Amazon works a little differently compared to other marketplaces, with a large audience and an even strong focus on their customer experience.
At first glance, selling on Amazon might seem overwhelming to you, with different plans, tools and ways of fulfillment. This guide aims to help you understand whether Amazon is the right marketplace for you and your business.
In this blog, we’ll cover the following topics regarding selling on Amazon:
- What is Amazon?
- Should you sell on Amazon
- How to sell on Amazon
- 5 tips for selling on Amazon
- How much does it cost to sell on Amazon?
- How to integrate your business operations with Amazon
What is Amazon?
Only recently started in 1994, Amazon has rapidly grown to become one of the largest online marketplaces. Expanding from selling books, to now seemingly almost anything!
What sets Amazon apart from its competitors is its millions of customers and Prime members worldwide. There’s a vast range of categories, meaning your product and brand will fit in somewhere. Unique to Amazon is their ability to fulfil products for you, called Amazon FBA, in this scenario, you send a large quantity of your products to Amazon to be stored in their warehouses. This option will be explored later alongside merchant-fulfillment.
What does Amazon sell?
In the early days of Amazon, it was limited to just books, and whilst books are still a large part of Amazon, they have now expanded into almost every other category. Because of this, Amazon attracts all types of sellers, from large household brands to small businesses creating handcrafted products. The most popular categories include:
- Home & Kitchen
- Clothing, Shoes and Jewellery
- Toys and Games
- Health, Household and baby care
- Electronics
- Sports and outdoors
- Pet supplies
- Office supplies
However, there are certain items that require extra approval from Amazon to sell, such as:
- Alcohol
- Cars & Motorbikes
- Food and Beverage
- Cosmetics
- Currency, Coins, Cash Equivalents and Gift cards
View the full list of Amazon restricted items in the UK.
Should you sell on Amazon?
The short answer is yes. Almost every business and its products have a place on Amazon, whether you're well-established or just taking your first steps to start your business. By far the biggest advantage of selling on Amazon is its astonishingly large customer base.
Amazon has 300 million active customers in over 180 different countries, and these customers aren’t just buying Amazon basic products. According to Amazon, third-party sellers account for 58% of Amazon sales.
Still not convinced? You can read our blog about the 5 best places to sell online in the UK. Some of these marketplaces might surprise you and work well alongside your Amazon store.
Pros of selling on Amazon
- Millions of customers worldwide
- A vast amount of seller tools
- Large compatibility with integrations
- Prime Shipping with FBA
Cons of selling on Amazon
Whilst we still recommend selling on Amazon for the most part, like every marketplace, there are some cons you should be aware of which mean Amazon might not be best suited to your company or business model.
- Not only will you have the set cost associated with your plan but you will also need to consider additional selling fees.
- There are a large number of returns on Amazon due to their customer policy. Amazon is keen to provide customers with a great shopping experience, this includes a very relaxed refund process. For your business, this might mean offering refunds and dealing with a large number of returns.
- You have to comply with all of Amazon's rules and regulations. Especially when it comes to FBA, there are many standards and best practices that Amazon expects you to follow. Such as using GS1 barcodes.
- Some categories can be very competitive. With the more popular categories, you're likely to be competing with big well-known brands alongside thousands of other smaller businesses like yourself.
How to sell on Amazon
1. Picking the right plan
Unlike other marketplaces, Amazon has multiple options for you to choose from when signing up. Amazon offers two plans to its customers in the UK, the individual plan and the professional plan. Having the option between the two is great for businesses to choose a plan that's geared towards their needs.
We’ll cover the costs and features of each plan later in this blog, for now, there are a couple of differences you need to know between the two. Firstly, with the individual plan you are charged a certain amount for every item you sell. However, with the professional plan you’re charged a set fee every month no matter how many items you sell.
One thing to note is that with both plans you will still have additional selling fees on top of your normal plan price. This includes referral fees, fulfilment fees and storage fees.
If you’re a small store or even just launching then the individual plan is most likely the right choice, to begin with, whilst you set up your Amazon store and get your first orders in. As your Amazon store begins to gain traction then it’ll be worth looking into the professional plan to help reduce your cost per sale and increase your margins.
4. Setting up your Amazon seller account
After you’ve decided which plan is best for your business you can begin the set-up process. Before you start the set-up process here's a list of things you’ll need to set up an Amazon store in the UK:
- Business mail address
- Credit card
- A valid form of identification such as a passport or driver's licence
- Your company registration details, such as your company registration number and VAT number.
- You can start creating your account by clicking on the sign-up button at the top of Amazon's sign-up page.
- Create an Amazon account or sign in to one you already own.
- You’ll then be asked to enter some information about your business such as its location and what type of business it is. For example, limited company or sole trader.
- After you’ve entered your information you’ll be asked to verify your account before you can start listing your products on Amazon
4. Listing your products on Amazon
Once you’ve verified your account you’ll be introduced to Amazon’s Seller Central. Seller Central is where you’ll be able to manage your Amazon account and gain access to resources such as your inventory, reports, and metric tools.
After you’ve familiarised yourself with Seller Central you can create your first listing on Amazon. To do this you can either match an existing listing if you’re selling the same product as someone else or create an entirely new listing.
If you choose the individual plan, then you’ll have to upload your products to Amazon one at a time, whereas those on the professional plan have the option to bulk upload their products in large batches.
To create a listing you’ll need some basic information about your product including
- Global Trade Item Number (GTIN) obtained from the GS1 website.
- SKU (Stock keeping unit)
- Product Title
- Product description with bullet points
- Some stunning product images
- Search terms and keywords that customers will use to find your product
Once you’ve got your listing ready to go, it’s important to optimise it and make sure it meets all of Amazon's recommendations to help successfully launch your product.
5 tips for selling on Amazon
Now you’re ready to start selling on Amazon, you’ll want to make sure your products stand out from the crowd. Follow our 5 steps for selling on Amazon to get the most out of your product launch.
#1: Get your Amazon listing right the first time
Amazon focuses less on the brand behind products and instead features the products as the main focus. It’s because of this that it’s important to create a well-written, visually appealing and informational product listing.
Here are the top 7 tips for creating that perfect Amazon listing for your products:
- Your title should be 200 characters max, and you should capitalise the first letter of every word in the title.
- Images should be 500 x 500 or 1,000 x 1,000 pixels to increase listing quality and provide a clear image of the product for users to see.
- Variations in your product should be set up such as different colours, scents, or sizes or for the user to choose from.
- Keep your listing quick and snappy. Using things like bullet points and short descriptive sentences highlighting key features and benefits.
- Target the “featured offer” also known as the "Buy Box". When customers click on a product on Amazon if the same product is sold by multiple sellers then Amazon will pick one seller to be the featured seller. This means most of the time the featured seller will win the sale unless the customer purposefully chooses an alternate supplier..
- Related to the featured offer, “other offers” are when the different suppliers are listed below the product. Other sellers might be offering a different price or quicker shipping options, etc. If you price your product competitively or offer faster shipping then customers might choose you over other sellers.
- Use descriptive keywords which will improve the chances of people finding your listing.
#2: Consider Amazon FBA or Merchant Fulfillment
When selling on Amazon, there are two main options to choose from when it comes to fullfilment. You can opt to have your products fulfilled by Amazon. With this option, you’ll ship your products to one of Amazon’s storage facilities and they’ll handle the distribution and storage of your products.
This does come with some additional costs as well as many benefits. FBA is the best option if you're looking to scale your business and offer the best service to your customers.
The other option sellers have is called merchant fulfillment where you will be responsible for tracking your inventory, packaging and shipping your product to your customers.
Choosing between the two can be difficult, as with anything in business, it would be wise to research both and see which one fits your current situation. Read our blog for more information on FBA vs Merchant fulfilment.
#3: Consider Amazon's Brand Registry
For larger businesses, it’s worth looking into Amazon's brand registry. This program aims to protect brands that are selling on Amazon, stopping people from pretending to act as your brand and sell products under your brand without your permission.
The eligibility criteria for Amazon's brand registry include needing a pending or registered active trademark for a text-based mark or an image-based mark.
#4: Use Amazon's free automated pricing tool
Price is a determining factor for most consumers and finding the right price can be difficult. Amazon’s automated pricing tool adjusts prices on your listings quickly and automatically depending on and what your competition charges. You can set price limits and price rules to ensure you still make a profit margin whilst increasing demand.
#5: Build customer reviews
Customer reviews are one of the most effective ways to build your trust with customers. According to a report by Bright Local, 98% of people read online reviews. If the majority of your customers are looking for reviews before they are willing to spend with you, it’s important to build a strong review portfolio.
Requesting customer reviews through email marketing is a great way to quickly build reviews under your listing and help increase your sales.
How much does it cost to sell on Amazon?
The cost of having access to Amazon’s huge customer base depends on the plan you pick. However, it is worth remembering that there are additional selling fees no matter which plan you pick. You should remember to account for these extra costs when calculating your total cost per sale.
The Individual Plan costs £0.75 (excl. VAT) per item that you sell on Amazon. With this plan you gain access to the most basic Amazon features such as adding new products to Amazon's catalogue and the option to access fulfillment by Amazon. It’s important to note that with this plan you won't have access to advanced selling tools or advertisements on Amazon.
The Professional Plan costs £25 (excl. VAT) per month. Amazon recommends this plan for businesses that sell more than 35 items a month. With this Plan you gain access to more advanced tools and features such as:
- Listing items in bulk
- Sell in additional categories
- Inventory reports
- API integrations
- Advertising tools
- Run promotions
- Multiple users to your Amazon account
Additional selling fees:
Referral fees. This is a charge from Amazon on each item sold. How much this fee is depends on which category your product is in. According to Amazon, most referral fees fall between 8% to 15%. View the full breakdown of Amazon’s referral fees.
Fulfillment Fees. These fees do depend on which plan you choose. With fulfillment by Amazon, you'll have a flat fee per item as well as a storage fee to consider. If you’re fulfilling orders by yourself, then you have a little bit more freedom. On the professional plan, you can create your own shipping rates for customers for most items. However, on the individual plan, you have to use Amazon’s set shipping rates for all products.
How to integrate your business operations with Amazon
If you’re using the professional plan you’ll have access to API integrations for Amazon. Using an API integration can increase your selling efficacy and keep your Amazon store running smoothly.
Mintsoft’s fulfilled by Amazon (FBA) solution allows you to manage all your FBA activity within the Mintsoft software. This Amazon FBA integration helps you stay compliant with the FBA regulations, ensuring stock is replenished on time and that your Amazon store runs smoothly.
Additionally, our Marketplace API Integration for Amazon can help you manage your inventory across multiple marketplaces all from one platform, helping you make sure stock is kept up to date. Book a 121 demo with us to find out how we can help your business thrive on Amazon.
