Had an interesting email from Frances last week, who’s a mumsclubber who’s having great success on Amazon, she offered to share her tips, so here it is. Thank you Frances, it’s a great read.
I’d love to hear your thoughts…
How to sell on Amazon
I’m Frances from bigbooklittlebookcardboardbox and I sell my children’s bookcase through my website, through ebay and via Amazon. Approximately 50% of my sales come from Amazon, but I see very few MumsClub members selling there, so I wanted to share my experience and provide some tips about making money through this vast marketplace.
If you want to sell an item that is already for sale on Amazon, you just need to see if you can match the price that the item is currently available for (taking into account the fees). Sadly, the competition is fierce and many online sellers decide they can’t compete on Amazon. If you sell your own unique product, or have an item that no one else sells on Amazon, then you can set your own price and make a good profit despite Amazon’s notoriously high fees.
Getting started
Setting up an Amazon seller account is straightforward. You will need to decide whether to go for an Individual seller account (paying fees of 80p per item sold, + order value percentage) or a pro-merchant account (monthly fee of £28 + order value percentage). As a rule of thumb, you pay Amazon approx. 20% of your total order value (including postage). So the fees are considerably higher than ebay, but Amazon payments are disbursed directly into your bank account, so there are no paypal charges.
Obviously the individual seller account is best while testing the water, as there are no fees if you do not sell. The Pro-merchant account becomes mathematically cost effective at 32 items per month, but I actually found becoming a pro-merchant increased sales in itself, presumably through greater visibility in the search results, so I would recommend switching to pro when you are averaging about 25 items per month. Also, you won’t be considered for the Blue Box (see below) until you become a pro merchant.
Tip – don’t simply upgrade your existing customer account to a seller account. Set up a brand new seller account. If you just upgrade, there is an anomaly where there are some restrictions to your account, e.g. you can’t set your own postage bands.
Acquiring a barcode/EAN new seller account. If you just upgrade, there is an anomaly where there are some restrictions to your account, e.g. you can’t set your own postage bands
It is only possible to sell items that are in the Amazon catalogue. Unlike ebay, each item appears just once on Amazon, and all sellers of that item list their ‘offer’ against it (which explains why Amazon is such a competitive marketplace – it’s generally the cheapest seller who gets the sale).
If you have a unique item, you will need to get a EAN number (barcode) for it in order to input it into the catalogue. Barcodes can be purchased legitimately for approx. £8 each from www.barcodestalk.co.uk You will need a different barcode for each variation of a product (colour, size etc).
In order to add a new item to the Amazon catalogue, you need to have a pro-merchant (paid subscription) account.
Tip – Pro-merchant accounts are currently offered first month subscription free, so sign up as a pro-merchant, add your item to the catalogue, then downgrade your account to individual seller before the month is up, to avoid paying the subscription fee.
Product listing
If you are adding your own product to the catalogue, give as much info as possible in your product descriptions and use the best pictures you can. Take a look at my listing here for some ideas – I’m not saying it’s perfect (I’m tweaking it all the time!) but you’ll see there are plenty of pictures, technical details, an in-depth product description and press reviews. You can also offer promotions (e.g. buy 2 get 5% off) through Amazon.
Tip – Amazon Product reviews really drive sales, so encourage as many of your customers as possible to leave you a positive product review.
Managing orders
When an order is made on Amazon, you get an email notification. You need to log in to Amazon to get the customer’s address, and confirm the shipment. All email correspondence is done through Amazon (you don’t get customer email addresses). You are paid every two weeks by Amazon directly into your bank account. Amazon automatically debit the monthly fee (if applicable) and their commission from your account balance.
The Amazon Customer
Amazon customers:
- Are loyal (they will buy from Amazon, even if the product is available cheaper elsewhere)
- Are high-value (are the demographic who will pay for premium products)
- Expect high levels of customer service
- Rarely leave feedback. Only about 5-10% amazon customers leave feedback (and naturally the dissatisfied ones will more readily!). This is something to watch as Amazon monitor feedback as part of their seller performance metrics (along with returns rate, late despatch, A-Z claims etc) and poorly performing sellers can have restrictions made on their selling activities (and lose eligibility for the blue box.
Tip – Amazon provides an ‘A-Z guarantee’ to its customers and if anything goes wrong, Amazon will always side with the buyer (e.g. award them a refund without insisting they return the item). Therefore always deal promptly with any correspondence from Amazon customers, as you do not want to get an A-Z claim against you.
The Blue Box
The ‘blue box’ (the ‘buy now/add to cart’ option) is vitally important to Amazon sellers. Approx. 95% of sales go to the seller who ‘owns’ the blue box. If you are competing with other Amazon sellers then the blue box is the holy grail. Eligibility for the Blue Box is largely down to price – Amazon usually awards the blue box to the lowest priced merchant (and rotate the honour where several equally-performing merchants offer the product at the same price). Naturally, if Amazon themselves sell the product, they will always award themselves the blue box! If you sell your own unique item then you’ll obviously get all the sales regardless of whether you have the blue box, but I noticed a slight uplift in conversions once I got the blue box, as it’s ‘one-click’ rather than three clicks to add the product to basket.
Tip – Eligibility for the Blue Box is a closely guarded secret but it took me about a year and 400 sales before I got the Blue Box for my product.
I hope you find this guide useful. Please do investigate selling on Amazon – it’s possible it won’t work for your business but it’s such a big a marketplace, and growing year on year, that business mums can’t afford to disregard it out of hand.
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4 comments
Lynn @ More 4mums says:
January 9, 2012 at 4:59 pm (UTC 0 )
Oh Amazon – how I love you – how I hate thee ! I have my own website and sell on ebay, but I find amazon the most frustrating platform to sell on.
Why ? As Frances says each item is listed via the barcode, however for myself probably about 10-15% of my stock items can not be listed due to a wide range of errors within the site and current listings. My products are listed in both Baby and Clothing which can be confusing. Books are probably easier as they tend to have a standard description.
You also have to be aware of the costs involved to ensure you are making yourself a profit – it is easy to get caught up reducing prices to the be cheapest ! I tend to use a spreadsheet with all my costs to show the minimum I can charge to make a suitable %age profit – I then look at the competition to see if I can sell for more !
On the plus side it can really drive sales, especially when you are starting out or waiting for your website to increase sales. You can send your Amazon customers a flyer for your website along with their package and hope for some return business. It is definitely worth trying, even more so if you have a unique product.
Frances says:
January 9, 2012 at 7:52 pm (UTC 0 )
I totally understand your love-hate relationship with Amazon! For me it’s love all the way, as I have total control of my listing and pricing, but when you don’t have that, I know Amazon can be a nightmare, and actually cost you money.
Have you tried contacting Seller Support about the listings with the errors? There’s only so much they will do – they won’t manually merge listings for example, but in instances where someone has abused the ‘one listing, all offers against it’ concept, e.g. by stating that the bra will come with a complimentary net wash bag, then they will take action.
Duncan Edwards says:
January 9, 2012 at 5:57 pm (UTC 0 )
Hi. Thanks I found this interesting. We have our own product and have been selling on Amazon for about a year with steadily increasing sales.
Our product an be used as a laptop bag or a buggy tray for kids so it is listed in some odd categories. Do you know how to improve the listing over other products?
Do links form other sites help? Have you experimented with the Amazon partners program? You can get other people to add your product to their blog with a personal link. They then get cash if there is a sale.
Frances says:
January 9, 2012 at 7:14 pm (UTC 0 )
Hi Duncan
Apparently the vast vast vast majority of Amazon users use Amazon as a search engine, i.e. they will type in ‘buggy tray’ into the search box, rather than shop by department (category). As such, the categories only come into play when someone wishes to ‘sort’ the results (by price low to high etc). To do that, they need to select a category, so it makes sense for the product to be in the category they would most expect to see it in.
If you ‘own’ the listings, you should be able to go in and rationalise across your product range, so if you’ve listed your item as a ‘buggy tray’ in its title, you can make sure it is appropriately categorised in the relevant ‘baby’ category.
In terms of visibility in the search results, this depends on how closely the listing matches the search term put in by the user. The title is the most important (so for my product, I have called it “Children’s bookcase: baby & toddler bookshelf / book storage box” to capture as many variations of searches as possible, e.g. it will capture ‘toddler bookcase’ ‘baby book storage’ ‘children’s book box’ etc).
There is also a tab on each listing where you can specify keywords. Amazon say NOT to duplicate the words from your title here, so in this section I have included others that might be typed in such as ‘bookshelves’. It is also permissible to include competitor brand names here, so if someone is likely to search for the ‘ACME buggy traylette’ you could add ‘ACME buggy traylette’ as one of your keywords and your product will appear when someone does that search.
Other than optimising your listing, your position will depend on popularity (Amazon put the more popular items (bestsellers) towards the top of the results page).
I don’t know whether links to your item help, but I’m sure it wouldn’t hurt! I haven’t used the Amazon Partners program because when I’m working with a blog I prefer them to refer direct to my own website so I get to keep all the profits! (and the SEO benefit of the link).
Good luck with your Amazon adventures!