There's quite a bit to know before starting you start selling on Amazon if you want to increase the likelihood of success. Here are a few things to keep in mind.
Amazon is a titan in the world of online shopping, so it’s natural to want to capitalize and sell your products on their platform.
But, it’s not as easy as simply uploading a product and waiting for the dough to roll in. We’re going to run through the top nine things you need to know before selling on Amazon.
#1: Seller Types and Fees
There are two types of selling plans on Amazon: the individual plan and the professional plan.
Sellers on the professional plan pay a monthly subscription fee of $39.99 and aren’t subject to per-item fees.
Individual sellers, on the other hand, don’t pay a monthly fee. They pay a per-item fee of $0.99 for each item sold.
Now, keep in mind that regardless of your plan, these are only a part of the fees you pay to Amazon when selling a product. Depending on the product, you may also pay a referral fee and closing fee.
Closing fees, which run $1.80 per item, apply to media products like books, music, software, DVDs, video games and consoles, and video game accessories.
When you do the math, if you’re selling 40 or less items a month, the individual plan will be cheaper. If you’re selling more than 40 items a month, then paying the monthly subscription fee ends up being more cost-effective.
However, there are some cases where the type of seller plan isn’t really up to you. This brings us to our next topic.
#2: Product Categories
There are 35 different product categories to choose from on Amazon. The product categories run the gamut, from baby products to watches and sports collectibles to makeup.
For 15 of the categories, you do need to request approval, and you have to be on the professional plan.
Some of these categories include watches, subscription boxes, car parts, and collectible coins. You’ll have to meet some general requirements for these types of product categories and submit a request for approval.
Typically you’ll get an email with their response within one to three business days.
Why does Amazon separate these product categories? It comes down to the quality of the product and quality of service.
Many general requirements require the seller to be in good standing, have sold a certain number of products, and a very small percentage of late shipments.
For the other 20 categories, you may be able to start selling without approval.
However, keep in mind that even if your product category doesn’t require approval, specific products within the category or sub-categories may need Amazon approval.
So, make sure that you check if your product category, sub-category, or product requires the professional plan or Amazon approval before making your plan selection.
#3: Product Listings
Amazon doesn’t allow duplicate listings of the same product. So if your product is already in their catalog, you’ll have to associate your version of the product on that same listing page.
While it isn’t the best approach for sellers, it’s absolutely the best approach for the customer. I mean, could you imagine if there were ten different listings for each of their products?
You’d never find anything!
There is a bonus to selling a product that’s already in Amazon’s product catalog; because the product listing page has already been created, half the work is done for you.
Unfortunately, if your product isn’t already something they offer, you have to make the product detail page from scratch, and there are a lot of very specific guidelines.
Fortunately, for those who sell uber unique products, Amazon provides you with templates sorted by category to help you through the process. You will need the UPC and SKU of your product, so make sure you have that handy before you start.
One of the added benefits of the professional plan is that you can add batches of products, where sellers on the individual plan can only add one listing at a time.
#4: Selling and Promoting
As you’re creating your product’s listing, it’s incredibly important to write titles and descriptions compelling enough to make people want to click.
This is also applicable to images. If your customer can’t see a clear picture of the product, they won’t buy it.
Once your foundation is laid down, it’s vital to understand how Amazon selects the order of the Merchant Offers List, which is where your product will live unless you’ve earned the Buy Box, but more on the Buy Box later.
There are four major contributors to your ranking on the Merchant Offers List: pricing, number of offers, seller history, and the number of reviews.
Obviously, if there are a small number of offers, your product is more likely to be seen, but what about the other three categories?
Amazon is known for offering products that cost significantly less than going to a brick-and-mortar store. To keep this reputation, they help sellers with competitive pricing by bumping them up on the offers list.
That said, it doesn’t matter how cheap your product is; if you have a lousy seller history full of late shipments and massive return percentages, you’re probably not going to make it very high on the list.
Last but not least, if you have a limited number of reviews or a high rate of negative reviews, you could also find yourself at the bottom of the offers list.
#5: The Buy Box
The Buy Box is that beautiful orange button on a product listing page that begs people to buy your product.
Every seller on Amazon wants to be attached to that Buy Box, but unfortunately, you can’t just add it by pressing a button.
Amazon selects the seller that gets the buy box. How do they choose? The same way that they order merchants on the offers list: pricing, number of offers, reviews, and seller history.
If you’re looking to compete for the Buy Box, there are a few things you should know.
First, only sellers on the professional plan are selected to be the Buy Box seller.
Second, if your product is used, you won’t be eligible for the Buy Box, but you can be selected for the Buy Used Box.
Third, if your product goes out of stock, you can lose your Buy Box, and you may not be able to get it back.
Lastly, you’ll have to have at least 2-6 months of sales history on Amazon before you qualify.
#6: Shipping Options
There are three ways to set your shipping rates in your Amazon account: by item or weight, by price, or what they call weight-tiered shipping.
Now, here’s where things get a little tricky. If you’re on the individual plan, Amazon will credit what they charged the buyer to your account when you ship an order.
Sometimes, what you get reimbursed for is less than what it costs you to ship.
The best way to ensure you’re breaking even on shipping is to pay special attention to the weight and dimensions of the products when you’re creating your listing.
This will help Amazon’s shipping calculators to get as close as possible to your costs.
Now, if you don’t want to have to deal with shipping at all, you can work with the Fulfillment by Amazon (FBA) feature.
When you work with FBA, you ship all of your products to Amazon. They take care of storing and shipping everything.
One last note on shipping before we move on; when you first start selling on Amazon, you may not be eligible for two-day shipping if you’re shipping items yourself.
On the other hand, if you’re going through FBA, your products will qualify for prime two-day shipping and even one-day shipping.
#7: Reviews – Dos and Don’ts
We’ve hit on the importance of reviews for ranking in the offers list, and to start you on the path to the Buy Box, but there are a few things you definitely need to know before you start selling.
First, and most importantly, gone are the days where you can incentivize shoppers for reviews.
We’ve all seen them, the reviews that say they were given the product for free in return for an honest review.
Well, Amazon banned that back in 2016. It’s crucial that you don’t give shoppers any type of bonus for leaving a review. Even asking for a review is a no-go on Amazon.
So, how DO you get reviews? It sounds cliché, but the best way to get a boatload of positive reviews is to earn them.
Ship quickly, offer great products, and when issues happen, because there’s always bound to be an issue or two, solve them quickly and with a digital smile.
While you can’t ask for a review, you can set up automatic “Thank you” emails to your shoppers after they purchase or receive a product. It’s an effortless way to make your customers feel appreciated.
Another great way to make your customers feel valued is to respond to their messages quickly.
There’s nothing as irritating as having to wait longer for a reply than it actually took for your product to be delivered.
#8: Big Sellers on Amazon
Based on everything we’ve reviewed so far, it should be no shock that one of the best items to sell on Amazon are unique products.
When you offer items like these, you limit your competition.
By using ads, you can get listed near similar products to gain visibility. While Etsy is usually the platform of choice for handcrafted items, things like handmade jewelry, knitted sweaters, photos you’ve taken and had printed on canvas, or even hand-etched glassware can be huge sellers, especially for shoppers who are looking for something outside of the norm.
If creation is not for you, you can still take advantage of this concept by selling products that currently have limited competition.
Browse Amazon to find products whose sellers have a limited amount of reviews or have a low seller rating.
If you can beat out the other seller’s service, you’ll find yourself in the Buy Box and with a lot more sales.
Used and refurbished products also tend to perform well on Amazon since a good portion of their shoppers are price-sensitive.
The key to any successful business is to analyze your performance. Thankfully Amazon has a ton of reporting features.
You can see a daily snapshot on your dashboard in Amazon Seller Central that shows your number of orders, units sold, and sales.
There is also in-depth reporting that offers a monthly glance at total inventory, page views, and even your brand performance.
As a new seller, it can be overwhelming. The best way to start off is to work on your brand performance.
That’s the key to boosting your sales and will be the area you have the most control over.
So What’s Next?
Have you started selling on Amazon yet? If not, and you’re looking to get started in the most efficient and pain-free way, then follow this proven formula on how to launch a successful Amazon brand.