Selling on Amazon

					Selling on Amazon

       Part 1:
 A Beginner’s Guide
                     First Things First
When selling on Amazon, it is very important to understand Amazon’s
rules. Amazon is the market place and they are also the merchant. They
open the marketplace to third-party sellers but they still view the
customer as an Amazon customer and they have rules in place to ensure
that all customers get the best online shopping experience. Amazon
keeps track of things like order cancelations, late shipments, refund
rates, and, of course, feedback.

Sellers who do not meet these expectations and guidelines are subject
to suspensions and can even be permanently kicked off of Amazon.

Amazon is passionate about customer service. They would rather lose
revenue from poorly performing sellers than have unhappy customers.

I’d say it’s worked out pretty well for them so far.
          Where to Start
Before creating an Amazon account
and starting to list products, read the
Amazon manual.
           Why Amazon Works
• Amazon has built a loyal customer base by
  offering such great customer service
• Their third-party marketplace is organized,
  standardized, and consistent
• Their seller policies ensure that only sellers who
  perform at the highest level are able to maintain
  seller accounts
• Leads to happy customers who want to buy from
  Amazon’s marketplace over and over again
        Amazon Sales Trends
                    Q4 2010
                 Sales up 37%
  First $10+ billion quarter ($12.95 billion)
        Amazon will continue to grow.

The time to get in is now!
   Are my products a good match for
• It will be easiest to start selling on Amazon if
  the products that you sell are already listed on
• If you sell new items and have multiple
  identical units, you can list and sell on Amazon
  quickly and easily.
• Just find your items, add your quantity, price,
  and description and you’re done!
           Notes on Listing Items
• When listing items on Amazon, it is important that the
  item match 100%. The condition notes that you can
  add are only for condition, not differences.
• You can’t list a five-CD set as ‘Acceptable’ condition and
  say that disc number four is missing in the notes. You
  can’t say that your MacBook Air is in ‘Good’ condition
  but has a broken screen and no battery or charger.
• If you do this, the buyer can open a A-to-Z claim and
  you will lose. If you lose an A-to-Z claim, you refund the
  buyer, and the buyer keeps the item.
              That’s Not Fair!
• As a seller, you may think that’s not fair. As a
  buyer, you may think it’s the fairest thing in
  the world. You didn’t get what you ordered, so
  you get your money back.
• Sellers who don’t follow the marketplace rules
  are punished. It ultimately creates a market
  where the good sellers thrive and the poor
  sellers are pushed out.
• Amazon is a buyer’s market!
     Is it Hard to Maintain Amazon’s
• I’m not trying to scare you; it’s really not that
  hard. As a new seller, I just want you to be
  sure that you know what is expected of you.
• Amazon is not eBay; they don’t play around
  and give you 10 chances to learn how to list
  your items. They expect you to read the
  Getting Started Guide for new sellers.
• Learn the rules, list your items, ship your
  orders; you’ll be fine!
             Seller Accounts
• There are two types of seller accounts on
  Amazon - Individual and Pro Merchant.
           Individual Account
• Individual Plan (Sell Your Stuff). If you are
  looking to sell only a few products or expect to
  have less than 40 orders a month, sign up as
  an Individual seller with Amazon which has no
  monthly fee but instead a per product sold
  fee of $0.99.
         Pro Merchant Account
• Professional Plan (Sell Professionally). If you
  expect to have more than 40 orders a month,
  a Professional account provides you with the
  tools and analytics to manage your products
  on Amazon. With a monthly subscription fee
  of only $39.99 plus selling fees on items that
  sell, selling on Amazon is a low-cost, low
  investment, incremental sales channel.
                 Which one?
As your sales or inventory increase, you may question
whether you should upgrade your selling plan to
become a Pro Merchant.

Here's a simple cost-benefit analysis that may help you
decide if a $39.99 subscription fee is worth it: 40 sales
per month = 40 x $0.99 fixed closing fee = $39.60. In
addition to off-setting your subscription fee through
the volume of your sales, you may also benefit from
the bulk listing and order management tools available
to Pro Merchants.
Fees – Open Categories
             Fees – Gated Categories

Amazon ties their payment processing fees into the commission so there is only one
fee to calculate when setting your price.

You may sell in Tools & Hardware which is a 12% commission. Ebay charges listing
fees, 9% Final Value Fees, and Paypal gets about 3% so the fees are basically the
same. But you get a better price on Amazon so your margins are higher.

Super bonus: There is no such thing as a non-paying bidder on Amazon!
   Why does Amazon have Gated
Amazon wants a consistent marketplace that
their buyers trust.

Example: Amazon will not allow new merchants
in the Toys & Games category leading up to the
fourth quarter each year. They do not want their
customers to have a bad experience on Amazon
because a new seller doesn’t fulfill their orders or
a fraudulent seller taking advantage of the Q4
boost in sales.
• If you want to sell toys in Q4 2011, start selling
  now and establish yourself as an Amazon
  seller. A good track record now will result in
  opportunities later.
           Fees Continued
Amazon allows sellers to charge their own
shipping to cover shipping costs. Book and
media sellers are allows to collect a fixed
shipping fee.

Amazon fees are deducted from your
payments account. You don’t have a bill at the
end of the month.

Amazon deposits your payments
directly in your bank account every two
weeks. You can request a disbursement
at any time.
   I Sold Something! Now What?
• You’ll get an email notifying you of the sale
• Log in to your Amazon Seller Account and find
  the order
• Print your packing slip, prepare your shipment
• Enter tracking information to be sent to the
• Confirm the shipment
• Done!
               EBay vs. Amazon
                   EBay strengths:
•   Auction listings (Amazon does not have
•   Collectibles market (eBay is good for one-of-a-
    kind items)
•   Anyone can create any listing at any time
•   Other strengths?
               EBay vs. Amazon
                   EBay weaknesses
•   Constantly redefining itself
•   Variable fees, listing fees
•   Losing customer base
•   Lower prices lead to lower margins
•   Inconsistent listings and search results
•   Price buyers (can be high maintenance)
•   Other weaknesses?
              EBay vs. Amazon
                    Amazon strengths
•   Easier to list (when products listings exist)
•   Flat commission; no listing fees
•   Better prices
•   Better customers
•   Fulfillment By Amazon Program (stay tuned!)
•   Other strengths?
              EBay vs. Amazon
                 Amazon weaknesses
•   Hard to list one-of-a-kind items
•   Not a collectibles marketplace (yet)
•   Limited customer interaction (good thing?)
    makes it difficult to market to your buyers
•   No auction type listings
•   Other weaknesses?
           Think of it This Way
• When you compare eBay to Amazon in terms
  of listing fees, compare them to casting a net.
  When you have listing fees, even if they are
  low, you have to take them into account and
  they will limit the size of your net. You have to
  catch enough sales to justify throwing your
  net because each time you throw your net, it’s
  costing you money.
            The Amazon Net
• With Amazon, there are no listing fees. You
  can throw as big of a net as you want. When
  the cost of throwing your net is zero, you
  don’t have to catch a lot every time you throw
• Just throw as big of a net as you can!
           Differences in Listings
• EBay
  50 sellers, 50 items, 50 listings

• Amazon
  50 sellers, 50 items, 1 listing

• Winner: Amazon
  Easier to find exactly what you are looking for.
  Consistent listings. Search results not jumbled
  with unrelated items
       Search DC9096: 726 results
(multiple sellers with multiple, identical listings)
        Search: DC9096. 58 results
(All sellers with identical listings list under one page. Simple!)
New Merchant Offers
• Feedback on eBay is very common, but less
  common on Amazon. You can expect 5-10% of
  your Amazon buyers to leave you feedback.
• Amazon is a 1-5 scale compared to eBay’s
  positive/negative system.
• This means that even if you have all happy
  customers, maintaining 100% positive
  feedback on Amazon is very difficult to do.
• 98%+ on Amazon is equal to 100%+ on eBay
     eBay vs. Amazon: Summary
• Amazon customers are very different from
  eBay customers.
• On eBay, price is king and buyers will shop
  around to try to save a buck.
• Amazon buyers know what they want and are
  willing to pay a higher price.
• Prices on Amazon should always be higher
  than on eBay.
Differentiating Yourself on Amazon
    You may see Amazon’s product pages and seller
    offerings as only being differentiated by price. This is
    not the case. There are many ways you can
    differentiate yourself as a seller on Amazon including:
•   Feedback
•   Description
•   Price (not all buyers are price buyers)
•   Return Policy
•   Featured Merchant status
•   FBA (stay tuned!)
             Creating Listings
• You are able to create your own listings on
  Amazon, however you are restricted to listed
  in the Everything Else category. Buyers can
  find you here by searching, but your product
  will not be categorized for customers to find.
  You can upload pictures as well.
  Adding Products to the Amazon Catalog

• You can add your product to the Amazon catalog
  if your product has a UPC code. Just follow the
  steps for creating a new product on Amazon and
  enter the UPC code when prompted.
• This allows Amazon to keep a consistent
  marketplace by easily identifying identical items
  and listings. If you enter a UPC that is already tied
  to a product, Amazon will take you to that
  product page where you can then list your item.
My products don’t have a UPC and I
don’t want to list in Everything Else!

No worries! This is one of our best kept
secrets. Without this, we would not have been
able to leverage Amazon that way that we do.

     You can BUY a UPC.
There are many sites that sell UPCs
      Creating Listings continued
• Being able to add ANY new product to the
  Amazon database is very powerful. You can be
  the first to market with any item that Amazon
  doesn’t sell
• Only problem is that other sellers can piggy-back
  (leech?) off your newly created listing
• If a UPC costs you $20 and you sell 200 items with
  that listing, it’s only $.10 per item.
• If you sell out or do not use the UPC for that
  product anymore, you can change the Amazon
  listing to something new. It’s YOUR UPC.

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