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Am I ready to sell on Amazon Marketplace?

54% of all goods sold in 2020 on Amazon Marketplace were from third-party sellers. Is there a place for every company on Amazon?
Amazon Marketplace - Digital Affair

If there’s one thing this pandemic taught every business is that we need more than a plan B. If you’re in a position where you’re considering the expansion of your digital footprint and online markets, you should consider Amazon Marketplace.

The overall process is simple, however there are some important decisions you have to make before you get started.

As you know, Amazon is one of the leading online marketplaces online. In 2020, 54% of all goods sold on Amazon were from third party sellers. This means that there’s a substantial market for SME’s on the platform. However, is there a place for every company on Amazon’s marketplace? Here are some notes.

What are you selling on Amazon Marketplace?

With over 400 million products sold, is your category the most likely to give more return on investment or not? Are your prices within the range of your competitors on the marketplace?

These are important questions to ask yourself because the number 1 rule when considering entering Amazon Marketplace is your price. It is a price-driven platform, so most users seek this website mostly to get the best deal on products.

Whatever you try to sell on Amazon, it must be attractive to your target audience and fitted on a price range within your competitors. Search for related products in your category, check the reviews and figure out what clients value the most. Is it quick shipping? Product quality and key features? Or maybe even seller responsiveness.

Gather all the information you need to start selling your product and stand out from the crowd.

How do you start selling on Amazon Marketplace?

The first step is as simple as registering in any other platform. You have to create a seller’s account and choose a plan – individual or professional. This decision must be based on the items you’re expecting to sell. If you’re planning to sell more than 50 items per month, we recommend choosing a Professional account.

Professional Selling Plan has a monthly subscription fee of 39,99$ with no fee per-sale. The Individual plan, however, doesn’t have a monthly subscription, but it has a 99 cents fee per sale, as well as other standard sales fees explained below.

Selling directly to customers

After choosing the right plan for your business, there’s another important decision when signing into Amazon Marketplace. Are you shipping your products directly to your customers or do you prefer leaving that to Amazon?

Selling directly to your customers puts you in charge of all the stages in the sales funnel. Posting products, making sales and shipping to customers. This sounds simple, but one must remember that Amazon is a major force on online sales worldwide. It is well-known for its user experience: fast shipping, solid refund policy and reliable customer service.

Amazon has unified its European marketplaces so that sellers can access Amazon.co.uk, Amazon.fr, Amazon.de, Amazon.it and Amazon.es all from a single account.

With such low barriers to entry, you’ll store all your stock in one European location. You only need to register for VAT and get an EORI number once. From a single dashboard, you can send your items into six different European countries.

This is great news, but it involves a complex logistical process when shipping to international customers. Besides your responsibility of shipping and handling, the customer will always have additional shipping costs, which is a major turndown.

… vs Fulfillment by Amazon (FBA)

To save you time and energy, you can opt for Fulfillment by Amazon (FBA). With this service, the Amazon Marketplace seller firstly sends its products to Amazon. From there, they handle the subsequent shipping stages to the final customer. This service also gives you access to two-day delivery, free shipping, as well as other Amazon Prime perks.

This is a huge point of difference when it comes to creating a better user experience than your competitors. Delivery date is oftentimes a tiebreaker when purchasing on Amazon Marketplace. Unless you’re really trying to squeeze your budget, you should opt for this service.

This may sound as a strictly better scenario, but there are some additional features you should know about. And by features, we mean costs. Amazon will charge you a monthly inventory storage fee per cubic foot and a fulfillment fee for each item sold.

These rates will vary widely based on your business’s situation. Here you can check FBA’s fulfillment fees according to your business dimensions and expected results on Amazon Marketplace.

Additional fees and percentages

If you thought it was over with costs, then we’re sorry to disappoint you. As an Amazon seller, you also have to pay fees for referral and closing sales.

These referral percentages changes differ from category. If you’re on the jewelry market, for example, expect to pay 20% for the total sale price up to $250.00. The exceeding value will cost you an extra 5%.

Product categories

There’s one more step before you can start selling products on Amazon Marketplace. You must check if your stock fits an open or professional category. There are more than 20 open categories for selling on Amazon, where every third-party seller can list products without approval.

However, if you want to sell products in a professional category, you must have a Professional Selling Plan, and approval from Amazon to list your product. According to Amazon, this process helps “ensure that sellers meet standards for product and listing quality as well as other category-specific requirements.”

How to rank higher on Amazon

As pointed out in a Harvard Business Review article, “These days the platform is essentially the product search engine. Shoppers love it because it lets them comparison-shop and has an easy checkout process, responsive customer service, and speedy, low-cost shipping. But they’re loyal to Amazon, not necessarily the brands they’re buying“.

More than ever, your products must be visible on Amazon Marketplace. You have to be the most descriptive seller to attract organic customers. In this case, more is… more!

Photographs, keywords, bullet point information and main description wording is vital to maximise your reach as an Amazon seller. Our free tip for you today is to research products related to those you want to sell. It’s a great way to plan alternative keywords and reassure your product listings are optimized for the new marketplace.

The importance of Amazon product reviews

Sales are the number 1 factor on Amazon Marketplace ranking. Nevertheless, there are two other features that can boost your conversions – product reviews and star ratings.

Recent studies show that 84% of shoppers trust online reviews as much as a personal recommendation. Additionally, 91% of shoppers read a product review before buying it online.

Amazon Marketplace is constantly improving its review processes and encourages its sellers to interact with product feedback. Customers enjoy this kind of interaction and are becoming more and more perceptive of reliable (or not) reviews.

It’s therefore important to create a great user experience, as well as a crisis management plan, e.g. a negative review. When well planned, it can turn out to be a great opportunity to build your reputation as a seller.

How to become a profitable Amazon seller

As we have said in a previous article, online marketplaces are booming. Becoming an Amazon seller is great for your company’s expansion and requiring simple steps. Entering the platform allows any company to reach a potential 271 million customers only within European continent. Nevertheless, joining this marketplace as a seller demands great questioning and planning.

First of all, if your business fits within Amazon requirements and investment. It’s important to consider all the fees associated with every item sold, according to your product’s category percentage.

Opting for Fulfillment by Amazon (FBA) service is as an investment as sales boosting factor. With its Prime perks for consumer and faster delivery dates, FBA helps you stand out from the crowd.

This user experience, more than helping boost sales, must be reflected on product ratings and reviews. Together with sales, positive feedback is important to get better ranking on Amazon’s search results.

However, don’t dismiss a negative comment or feedback. Seize it as an opportunity to build reputation and trust around your brand. Create a positive atmosphere, offering refunds or replacement products. Don’t forget – it all starts with an apologetic message with a caring tone!

It is also important to have a great product copywriting. Search for similar products from other sellers. Ensure that your product can be ranked in similar keywords and offer the most information you can. Product title, images, description and key features are the most important factors when listing a product into Amazon Marketplace.

Last but not least, it is vital to have patience and review your pricing strategy. Amazon is a price-driven platform, so do your research and offer competitively priced products aimed at a targeted audience.

Another tip for today is to anticipate all costs when entering the Amazon Marketplace. Estimate how much your profit would be, based on your current price margins. Value bottom over top line sales. It is better to sell many low-priced products over few top-lined products. This is the most often used strategy within Amazon vendors, who get sustained growth year-over-year.

Carla Santos

Carla is a marketing manager who doesn’t like to talk about herself. She prefers to write and talk about the stories she helps telling as a marketing manager. Her professional path is connected to content marketing strategy, copywriting and social media management. She’s passionate about travelling, reading biographies and cooking a new recipe every week.

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