The 5 steps to sell on Amazon
Updated: Sep 16, 2020
Today we are going to summarize the whole process of selling on Amazon in 5 steps to highlight some milestones that every seller should know. No matter the reality of your business, its needs, and the expectations you have for it will mark the steps and strategies you develop. These are the essential steps:
1. Product and market analysis
Amazon has such an enormous volume of business. It sells so many categories and products that, if we do an overly simplistic analysis, we can think that anyone can become an Amazon seller. We recommend you do not start from that premise without doing a preliminary analysis to avoid serious problems later on.
We always emphasize that Amazon is not for everyone, but it will interest you if:
• You have a good profit margin: manufacturers and distributors with good volume negotiations are the ones that can play the most in a market where price is the most important variable. Retailers that are fairer should opt for other channels, such as an e-commerce website.
• Your product has low competition: if you are the only one selling that kind of product, this is for you, but entering a saturated market within Amazon is a barrier in which, fighting for price, you bid farewell to your income margin.
• You don't have your own e-commerce platform: Amazon eats everything and will become your competition by cannibalizing sales.
Find out who is selling the same product and in what price range. You can do it within Amazon's own search engine or use reverse search tools to find them by ASIN (try Helium 10's “Brain” tool, for example).
You also have to understand about the commission that Amazon receives for each sale of your product, even more if you intend to use the FBA service. This varies depending on the category, but they start at 7% and can reach 45% in some specific cases such as accessories for Kindle.
2. Choose the sales regime
Now that you are clear that you can compete on Amazon, you will have to make the following important decision. There is no single sales mode, so you should know them all with their advantages and disadvantages before launching.
You can choose between Seller Marketplace and Seller Retail. The characteristics are:
• Single-customer provider: You only sell to Amazon, not to the end customer.
• Last in the hierarchy: the priority is the customer, then the platform, and, finally, the seller retail. This applies, for example, to any claim or management.
• The negotiation is direct with Amazon: you must make clear what will happen to the excess stock, return policy, or the default payment method of 90 days. Remember that Amazon decides the price at which you market your products. If they decide to sell them at a lower price than the one on your eCommerce or any other platform, they can represent a great threat. In exchange, it will prioritize the sale of these products.
• You sell to an end customer through Amazon, which operates as a simple intermediary.
• You decide the sale prices of each item.
• The negotiation is direct with Amazon: you must make clear what will happen to the excess stock, return policy, or the default payment method of 90 days. You can sell on Amazon as FBM (Fulfilled By Merchant) which is when you as a seller manage from order receipt to logistics, deliver, etc. The alternative is the so-called FBA (Fulfilled By Amazon), where they take care of absolutely everything: You send the product to them and they market it.
The most powerful sales formulas for Amazon are always the ones that interest them the most because they are obsessed with process control and customer retention.
3. Upload your listings or products
Once you've chosen the sales regime and create your account, the next step is to upload the catalog of your products for sale on Amazon. For this, you have to go to Amazon Seller Central and follow the necessary steps.
When the products you want to sell are already in the Amazon catalog, all you need to do is locate them by searching for their ASIN, name, or EAN13 and then add the price and stock that you put up for sale.
If it is not created, you will have to create it by filling in all the required fields and take into account:
• You have to put complete sentences
• Include useful information that avoids customer misunderstandings
• Upload all the images you can
• Mention the product characteristics
• The ways of use
• Warranty policies
There are many other fields that are not essential. Our recommendation is to complete them all and do it with great care. We also recommend working with Feeds and not manually, so everything that is uploaded with Excel Files can be downloaded again using Reverse Feeds. And trust us it will be very beneficial!
Finally, do keyword research to find out how your customers phrase their searches. Use those words in titles, statements, and product features. Combine great texts with high-quality images (at 1,000 x 1,000 pixels).
4. Win the Buy Box
How do you win the Buy Box? Amazon prioritizes the most authoritative sellers and this is calculated based on some signals that its algorithm processes:
Good Merchant Status
You need to prove a track record of at least 3 months with a good sales history before you start speaking. 3 months that can go up to 6 in certain categories.
For Amazon, being ultimately responsible for customer management is always a plus, so if you are on the FBA you will have more options to win the Buy Box.
Amazon wants its customers to receive their products quickly, for something they have a very strict delivery time. Make sure that the percentage of orders delivered on time never drops below 97%.
One of the most determining factors is the final price of the product (including all shipping rates and expenses. If you are in a position to give the best price and the rest of your parameters are normal, you can rank above other competitors even if they have other comparatively better ranking factors.
To automate this process of price search, comparison, and repricing (raise and lower prices as the competition does) you can search for some online payment tools such as Sellics.
Reviews and ratings
It makes sense that if the most important thing is to have satisfied customers, the quantity and quality of the opinions are decisive. You have to stimulate the buyers to the maximum to leave their opinions, ask them directly even adding some detail in the shipment itself such as a simple card.
Always act when you detect bad reviews, take an interest in repairing the problems to avoid incurring claims. Customers have to be satisfied and if they don't they run the risk of losing position (Buy Box and searches) and even if you accumulate too many complaints they can close your account.
When you register your seller account, among all the conditions you accept is the service clause that says that you agree to respond to customers within a maximum period of 24 hours. If you do not, you will be penalized or directly without an account for breach of contract
5. Work the recruitment
You need to drive traffic to your products and, above all, generate sales so that certain traction begins to exist. Amazon only has one premise: it wants to sell the more the better (taking care of the customer so that it is recurring).
As long as you comply with their guidelines and respect the rules of the game, they “reward” the products that sell best. This translates to better internal search (SEO) positions and you will win the Buy Box more often.
You have at your disposal Amazon's PPC (Pay Per Click) platform. It is not that it is a wonder, it is somewhat limited, but in return, it is not as expensive as other alternatives like Google and Facebook Ads.
It works in a similar way to those already mentioned. Campaigns based on keywords, bids in real time and, the product with the best parameters is the one that will occupy a prominent space in searches over those positioned organically.
Anything that drives sales helps you, directly and indirectly, to sell even more. Use all the tools at your disposal email marketing, SEO in commercial search engines, social media, etc., everything that can generate referred traffic is potentially beneficial.
As you can see there are many things that you should take into account, but following these 5 steps, you will sell on Amazon with guarantees.