Are you looking to experiment with a different sales channel than your online store, or maybe you have a business idea and are looking for a simple way to sell your product to consumers? Marketplaces are all the rage. Many entrepreneurs want to turn to these multi-seller platforms to sell their products. Amazon is one of the most popular platforms.
Before you start selling products on Amazon, you need to think about it and make sure you understand what you are getting into.
What is Amazon Marketplace?
Amazon Marketplace is an online shopping platform that allows third-party sellers to list (and sell) new (or used) products directly on Amazon. Amazon also offers a service called "Shipped by Amazon" for those who want to outsource the logistics and shipping to the online retail giant.
Businesses authorized to sell on Amazon Marketplace can index, market, and sell their products using Amazon's interface.
If you already have an online store, you even have the option to link it to Amazon Marketplace and have your products sync your inventory to the platform and manage your orders from one place.
Of course, it's not free, and Amazon charges for the ability to sell on Amazon Marketplace, so businesses have a choice of plans, which determine what is due to Amazon.
Amazon Marketplace also allows merchants to customize their product listings, prices, and shipping destinations: these are the "Amazon Stores".
While selling your products on Amazon Marketplace can get you in front of a wider audience, while streamlining orders, the benefit can be debatable: additional fees, fierce competition, and various other restrictions can limit the value of the deal.
Before you decide whether to spend time selling your products on Amazon Marketplace, you need to understand how Amazon works and what this sales channel will cost you.
How to sell on Amazon: pricing
Before launching and selling on Amazon, it is imperative to understand how the Marketplace works. The Marketplace is designed for both private and professional sellers.
You have two options depending on the volume of sales:
Selling as an individual (or small seller)
This section is for anyone who plans to sell less than 40 items per month.
You can only sell items in the following categories:
- Auto/Moto,
- High-Tech,
- Toys-children-babies,
- Culture (Books, Music, DVD),
- House/Garden,
- Industry,
- Tools,
- Travel,
- Sports and Leisure.
The price
The fee will be 0.99$ per item sold, plus various sales and management fees depending on the category of the item in question.
Selling as a professional seller
For those who intend to sell more than 40 items per month, you must subscribe to a "pro" package. This package offers many advantages and costs 39$ per month:
- The removal of the 0.99$ fee per item sold.
- Access to more tools.
- The absence of the "60 days constraint", which obliges to put back on sale the unsold items.
Amazon's complementary services
Amazon FBA
For those who wish to delegate to Amazon the storage of products, their deliveries, and the after-sales service, it is possible! Simply send your stock to an Amazon warehouse. This service saves a lot of time and money on storage costs. The products managed by Amazon benefit from better referencing and become eligible for "premium" delivery.
The price
On the price side, it gets a little more complicated: you will have to pay shipping costs, additional fees (for packaging, tape, bubble wrap, etc.), and storage (the price is per m², based on the nature of your products). The complete price list can be found at this link.
Amzrefund
A complementary tool to Amazon FBA, AmzRefund is software that tracks lost or damaged inventory in Amazon warehouses. It allows you to get your money back, by sending refund requests to Amazon.
This software captures 12% of the money Amazon has to refund...
Amazon Stores
Having a profitable product is not enough, you have to know how to sell it and make it visible to buyers, that's why Amazon, through its various tools, tries to make third-party sellers more autonomous and efficient. These sellers must be able to build customer loyalty and brand equity.
Stores is an Amazon feature that allows brands to design their "multi-page" catalog to showcase and highlight their products. Amazon Store allows brands to capitalize on different sources of internal and external traffic. But also to boost sales by improving its ranking, or to promote new products to existing customers.
Many store templates are available and allow you to customize your store.
The price
For once, this option is totally free and available to everyone.
Amazon has also implemented Amazon Store Insights, which allows you to measure the impact of the Store. Amazon Store Insights provides insight into the performance and effectiveness of the Store. The tool allows you to understand how customers interact with your store and external traffic can also be taken into account, capturing information about the effectiveness of advertising campaigns external to your Amazon Store.
Conclusion
I hope this article gives you a good overview of what Amazon offers to third-party sellers. While the service is expensive, it can be profitable to sell on Amazon as long as you can maintain a gross margin of 50% or more. Typically, Amazon will take 25-30% of your revenue for fees.
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