How to sell products on Amazon

If you run your own online store or are venturing into online sales, you shouldn’t leave Amazon out of the equation. But first, it’s important to un­der­stand how to properly use the technical ad­vant­ages and the reach of Amazon as a seller and what the pre­requis­ites are.

As things stand, Amazon is and remains the market leader and largest mar­ket­place in e-commerce. The UK mar­ket­place, along with the US and German mar­ket­place, are the most important sales markets for Amazon. This monopoly position is probably the most decisive pro for anyone who wants to sell products online.

Here are the most important pros and cons when selling products on Amazon.

As an Amazon seller, you’ll have automatic access to Amazon’s huge existing customer base. What’s more, you don't ne­ces­sar­ily have to operate a separate online store.

These are the top pros when it comes to selling on Amazon:

• Globally networked digital and lo­gist­ic­al in­fra­struc­tures
• Wide reach and vis­ib­il­ity through Amazon search engine op­tim­isa­tion
• Wide range of shipping and payment options
• Con­nec­tion to in­ter­na­tion­al Amazon mar­ket­places
• Out­sourcing of transport, storage, and logistics possible through the optional Ful­fil­ment-By-Amazon (FBA) program

And don’t forget that Amazon is a popular and trusted brand with excellent re­cog­ni­tion value.

The cons of selling on Amazon is the per­cent­age sales fee, which Amazon charges depending on the seller tariff and product groups. This can range between 8 and 20 percent. There are also shipping and storage fees to factor in when using FBA, as well as costs for returns and disposal.

The size and reach of other Amazon sellers can also become a con, as it’s a com­pet­it­ive market with many similar goods. You should also consider the workload that comes with present­ing and editing your product pages, as well as the general de­pend­ence on Amazon. Seller accounts may be blocked for justified or un­jus­ti­fied reasons.

Before you begin planning, you need to pick a seller account. For this, Amazon offers two plans at sell.amazon.com:

Another option is the paid service Ful­fil­ment by Amazon (FBA), which can increase sales by up to 37 percent, according to Amazon. With FBA, Amazon takes care of all the logistics, including:

• Storage
• Shipping
• Transport
• Tracking packages
• Customer service
• Returns and refunds

Another option is Amazon Vendor Central, an invite-only portal from Amazon for larger man­u­fac­tur­ers and brands. In this case, Amazon buys products and takes over the sale and shipping. The con is that it’s not easy to get out of the com­mit­ment. In addition, there’s a strong de­pend­ency on Amazon with customer service and customer contact running primarily via the sales platform and man­u­fac­tur­ers in­dir­ectly becoming suppliers.

The cost of selling on Amazon depends on various factors. Here are the most important ones.

Different fees apply depending on the plan you choose. With the basic In­di­vidu­al seller account, you pay £0.75 per item sold plus a pro-rata sales fee of between 8 and 20 percent depending on the category of goods. With a Pro­fes­sion­al seller account, the flat fee per item sold is waived. Instead, you pay a monthly fee of £25 plus VAT and a per­cent­age sales fee.

For each item sold, all sellers incur per­cent­age sales fees that are auto­mat­ic­ally cal­cu­lated based on the total price. The fee is de­term­ined by the per­cent­age Amazon has set for the product category. It generally ranges between 7 and 20 percent but can be as high as 45 percent in the ‘Amazon Devices Ac­cessor­ies’ category. The minimum sales charge per item sold is 25 pence. In the ‘Media’ category, a closing fee may be added.

If you ship your own products, Amazon’s shipping costs are based on the product category and shipping method.

If you want Amazon to handle shipping, storage, trans­port­a­tion, customer service, and returns, choose the FBA program. In out­sourcing the process to Amazon you’ll incur the following costs in addition to the per­cent­age sales com­mis­sion and the basic seller fee:

• FBA shipping fee (flat rate): You pay flat storage and shipping fees depending on category, goods size, quantity, condition, and storage re­quire­ments.
• FBA storage fee: Amazon charges storage fees based on the daily storage volume (cubic metres per month) and whether it’s peak season or not.
• Disposal/return fee: For returns, Amazon charges 20 percent of the sales com­mis­sion. If returns can’t be processed, ad­di­tion­al costs will be incurred for disposal or returns.

If you want to achieve greater reach with your products, you can use Amazon Ads to place ads or have ad­vert­ising campaigns run by marketing spe­cial­ists. Amazon dis­tin­guishes between self-service and managed service.

• Self-service: If you’re taking marketing into your own hands, you’ll get access to Amazon Ad­vert­ising Console. Here you can choose ad­vert­ising media that you configure according to your needs and re­quire­ments. You can advertise products, cat­egor­ies, or keywords in this way. Sponsored ads are billed per click.
• Managed service (Amazon DSP): Here you leave the selection and booking of ad­vert­ising campaigns to Amazon’s marketing experts, at a fee. Since the minimum spend is around £44,000 ($50,000), this service is only suitable for large sellers.

Follow these steps to suc­cess­fully get started selling on Amazon.

• Product idea/sales strategy/logistics: Decide what you want to sell and whether you want to be a man­u­fac­turer/supplier or primarily a seller. For example, you can sell homemade items or products from other man­u­fac­tur­ers. If you want to outsource logistics, you need suitable ful­fil­ment partners. You can also try Amazon’s optional FBA program.
• Com­pet­it­or analysis and target audience: Learn about your com­pet­i­tion and suc­cess­ful pricing models in the same category and position yourself in the market. Define which target group(s) you want to address.
• Business plan and financial plan: If you want to sell products on Amazon pro­fes­sion­ally and not just as a side hustle, you need a business plan and a realistic financial plan. The business plan includes product ideas, sales and marketing strategies, a defin­i­tion of your target group, business goals, and possible risks. Ideally, it serves as a basis and guide for Amazon sales. The cost cal­cu­la­tion for Amazon fees incurred as well as the costs for man­u­fac­tur­ing and logistics are es­pe­cially important.
• Marketing strategy and tools: Make the most of tools and strategies like Amazon e-commerce tools to maximise your chances of becoming a suc­cess­ful seller. Sponsored ads, social media marketing and Amazon keyword tools for Amazon SEO can boost your profits and your Amazon rankings.
• Business re­gis­tra­tion: If you want to sell items on Amazon on a regular basis and on a large scale you probably need to register a business and register on local and state levels.
• Imprint and privacy policy: A legally compliant business strengthens customer con­fid­ence and creates clear con­di­tions with regard to the right of with­draw­al.

1. Chooser your Amazon seller plan: Your Amazon plan choice depends on the size and scope of your online business. When you create it, you provide required in­form­a­tion about yourself, your business, contact details, and payment methods.
2. Choose between Ful­fil­ment by Amazon or Ful­fil­ment by Merchant: Decide if you want Amazon to handle all logistics and customer service via FBA or if you want to take care of ful­fil­ment, logistics, and shipping as a merchant.
3. Name your seller account: Give your seller account a dis­tinct­ive, ap­pro­pri­ate name. It should be catchy and pro­fes­sion­al, as it will be displayed on the detail pages of your products as well as in your Amazon store.
4. Add your products: Once you’ve created your seller account, you can start listing products in the Seller Centre. Product listing is free re­gard­less of the number of products. Here you can also manage orders, inventory, product in­form­a­tion, images, videos, prices, and offers. If you sell under your own brand, you must register it with Amazon.

Despite Amazon’s many pros, your online store isn’t guar­an­teed to be a success even with good products. But it helps to take advantage of the Amazon algorithm, develop suitable strategies, and generate more reach and sales.

1. Maintain your Amazon store: Regularly update product in­form­a­tion and provide high-quality product images, generate positive reviews, and drive traffic through Amazon ad­vert­ising or social media.
2. Collect positive customer feedback: Positive reviews generate trust in your products.
3. React to negative feedback: Address negative reviews, contact customers, and offer re­place­ments or returns. In the best case, customers may change their negative reviews or delete them.
4. Make the most of Amazon SEO: The Amazon SEO tool helps optimise keywords, measure the success of your keyword strategy, and analyse the com­pet­i­tion.
5. Set up ad campaigns: Use sponsored ads to improve your products’ reach and vis­ib­il­ity.
6. Adjust prices to cat­egor­ies and com­pet­i­tion: Make sure that your prices are reas­on­able, not too low and not too high, so as not to scare off customers or sell yourself short. Include pricing strategies of com­pet­it­ors as well.
7. Add special offers and temporary free shipping: Take advantage of pro­mo­tions or limited/seasonal offers for free shipping.
8. Use Amazon Mar­ket­place Web Service (Amazon MWS): Analyse and optimise your store by analysing data on orders, sales, inventory levels, and customer buying behaviour.
9. Ship via FBA with Amazon Prime: If you don’t have lo­gist­ic­al resources, you can optimise your sales strategy with FBA. With FBA, you benefit from Amazon’s logistics and shipping structure and take advantage of the renowned Prime shipping.

Even though Amazon is the most suc­cess­ful online sales platform, there are other in­ter­est­ing ways to sell products online. The following Amazon al­tern­at­ives are worth checking:

• Launch your own online store and manage B2C, order and sell processes, and online marketing via your own platform. Create a matching domain through which your store is made public.
• Create your own website with an online store, for example with WordPress and a WordPress plugin like Woo­Com­merce.
• Use drop­ship­ping and sell others’ products in your online store.
• Sell your products on Instagram.
• Try one of the other major online selling platforms like eBay, Alibaba, or Etsy.