If you sell products online, you should seriously consider looking at how to sell on Amazon as an additional sales channel. If you want to start selling products online, Amazon is a great place to get your feet wet and start making sales quickly.
In Q3 2016, Amazon’s net sales were $32.7 billion. And did you know that 44% of people shopping online go directly to Amazon to do product searches. That number is insane! Check out more statistics on Amazon at Expanded Ramblings.
When I used to sell on Amazon, I was only selling one product and I was getting between $2500-5000 per month in revenue. Imagine if you had multiple products selling a few thousand a month? Those numbers start to add up.
So keep reading if you want to know how to sell on Amazon and start making money online…
Ways to Sell on Amazon
There’s a few different ways to sell on Amazon – wholesale, private label, retail arbitrage or handmade.
Wholesale means that you find other brands’ products to sell, buy them at wholesale prices and then sell them on Amazon.
Private label is when you find a supplier that manufactures a product for you and allows you to stick your brand name and packaging on it. This can sometimes require a bit more money upfront, but less work is involved and the profit margins are higher. With this method, you can also take advantage of Amazon’s FBA program where they take care of the product fulfillment and shipping. That is what I was doing with my Amazon business.
Retail arbitrage is when you find products on clearance at your local retailers like Target, Walmart, Marshall’s, Ross, TJ Maxx, etc., then ship those products to Amazon and sell at a profit. This requires a bit more work on the part of the seller with finding products to sell and physically mailing them to Amazon.
Handmade is a new section on Amazon, allowing people who make handmade products to sell on Amazon in a similar way to how they would sell on Etsy, the handmade marketplace.
Amazon FBA vs Merchant Fulfilled
Now that you’ve figured out what to sell, you’ll need to determine if you’ll have Amazon fulfill (FBA) your orders or if you’ll fulfill them yourself (Merchant Fulfilled).
One of the great things about selling on Amazon is being able to take advantage of their FBA (Fulfillment by Amazon) program where they package and ship your product for you. Using FBA allows your products to be shipped via Amazon Prime, which makes your product more attractive to Amazon’s prime customers.
One of the downsides to FBA is the cost involved, usually around 15%, depending on how much your product weighs, and they have also recently started charging long term storage fees. So if your product doesn’t sell, they’ll charge you for storing it after a certain period of time.
The type of products you’re selling will determine if you’re able to use FBA or if you will fulfill yourself. If you’re wholesaling, private labeling or doing retail arbitrage, you can send your products or have your supplier send your products directly to Amazon’s warehouses. If you’re selling in their handmade marketplace, most likely you will be fulfilling these orders yourself since handmade products are made-to-order.
Create Your Listing
If you’re wholesaling, private labeling or selling a handmade product, you’ll need to create a listing on Amazon. If you’re doing retail arbitrage, you can ignore this section because you’ll just add yourself as a seller to an existing listing.
But before you create your listing or send any products to Amazon, you must first create an Amazon Seller Central account. You can easily register for an account here. It costs $39.99 per month to have a Professional Selling Plan, which you’ll want if you’re going to use their coupon codes and Sponsored Ads. If you’re selling as one of their Handmade at Amazon artisans, they’re waiving the monthly fee until December 31, 2017.
What you’ll need for your listing:
- Product Title with your keywords
- High-quality photos, taken per Amazon’s photo guidelines
- Compelling copy listing the benefits of your product rather than just the features.
For your product title, you have 200 characters that you can use for most product categories so take advantage of this. Make sure to put your main keywords at the beginning of your product title. Add additional keywords but don’t repeat them. Make your title readable, don’t just stuff it with keywords.
An example of a good product title:
An example of a bad product title:
Do not use wording that includes a guarantee, any number one sellers, number one new release, product promotion or five-star product information. These used to be popular product title methods, but they are now against Amazon’s Terms of Service.
Amazon has very specific guidelines on the images used in your listing. If you’re not good at photography, I recommend outsourcing this to a photographer experienced in photographing products for Amazon. I found an awesome guy on Fiverr that provided high-quality photos for my products at a very reasonable price.
There’s a section on your product listing where Amazon lets you add five bullet points describing your product. Again, take advantage of this section. Here is where you want to list the features and benefits of your product. A feature describes the product, like weight, size, color, material, etc and a benefit describes how the product solves a problem. Make sure to really highlight the benefits of your product to get your customer to buy.
An example of highly optimized bullet points:
An example of poorly optimized bullet points:
This section is below the photos and bullet points. It’s another place to describe your product and really sell it. You can use HTML in this section and there’s a maximum of 2000 characters. Brush up on your copywriting skills or outsource this to a copywriter.
Do Promotions and Get Reviews
Besides an optimized listing, having a high velocity of sales and a lot of high, quality reviews is the key to your product ranking and selling well on Amazon.
However, Amazon has recently changed their Terms of Service (TOS) regarding reviews because they are trying to crack down and ensure the quality and accuracy of the reviews of products. Sellers used to be able to give away a highly discounted product in exchange for a review. And the customer would have to disclose in the review that they received the product at a discounted price in exchange for a review.
However, this is now against Amazon’s TOS.
You can still do product promotions and giveaways but you cannot explicitly ask for a review in exchange for the discounted product. Instead, you’ll need to make sure you have a great email follow up sequence in place, building a relationship with your customer and asking for feedback on the product. You can use a service like Feedback Genius to do this. They integrate with your Amazon Seller Central account to send out emails automatically after someone has bought your item, after it ships, once they’ve received it and any other time you set. Their base plan is free up to 100 emails per month.
Turn On Amazon Sponsored Ads
Now that you’ve started getting some sales and reviews, you’ll want to take advantage of Amazon’s internal Pay-Per-Click Advertising called Sponsored Ads to keep those sales rolling in and increase your ranking.
Sponsored Ads is easy to use, you can easily set up an Automatic campaign where Amazon will choose the keywords for you based on your listing. Once you’ve done an Automatic campaign for a week or two, you’ll want to check to see which keywords are working the best and then do a manual campaign focusing on those keywords.
Also, keep an eye on your ACoS (Advertising Cost of Sales). This is your total ad spend divided by your attributed sales. You’ll want this number below 40%, ideally in the 10-20% range to make sure you’ll still making a profit.
As you can see, it isn’t as complicated as you might have thought to sell on Amazon.
Just do your research, figure out what types of products you want to sell and how you’ll fulfill them based on your business goals. Then take action.
So if you’ve been considering selling on Amazon, I say go for it! You’ll learn a lot along the way and quickly start making sales.
If you’re stuck trying to figure out what to sell, take my FREE 7 day course on How to Start an Online Store. Day 1 goes into more details on finding a profitable product and day 2 helps you find a supplier.
Have any tips on how sell on Amazon? Please leave a comment below. I’d love to hear them!