Starting a business in a marketplace like Amazon can be profitable. A 2016 study by BloomReach found that when shoppers look for something to buy, they usually do an initial search on Amazon. What’s even more impressive is that about 9 in 10 consumers will go on Amazon even after finding a product on a different website.
But before you take your business to Amazon, here are some tips that will help you get started:
- Familiarize yourself with the different seller plans and
and fee structure
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- Amazon Individual Seller – Choose this option if you’re a small business that aims to sell less than 40 items per month. As the cheapest option, this will cost you $0.99 per sale. On top of that, there are also transactional costs, ranging from $0.45 to $1.35.
- Amazon Professional Seller or Vendor – This option will allow you to sell an unlimited number of items, without the per sale fee. Instead, Amazon will charge you $39.99 per month, in addition to selling fees. You can also opt to become a vendor and sell goods to Amazon as a wholesaler. Choosing to be a vendor saves you from worrying about product listings and logistics concerns.
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- Weigh the Pros and Cons of Being a “Seller” or “Vendor”
If you’re a seller (the popular option), you will have ownership over your inventory, under your unique brand. Your business will essentially act as a third-party seller. As a seller, you can choose two arrangements:
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- Fulfilled by Amazon – You send your inventory to Amazon and they take care of shipping, returns, and customer service.
- Fulfilled by Merchant – You take on the responsibility of shipping products and managing customers.
As you can see, there’s a lot more work that comes with being a seller. However, you do have a greater degree of control over inventory and branding. You potentially get higher profits too since you get to dictate shipping and price.
On the other hand, as a vendor, Amazon takes product listings and logistics off your hands. You may just have to wait 90 days before you receive payment and you have significantly less control over market price.
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- Do research on viable product
categories; edge out the competition
With over 20 product categories, there are a lot of opportunities to make a profit. Say you want to do well in a specific category. Some action steps to take are:
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- Find out why consumers prefer one seller over the others.
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- Collect and analyze product reviews.
- Consider starting off with a few products to sell and test consumer reception.
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Through Amazon’s platform, the amount of data you have at your fingertips can be mind-boggling. It’s easy to get lost in all the various special terms, acronyms, and specific selling requirements. Avoid information overload by focusing on specific outcomes (e.g. increase sales by X% over competitors). Once you’ve done that, use the data on customer preferences, top-selling products, and competitors to inform your strategy to achieve your outcomes.
We’ve barely scratched the surface here. Looking for more advice and tips on how to get your business into Amazon? FilePino can help you with that! Shoot us a message at info@filepinostg.wpengine.com or call (+63) 917 892 2337.
