6 Things You Must Know Before Selling On Amazon

Amazon is a worldwide brand recognized for being responsible for more than $386 billion in sales in 2020. It was the fourth tech giant to reach a $1 trillion market capitalization, and it is on track to reach $2 trillion soon.

When it comes to selling online, Amazon is one of the biggest e-commerce marketplace platforms out there. And for good reason – it boasts over 300 million active customer accounts and continues to grow at an impressive rate.

For merchants, retailers, and small business owners with a list of the best products to sell on Amazon, this is a great e-commerce business opportunity. But there are some things to consider before taking the plunge.

1. Amazon’s Fees

Amazon charges a number of fees for selling on their platform, including a listing fee, referral fee, storage fees, etc. It’s important to be aware of these costs upfront so there are no surprises down the road.

While Amazon’s fees may seem reasonable at first, there are a few disadvantages to consider. For one, the listing fee can be costly for businesses with a large inventory. The referral fee, based on a percentage of the sale price, and variable closing fee can also add up especially for smaller businesses.

2. The Competition

Amazon is a very competitive marketplace. There are millions of sellers vying for attention and only a limited amount of space on the platform.

To be successful on Amazon, businesses need to differentiate themselves from the competition by researching the Amazon Marketplace to find their niche or unique selling points. This can be done in a number of ways, such as by offering competitive prices, unique products, or superior customer service.

If you’re building a brand, file for trademarks on your brand name and use the Amazon Brand Registry service to protect it and access additional seller features. If you are going for volume, you can expect a price battle, but still, standing out from the crowd might provide you with that winning edge at the final purchase stage.

3. Fulfillment by Amazon (FBA)

Fulfillment by Amazon (FBA) is a program that allows businesses to outsource their fulfillment to Amazon, including the handling of customer service. You store your products in bulk at Amazon fulfillment centers, where they handle shipping your orders for you. This can be a great option for businesses that don’t have the time or resources to handle fulfillment themselves.

As a perk, your product is listed as Prime Eligible, accessing a pool of more than 200 million Prime members today – in the United States, there are 147 million of them!

Your order volume will skyrocket, but at a cost. The FBA fees bring down your margins, and the many stringent FBA policies and guidelines can be demanding. This can take away your independence as a seller, so consider it carefully before you sign up.

4. Uploading A Listing Doesn’t Guarantee A Sale

Any seller can create an account and upload an Amazon listing. So, don’t expect to just sit back and make a guaranteed sale on your particular product, out of the multitude of others, in the huge Amazon marketplace of almost endless choices.

Your listings, inventory, and more need regular upkeep and monitoring just to keep up with the competition. Use Amazon’s platform tools and the plethora of third-party Seller tools to research the search and sales volume of your competition and to optimize and refresh your listings.

5. Advertising and Marketing

Amazon is a huge platform with a lot of traffic, but that doesn’t mean your products will sell themselves. You’ll still need to do some marketing to get the word out about your business and drive traffic to your listings, and get your listing into the top search results

Running advertising campaigns through Amazon’s advertising platform can be a great way to promote products and boost sales by putting them into top search results and better page visibility. However, it can also be expensive, complex, and time-consuming to maintain. Businesses need to carefully consider whether advertising is right for them before investing the time and money.

6. The Steep Learning Curve

Serious selling on Amazon requires a bit of a learning curve. There are a lot of moving parts, and things can change quickly. When selling on Amazon, businesses are essentially aligning themselves with the Amazon brand and need to follow their rules. On a such a huge and complex platform that stretches across the globe, they can be idiosyncratic and occasionally baffling at times.

Businesses need to be prepared to invest the time and resources into learning how to sell on Amazon. This includes familiarizing themselves with the platform, their seller policies and guidelines, understanding the fees, and mastering the art of customer service. Fortunately, Amazon has an extensive and detailed help system, including forums, webinars, and their own Seller University.

Final Note

If you’re looking to sell products on Amazon, it’s important to understand the fees and regulations that come with doing so. Additionally, Amazon is a highly competitive marketplace, meaning sellers need to be prepared for stiff competition.

In order to stand out from the rest of the sellers on Amazon, make sure you differentiate your product by highlighting its unique features and benefits. By following these tips, you’ll be well on your way to a successful Amazon selling experience.