory until the customer receives the product.
In this model, Amazon handles payment from the customer and pays you every two weeks. You gain access to Amazon’s customer service team, which handles inquiries, returns, and refunds. You will also gain access to Amazon Prime and free Super Saver shipping to expand your business.
Listing Your First Product
The product detail page is where sales happen on Amazon. The information you put on this page helps sell your product and encourages shoppers to buy. The brand Homesick is a great example of a product page that sells. Let’s take a look at the reasons.
Targeted Product Title
Your product title is critical for your 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.
Product titles have a maximum limit of 200 characters, but you’ll want to keep your title between 60 and 80 characters. Why? A Skubana study of over 3,000 high-ranking Amazon listings showed that 33% of them fall between 60 and 80 characters. Amazon recommends considering this. Amazon can truncate product titles that exceed 112 characters.
Every word in your product title is searchable. Put the most relevant keywords at the beginning of your product title. You’ll 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, concise description of your product. They can then decide whether to stay on your page or look for 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 photos 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 how well the product fits their needs. Note: Make sure your images are high quality. Shoppers can also zoom in to see the fine details of your product. You don’t want to present a low-quality image.
How many images should you include? According to the Skubana study, 62% of the highest-ranking 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 Points
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 its bullet points short and sweet, highlighting only the key information that buyers look for in a candle, such as burn time, scent notes, wax type, and candle care.
Make sure
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Source: https://www.shopify.com/blog/how-to-sell-on-amazon-using-shopify
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