In this day and age, almost everyone knows what’s Amazon. It’s a digital marketplace with around 300 million active users as of 2021, and that figure only seems to be increasing.
Due to its prominence, many sellers have set their sights on selling products on Amazon to maximize their revenue. While it does have promising benefits to merchants, selling on Amazon has its fair share of difficulties that you won’t encounter anywhere else. For that reason, diving headfirst can be seen as a bad move, but that’s precisely why you’re here.
Listed below are six things you should know before selling on Amazon.
1. Amazon Offers Two Selling Plans
When creating a seller account on Amazon, you must choose from two plans, namely the Individual Plan and the Professional Plan. Here’s a closer look at each plan:
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Individual Plan
The Individual Plan is suitable for merchants who intend to sell only a small number of items. Instead of paying a fee every month, sellers using this plan must pay a fee of USD$0.99 for every item they sell through the platform. Although the price is the main difference between the two, there are other differences.
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Professional Plan
When you choose the Professional Plan, there are no per-item fees like the Individual Plan, but you must pay a monthly subscription fee of USD$39.99.
This plan is ideal if you’re working with wholesale suppliers as you’re likely to sell a considerable number of items, which would equate to a lot of money if there was a per-item fee. Moreover, you gain access to various tools and benefits that can make selling a lot easier, such as the ability to upload multiple items or the chance to win the buy box.
Each one of these plans carries several advantages to the seller, so choosing the right plan is of utmost importance. Also, take note that aside from the per-item and subscription costs of these plans, there are other fees you must pay when selling on Amazon.
2. Selling On Amazon Is Not Free
Although selling on Amazon is indeed profitable, it’s not free by any means. In fact, there are several fees you must pay to keep selling on their platform. These include the following:
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Referral Fee
Even with the Professional Plan, sellers must still pay a fee for each item sold. This is what Amazon calls a referral fee, and it’s usually 15% of the item’s price. The rate differs according to the product category. So, for example, pet supplies have a referral fee rate of 15%, while video-game consoles have a rate of 8%.
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Closing Fee
On top of the referral fee, merchants must also pay Amazon a closing fee for every item sold. This is usually part of the 8% to 15% fee rate mentioned earlier.
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Fulfillment Fee
If you use the Fulfillment by Amazon service of the platform, you’ll need to pay a fixed amount depending on the shipping weight of the item sold.
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Shipping Fee
If you’re not using Fulfillment by Amazon and store your products yourself, Amazon charges a shipping fee based on the product category and weight of the item.
3. There Are Three Ways To List Or Sell A Product On Amazon
Once you join the platform as a seller, the next step is to list the product you want to sell. In this step, you have three options to choose from. Here’s a closer look at each option:
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One-by-One
As the name implies, using this method, you can list products one by one. It’s the simplest way to do it, but it takes a while since you need to add the information manually.
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Templates
Amazon has numerous Excel files in its database that sellers can access. By selecting a file that contains data on the product you plan to sell, you can speed up the listing process.
Naturally, you need to know how to modify Excel files if you want to use this method.
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Automated Feeds
If you don’t want to spend any time listing products, you can simply send the data to one of Amazon’s partners, and they’ll list the product using the data you gave them. This is the easiest way to list products, but it does cost you money.
Since each option has its respective advantages and disadvantages, you must take your time selecting an option depending on your spare time and the number of products you plan to list.
4. Sellers Must Answer Customer Inquiries Within 24 Hours
When a customer sends an inquiry on Amazon concerning one of your products, they’ll see a pop-up message telling them that the seller will send a response within 48 hours.
However, in reality, Amazon requires sellers to respond within 24 hours, or there will be consequences. This is to ensure that customers can enjoy top-notch customer service from the platform. That’s why Amazon is the most popular selling platform, after all. On that note, make sure you keep that in mind to avoid unnecessary conflicts.
5. Amazon Rarely Removes Unauthorized Resellers
When you visit Amazon as a consumer rather than a seller, you may find other merchants selling the same product as you are. Depending on who listed the product first, these are called resellers.
Naturally, they can serve as competition for your potential customers. Unfortunately, Amazon rarely removes even unauthorized resellers, so you have no choice but to tolerate resellers.
6. Sellers Are Not Allowed To Re-Market To Past Customers
When a consumer purchases one of your products, you’d assume that they would be interested in buying yet another item among your line of products. While that may be true, Amazon prohibits re-marketing to past customers. That means you can’t send them an email, text message, or contact them in any way, as that would be against Amazon rules and regulations.
Therefore, you’ll have to settle with finding new customers. But of course, if they somehow find your brand without your intervention, they’re more than welcome to buy from your shop again.
Final Words
As profitable as it can be, selling on Amazon isn’t an easy task. Unless you’re knowledgeable of how it works, you’re likely to only splurge money into the platform without getting much at all. As such, before you get into the platform and start listing your products, you might want to learn about Amazon first. In that regard, this article should be pretty helpful.
