Thinking about getting into bed with Amazon? Read our checklist of things you need to consider before starting your business.
It's been more than 20 years since Amazon sold its first product online. During this time, the company has become the world's largest e-commerce platform and has significantly impacted how people worldwide do business and shop.
In the United States alone, 150 million people shop on Amazon. In addition, small and medium-sized businesses offer more than 4,000 products on Amazon every minute. Therefore, selling on Amazon can become an excellent opportunity to start or scale your e-commerce business. Still, there are some nuances you need to know before working with the platform.
Amazon, like any other business, has to make money. Therefore, any opportunity to earn income for you is also an opportunity to earn for Amazon. For example, the Fulfillment by Amazon (FBA) program allows you to sell your goods to more buyers. Still, order processing, storage, and delivery of your products by the marketplace can cost hundreds or even thousands of dollars in commission. So before you sign up, find out exactly how much Amazon will charge to deliver your products to customers and calculate profits correctly. Then, with a convenient FBA revenue calculator, you can estimate your fees and revenues to decide which goods to sell.
There are 2 million active sellers on Amazon, so the competition is inevitable. You can choose between two options: find an unoccupied or not very saturated niche or sell the most in-demand products, investing more in advertising. If you want to sell under your own brand, be sure to apply to the Amazon Brand Registry to protect your trademarks.
The Fulfillment By Amazon program allows you to store products in Amazon fulfillment centers. Its employees will process orders and deliver them to customers for you. In addition, program participants receive the privilege of their products appearing in the Prime list, opening access to more interested buyers. The volume of orders will grow, but you will have to pay for it: FBA commissions (which have grown significantly recently) will reduce your margin.
Thus, although you may opt for the self-processing of orders, you will never be able to compete with your own listing on the FBA. As a seller, it can deprive you of independence, so think twice before registering. It may be better to choose the FBM program right away, especially considering that Amazon has been taking steps to reduce the number of goods from third-party vendors in its warehouses since last year.
A Unique Selling Proposition (USP) can determine whether a visitor will purchase from you or a competitor on the Amazon platform. Whether it's a witty product description, a nice bonus, or the best guarantee, something in your sales proposition should make shoppers pay attention to the goods. So, how to formulate your USP? One way is to read customer reviews for the products you want to sell or your products (if you've been in sales for some time). Then feel free to use this information to understand why people need such goods and how to improve them.
Amazon.com allows any registered reseller to place the product on its site, and every platform user can find it. However, Amazon is giant, and placing a product on the marketplace does not guarantee that it will be sold. So don't expect to start selling by registering an account and listing your goods only. Instead, analyze your competitors, set up advertising through the Amazon platform, and optimize your ads. Keep in mind that sales directly depend on your effort into the promotion.