Getting started on Amazon can be daunting. I’ve even heard some refer to it as “a headache”. What is interesting though, is that many of the sellers who stated this, haven’t actually sold on Amazon before! I found this baffling and decided to dig deeper to find out why there is this preconceived notion.
Get registered, get approved and start selling
When I asked sellers, “why is Amazon a headache”, I found that their answers were twofold. Their primary concern is that getting started on Amazon is intimidating, overwhelming and frustrating; half of them didn’t even think it was possible due to their products’ conditions. Their other concern is that they wouldn’t stand a chance against the competition, partially due to the impression that FBA is their only chance to compete in that marketplace.
As a huge advocate of supporting small and medium sized businesses and sellers alike, I wanted to clear the air and provide guidance for those looking to take the leap into the Amazon marketplace. My goal here is to reduce that “headache” and outline the steps you can take to get registered, get approved and start selling on Amazon. Lastly, I’ll provide some tips you can use to be a successful Amazon seller, without the need to use FBA.
STEP 1 Find out If Your Products & Conditions Are Eligible for Sale
Amazon has strict product requirements. If you’re unsure about whether or not your products are eligible for sale on Amazon, here’s the easy, sure-way, to find out.
Sign up for an Individual Selling Plan on Amazon
To see if your products and conditions are accepted on Amazon, simply sign up for their Individual Selling Plan. This is a free Amazon seller account that will allow you to check if your products need Amazon approval or if you can start selling right away.
Check if there are selling requirements for your products
Go to Amazon’s “add an item” page and search for a few of your products. Once you’ve located your product, you’ll see the option to either select the item’s condition and create the listing, or the option to “apply to sell” it. If you’re unable to find your product, you can create a new listing on Amazon here.
Take the next step
If you see the “sell” button on your product, you’re good-to-go and can create your listing right-away. If you don’t see the sell button, you may see the “apply to sell” button instead. If that’s the case, simply click it and complete the application flow.
Once you complete the product application, it may take a few days for Amazon to process your request. You can check on your Amazon product applications here, then once you see the “Approved” status, click the “List Products” button to get your products live.
STEP 2 Understand the Amazon Seller Start Up Fees
The way that Amazon collects seller fees is very different compared to eBay. It’s important to understand these fees before fully committing to Amazon, just to make sure you have the margin to cover the costs. Here are the different plans Amazon offers and what the fee structure looks like.
Amazon offers 2 selling plans, the Professional Selling Plan and the Individual Selling Plan. For new sellers, I recommend starting on the Individual Selling Plan and only upgrading to the Professional Plan when needed; keep reading to see when I recommend you do that (step 4).
Amazon referral fees are unavoidable. Each time you sell an item on the Amazon marketplace they will charge you a commission, called a referral fee. It’s important to note that depending on the category your item was listed in, the fee may vary. This is why I suggest you complete Step 1 first, to make sure you have Amazon’s approval to sell in a specific category before you go about projecting these fees. Find your category here to see what the referral fees would cost you.
Variable Closing Fees
If you sell in one of Amazon’s media categories, you will also incur a $1.80 closing fee per media item sold. This does not apply to all sellers, rather only to those who sell items such as books, DVDs, music, software and computer/video games, video, video game consoles and video game accessories.
STEP 3 Maintain a Positive Seller Account Health Score
Amazon takes seller reputation and buyer satisfaction seriously. If you are not mindful about your Seller Account Health score it’s likely your time on Amazon won’t last long. The most important advice I can give is to focus on your seller reputation. Only after you’ve perfected your shipping processes, inventory control, customer service and feel confident with meeting buyer expectations, should you then start adding more product and/or executing campaigns to accelerate sales. Here are a few tips you should follow to start off strong:
If you are not mindful about your Seller Account Health score it’s likely your time on Amazon won’t last long
Set up your Amazon Shipping Template right away
Before activating your first product on Amazon, make sure your Amazon Shipping Template(s) accurately reflects the regions and shipping transit times you can reliably offer. Amazon’s policy states that sellers need to maintain a Late Shipment Rate (LSR) of less than 4% within a 30-day period otherwise your seller account is at risk. After the mailman picks up your packages, be sure to confirm the shipment in Amazon ASAP and within the timeframe your template specified.
Have good integrity and provide quality products
Even more strict than the Late Shipment Rate, Amazon expects all sellers to have an Order Defect Rate (ODR) of less than 1% in a 60-day period. Any good seller knows you need to accurately represent your product. Listing details such as images and item details like weight, color, fabric, dimensions, texture, functionality, etc, all need to be accurately described in your listings. As Amazon is especially rigorous about this, be sure to keep a close eye on your ODR here. This includes negative feedback from your customers, A-to-z Guarantee claims and chargebacks.
In addition, Amazon also looks at your Return Dissatisfaction Rate (RDR). In the case one of your customers returns an item and leaves you negative feedback your RDR may be at risk. Secondly, if you do not provide a response to a late shipment within 48 hours your RDR may also be at risk. Lastly, if you incorrectly deny a return you may also see that affect your RDR in a negative way.
As you can see, Amazon takes customer satisfaction very seriously. This is why it’s extremely important to have good integrity, sell quality products and be responsive. You’ll want to start slow, with a fraction of your product volume and only scale up once you have full confidence in your listings’ details, inventory control and fulfillment processes.
Ship on time
Last but not least, monitor your On-Time Delivery Rate (OTDR). To be a successful FBM (fulfilled by merchant / non-FBA) seller on Amazon, they recommend you maintain an OTDR rate of 97% or higher.
The key to any successful business is to fulfill the needs of your customers and with the steep competition in the ecommerce industry, ease of transaction is now a common buyer need. Don’t just take my word for it, review Amazon’s Best Practices here and see for yourself.
STEP 4 Win the Buy Box
Many sellers have asked “can you win the buy box”? In short, yes, but it’s hard, there are many requirements and as Amazon’s buy box algorithm isn’t public, there’s no guarantee. That said, if you follow the tips below you’ll be giving yourself a fighting chance.
Become a Professional Amazon Seller
Once you’ve completed the steps above and feel confident in meeting your Amazon buyer expectations, it’s time to upgrade to Amazon’s Professional Selling plan. Amazon reserves the buy box for sellers who are subscribed to their Professional Selling plan, so in order to really compete in the Amazon marketplace it’s critical to upgrade your plan. You can see which Amazon plan you're on, and upgrade to Pro right from your Account Info page.
Have a stellar Account Health Score
Amazon also reserves the buy box for the sellers who have the best metrics, which may vary depending on the category your product is in. Be sure to fully read and understand Step 3 above to become familiar with those Account Health metrics, then keep a close eye on your score here.
Offer free 2-day shipping
Everyone is trying to win the buy box; many of which are FBA sellers who can guarantee a 2 day delivery time. This is why if you’re a FBM seller it’s extremely important to offer a 2 day delivery guarantee or overnight if possible.
It really goes without saying, but make sure you’re being competitive with your pricing. While you don’t have to be the absolute cheapest seller, you need to make sure your offer is fairly priced and in the ballpark of the prices from competing sellers.
Don’t run out of stock
Once you get placed in the buy box, it’s important to keep that product in stock. If you run out of quantity, someone else will take your place.
Check to see if you’re eligible for the Buy Box
If you’re on Amazon’s Professional Selling Plan, you can enable the “Buy Box Eligible” column on your Seller Central Inventory Management page here. Find the Column Preference button and then click it to select and enable the Buy Box Eligible column. Sometimes this process can take months, just hang in there, stay focused on selling quality products quickly, and keep your eye on the prize.
STEP 5 Succeed Without FBA
While FBA does offer quite a few benefits, it also can be costly. Here are some techniques you can use to become a successful seller on Amazon without joining FBA.
Appeal to green shoppers
There’s actually quite a large community of Amazon shoppers who avoid purchasing from FBA sellers. The community of “zero-waste” shoppers is growing, you can even see here on this Amazon community thread that many shoppers are chiming in saying they hate the oversized packaging FBA uses, and on top of that they’re reporting many of their FBA orders were delivered late or damaged. One Amazon buyer even reported that 10 out of the 12 orders he placed, arrived late.
This means there’s a market opportunity that you can capitalize on. The mindset that “FBA is your only chance to succeed on Amazon" is outdated. The times are changing, we’re seeing ethical shopping and zero-waste packaging become more and more popular. A significant percentage of buyers are done with big corporations, they want the personal touch and customer service that only small to medium sized sellers know how to provide.
The mindset that “FBA is your only chance to succeed on Amazon" is outdated.
If you are the owner of your own brand, you can create an Amazon Storefront and write about your business. Be sure to talk about the ethical and sustainable business practices you follow and how you’re helping contribute to a better and cleaner future.
Entice buyers to “Buy Again”
For FBM sellers, it’s extremely important to fulfill and even exceed your customers expectations. This will encourage your past Amazon buyers to use the “Buy Again” button, which will turn your one-time customer into a repeat customer. This is especially important if you sell convenience goods, groceries, pet supplies, baby supplies and other everyday necessities.
Advertise on Amazon
Pay to have Amazon promote your listing. I’ll admit, many sellers have told me that they’re frustrated with the concept of paid advertisements on marketplaces. They explain, “I’m paying subscription fees, referral fees, per item fees and now they want me to pay to get my listing noticed, isn’t that the responsibility of the marketplace”! And while I can definitely understand that perspective, it’s still a technique available for you to use. Even setting an advertising budget of just $10 per month could make a positive impact on your sales.
Join the Seller Fulfilled Prime program
Did you know you can get the Prime badge on your Amazon listings even if you’re not an FBA seller? Well, you can. Not only does becoming a Seller Fulfilled Prime merchant give you the ability to sell to everyone who’s subscribed to Amazon Prime, but it also represents that you’re a trusted Amazon seller and that you guarantee 2-day shipping. This is your big opportunity, so once you’ve completed all the steps above and feel 100% confident in your business processes, be sure to join this program.
Thank you for stopping by and reading my article, I wish you the best on your venture into the Amazon marketplace! On my last note, I wanted to share that if you need any help getting your eBay items added to Amazon, you may try Auctiva’s 30-Day Free Trial and use the Auto-Lister to get your eBay items added to Amazon. Auctiva is a multichannel selling tool designed to help eBay and Amazon sellers save time, simplify inventory management and synchronize product quantities across marketplaces so that sellers can expand their product reach, without the worry of overselling.