No matter which group readers may fall into, many have found quite a bit of success through the platform. After all, in 2018, Amazon announced that there were over 20,000 businesses on the platform doingover $1 million in sales in the previous year.
However, for those who seek Amazon domination, the first thing to consider before becoming the next million-dollar seller is a solid foundation.
The fact of the matter is that untold numbers of retailers flock to the marketplace each year looking to increase their revenue. However, many fail as a result of unoptimized product pages, a lack of knowledge, and neglecting to put the proper building blocks to success in place.
That is what this piece aims to remedy.
For those who have Amazon domination on their mind and will settle for nothing less, let’s take a moment to step back and get our feet underneath us.
Here is what retailers need to know about selling products on Amazon and, in time, dominating the competition.
Choosing a Selling Plan
Amazon offers two selling plans: individual and professional. Below, you’ll see a breakdown of each plan’s pros, cons and fees.
Individual Seller Plan
This plan has no monthly subscription fee, but you have to pay a $0.99 per item fee. This is ideal just for testing because the professional account offers more benefits than this plan and practically pays for itself if you sell more than 40 products per month.
Useful to get acquainted with the system and testing if it’s to your liking.
Can’t sell in restricted categories. These types of categories require an approval process, but they are not available for approval if you’re using this type of account. Examples of restricted categories are beauty, collectibles and fine art.
Can’t upload multiple products listings. With the professional selling plan, you get the option of uploading multiple listings with inventory file templates. These are Excel spreadsheets that contain various columns for describing and listing products. Unfortunately, this option is not available under this plan.
Doesn’t include reporting features and can’t use third-party integrations.
Not eligible for the Buy Box. This is a huge con! According to BigCommerce, this box accounts for 82 percent of sales on Amazon, with the percentage being higher for mobile. Thus, if you’re not eligible for it, you’re wasting potential revenue.
Professional Seller Plan
This plan has a monthly subscription fee of $39.99 but has no per item fee, unlike the individual seller plan. It’s recommended for all merchants who are serious about selling on Amazon since it offers more benefits than the individual plan. If you’re planning to sell 40 or more items per month, this plan is your best bet.
Eligible for the Buy Box
Can upload multiple products
Can use third party integrations
Offers advanced reporting features
Not ideal for sellers who are just looking to sell a couple of items per month since it has a paid subscription.
As mentioned before, when selecting your selling plan, consider the amount of products you want to sell. If less than 40, the individual plan is right for you. If it’s more, the professional plan is ideal. I’d only recommend the individual plan for testing. You can always switch your plans at any point.
Understanding Amazon Selling Fees
Listing products on Amazon is free, but you’ll have to pay fees once your products are sold. The usual fees are: shipping, referral and variable closing fees. If you’re an FBA seller, you’ll have to pay an additional set of fees we’ll discuss shortly. There is no per item fee unless you have the individual seller plan. Also, note that Amazon automatically takes their fees from your revenue and disburses the rest to your account. See the breakdown below of all fees with their respective details.
Shipping fees: These fees vary according to product category and shipping service. To qualify for 2-day shipping, you must be selling on Amazon for at least 90 days, and you are required to abide by certain standards. For example, you must have less than a 1.5% cancellation rate and have 10 or more orders in the past 30 days across all shipping options.
If you decide to fulfill your orders with Amazon (FBA), you’ll get additional fees related to fulfillment, storage and optional services.
Referral fees: You must pay this fee for every product you sell. The fee is calculated differently for media and non-media products and also varies according to the product category. Many products are also assigned a per-item minimum referral fee. In that case, you’ll have to pay the greater of the referral fee or the per-item minimum referral fee.
So, if you’re selling a handbag that costs $20 and that product category has a 15% referral fee and a $1 per item referral fee, then you’ll only pay the referral fee ($3) because it’s higher than the per item referral fee ($1). The per item referral fee is not to be confused with the per item fee charged by the individual selling plan as these are two different fees—the referral fee is charged to every seller, regardless of their account.
If you’re curious about how these fees are calculated, for media products, the referral fee is calculated by product price excluding taxes collected by Amazon. For non-media products, the referral fee is calculated based on product price.
Variable closing fees: These vary according to product category and shipping service.
“The closing fee is $1.80 per unit sold for products in the Books, DVD, Music, Software & Computer/Video Games, Video Game Consoles, and Video Game Accessories categories.”
Fully understanding the costs involved in selling an item on Amazon really opens your eyes to how important pricing and product selection are as a seller. Take the time to calculate costs to figure out if you can be profitable. Otherwise, you’ll be wasting your time selling for a very small profit or, even worse, end up with no profit whatsoever.
Additional Fees Charged When Using Fulfillment by Amazon (FBA)
About FBA: Stands for Fulfillment by Amazon. Amazon just helps sellers fulfill the orders, but they don’t own the seller’s products. In other words, you’re not selling your products to Amazon. They are just the middleman between you and the buyer.
You’re eligible to offer free 2-day shipping to Amazon Prime members. This is a great benefit since most buyers shop with Prime memberships and love the fast and free 2-day shipping. This membership has jumped to over 200 million members worldwide.
It can help you save time and space. Leaving the fulfillment to Amazon will help you save precious time to focus on growing your business. It can also help you sell products that may take up too much space in your office, warehouse or home.
Besides fulfillment, Amazon will also help you skip the hassle by handling any returns.
Allows you to fulfill orders from other channels
If you can’t turn around your inventory fast enough, you’ll be charged an additional fee. Also, you have to take these extra fees into consideration when determining profit. Your products have to be affordable enough to absorb these fees and still be able to make a profit.
About FBA Fees: Amazon charges various fees for fulfilling orders. These fees vary according to media versus non-media products, item’s weight and storage time length.
FBA vs. MFN
We all know the benefits of FBA: It helps win the Buy Box, helps sellers save time by taking care of fulfillment and shipping, etc. However, FBA may look good on paper, but it’s not the best option for every seller. MFN or Merchant Fulfillment Network—when you ship Amazon orders directly from your own home or warehouse—works better than FBA for some cases. You have to evaluate the pros and cons of each to make a smart decision.
One of the ways to assess if FBA or MFN is right for your business is to compare costs. By comparing costs, you’ll be able to see if you can afford to pay for FBA fees and if you’ll be able to make a profit using this fulfillment method. Usethis calculator to compare costs and discover if FBA makes sense for your store.
Another thing to consider is how fast you’ll be able to turn around products. Since Amazon charges additional fees for long storage, FBA may not be the best choice if you don’t know how fast you’ll be able to sell new products or if you have no turnaround history to make accurate estimations.
Furthermore, take into account that FBA may result in lower profits per product due to its fees. On the other hand, it can also help you sell more products by offering more appealing shipping options (2-day shipping) and offering higher chances of getting the Buy Box.
How to Find the Best Products to Sell on Amazon
Finding the best products to sell can be challenging; however, knowing what works and using online tools can help make it feel less daunting. Some of the tools you can use to find good potential products are the following: Google Keyword Planner, Google Trends andMerchant Words. All of those tools are free, but there are other more advanced ones that require payment.
There are several physical attributes that are preferred in the ideal product. One of them is weight. Look for a product that is light in weight (around 2 lbs.). It will help make the shipping more affordable and allow you to get cheaper pricing in the FBA program.
Another point to consider is fragility. Select products that are not easily breakable. This will prevent returns from customers who receive broken products. Most importantly, you’ll want to find products that are in demand and which can be profitable. Otherwise, you’ll end up with a bunch of inventory nobody wants to buy.
The two most common ways to get products is with retail arbitrage or to source them from China. If you’re sourcing products from China, visit Aliexpress or Alibaba to compare prices and discover which products have a good potential to be profitable after considering all costs. If you’re sourcing through retail arbitrage, make sure you use the Amazon seller app to see pricing on the go.
Tips for Getting Set Up
Now that we have a better understanding of all the fees involved and how to select a good potential product to sell, let’s delve into details of how to set up product listings.
No matter if we are discussing product title optimization for Google Shopping or the Amazon marketplace, writing alluring product titles is critical as this gives customers a better idea of the product you’re selling. It helps users make differentiations among the same type of products.
For example, if someone is searching for “headphones” and all the images look similar, titles would help that user figure out which listing he or she should click on.
As a seller, you have to keep these things in mind to create product titles that are useful to the user and to increase clicks to your listing. Amazon recommends including all the following attributes in your titles:
Bullet Points and Product Description
The user has already clicked on your listing, so he must think your product may be what he’s looking for. Now, it is your job to assure the user that your product is better than your competitors. Therefore, it is necessary to understand how to write product descriptions that sell.
Writing strategies aside, bullet points and product descriptions can also help you get this job done.
Provide additional product features, such as fabric materials, dimensions and compatibility with complementary products. Also, give them ideas on how the product can benefit their life by solving a problem.
In the product description, you can provide more of a story on how the product can be used and benefit the user’s life. Also, keep in mind that providing enough useful information will help you prevent any misunderstandings that can lead to bad reviews or returns.
These are the keywords that will help Amazon know which searches should retrieve your listings. Start by doing research to find out what keywords people are using to find products like yours. For those who are familiar with conducting keyword research for Amazon PPC campaigns, this should be relatively simple. For the uninitiated, tools such as keywordtool.io can help you get this done.
Then, build your list, including as many relevant keywords as possible. Don’t worry if your list doesn’t look sales-like. They will live in the backend, so your customer won’t be able to see them.
Amazon knows that good images sell. That’s why it enforces its own set of image requirements that all sellers have to follow. For the most part, it consists of having a white background (RGB values of 255, 255, 255), images should be 1000 pixels or larger in either height or width to enable zoom function, having the product fill 85 percent or more of the image and no watermarks.
These guidelines help the platform look uniform and consistent. Otherwise, different background colors or product photo qualities would get too distracting for buyers. If you’re taking your own photos, consider investing in an affordable photo kit. It will help get better lighting and focus on all your images.
A+ Content (Formerly Known as Enhanced Brand Content)
Alongside the more traditional product images, it is wise for retailers to employ A+ Content to boost Amazon sales. After all, if Amazon domination is on a merchant’s mind, then pulling out all of the stops is a prerequisite to such a conquest.
“[A] feature [that] enables brand owners to change the product descriptions of branded ASINs. Using this tool, you can describe your product features in a different way by including a unique brand story, enhanced images, and text placements.”
While this is wholly optional, the fact of the matter is that the deployment of A+ Content can serve a variety of purposes, all of which are aimed at higher conversion rates.
For instance, merchants can use this visually appealing product listing element to dive deeper into their company’s story and background, thereby giving consumers a better feel for the organization and its values.
Another way that A+ Content can be utilized is to provide consumers with alternate images of the product. This could include closeups of specific features, live-action shots, lifestyle images, and the like.
Ultimately, the idea here is to give consumers more in-depth knowledge about the products and/or company by including supplemental information in the form of both copy and images.
Again, this feature is optional for merchants to utilize. However, it is strongly recommended as it not only helps to further educate and entice consumers but it can also be leveraged as a branding tool to help a seller stand out from others within the marketplace.
This is a critical step in succeeding on Amazon, given that the platform is already extremely crowded and continues to become exponentially more cacophonous with each passing month and year.
However, while this feature can be a powerful tool, it is worth noting that Amazon’s A+ eligibility requirements dictate that:
“This feature is only available to Professional sellers who have been approved as brand owners through the Amazon Brand Registry process, as well as emerging brand owners who are part of certain managed selling programs, such as Launchpad and Amazon Exclusives.”
Amazon domination, before ever getting to the more advanced tactics and strategies (such as understanding Amazon’s A9 algorithm), is only achieved through first solidifying a solid foundation.
The information outlined above gives retailers the knowledge and building blocks they need to create a robust, abiding presence on Amazon. While this may sound simplistic, scores of Amazon sellers do not put these practices into play. As a result, they generate minimal sales and ultimately wither away.
Therefore, those seeking complete Amazon domination must first place solid ground under their feet. Ensuring this is the only way for retailers to successfully conquer those who sell the same or similar products.
Ronald Dod is the Chief Marketing Officer and Co-founder of Visiture, an end-to-end eCommerce marketing agency focused on helping online merchants acquire more customers through the use of search engines, social media platforms, marketplaces, and their online storefronts. His passion is helping leading brands use data to make more effective decisions in order to drive new traffic and conversions.
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