Selling On Amazon
Amazon.com ranks among the largest market platform on the Internet. Every month, millions of different kinds of goods are sold on Amazon.
Have you been wondering how you could sell your products on Amazon? If yes, you will find the lesson below titled, Conquering Amazon very valuable. It’s actually from the book, The Online Millionaire: Strategies for Building a Web-based Empire on ebay and Beyond, by Amy Joyner.
Enjoy!
Conquering Amazon
The Lowdown
Amazon.com is now one of the Web’s biggest retailers. In 1994, however, it was just an entrepreneur’s fledgling dream. Founder Jeff Beezos had an idea that the Internet could offer book lovers a unique experience they couldn’t have in any traditional bookstore-the ability to browse a selection of millions of titles in a single sitting.
In July 1995, Bezos began selling books online from his Seattle garage, fulfilling orders for customers in 50 states and 45 countries in that first month alone. Now, the company’s sales total more than $8.4 billion annually.
In the 12 years since, Amazon.com has evolved into much more than an online bookstore. Now, the company is one of the best-known brands on the Web. It offers a virtual smorgasbord of anything people want to buy online-books, movies, music, gourmet food, computers, clothing, electronics, drugstore items, cameras, sporting goods, tools, hardware, and the list goes on.
The company is well on its way to achieving Bezos’ ultimate goal of offering the “Earth’s biggest selection.” Part of the way Amazon has achieved this is through partnering with other companies-including Toys “є Us, Target, and Borders-and by opening its marketplace to other merchants of all types and sizes.
In 1999, Amazon launched its own auction platform, as well as an initiative called zShops that enabled individuals and large merchants to open stores and list products for sale for a low monthly subscription fee and a cut of revenues. A year later, Amazon further opened itself to outside sellers with the creation of its Marketplace program. Anyone with something to sell-be it new or used-can be an Amazon Marketplace seller.
There are no monthly subscription fees and no upfront listing fees. Charges are levied only when an Amazon Marketplace item is sold. Now, Amazon also has what it calls “Pro Merchants,” mostly medium-sized to large sellers whose products are included in the general Amazon catalog.
These Pro Merchants typically list and sell a large volume of goods on the site every month, thus supplementing their own website sales. Third-party sales on Amazon .com have grown significantly since the programs started in 2000. Once accounting for just 6 percent of items sold on the web site, merchandise from third-party merchants now amounts to almost 30 percent of Amazon’s sales.
There’s yet another way for outsiders to make money on Amazon. The e-tailer has operated its Associates program since 1996 and essentially created the model for online affiliate marketing programs. Today, Amazon’s is the largest and most successful online affiliate program with more one million members worldwide. Affiliates earn between 4 percent and 10 percent in referral fees for promoting Amazon products on their own sites.
Jeff Bezos, in realizing his own dream of online entrepreneurial success, has helped thousands of others achieve theirs by opening Amazon.com to third-party transactions. The site, which continues to grow in popularity every year, is a good channel for growing incremental sales. Many merchants flock to Amazon because of its huge audience and buyer- and seller-friendly policies.
Though it’s a more expensive marketplace by comparison, sellers report that they encounter less fraud and fewer customer service hassles from Amazon buyers while spending less on managing sales in this channel than in others.
Getting Started
In order to sell on Amazon.com, you’ll need to create an account. (If you’re already a customer, there’s no need to register a separate account, although Amazon does recommend that you maintain separate ones for personal purchases and business sales.)
When you sell at Amazon, the company collects all payments and distributes them to you via a bank draft every two weeks. Therefore, it is important to register for Amazon Payments. You’ll choose a nickname for your company-similar to your user ID on eBay-and will also be asked to provide your phone number and checking account information (including account numbers and routing numbers) so you can get paid for what you sell.
If you’re a new seller, you’ll have to wait at least 14 days before receiving any cash from Amazon for sales completed through this web site. This is purely a security measure that gives Amazon time to make sure you abide by its seller requirements and don’t welsh on any transactions. After this two-week holding period, you can manually disburse funds to your checking account daily, if you choose.
Finally, before you start listing products on the site, you’ll need to set up your seller preferences, in which you outline your default shipping method, as well as your customer service and returns policies.
With these steps completed, you’re set to begin listing individual items for sale in the Amazon Marketplace. In order to outfit your own zShops storefront or easily sell in volume, you’ll need a Pro Merchant subscription, which will enable you to upload listings in bulk.
You’ll pay $19.99 a month for your first two months as a Pro Merchant subscriber and $39.99 a month thereafter. (You must register a credit card with Amazon for monthly subscription charges.)
For the cost, Pro Merchants get privileges that other Marketplace sellers don’t, along with discounted selling fees. Pro Merchants have the ability to list an unlimited number of products for sale on Amazon every month, and can open a zShops storefront that can be promoted directly to customers, something basic Marketplace sellers can’t do.
Basic Marketplace listings expire after 60 days, but Pro Merchant listings stay active until the item sells. In addition, Amazon charges Pro Merchants less for every sale they make through the site. Most Marketplace sellers pay a 99-cent transaction fee on every sale, plus a commission of 6 percent to 15 percent. Amazon automatically waives the 99-cent transaction fee for Pro Merchant subscribers.
The next step to selling on Amazon is actually listing your products for sale. I’ll first walk you the process that a basic Marketplace seller would use, and then tell you about the bulk-listing tools available to Pro Merchant subscribers.
The great thing about Amazon is that most of the products you’ll want to sell are probably already cataloged on the web site. So, setting up a listing is really simple. From any Amazon product detail page, you just click on the link to “Sell yours here.”
You’ll have the option of grading your item as new, refurbished, used, or collectible and adding a comment about the item’s condition. Next, you’ll set the price for your product, based on your own inventory cost and what Amazon and other Marketplace sellers charge for the same product.
Finally, you’ll choose your shipping options-standard, international, or expedited-and submit your listing for inclusion in the Amazon.com search database. Before submitting the listing, you’ll get a chance to review it and to see how much you’ll earn, minus Amazon’s commissions, if the item sells.
As a Pro Merchant subscriber, you’ll probably find it much easier to submit multiple product listings at once, using management software like Monsoon, SellerEngine, ChannelAdvisor, or the site’s free Inventory Loader tool. If you use Inventory Loader, you’ll need to aggregate your inventory database into a single tab-delimited text file, which is essentially a spreadsheet file saved in a specific format that Amazon can read.
Your spreadsheet must include specific fields, such as the item’s International Standard Book Number (ISBN) or Universal Product Code (UPC), price, and quantity available, in a specific order. To ensure that your bulk upload file includes all the information Amazon requires, download the spreadsheet template at www.amazon.com/exec/ obidos/tg/browse/-/1161314/ref=br_bx_c_1_0/103-7307034-5587808 and fill in all the necessary information for your products.
You may find it necessary to make revisions to your Amazon inventory as you sell stock on other web sites or add new items to your product catalog, and you can do so by submitting modifications and additions through a separate bulk upload file.
Occasionally, you may want to sell an item that’s not already included in Amazon’s vast product catalog. Pro Merchant subscribers have the option of adding what Amazon calls “product detail pages” in 15 categories-baby; books; camera and photo; computer and video games; electronics; kitchen, home, and garden; music; musical instruments; pet supplies; software; sporting goods; tools and hardware; toys and games; video and DVD; and everything else.
Catalog additions cannot be made to the following Amazon categories, also known as stores: apparel and accessories; beauty; cell phones and cell phone plans; gourmet food; jewelry and watches; magazines; office products; and health and personal care.
Once you’ve determined that a product you want to sell isn’t already included in the Amazon catalog, you can begin the manual process of creating a product detail page. First, you’ll classify the product by category, subcategory, and type with prompting at each stage by Amazon.
Next, you’ll add the product details-specifically the product name, manufacturer, or publisher-and a description that will appear in the online catalog. It’s important to note that the description should be a basic one, without specific information about the condition of the item you’re offering for sale. That’s because the description will be used by you as well as other merchants who sell the product on Amazon in the future.
After submitting your product details, Amazon evaluates the listing. If you’ve done everything correctly, the item will be added to the site’s product catalog immediately. You will have the option of adding up to eight images to your product submission, provided those photographs meet Amazon’s criteria.
Preferably, products should be photographed against a white background, and they must be in focus and well lit. Image files can be no larger than 50 kilobytes in size and at least 500 pixels in length to be properly displayed. Once a product is accepted into Amazon’s catalog, you can start selling the item, following the steps outlined earlier in this chapter.
How It Works
The great thing about Amazon is that your listings appear alongside those offered by the e-tailer itself and its large merchant partners, like Target, Office Depot, and The Bombay Company. Shoppers can choose to buy directly from Amazon, from one of its big retail partners, or from smaller merchants like you. Price is often the determining factor.
Take, for instance, a search for “Sony PlayStation Portable,” a popular, handheld video game system. The main product page lists a unit available for $199.99 directly from Amazon.com, but shoppers also have the opportunity to choose from “24 new and used” game systems offered at various prices by third-party sellers on Amazon.
These listings are grouped by condition and then by ascending price. Shoppers can see at a glance how the various third-party merchants rank in terms of customer satisfaction and service thanks to Amazon’s five-star seller rating system.
Customers interested only in items from third-party sellers also have the option of just browsing or searching zShops listings. Or they can visit a zShops seller’s storefront directly to see everything that merchant has to offer.
Although it is competing with these third-party merchants, Amazon makes it safe and easy for customers to buy from Marketplace sellers by extending its product and security guarantees to those transactions. Amazon processes all financial transactions conducted on its web site, meaning that buyers never have to share their credit card information with unfamiliar sellers.
When customers decide to buy a product from an Amazon Marketplace seller, they complete the checkout process as if they were buying directly from Amazon. Amazon then sends an e-mail receipt to the buyer and another e-mail notifying the seller that a particular item has sold.
That seller e-mail includes instructions for shipping the product to the buyer, but doesn’t contain any of the buyer’s private credit card information. Amazon pays sellers every two weeks with automated direct deposits to their bank accounts.
A big difference between Amazon and the other online marketplaces is its relatively simple fee structure. Sellers pay no listing fees only commissions after a sale. As previously mentioned, basic Marketplace sellers pay a commission plus a 99-cent transaction fee for every sale, which is waived for Pro Merchant subscribers. Expect to pay a 15 percent commission on most items sold at Amazon.com, with a few notable exceptions. The commission rate is 6 percent on computers; 8 percent on cameras, photo equipment, and electronics; and 10 percent on items in Amazon’s Everything Else store.
Unlike other online marketplaces, you have little control over shipping charges and policies. Amazon requires that third-party merchants ship products within two business days of receiving a customer’s order. When you sell an item in the Amazon Marketplace, Amazon gives you a shipping credit to help cover your costs.
The actual amount of the credit depends on the type of product you’re selling-the credit for books, video games, and DVDs ranges from $2.49 to $3.49-which should cover the cost of shipping a two- or three pound item with the U.S. Postal Service via media mail. The standard shipping credit for other items is a flat $4.49, plus 50 cents per pound.
As a seller, you’re obligated to ship the item even if the credit doesn’t cover your costs. So, make sure to account for additional shipping, packaging, and handling fees when setting your selling price on Amazon.
Like most marketplaces, Amazon has a feedback system through which buyers can rate third-party merchants. Interestingly, however, many Amazon sellers don’t put as much emphasis on cultivating high feedback scores as they do on sites like eBay. That may be because the Amazon Marketplace already provides buyers with an added level of confidence and security because of the financial protections that are in place.
Amazon also takes steps to monitor sellers’ performance and measure them against specific category benchmarks. From your seller account page within Amazon, you can access your “Performance Summary” for all past transactions.
The summary provides a consolidated view of sales, refunds, feedback, and any claims customers have made against you. Amazon sets performance targets for sellers in each category. Those sellers identified as poor performers will receive an e-mail from Amazon with tips on how to improve their performance ratings.