Amazon – selling online to a vast market
As a Sales Channel or route to market Amazon is a great one for some people and a nonrunner for others. Study the store itself and it will tell you what you want to know – check the best selling categories. Find out which products sell well and which do not, as all the figures are there for you to research. Much of what sells is manufactured in China and offers great margins to sellers, which allows for costs, whereas locally produced goods usually have less gross profit to play with and Amazon can be too expensive
at about 15% sales commission and costs. Some people make a lot of money on Amazon, but in the way that I say Facebook is not a reliable singular place to have your web presence, Amazon cannot really be your only online store or route to market. Both companies change their algorithms & rules, which can detrimentally affect its members, who have no control over these decisions. Create your business and build your own brand, then use both Facebook to promote and Amazon to sell, as parts of the whole sales and marketing mix. If you simply find a cheap product that sells on Amazon, you can depend on others to copy you and sell cheaper, including Amazon itself, until there is no margin anymore. The Lee time from China can cause problems as within the 6 or 8 weeks could see prices change dramatically. This happened to me with Memory, when I had MP3 players made in China and by the time they got to me the selling price had reduced by 50% – no profit, loads of work and stock that could not be sold. That item was dead before it ever got started. The investment in 100 products also tied up capital as it was paid in advance. Some manufacturers take 50% up front and 50% on delivery. Lesson learned.
Best products for Amazon
An ideal product is going to sell at around €20, cost €10 to get manufactured and delivered to you. After the 15% sales commission cost of €3, you end up with €7 per sale. It would be great to get a lightweight product that is manufactured in your home market. Offer short lee times and quick delivery, does not perish and which could offer repeat sales or that leads to sales of complementary products. eCigs offered that recently with reorders and oils, holders and wallets etc, but it got very competitive. If you can do it, make it yours, as in customise it and brand it for you, then try to get loyal buyers to stay with you for the quality of both service and product. Try to forward sell during the lee time by doing an offer or to collect payments/deposits.
Questions about Selling on Amazon
What are Amazons costs?
See here for fees, but basically there is a $0.99 cents Per Item fee or a Referral percentage whichever is the higher. The Referral percentage fee is based on product type – for example, Electronics are 8%. Then add that plus a Variable Closing Fee (usually about $1.35). If you have a Pro Seller account for a monthly fee of $39.95 you do not pay the $0.99 cents per item fee. But will you sell over 40 items a month?
What is FBA Freight by Amazon ?
“Fulfilled by Amazon” products are offered by you as a third-party seller, but despatched from an Amazon fulfillment centre to the buyer.
You use Amazon for the entire process, acting as your store, shipper, packer plus order and customer service department.
In your seller central account, you get a shipping label from Amazon which will identify your product or products. The manufacturer can use this label and ship directly to your designated Amazon Fulfillment Centre. Amazon will charge for stocking in the fulfillment center storage area, charge for picking & packing and a percentage on sales of between 8% and 15% so plan for €15% minimum and to be safe say 20%. You cannot afford to be paying rent for storing a product that does not sell in reasonable volume. Charges vary for different products and weights or volume. Minimum fee charged is $1.
Amazon selling tips
1. Get traction early by getting your customers to do reviews quickly when you start selling to get over 25 positive feedback items
2. Promote in Amazon PPC Pay Per Click to get sales fast when you launch, to show that the item is wanted, even if the PPC costs take all your gross profit – consider it a marketing cost.
The combination of both will impress Amazon and you will rank well.
3. SEO – as with websites, you need to optimise keywords and tweak content to convert people who find your products. Do promos and find out what people want from you. It is like tweaking the display in a shop or your advert in a local paper. You can do it yourself, by studying Amazons own tips. The listing has to be optimised.
4. Time – Again, you want a product with potentially a long life, ideally your own brand, so you are building up something that will have a reasonably long lifespan. Otherwise you end up starting all over again.
5. Test – ignore the instinct to make money fast, by testing and researching until you get it right. Offer up your margin to get traction and feedback, until you get a profitable model.
6. Get Rich Quick should not be your expectation. Like any marketplace, you want to build a business and forget about a quick hit or fast buck, unless you are much smarter than the other sellers. For a longer term success get it right at the beginning, to ensure that your venture lasts in the long term. Build the brand, the business, the sales and the profits will come.
7. Units – Units should be 100 minimum available, but probably 250 being made available in a more competitive area – double that for a busy area.
8. BSR – Best Seller Rank – if you can get in to this you will be better ranked by Amazon and will appear higher. As with Google, the guys at Amazon want to give people what they want when thay search for something. Sales and conversion will determine this and in your local Market rather than competing with all Amazon stores worldwide.
9. Reviews – Get as many as you can. They may not help you rank, but they will help you convert visitors to buyers.
10. Gaming the system – You can use companies who help get a high ranking, such as Zonblast, an algorithm manipulation tool, which may temporarily be able to game Amazon somewhat. It just automates what you would have to do to rank well, much the same way as we do SEO for websites. Amazon is like Google, but somewhat behind them in terms of the SEO, so these white hat techniques do work.
Before you attempt to sell anything on Amazon, use it to do your research – the answers are all there for you. Be aware that the USA is a much more open obvious marketplace for Amazon, one language, one currency, one shipping rate. The UK is smaller but similar. Ireland is more complicated, higher shipping, euro currency, very small local market, less obvious information. when studying what sells well in Amazon.
Sales Channels with Amazon
Your ecommerce website should be on a platform that works well with Amazon, so that you have one single stock management system – check out Magento, which will allow you integrate with both eBay and Amazon.
Warning: Watch your back as Amazon will look at their own stats to find out what is selling well for you – then they will do their own version of that product if the numbers are good enough, which will cut you out 🙁