Selling in the Amazon Marketplace is something that every online seller should consider. Since its creation 25 years ago, Amazon has grown to become the top ecommerce platform in the world. As of 2018, Amazon’s share of the US ecommerce market hit 49%, bigger than eBay (6.6%), Apple (3.9%), and Walmart (3.7%) combined. In addition, Amazon is now the leader in online sales, with no sign of slowing down anytime soon.
On the other hand, it has also become a huge platform that can make it overwhelming for new sellers. To date, there are over 2.5 million active sellers on Amazon Marketplace. Millions more are added to that number every year. With such huge competition, it’s no wonder new sellers will have a hard time cracking the market. But this shouldn’t stop you from becoming profitable as an Amazon seller. In this article, we shall cover the following topics:
1. Benefits of Being An Amazon Seller
2. Common Mistakes In Amazon Selling
3. Steps In Becoming A Profitable Amazon Seller
Benefits of Being An Amazon Seller
Being an Amazon seller can be a lucrative opportunity. If you want to be an online retailer, selling on Amazon is a good starting point. It’s a dominant online retailer that allows you to sell anything from toilet paper to electronic items. It is an extremely powerful platform that will allow you to start your online retail business quickly and easily.
Selling your product on a trusted brand like Amazon increases your chances of increasing your online presence in the retail industry as well as boosting your sales. If you are still having second thoughts about becoming an Amazon seller, here are some of the benefits that you can derive from selling on the platform:
1. Leveraged Traffic
Amazon.com attracts about 150 million people per month in the US alone. These people are ready to buy. Not everyone will buy your product. As an Amazon seller, potential customers will get to see your products in its proper niche. You put your online retail store in a prime position of being seen by new and first-time customers.
2. Ready Online Shopping Website
When selling on Amazon, you get access to its ready-made online shopping websites. All you have to do is fit your products into the system and they will be visible to anyone who visits Amazon. As an Amazon seller, you will already have an online business model that works. Amazon will also handle the orders and delivery.
3. You get to be part of a trusted brand
As an Amazon seller, you will easily get the trust of potential customers because you are actually buying something from them. Amazon is a trusted brand so customers will be confident to buy from any store that carries the brand. In fact, 90% of consumers check a product on Amazon when searching for and comparing products.
4. Your business is always open, always selling
Unlike a physical store which operates limited hours, online stores operate 24/7 so you won’t miss a potential sale. Amazon stores work around the clock so customers can buy your products at their most convenient time.
5. Expand your business globally
When you have a physical store, your reach may only be as far as where your store is located. With Amazon, however, you can reach customers in over 180 countries and give your products a global reach.
Common Mistakes of Amazon Sellers
As a newbie seller, it can be easy for you to get overwhelmed by the prospect of 240 million shoppers. As more shoppers are added to the marketplace on a yearly basis, many Amazon sellers leave the site within six months due to reasons which could have been avoided. Here are seven mistakes you should avoid to succeed as an Amazon seller.
1. Forgetting to Collect Sales Taxes
Whether you are collecting state and local tax on your sales from Amazon, you will still incur tax liabilities. As their online seller, Amazon will collect state tax on orders on your behalf. Tax liabilities are unnecessary and can chip away at your margins especially if your orders emanate from populous states or where many orders are shipped.
2. Entering Incorrect Prices and Inventory Quantities
When creating an Amazon listing, the pricing and inventory are live instantly. However, there is no “sandbox” in Amazon where you can practice your product listing skills. If you don’t have inventory, indicate zero inventory. If you have inventory, don’t overstate the quantity.
In Amazon, your inventory can quickly sell and overselling will have a chilling effect as it could result in account suspension. Also, if you won’t be offering products at low prices, don’t play with low prices. You could easily lose thousands of dollars if you play around with low prices. Such deals can get sold out overnight and if you aren’t paying attention, it could result in a significant loss. Ensure that you apply a true price and inventory level so you don’t get burned.
3. Items Do Not Match Product Listings
As an Amazon seller, you need to ensure that your offer will match current product listings. The word “almost” isn’t enough in Amazon. You have to make sure that the products listed in your inventory are the ones you will be selling. If the customer buys and finds out that the product does not match the listing, they will likely complain and you can get suspended for not matching your listing with the right product.
4. Slow Response on Customer Inquiries
Amazon sellers have 24 hours to respond to customer inquiries. Taking more than the allotted time will result in getting dinged by Amazon. Too many dings will result in account suspension. You can ask the assistance of external service providers for additional staff for rapid customer response.
5. Failure to Gather Customer Feedback
Customer feedback is very important for Amazon sellers. They are tracked not only for quality but also for quantity. Typically, 2-5 percent of all sales should have feedback. Even established sellers get continuous customer feedback. You should devise a system for requesting customer feedback. If you are a new seller, you should sign up with customer feedback providers so you don’t have to worry about feedback quantity. The quality of the feedback is also vital to your business. Too much negative feedback indicates that it’s time to make some changes to your business.
6. Fulfillment Errors
If you are new to Fulfillment by Amazon, it can be easy to make mistakes such as late shipping, or not providing shipping tracking information to Amazon or order cancellation due to unavailable inventory. Things can get immediately out of hand if you don’t control order fulfillment at the onset.
As a new seller, you should make sure that your first 10 orders are perfectly fulfilled—shipped on time and tracking information entered into Amazon. If you are unsure that you can fulfill the order on your own, you can still move your inventory to the Amazon FBA program. With the program, orders will be sent out on time with proper tracking information and ensure that your inventory is always in stock.
7. Competing against Amazon
As a newbie seller, one of the biggest mistakes you can make is being a direct competitor of Amazon Retail. You won’t get too many sales or sales at profitable levels. In the thick of competition, Amazon Retail can still win even at unprofitable levels. Check whether Amazon Retail is selling inventory you plan to buy or sell. There are many tools that can help you do just that like CamelCamelCamel.com and Keepa.com.
Steps In Becoming A Profitable Amazon Seller
Becoming a successful Amazon seller does not happen at once. It takes a lot of hard work on your part. It won’t be achieved by just reading articles, watching YouTube videos, or visiting forums. You need to actually do it and put in several hours of research. Here is a guide on what you need to do to achieve success as an Amazon seller.
1. Create an Amazon Seller account
If you don’t have one yet, you need to sign up as an Amazon seller by undergoing the registration process. It will only take a few minutes as you need to provide the necessary information. Make sure that you have the following information on hand:
- · Business e-mail address. You should set this up prior to registration as Amazon will start emailing you after registration.
- · Business details. Make sure you have your business name, address, and contact details ready.
- · Bank Details. You will need a credit card to cover the costs of subscription and advertising costs. Your bank information is also needed for transferring the funds from Amazon.
- · Phone Number – Amazon will use your phone number to contact you during the registration process so make sure that your phone is charged and in arms reach.
- · Tax Information – Make sure that you have your Social Security Number, company Federal Tax ID, and state tax ID information.
2. Find the Best Products to sell on Amazon
If you already have a product line to sell on the platform, you may skip this step. However, if you are like others trying to search for the right product to sell, you need to understand that this will take time and patience. Finding the right product does not happen overnight. Look for a product with high demand but low competition.
3. Find A Supplier and Shipper
Once you have found the right product to sell, the next thing to do is to find someone who will manufacture and ship it to your warehouse. Make sure that the company you have in mind understands your product, expectations, and you can easily get along with.
Send out an email to potential suppliers and get as many quotes as you can. Don’t just settle for the first company you will find. You may find out a few months later that you could have gotten a similar service for a few hundred dollars cheaper.
4. Market Your Products
How you market your product will dictate how it will be visible to your customers. How will you make it look as awesome as possible? Start by creating a great product listing. You need to optimize your listing to ensure that you convert as many views into sales as possible. From the title, bullet points, description, product photos to content, everything has to be optimized.
Add the right keywords to make sure that your products will appear in the right category. Search for the keywords that your competitors are targeting. You can do a keyword search to have an idea of the keywords associated with their product.
5. Be The Person You Would Want To Buy From
To become successful as an Amazon seller, you need to deliver excellent customer experience. This will greatly boost your chances of customer return and positive feedback. Thus, you want to make sure that your customers end up happy and satisfied.
Always inform your customers about the status of their order if it is still being processed or already dispatched. Not only will it keep impatient customers happy but also build rapport and make them feel involved with the whole process.
6. Look After Your Amazon Seller Business
Launching your first product will be the most difficult so don’t be discouraged if you experience a few obstacles along the way. You should learn from the experience so that you will know your mistakes and avoid them.
7. Keep at it
Once you have a product that is selling nicely, you can probably work on improving your one product business. Eventually, you can expand to an online shop and sell multiple products or run several online shops. Your success will start with keeping at it. Your determination and perseverance will take you far. There will be trying days but you should never give up because it will be worthwhile in the end.
Don’t ever fall into the mistake of getting lazy. Build on your success and grow from it. Live your dream and do not make excuses.