It is common practice for marketplaces to look at Amazon as an additional channel to increase their sales. Before we start, we need to understand how we can actually do it. We would like to explain in 4 simple steps how to sell on Amazon. Although it is not complicated, you need to know a few things to be able to do it successfully.
How to sell on Amazon in 4 simple steps
We are going to summarise the process in 4 steps highlighting the most relevant aspects that you should know. The context of your business, your positioning and your corresponding expectations will mark other steps, here we are going to detail which ones are essential.
1. Product and market analysis
It is necessary to make a good analysis and not fall into the false premise that everyone can sell on Amazon. To see if it is relevant to open this new sales channel it is important to take into account:
- If you have a good margin: Amazon’s commissions can range from 7% to 45% (e.g. Kindle accessories)
- Sectors with few competitors or with little digitalisation: think that if there is a lot of competition, this can lead to a fight to adjust the price and affect the margin a lot
- If the products of your competitors have few reviews or many but of low quality
- You don’t have your own Ecommerce: Amazon is better positioned than anyone else, so competing against them is impossible.
In order to evaluate all of the above it is very important to be able to research who is selling your product and in what price range. A very simple trick is to search for them through the search engine itself.
2. Program type
You will need to choose the type of programme that best suits you. There are two programmes available: Amazon Vendor Central and Amazon Seller Central. Amazon Vendor Central and Seller Central sound similar, but the differences between the two platforms are significant and, as a brand manufacturer, affect your selling strategy on Amazon.
- Vendor Central
The main difference is that Amazon Vendor Central sellers are suppliers and Amazon, the buyers then do not have direct contact with the customer.
- Seller central
On the contrary, under the figure of Amazon Seller Central, you sell the products directly exploiting the Amazon customer database, doing all the work for themselves. However, if you opt for the FBA (Fullfilment by Amazon) programme, Amazon will take care of your logistics for a small fee.
3. Upload your products/listings
Once you have chosen the selling programme, the first thing to do is to go to Amazon selling central and in the inventory window choose the option “Add Product”. Next, Amazon will give you the option to choose a listing that is already on the platform, which you can search by name, ASIN, UPC and so on. On the other hand, below we will click on “create new listing from product”, which means to create a listing for a new product.
The listing is basically divided into the following categories:
- vital info → place the name of the product with the appropriate words
- Variations → place variations by size colour or dimensions
- offer, images → the images that are displayed when searching for the product
- Descriptions → your own description of the product
- Keywords → the keywords you want to rank for
- more details
Here is a link where you can follow step by step how to create a new listing on amazon.
4. Win the Buy Box
Appearing or not in the Buy Box is what makes the difference. Think about when you search for a product on amazon, there is only one product that is much bigger than the rest that you can add to your basket. In fact, a relevant fact is that sales in the Buy Box are 82% on desktop, and on mobile we are already talking about almost 94%.
The following actions will earn you the coveted buy box.
- Outstanding trader status
At least three months of a track record in the application ( 6 for some product categories )
Here we recommend that you use the FBA scheme where they manage your stock and ship it to you
- Shipping times
Amazon always puts the customer first so you will have to make sure that your on time delivery rate is equal or higher than 97%.
Perhaps one of the most important factors. It should be noted that Amazon always takes into account the price with fees and shipping. Here the importance of doing a good study of competition. To position yourself in the buy box you might want to lower your margin a lot in order to appear there and generate much more volume. You can evaluate some pricing applications such as Appeagle.
- Reviews and ratings
It is essential to be able to win the buy box. A highly recommended trick is to ask and insist your customers rate you. You don’t need anything elaborate, just add a simple card to your order telling your customer that you would appreciate their rating.
- Response time
When you sign a contract with amazon (when choosing a plan for example) you commit to respond within 24 hours. So responding later will penalise you.
Also stress the importance of these three indicators:
- Order defect rate (ODR) below 1%.
- Pre-fulfillment Cancel Rate (PCR) maximum of 2.5%.
- Late Shipment Rate (LSR) below 4%.
Now you have a clearer idea of how to sell on amazon. Above all, we recommend you to study the margin you have and your potential competitors on Amazon. From our point of view, if you are a retailer, it is very complicated because you do not enjoy wide margins. On the other hand, if you are a manufacturer, it can be a very interesting opportunity. The other steps can be fine-tuned as you make sales. It’s all about getting started!