Not only is Amazon the world’s largest online retailer, it is also one of the world’s largest search engines. The choice of products on Amazon is vast. If you’re hoping to succeed as a vendor and sell on Amazon, you need to make sure you have your strategy right.
How To Sell On Amazon? Costs, Shipping, Prime, and Advertising
Visitors to Amazon are highly product-focused and often have a strong intention to buy. People don’t generally come to Amazon to discover random items, they come knowing what they want and how to search for it. They have commercial intent. Sellers who don’t deliver an efficient, professional service simply won’t succeed. Your number one aim as a vendor is to rank highest in targeted searches. This won’t happen without a good deal of planning, commercial knowledge, and hard work.
This guide on how to sell on Amazon will help you understand how Amazon works and best practices for the best possible service to your customers. The guide will cover the following:
- Amazon Vendor Central vs Amazon Seller Central
- What is the Amazon Marketplace?
- How much does Amazon charge sellers?
- Amazon Shipping
- Amazon Prime
- How to advertise on Amazon?
- 14 best practices for selling products on Amazon
To decide which platform is right for you, you must understand how they differ. With Amazon Vendor Central it’s Amazon who buys and sells the products for you. With Amazon Seller Central you deal directly with buyers and potential buyers. Here are some of the pros and cons of each service.
The pros of Amazon Vendor Central
- Customers may place more trust in products as they are approved and sold by Amazon.
- Sellers can choose their keywords and search terms to drive high-quality traffic.
- There are better advertising options available in Amazon Marketing Services than the Seller Central option.
- You don’t have to manage taxation, lost products or manage sales reconciliations. With Seller Central these are the vendor’s responsibility.
- You can create enhanced content via the Amazon A+ Detail product pages. This suite includes high-definition videos, enhanced images, comprehensive FAQ sections, and comparison charts.
The cons of Amazon Vendor Central
- Prices can fluctuate at any time.
- Your payment terms are fixed in the traditional retail model, rather than the quick payment terms that Sellers enjoy.
- Fulfilment SLAs are often tight. If your company struggles to fulfil orders swiftly it may not be the right choice.
The pros of Amazon Seller Central
- You have complete control over your listing content, including pricing.
- Retailers opting for the personal plan only pay per sale.
- Retailers who choose the Professional Plan pay a competitive subscription fee. They also get access to inventory management software, customised shipping options and prioritised placement on listings.
- You’ll get valuable insights on who is buying your products and from where.
- Your customers will enjoy speedy payment via Amazon Pay, and you’ll enjoy the high conversion rates.
- Automated pricing controls mean you can match other retailer’s pricing and remain competitive.
- You have access to Amazon’s advertising service and only pay when someone clicks on your ad.
- You can avail of Amazon’s local or international fulfilment service.
The cons of Amazon Seller Central
- The costs of managing fulfilment can prove a challenge. This is particularly true for low ticket items.
- As a third-party vendor, you may miss out on sales. Your listings won’t have the trust indicator that fulfilment is carried out by Amazon.
Many visitors to Amazon struggle to differentiate between Amazon and Amazon Marketplace. But if you sell on Amazon, it is important to understand how they differ. The differences and the defining features of Amazon Marketplace are as follows:
- Amazon is the world’s largest online retailer. It sells everything from light bulbs to wine for cats. Shopping on Amazon means buying directly from them or from individual sellers.
- Amazon Marketplace acts as a kind of third-party shopping centre for major retailers. It integrates seamlessly into the Amazon platform. Both platforms offer product descriptions and a facility for posting ratings.
- Amazon does not permit the sale of used items. sellers wishing to sell these products must register on Amazon Marketplace.
- Amazon Marketplace often has a greater variety of goods to choose from. It may also offer more competitive pricing due to the retailer’s scope.
- Profits from Amazon go directly to the company. Profits from Amazon Marketplace are shared between the two entities.
- In order for companies to sell on Amazon Marketplace, they must follow Amazon’s rules. This includes having financial accounts in the jurisdictions they operate in.
If you sell on Amazon and list less than 35 products per month you pay £0.75 per product. For more than 35 items, the subscription fee is £25 per month, excl. VAT. If you chose the option to have your products fulfilled by Amazon extra costs apply. Amazon’s calculator will help you gauge what your costs will be.
Fulfilment By Amazon (FBA) is a great option for businesses that struggle to manage deliveries. Sellers also enjoy the stamp of approval and trust which Amazon’s service brings. In fact, all FBA offers feature a badge to entice customers.
Using the FBA service is simple. Select the FBA option when you list your products and send to Amazon’s fulfilment centre. When orders come in, Amazon pick, pack and deliver across Europe. Amazon also provides customer service in the local language. It handles returns and refunds directly with the customer.
Fulfilment By Amazon – Pricing
Amazon’s fulfilment service is highly flexible with a number of solutions to suit businesses of all sizes and scope. There are no minimum inventory requirements, no fixed subscription fee and you only pay for the services you use. You can find out more about pricing in the UK, Germany, Italy, France, and Spain by downloading Amazon’s FBA Rate Cards. There is also a calculator, information on storage fees and examples of standard sizes for products on this page.
Fulfilled By Merchant Shipping Options
Fulfilled By Merchant is when a seller lists a product on Amazon and handles everything to do with the warehouse and shipping. Sellers use their own resources instead of paying Amazon for any shipping or fulfillment service costs.
If you already have an e-store with fulfilment and shipping process established for incoming orders, this can be the best option for you to avoid any unnecessary costs. However, just ensure your process is able to handle the number of incoming orders. Amazon customers have high expectations for the delivery of their products and it’s likely they will not tolerate delays or mistakes.
How to sell on Amazon with Sendcloud
If you want to save time processing your orders, you can easily integrate your Amazon Marketplace with Sendcloud. Order information will be pushed into the Sendcloud environment, enabling you to quickly process each order. This will connect your Amazon store with multiple carriers and shipping services. Create and print labels efficiently, and ensure your customers receive the right tracking information for their orders.
If you already have an existing webstore, integrating both your store platform and Amazon with Sendcloud helps push all your incoming orders to one place so you can quickly process and follow everyone.
In March 2019 RetailWeek reported that there are 15 million Amazon Prime users in the UK. Shoppers using Amazon’s Prime service can avail of next day delivery and priority delivery options. Sellers on Amazon Prime must have a warehouse based in the UK and an Amazon Professional Seller account.
For sellers using the Seller Fulfilled Prime service, the benefits are clear.
- You get increased visibility in listings.
- Your customers will optimise the use of their Prime Membership by filtering their searches for products featuring the Prime badge.
- Your products are more likely to win the Buy Box. This makes your product the default option for return customers.
- Orders, returns and refunds are managed on the Amazon website.
- Once the order is completed, Amazon will manage customer service at no extra cost.
- Sellers have a chance to be featured on Today’s Deals. This is one of Amazon’s most visited pages.
- Inventory is managed from your own warehouse so you can keep an eye on stock levels.
There are a number of criteria that sellers must meet to qualify for Amazon Seller Fulfilled Prime:
- You must be able to ship 99% of orders on time.
- Only use labels purchased through Amazon’s Buy Delivery Services or the Amazon website.
- Can only use Seller Fulfilled Prime carriers that are approved by Amazon.
- Must have an order cancellation rate of less than 1%.
- You need to comply with Amazon’s Returns Policy.
- Need to use Amazon’s customer service facility.
Before you register with Amazon Seller Prime you must successfully complete a trial period. This proves to Amazon that you’re compliant and your service standards are up to scratch.
Costs for Seller Fulfilled Prime
There’s no subscription fee for this service. All costs depend on the delivery company used and Amazon.co.uk’s fees. There are no additional costs and the referral fees remain the same.
When setting your prices, make sure you take the costs of providing free shipping to non-Prime members into account.
Advertising on Amazon is a great way to promote your products. Successfully bidding on specific keywords gives you greater visibility and you only get charged when someone clicks on your ad. If your ads are successful it could also boost your organic listings on Amazon.
Amazon ads appear either as sponsored posts when you’ve made a search, on individual product pages or at the bottom of the page. The latter appear as sponsored products related to the item. You can choose from two ad formats. The listing-style that you see in the aforementioned searches and display ads which are are more like traditional ads with images, sales messaging and a call to action.
Advertising on Amazon is simple and straightforward.
- Log into Seller Central and click the Advertising tab.
- Select the products you want to promote.
- Choose the keywords you want to target.
- Decide how much you want to bid on clicks.
- Determine the campaign duration.
- Launch the ads and wait for the sales to come in.
Costs are based on how many clicks your ads get and how much you bid on them. Naturally, the more competitive search terms demand a higher fee. Advertising costs are deducted from your account balance by default.
Top tip: If you’re unsure about keywords or how much you want to bid on clicks, choose the automatic option rather than manual. Amazon’s analytics supply a good amount of engagement data. Once you gain some customer insights you can adjust your campaigns accordingly. You can update your budget at any time.
Top tip: Want to use display advertising and don’t have design skills? Try Amazon’s drag and drop design templates.
Amazon is a competitive, and lucrative sales platform. In fact, it’s the world’s largest online store. Visitors to Amazon are ready to find the most appropriate and competitive product. Then they’re likely to buy it.
Whether you’re starting out as a vendor or want to increase sales, it’s important to optimise your listings. From keyword targeting to fulfilment, here are some top tips for selling products on Amazon.
1: Make sure your product data is accurate.
Only use clear, natural and informative language. Don’t include unnecessary jargon and never stretch the truth. If you’re unsure of the right language to use, take a look at your top-performing competitors. You can do this both on Amazon and on the highest-ranking competitor websites.
2: Be clear and compliant.
Always be truthful when writing product descriptions. Failing to do so will result in poor company reviews and returned or refunded items. Your customer retention and brand reputation may also suffer.
3: Create an attention-grabbing headline.
Sounds obvious but it’s worth putting the work in to make your headline pop. Your headline should always be accurate and include high converting keywords. Consider your sales messaging. What is your product’s USP? Why should customers choose you? Top Tip: Try capitalising each word in the title to make it stand out.
4: Keep a close eye on your ranking.
The best way to gauge if you’re succeeding as an Amazon vendor is to check how you’re ranking. Rankings are based on the number and rating of your reviews and your relevance to the search query. They are also affected by the volume of sales and your conversion rate. You have less control over your sales and reviews but can remedy issues with search by refining your keywords. Which brings us onto our next topic…
5: Choose the most effective keywords and search terms.
Keyword research is an important part of your Amazon listing. Your title should include your brand name and the name of the product. It should also include its main defining features. If it’s a particular red running shoe by Nike then your title should read Nike Men’s Vaporfly running shoe, Red, Size 7.
Your keyword inclusions should also feature in your product description, FAQs, bullet points and images. Top tip: If you’re unsure of which keywords to target try using Google’s Keyword Planner or Keyword Scout to gauge search volumes. Many advertisers favour long titles with a lot of keyword inclusions. While this might look cluttered, it could prove successful in attracting high-quality traffic. Think about your audience and the language they’ll be using. Research the search terms that are proving successful for your competitors. You can then create a well-crafted ad that balances the need for high rankings with sounding like a human.
6: Choose the right imagery.
All imagery should be a true representation of your product and show it from different angles, or in use. Images should be at least 1,000 pixels x 1,000 pixels to take advantage of Amazon’s zoom feature. This enables buyers to scroll to enlarge it. Test different images to see if they affect your conversion rate. If you receive repeat queries about the image content, rectify as soon as possible.
7: Maximise your bullet points.
As mentioned before, bullets are a great place for keyword inclusion. They can also help optimise conversion rates. If customers query aspects of your product, address them here. Visiting the visit FAQs could present an extra barrier to sale. Use the first three bullets to promote your best features and the following points to clarify anything that could become a query or a barrier to sale. Consider using capitals at the beginning of the points to grab the customer’s attention.
8: Pay attention to bad reviews.
Ideally, you should keep a continual eye on reviews and take all of them seriously. If you feel you have been judged unfairly, don’t respond in anger. Address the customer’s concern graciously. Sympathise, if appropriate, and ask them to clarify their point. By getting as much information as possible you can gently and tactfully dispute the concern. You can then clarify your position and offer a solution. If you feel the viewer is incorrect, direct their attention to your policies or the product data that support your standpoint.
If the situation escalates, don’t try to force the exchange offline as readers may see this as an admission of guilt. It is also poor customer service. Reiterate your point and ask if you can call them to discuss their options in more detail. Don’t ever neglect to respond to bad reviews. This is also poor customer service and comes across that you don’t care.
9: Be appreciative of good reviews.
Good reviews mean new and repeat business. It’s as simple as that. Always thank customers for their kind words and say that you’re looking forward to their future custom. Try not to use stock responses as this can lack sincerity. Keep a repository of grateful responses to paste in and add context and personalisation to.
10: Provide an excellent fulfilment service.
This includes regular order checks, prompt query response and sending confirmation after the sale. Only use reputable third-party sellers and always keep your promises. State the delivery options in a prominent position on your listing and include more granular detail in the FAQs.
11: Manage your inventory.
Claiming you have stock when you haven’t is bad for business. If unavailable inventory slips through the net contact the customer immediately to resolve.
12: Ensure your pricing is accurate and competitive.
Not doing so isn’t compliant and could have a negative effect on your conversions, and reviews. Don’t forget that customers can search by lowest price so keep an eye on your competitors’ listings.
13: Provide outstanding customer service.
Make sure the customer has a good experience from the research stage right through to fulfilment. They are more likely to return and to recommend you. Handle returns and refunds graciously and answer queries and comments promptly and professionally. You must also listen. Your customers are the lifeblood of your business and all feedback is useful in one way or another.
14: Test your ad content.
It’s a great idea to experiment with the wording, images, sales messaging and titles to see what impacts on conversions. Unless your listing needs a drastic overhaul it is best to test one thing at a time. You should also wait for a good amount of customer engagement before judging how effective a change was.
What are your top tips for selling on Amazon? Let us know if there’s any advice we’ve missed in the comments below. And if you want to learn more about Sendcloud, check out the video below.