E-commerce is one of the most important business models in the present time, and it is expected to continue to grow. All the important retailers have their online shop, and even some are changing to an all online type of business.
There are some big players of the e-commerce, but without a doubt, Amazon is the biggest. This company started as an online bookseller. With the success of the books, Amazon started to add different products. Amazon´s online model business was so successful that today is the number one online seller of the world with more than 310 million active subscribers around the world by the first quarter of 2016.
Amazon revenue comes from sellers that pay a fraction of their sells for using its platform. Amazon also sells some products and has a Prime membership in which clients are offered free shipping.
It is possible for anyone to start selling on Amazon, you only need to open a seller account, fill all of Amazon requirements, like having a credit card in which they can charge you all of their fees.
Ok, let´s get in details here.
HOW TO SELL ON AMAZON
Types of Amazon sellers
When you subscribe in the USA Amazon, the first option you will see is “Start Selling” for 39.99 a month, but if you look a little down below you will see a small option of individual seller, which is free, but it has a fee on every sale that you make.
There are some differences between the two types of accounts. First, for every sell that you make on the individual plan Amazon will charge you 0.99 USD, and in the professional account, there is a monthly fee of 39.99 USD a month, meaning that if you sell more than 40 items you will be paying more on the individual account. Another difference is that in the Individual account you can only have one listing, only one product to sell. You can sell any number of this product, but if you are planning on selling more than one type of products you need the professional account. Also, the professional accounts have several more functions to manage your inventory, and with this seller account you are available to make campaigns to promote your products, some kind of ad words, so your products show on top of the search listings.
If you are new and just want to get to use the interface of seller central (Amazon place for managing products for sale) the individual account should be enough, and when you decide, you can upgrade to a professional account.
Also, when you subscribe to an individual seller account, you can start selling in the USA and Canada marketplace, and if you subscribe to a Professional account you will be able to sell in the USA, Canada and Mexico marketplace.
Now you have a seller account on Amazon, what are you going to sell?
Type of products to sell
There is two kind of products that you can sell on Amazon:
Every branded product has a unique code number (UPC code or Universal Product Code). When two or more sellers sell the same branded product, like a Samsung flat screen tv model SAM52N (it´s an example, not a real tv model), they share the same UPC code, because these codes are unique to all products. When more than one seller offers the same product, only one of them has the “Buy Box”, which means that when someone do a search for this tv model only the product of one seller will show, and with small letters below this seller information appears that there are more offers from different sellers, and you have to click here to see the others offers, something that clients doesn´t do very often.
Who has the “Buy Box”? The seller that has the best selling ranking, and if you are unlucky, Amazon will be selling this same product and always will have the “Buy Box”.
Most of these products are from China, they don’t have a brand and when you buy this kind of products you can buy a new UPC code and you can attach it to your products. This way you own your products brand (which you can attach to your products as well), and when you sell this kind of products nobody else will have the “Buy Box” but you, not even if they buy the same product from the same vendor because you will brand your products with your unique name and UPC code.
As you can see, unbranded products are what can deliver more gains and sell opportunities. So I will continue with unbranded products for selling on Amazon.
Selecting the products to sell
This is probably the most important task when you are starting an online store anywhere. For starters, it is recommended that you select only one product, and when this product starts doing well you can add another one, this way you will be growing and you won’t risk too much capital.
But, what product to choose? You need to choose something that is selling good, that has high demand, but also something that it isn’t too big, the smaller the better because the delivery fees from China can be expensive for larger products. Amazon also has some product categories that are locked for starters sellers, like watches, electronics, and clothing.
Despite all these conditions, there are thousands of products that you can choose from. The first webpage you want to check is the Amazon Best Sellers, then, check Best Buy and search for products that have a lot of sells, then you can check Ali express and check for products that have many orders. Make a list of at least 10 products that you could sell, then narrow it until you only have one product. As I said, this is the most difficult part. There is a webpage that you can use for guidance, www.merchantwords.com, here you can write down a product and this page will display the number of searches of that product inside Amazon. It is recommended that the product that you choose has at least 40 to 50 thousands searches per month. You can make some searches, I don’t remember 4 or 5, freely a day, if you want to do more you have to pay a monthly fee.
The next step once you have chosen your product is to buy it from China.
How can you safely buy from China?
I´m going to focus on Alibaba, which is one of the biggest retailers of China, Thousands of factories are inscribed in this platform selling products of all kinds.
Search for your product in the Alibaba portal, look for suppliers that offer a low MOQ (minimum order quantity). Even the ones that have high MOQ once you contact them you can negotiate and most time they will agree to send you fewer products. I don’t advice to buy more than 100 products for your first time, even if you buy 50 is good to check the market.
There are a few things that you should look for in your provider information.
Is a membership paid to Alibaba, and they certificate the location where the provider is.
Is a free service by Alibaba that protects your orders. If you are not satisfied with the products that you received, or you just didn’t receive them, you can ask a refund from Alibaba.
A third party company assesses the installation of the provider and makes a report that you can get.
Make sure that your provider has been a Gold Member for at least 2 years, and that it supports Trade assurance. If it is an assessed Supplier, then the better. Also make sure that they receive payments by PayPal, this way your transaction will be protected as well. Never pay with Money Gram because you won’t be available to get a refund if anything wrong happens.
If you follow these guidelines your transaction should not have any problems.
Once you have chosen your provider is time to contact them. Once you click on your supplier name, scroll all the way down where you can send a message. As with everything, always be polite, put the name of the person who will receive the message, next write a little about your company (even if it is you only) and explain that you want to do a small purchase so you can test the market and if everything goes well you will be buying more from them. Ask them for their final price for a number of products that you are buying, and if you want them to put your logo on your products (You should have one beforehand).
If the supplier contact and you are happy with your products then ask for a sample. Usually, samples are free but you have to pay for the delivery. It is important that you receive a sample of the product before buying a lot of them, you don’t want to buy garbage and sell it on Amazon because your buyers will make a review of the product that they get and if you get bad reviews you won’t be able to sell and also Amazon won’t be happy and they will downgrade your seller ranking.
Once you get your sample and have tested it, it´s time to make an order. Negotiate with your supplier and ask them if they have delivery options, and make them give you a quotation. If you are not happy with the delivery fees you can search for a delivery company in Alibaba, just search Air Freight to the USA and you will get many options.
Also, when you get your sample be sure to take photos, a lot of photos before you open your package, and of your product alone from different angles. You will use the pictures for the description of your listing on Amazon.
Making the first listing
From your seller central account, you will be able to add products to your inventory. If you are following the route suggested here, your product should be a new one. You will need a UPC code here for your new product. Do a search for buy UPC codes and find a retailer. Buy one UPC.
Once you have your unique UPC you can add a new product to Amazon. You will have to choose the category and subcategories. Once you can add the information of your product, there are some elements that are very important:
The title should have as much information of your product as you can, the name of your Brand, the name of the product, essentials characteristics like color, size, what is it for, etc.
These should be high-quality pictures with a white background, at least the first picture. If you don’t know how to do this, you can always hire a freelancer to do this. There is a very popular site for outsourcing, is www.fiverr.com. Here you can find freelancers that will work their magic with your images for 5 USD.
The best way to this is to for each bullet point is to write a characteristic of your product along with a benefit that that characteristic gives.
Be as explicit as you can, remember, the best conversion is made from the best looking, informative product pages.
There is something else that I need to talk and is the way you can deliver your goods. You can choose to deliver your products yourself, in which case once a sell is done you need to go and send the product to your client. This has two major disadvantages.
One: You will use a lot of your time, you will have to do all the delivery processes.
Two: Amazon will degrade your seller ranking if you infringe to fulfill the delivery on the time that you specified, and Amazon is very strict on this.
A way to avoid all this is for you to send all your products to an Amazon center and choose FBA (Fulfillment By Amazon) as your way of delivering your products. This way Amazon will take care of all the procedures to make your products arrive at your customers. Of course, this has a cost, but most of the sellers Choose FBA because it can also help on their seller rankings.
When you first start as an Amazon seller you don’t have a seller history. For this reason, your products won´t appear in the first places of the searching results. To start gaining momentum you can do a few things:
- Tell your friends to buy your products, and after they do, that they make a positive review of your product.
- Have a paid campaign within Amazon, so your listings have more exposure.
If you want to learn more you can buy an e-book like this one: Amazon Selling Blueprint
As you can see, selling on Amazon can be tricky, but thousands of sellers are making huge amounts of money, having between 20 % to 40 % profit. The hard work is always at the start, after that, many processes can be automating and you can even hire a virtual assistant to manage your inventory.
Please leave me a comment if you have any doubts.