The following is a guest post from Synccentric, written by Madeline Dudziak
When you’re looking to get into selling merchandise on Amazon you probably will have a lot of questions. How soon can you turn a profit? How much money will I need to have to get started? Will I need to deal with returns? It can be a lot of work to sort through the information and make sure that you get your merchant business off to a good start.
Before you start selling on Amazon there are some important things to know and that’s why this helpful list was compiled. It’s likely some of your questions will be answered so you will feel good about your decision to use Amazon as a platform to sell merchandise. Read on for the 5 things you should know.
1. How Does Amazon Decide on the Merchant Order?
So you have a product listed and it’s just one of 25 similar items sold by third-party merchants like yourself. And yet, you see that your item is listed significantly lower on the list than some of the other items. You obviously understand that the closer to the top your listing is, the more likely someone will buy it. (No one likes to scroll multiple pages of the same item.)
Amazon favors sellers who have a solid selling history so the best thing you can do is to sell products and get positive selling feedback. But that is definitely easier said than done right? Of course, you want to sell things, but that advice isn’t helping you right this second. In order to help you sell more items, you want to be sure you are pricing them correctly.
Everyone knows that Amazon is a place to find competitively priced merchandise, so make sure you aren’t pricing yourself out of the running. In order to boost sales, and get a higher seller ranking it may be worth trimming your bottom line for a short while. You can grow your business on Amazon quickly by following this advice.
Once you have more positive reviews and a longer sales history your listings should move up on the page. Amazon likes to work with sellers who follow their rules and regulations so make sure you’re abiding by them to see continued success. Make sure every transaction you complete runs as smooth as possible for great customer feedback!
2. What Kind of Merchants Do Well on Amazon?
The answer to this really depends on a lot of factors but the number one indication that you will sell well on Amazon is if Amazon isn’t already selling the items you keep in inventory. Amazon is a huge conglomerate and will be able to nudge their prices lower than yours to be the number one seller of almost anything, but there are cool tools you can use to help figure these things out such as Amazon Fee calculators.
Selling the same thing as Amazon doesn’t preclude you from the possibility of doing good business, especially during busy shopping seasons when you have something people want to buy, but if you can opt for items that Amazon isn’t already selling you are certainly going to have a better shot at selling your merchandise.
If you are a small business selling unique, one-of-a-kind items like jewelry, there is a great chance you will do well selling on Amazon as there won’t be any competition, plus you will also have some flexibility in how you price your wares throughout the year and can offer enticing sales when it benefits you the most.
Amazon also has a huge market for used and refurbished merchandise so that is another area you can look into if that’s not a current offering of yours. It is likely if you are offering something unique that Amazon will not decide to sell it themselves, leaving room for your business to flourish.
3. What Is Fulfilled By Amazon?
Amazon offers a unique program with it’s Fulfilled By Amazon (FBA) service, but that doesn’t mean it’s right for everyone. What happens is this, you sign an agreement with Amazon and send your merchandise to their warehouses. When customers purchase items from you, Amazon takes care of the entire fulfillment process, meaning it ships directly from them.
This can be a huge boost to sales, as one concern customers have with buying from third-party sellers is the speed of delivery, especially those consumers who are used to their two-day shipping. There is a certain amount of trust shoppers give to Amazon and when you enter into an FBA agreement you are getting the benefit of the trusting relationship Amazon has built.
Since Amazon will be handling all your shipping needs and also dealing with any returns that need to be made, this also offers you a chance to focus on other facets of your business. There are many resources available online to help you decide whether the FBA plan is the right one for you.
4. What Is The Buy Box?
You know when you’re shopping on Amazon and you click to say “add to cart”? That is the Amazon buy box and every yellow add to cart button is linked to a specific seller of an item. Sometimes that’s Amazon themselves but other times it’s linked to the third-party merchant.
The Buy Box is a huge deal to be linked to because instead of having customers scroll and choose you to be their seller, anyone can just click once and poof, your item is in their cart. Winning the Buy Box link is a coveted spot and is certain to increase the sales you will make on Amazon. But how can you get the Buy Box? What are the secrets?
It is incredibly rare to earn the Buy Box but it can be done. First, you will want to make sure you have a professional seller’s account. Without one, you are ineligible for the Buy Box. You also need to be a seller with at least 2-6 months of positive seller history so aiming for the Buy Box right out of the gate isn’t going to happen.
Even if you achieve all this, you may never earn the Buy Box but if a seller’s products ever go out of stock they are automatically kicked out of the Buy Box link and another merchant will take the spot, and that could very well be you! So keep your items in stock and get good feedback for the best chances at winning the coveted spot.
5. Follow the Rules
I know, we mentioned this up there in the first tip but it can not be overstated that following the guidelines Amazon has set up for their third party sellers is so important. Amazon is not shy about suspending accounts or even permanently banning sellers who they feel are not working up to the standards Amazon sets forth.
If your account is suspended or inactive you cannot sell your items, and worse, if you are an FBA seller it will be costly to get your inventory back from Amazon, so double check all their rules and stay on the up and up. Some of the most common reasons for being suspended are selling counterfeit materials or illegal substances so make sure you understand your products.
Selling on Amazon can be a wonderful business model to get into, whether you are starting a new business from home or you are wanting to expand your small business into an Amazon merchant agreement you can absolutely find success using Amazon as your route to finding new customers.
It may take some time and effort on your part to get the sales you are hoping to achieve but it can be done, especially when you go into your seller’s agreement knowing these five things already and have a game plan to meet your goals. You may even earn that Buy Box!
Madeline Dudziak is a lifestyle writer who enjoys covering many different topics. She’s a busy mom who has somehow found time to cultivate a love of research and writing that she often gets to express in guest posts like these. Madeline is especially skilled in writing about topics related to e-commerce and marketing. Madeline’s also a freelance theater reviewer for the River Cities’ Reader, which combines her passion for writing with her passion for theatre.
Also a huge fan of reading – perhaps a natural result of being named after the famous children’s book – Madeline’s Kindle is always crammed with more books than leisure time allows. Among other ways, she spends her free time are fun activities with her husband and young children, volunteering, and participating in two book clubs.
Chris Walton is an accomplished Senior Executive with nearly 20 years of success within the retail and retail technology industries. He is well-versed in merchandising, store operations, inventory management, product design, forecasting, e-commerce, pricing and promotions, and tech product development.
Chris was most recently a Vice President with Target, where he led the retailer’s Store of the Future project and also ran the Target’s home furnishing division for e-commerce. He previously worked for GAP, Inc., as a Distribution Analyst and Manager.
Chris holds a BA in Economics and History from Stanford University, and a MBA from Harvard Business School.
He likes to dress as Darth Vader for Halloween, and his wife also frequently asks him to ask Alexa, "to turn off the music."