When it comes to sales platforms, it is difficult to beat Amazon.com. Millions upon millions of people shop on the site almost every day, and the site also serves plenty of niche interests that can play into the hand of almost any shop owner. This article seeks to present the basics of how to sell items on Amazon, but as with any other sales site, there are pros and cons to consider.
Six Basic Steps
Amazon makes it pretty easy to get started with your own shop. There are six basic steps that you need to know It will seem daunting at first, but it can be pretty easy if you take it one step at a time. The steps are: getting started, pricing, websites, advertising, fulfillment, and fees.
The very first step in starting your Amazon sales journey is to access Amazon services. This site has a giant “Start Selling” button that will set you on your way. This will lead you to a series of pages that will ask you for your current Amazon account, or you can make a new one. They will also ask you for your address, a display name for your shop, and credit card information. On top of those things, they will also want your phone number so that they can call or text you so as to verify your identity. Lastly, they will have you go through a tax interview so that they can further identify you. All of this actually takes only ten or fifteen minutes at most.
Pricing to Sell Items on Amazon
The second step of learning how to sell items on Amazon is to understand the pricing structure. Right off the bat, you will have to make a choice: Will you choose professional or individual pricing? This is a big deal, especially if you are looking to sell a bunch of products. If you choose to sell as a professional, Amazon will give you one month free! This is a good deal, as the standard professional rate is $39.99 USD per month. Amazon recommends this option for those that hope to sell 40 or more products per month. If you want to sell less than 40 items per month, the individual option is the way to go. This option does not have a flat rate, but instead charges $0.99 USD per item sold. It is basic math here, right? I think these two options could be broken down a little more, too.
For the professional option, there are plenty of benefits. Not only do you have access to Amazon services and the ability to add new products to the site whenever you would like, but it also gives you the ability to use spreadsheets and other tools for management, to receive sales reports, and also to be able to customize shipping costs and add promotions to your shop. All of this gives you plenty of control over your dealings on the site. Indeed, as a professional, you can even become a featured merchant Which is a big deal with millions of people seeing your shop.
As for the individual option, it plays much more like Etsy or Ebay. You will be charged on a per item basis, and you will not get much in the way of benefits. The most you receive is access to Amazon services, and the ability to add products at will. Both the professional and the individual options, however, are subject to further fees than just the upfront rate, but we will get to that a little later.
One of the most interesting steps when learning how to sell items on Amazon is the website building aspect. Most people do not really think about an actual “shop” on Amazon, as people usually browse for individual items, and then they might see the shop name along the way somewhere. Believe it or not though the shops on Amazon each have their own full-blown page. In all honesty, they are really nice too.
Creating your own site / shop on Amazon used to be a pain, but now Amazon has created all sorts of widgets to choose from that allow you to do just about anything, and there are also plenty of options that will help you create a unique look and feel for your shop. You can also change your web domain name if you have a shop elsewhere on the web already, as Amazon has a built-in optimizer for web search engines. So, this means that your shop may pop up in the top of Google search results for certain products. This is a huge deal, and it is included in your flat monthly rate.
Advertising on Amazon
When learning how to sell items on Amazon, it is a good idea to understand how to advertise on the site, as well. Any experienced Amazon shopper knows what these ads look like, and I daresay that they are highly effective and to the point. These ads are directed at whatever the shopper is searching for on Amazon, and they are usually very well selected.
Advertising on Amazon is a synch. A seller can simply upload their catalog and then set a budget just like Facebook or Etsy. On Amazon, however, you will only pay when a shopper clicks on the advertisement. But since they clicked on your shop, there is a good chance you will get a sale! The price per click actually revolves around your bid. Yes, Amazon allows you to bid on your advertising rates. With the amount of traffic going through this site any serious seller will not think twice about advertising. As an avid Amazon shopper, I can vouch for the fact that the ads work.
Fulfillment with Amazon
Probably the most serious part of learning how to sell items on Amazon is the fulfillment component. This includes the process of making a sale, shipping the product, and utilizing Amazon’s services in this area. There are always options when dealing with Amazon.
So, you’ve just made your first sale. The customer has paid you for your product, and now the ball is in your court. The first issue to understand is how to ship the product. There are some options here. Yes, you can simply ship it yourself. This is quick and easy, especially if you are only on an individual account.
When shipping items yourself, Amazon will charge the buyer the appropriate shipping rate and then Amazon will credit your account with that amount. That way you are actually getting the money for the product and the shipping price too. However, some shops sell so much that they cannot handle the traffic. In this case, Amazon Fulfillment Services can be enlisted.
Fulfillment by Amazon is a simple process, though not for control freaks. With this option the seller sends all his products to the closest Amazon fulfillment center. Once there, Amazon will catalog and store your items for a minimal fee. When you receive an order Amazon will handle and ship your products for you. On top of this, sellers that choose this option are eligible for Amazon Prime and FREE Super Saver shipping.
I do not know about you, but I tend to purchase products on Amazon that allow me to take advantage of my Prime membership. Prime members are often already Amazon aficionados, so choosing the option to fulfill through Amazon can actually help draw in sales and create a consumer base. On top of that, these services also include Amazon’s excellent customer service, which is also a comfort to seasoned buyers.
In addition to allowing Amazon to handle your orders, sellers also have the option of simply allowing payments through Amazon. Yes, you can advertise on the site, but still have the actual sale process through your own personal website. Most sellers, however, seem to elect to allow payments through Amazon, as the site has proven security and makes consumers feel much more comfortable. Plus it is just easier for both the seller and the buyer since he seller does not have to mess with security or maintenance on a payment system and the seller will not have to enter information. Indeed, with all of its services, Amazon really does make it easier to sell—for a price.
For all the many services and options that Amazon offers, there will always be a price to pay. When dealing with Amazon fees, the basic ones include: the subscription fees, the referral and variable closing fees, the charges for fulfillment by Amazon, and also the processing charges for having payments made through Amazon.
Subscription fees have already been discussed, but I will mention them again. For a professional account, the seller must pay $39.99 per month. However, for the individual seller, the price is $.99 per item sold. So far, not bad.
Next, there are referral and variable closing fees to pay on the products you’ve sold. These fees vary based on the type of products you are selling. The most dominant type of product is media, and so media has it own table of rates. For any kind of media, such as music, movies, books, video games, etc., the referral fee is 15% of the sale price and a variable closing fee of $1.35 per item. Amazon gives the example of selling a $10 book, which will net you a total of $10.15 after a credit of $3.99 in shipping, a referral fee of $1.50, a fixed per item fee of $.99 (unless you have a professional account), and a variable closing cost of $1.35.
So, now you know how important that shipping credit is and why some sellers can afford to sell items for $.01. Of course, for non-media products, things are even a little brighter. The referral rate is on average still 15%, though some products, such as Kindle accessories, are as high as 25%. Also, there is no variable closing fee, as this fee is exclusive to media.
The next set of fees are for Fulfillment through Amazon. Among these fees, there are storage fees, pick & pack charges, and weight handling fees. This all sounds scary, but they are all somewhat reasonably priced. For the same $10 book, you would net $4.39 after the fixed per item fee of $.99 (unless you have a professional account), a $.01 storage charge, a $1.50 referral fee, a $1.35 variable closing fee, a pick & pack fee of $1.00, and a weight handling fee of $.76.
Notice that you do not receive a shipping credit, as Amazon is handling that end of things. The lack of shipping credit is the big difference here, as the extra fees only tack on $1.77. Worth it? I would say yes! Remember, though, that these fulfillment fees are based on the weight and dimensions of your products, and so cannot really be listed exhaustively here.
Lastly, there is the Amazon payment fee. This fee does not apply to those that are selling on Amazon, but only applies to those that are part of Amazon, but only use Amazon for advertising, fulfillment, etc. In other words, their actual shop is located off the main site. These sellers must pay a payment fee of 2.9% plus $.30 per transaction. This is for processing credit or debit card transactions. This is relatively low for most sites, and comes with Amazon’s proven security. So, it’s one of the best.
If you’d like a simple way to calculate all of your Amazon selling fees you can use our Amazon Fee Calculator.
Final Advice to Sell Items on Amazon
Amazon.com is one of the best places to sell, not only because it is relatively cheap to do so, but also because of the all of the traffic and exposure that will be hitting your products. Getting started and learning how to sell items on Amazon is really easy, but I recommend that you come into this with a game plan.
You should know if selling products on Amazon is meant to be a serious money-maker for you or not. If you figure this out beforehand, you will not have to mess with the professional and individual options much. Your decision will be easy. In fact, it may be wise to sign up for professional option regardless, as it is free for one month. Yes, that means no per item fee for a whole month!
So, if you decide that you want to be professional level seller, I recommend that you enlist the help of Fulfillment by Amazon. It is easier, and includes security, Amazon’s customer service, and a general peace of mind that you might not get while you are frantically running around trying to ship items. If you would rather sell only a few items, then stay out of Amazon’s services: They are not worth your time.
Finally, Amazon is a great place to sell, and their fees are pretty low. But be sure to find a good balance. Like I said above, some shops sell items for $.01 because this nets them a shipping credit, and it also keeps Amazon’s percentage fees very, very low. This works for many shops, but it all depends on your products and your goals of profit per item. As always, plan ahead before getting into any of this. Amazon is a great place to be, and it can be even better with a level head and a simple plan.