By following the directions in this article, “How to Sell on Amazon,” you can begin selling on Amazon and Amazon FBA in the most efficient and time-saving manner possible.
By selling through Amazon Prime, Amazon sellers may most effectively reach a loyal consumer base. Approximately 112 million American households (51,3%) have paid memberships to one of Amazon’s premium services as of the date of this writing.
In the majority of categories, sales of Prime-branded products increase. Customers will understand that you care about them, your business, and your products if you display the Prime badge. Numerous Prime members exclusively purchase items whose packaging bears the Prime emblem.
How can you take advantage of this trend and increase your Amazon Prime sales as a merchant?
Fulfillment by Amazon (FBA) is not the sole option for becoming an Amazon Prime member; in fact, there are three alternative ways to join.
We will discuss the three distinct ways to sell on Amazon Prime, how they operate, their benefits and drawbacks, and how to determine which method is ideal for your business.
Why Sell on Amazon Prime?
There are a variety of advantages to selling on Amazon Prime. There are indications that Amazon Prime items are prioritized in search results.
This is essential for private label sellers, who must compete with a large number of identical products that all carry the Prime brand and would suffer if they did not.
Amazon Prime provides you an advantage over competitors when competing for the Buy Box when there are several sellers of a product. The Buy Box winner is selected by a number of factors, but this is among the most significant.
The shopping patterns of Prime members offer businesses a considerable competitive advantage. Customers generally select “Hide non-Prime products” or “Hide items that are not Prime eligible” to narrow their search results.
This is due to the fact that Prime members have become accustomed to the speedy 1-2 day shipping and cannot stomach the thought of waiting much longer for their things to arrive.
Prime members not only spend more overall but also make more purchases and spend more on each one.
When you make your product available on Amazon Prime, you improve the likelihood of generating a substantial number of sales on the site.
The 3 different ways to sell on Amazon Prime
The following is a rundown of the three different channels through which your products can be sold via Amazon Prime:
Fulfillment by Amazon (FBA)
Amazon Fulfillment by Amazon (FBA) is the company’s full, user-friendly, pay-as-you-go logistics solution. It includes storage, order fulfillment, shipping, returns, and customer service.
Because the FBA program is connected to the Amazon marketplace, when you sell an item on Amazon that is also in an Amazon warehouse, the order is automatically filled.
The FBA program is open to both small business owners and international organizations.
Seller Fulfilled Prime (SFP)
With SFP, retailers can manage their own shipping and delivery while still having their products qualify for Prime badges.
The products are subsequently delivered to the customer by the seller, who either uses its own fleet of delivery vehicles or enters into a contract with a third-party logistics provider.
SFP membership is contingent on consistently meeting demanding criteria and performance benchmarks.
The approach is especially beneficial for companies that manage their own fulfillment (for orders placed through their website or other marketplaces).
Rather than selling directly to customers through the marketplace, Amazon sellers supply Amazon with products at a wholesale level.
You may join Seller Central only if Amazon personally asks you as a vendor.
The vast majority of well-known brands and manufacturers will be interested in Vendor Central, and several have already been invited to participate.
Signing up for Amazon FBA, a highly automated and sophisticated fulfillment network, is the simplest way to begin selling on Amazon Prime.
Your goods are securely stored in Amazon’s warehouses after being delivered to them. Amazon handles all aspects of customer orders placed in response to your listing, including selection, packaging, and shipping.
Any products you send to FBA are eligible for the Prime label by default.
- FBA is simply an outsourcing solution for the fulfillment sector. The cost of shipping or any other component of order fulfillment will not be your responsibility.
- Features include both complete automation and connectivity with the Amazon marketplace.
- Both delivery and customer support are handled by Amazon.
- FBA fees might be less expensive than packing and shipping yourself if you don’t already handle any shipment.
- Amazon has the right to erase any customer reviews that it chooses to do so because of fulfillment or shipment issues.
- In addition to the Prime badge, your listings’ “Fulfilled by Amazon” branding may boost customer confidence.
- For example, the costs of long-term storage may seem unclear and random at first.
- If your company’s shipping costs are high, FBA may cost more than taking care of your own shipments.
- It’s important to keep an eye on your FBA inventory and place new orders regularly. It’s also important to remember to give shipments enough time to arrive.
- If you want to avoid paying Amazon’s “Inventory Placement Service” fee, the company may ask you to send small amounts to multiple distribution centers.
- If your products are “commingled” with those of another vendor, it’s more likely that a bad or fake product from that vendor will be blamed on you.
Who is FBA right for?
FBA can be very advantageous for many businesses, especially those with little to no sales outside of Amazon.
The entire fulfillment process is completely outsourced, allowing retailers to focus their efforts on more worthwhile tasks like product development and promotion.
You can manage customer fulfillment and obtain the Prime badge with FBA in one fell swoop if you only accept orders from Amazon.
If a seller meets one of the following requirements, even if they already have their own shipping setup, they should think about using FBA:
- Want to expedite distribution to as many locations as possible; or
- Not able to serve as an SFP because it doesn’t fulfill the standards.
With FBA’s Multi-Channel Fulfillment (MCF) functionality, firms may sell across many channels without investing heavily in a separate delivery infrastructure. Amazon transforms into a 3PL that can manage orders from any source with MCF.
Due to the increased fees associated with MCF compared to “regular” FBA, it may be more cost-effective to utilize a separate 3PL if you receive significant orders from sources other than Amazon.
Seller Fulfilled Prime (SFP)
Amazon’s Seller Fulfilled Prime program allows businesses to benefit from Amazon’s Prime selling features without giving up control of their inventory or order fulfillment.
To be eligible for SFP, you must consistently meet performance standards, use authorized carriers, purchase shipping labels from Amazon, and ship items on the same day. You cannot add shipping expenses to your order.
- You will continue to oversee inventory and complete orders.
- FBA won’t charge you for shipping or handling; your only responsibility will be to maintain stock levels in your own warehouse.
- You can handle refunds and returns with more ease now that you have this newfound power.
- Heavy and bulky items have the potential to bring in more money because they won’t need to be shipped twice.
- SFP merchants are permitted to provide products with unique storage needs, such as temperature control or brief expiration dates.
- Multiple fulfillment options, such as SFP for large items and FBA for smaller items, are available to sellers with a wide range of products.
- It is crucial to keep a top-notch shipping operation that complies with all SFP rules, including quick order fulfillment and full payment of all costs.
- The costs of setting up and running a warehouse are high, as are those of hiring staff, obtaining the required computer software, and buying and storing products.
- Sellers must fulfill stringent standards, such as the $200 minimum purchase threshold and the ability to provide Premium Shipping for a trial period of 5 to 90 days, in order to be accepted for SFP. There are frequently persons on a waiting list who want to submit an application.
- A seller must switch to FBA in order to maintain their Prime status if they originally satisfy the SFP standards but later find they are no longer applicable.
Who is SFP right for?
SFP is a terrific choice for companies who can already ship through other methods (such as their own website, other online marketplaces, in-store sales, or telephone orders).
Since they won’t have to deal with the inconvenience of managing inventories at a second location, they can continue to use what they already have while maximising their present assets and fixed expenses.
SFP is a wonderful alternative to FBA for businesses that already have a warehouse and staff knowledgeable with Amazon’s order fulfilment criteria.
Certain product types are more compatible with SFP than others. Items that must be refrigerated, contain hazardous materials, or are too large, heavy, or cumbersome to ship through FBA are prohibited.
When entering Vendor Central, everything changes. Amazon invites brands to sign up, and if they do, the business will purchase directly from them at wholesale prices.
Your products will be sold on the Amazon website, and Amazon will handle all aspects of the transaction, including inventory management, shipping, customer service, and refunds. If you permit Amazon to sell your products, they will be recognised as Prime Eligible automatically.
- The vendor portal is simple to use. You simply manage purchase orders and bill Amazon; selling wholesale to Amazon is the same as selling wholesale to any retailer.
- Amazon handles all direct consumer sales. Nobody is thinking of you in this.
- Customers who are sceptical may be persuaded by the “Ships from and sold by Amazon.com” label attached to Vendor Central listings.
- A+ Content, Subscribe & Save, and Amazon Vine reviews can all help marketers.
- Vendor Central’s invitation-only policy is stringent.
- If you want to maximise your return on investment, you should continue to invest in advertising. It may be expensive.
- Amazon will choose which items to purchase and in what amounts. We anticipate that order sizes will be modest.
- If Amazon does not intend to carry your goods, you must either sell it directly to customers or find a third-party seller.
- Amazon may cause prices to fall below your MAP.
- It is possible that Amazon’s contract terms, including the price, are non-negotiable. Consequently, profit margins may be reduced.
- To fulfil Amazon’s purchase orders, you may need to ship multiple minor goods to different destinations, necessitating efficient logistics.
Who is Vendor Central right for?
The programme should be used by producers and brands that only market to wholesale customers. A business should think about using Vendor Central if it lacks the resources or experience necessary to market to customers directly.
Businesses who are mandated under the Product Availability Policy to sell directly to Amazon must also go by the “Standards for Brands Selling in the Amazon Store.”
Do you really need to sell on Amazon Prime?
Before registering for FBA, SFP, or Vendor Central, consider whether you truly need to sell on Amazon Prime.
Amazon.com sells more than 12 million things. Many products that do not have the Prime emblem sell well despite not having it. Many things that do not sell well do so despite having it. The use of Prime does not ensure success.
Having the Prime badge is useful in some situations, but not in all. If that’s the case, does it make sense?
You really need Prime if:
- Even if you offer products under your own label, many of them bear the Prime logo and compete for your customers. This is how most private branded goods appear.
- You must outbid other vendors to get the same third-party branded product displayed in the Buy Box on the same listing; at least one of these competing sellers is a Prime member.
In conclusion, it will be challenging to generate sales if you are directly competing with merchants who provide Prime.
But then again…
You might not need Prime if:
- Most of your marketing efforts are probably already being done for you by brand recognition of your goods. Regardless of whether your goods is eligible for the Prime discount, customers who need it right away will pay the full price. (However, if they are exclusively looking for Amazon Prime substitutes, they could never discover your stuff.)
- Your costs are considerably lower than those of Amazon Prime rivals. Prime suppliers are significantly more expensive, yet it’s still possible to get the Buy Box.
- You own a bookstore where people may buy secondhand books, rare books, and other literary works. Because they are unique, there won’t be as much competition for these.
- Some of the items you sell that are not available on Amazon or do not ship right away include commercial gear or equipment, specialty tools, low-volume parts, etc. It is unlikely that Amazon will promote these items via Vendor Central because FBA is challenging for small businesses.
Final thought: Business type, competition, and demand
Selling on Amazon Prime almost certainly increases sales for the vast majority of sellers. Here are three things to think about when deciding whether to receive your product listings through FBA, SFP, or Vendor Central.
What kind of Amazon business do you start with? Is your goal to sell to customers, businesses, or both? I’m interested in the product you’re offering as well as the precise strategy you’re using to market it.
Next, define the nature of your sector’s competitors. If your products compete with those at similar price points that already have the Prime designation, you will almost certainly need it.
Third, how strong is demand for your products? Prime is effective in high-demand situations. You probably don’t need it if your goods are unique or uncommon.
Finally, you may market your brand and products by quickly and effectively connecting with customers via one of Amazon Prime’s three seller programmes.
Analyze your company’s current situation, decide on the best course of action, and “get ready” for record sales figures.
Frequently Asked Questions (FAQs)
How to sell on Amazon for beginners?
A product listing is required in order to sell an item on Amazon. If someone else is selling the identical thing on Amazon, you can either copy their listing or make a new one (if you are the first or only seller).
How to sell on Amazon for free beginners?
1) Sell a free product. If you’re like me, you probably have something collecting dust. How about Amazon?
2) Register for Amazon. Amazon’s seller account is free. You just need to give Amazon some info.
3) Free Amazon listing. Amazon.com offers over 300 million goods. Therefore, chances are considerable that everything you plan to sell is already advertised. If so, you can join the list of sellers offering the product.
4) Ship when sold. After a sale on Amazon, deliver the merchandise to the customer.
Steps to sell on Amazon without inventory?
How you sell on Amazon without inventory depends on your business’s stage and growth goals. We buy Amazon FBA businesses and turn them into consumer brands. We offer passionate entrepreneurs fast, efficient payouts equal to years’ worth of e-commerce profits. To qualify, your business must have 70% or more of its sales through Amazon FBA and have made at least $200K last year.
How to sell on Amazon and make money?
1. You can sell your own products with your own label on Amazon.
2. Use Kindle Direct Publishing to put out your own books.
3. You can sell in bulk on Amazon.
4. Deliver goods for Amazon.
5. Become a blogger.
6. With retail arbitrage, you can sell things that you bought in a store.
7. Using online arbitrage, you can buy and sell items from online stores.
How to sell on Amazon without GST?
All of us are familiar with GST. We pay GST on everything we buy. But can we be sure about that? This does not appear to be the case. Everything on this list is either GST-free or comes with a zero GST price tag. To find out more about them, read the blog. Goods and Services Tax (GST) is an indirect tax that Cleartax says has superseded other indirect taxes in India. These taxes included excise duty, value-added tax (VAT), services tax (ST), etc. The amount of this domestic indirect tax is determined on the specific goods and services used.