Selling your business’s products on Amazon carries one huge benefit: expanded reach. The e-commerce giant has more than 310 million active customer accounts worldwide and accounted for 43% of all online retail sales in 2016, according to market research firm Slice Intelligence.
You’ll also have the option of tapping into the 80 million Amazon Prime members who get free two-day shipping on eligible orders.
“The Prime program is a huge factor in people’s purchasing decision, and a lot of customers will screen out anything that isn’t Prime eligible,” says Kiri Masters, co-founder and CEO of Bobsled Marketing, a digital marketing agency that helps businesses sell on Amazon.
However, there’s no guarantee your small business will succeed on Amazon in a competitive market. Here are three quick tips to help you get started.
1. Determine whether your product can be sold
More than 20 product categories don’t require Amazon’s permission to sell, including beauty products, cameras and photo gear, and equipment for home and garden, home improvement and sports.
If you sell automotive and powersports products, clothing and accessories, fine art, grocery and gourmet food, jewelry or other items, you’ll have to submit an application for Amazon’s approval.
To sell more than 40 items a month or sell products that need Amazon approval, it’s best to sign up for Amazon’s professional plan, which costs $39.99 per month (plus per-item fees). You can sell an unlimited number of items under the pro plan.
You can get by with an individual plan if you sell fewer than 40 items a month and they don’t require the company’s approval. While there’s no monthly fee, you’ll pay 99 cents per item for each item sold, plus referral fees, which hover around 15% for most products.
Among the prohibited products are offensive items that promote violence, intolerance based on race or sexual orientation (such as anti-LGBT merchandise), illegal drugs and weapons, pornography, any product that contains tobacco, and e-cigarettes. Read Amazon’s community guidelines carefully.
2. Make your product stand out
After you’ve determined your product may be a good fit to sell on the site, it’s time to focus on creating a listing that stands out from competitors.
- Fill out your listing with a relevant title and clear product description so it is search-friendly and customers can easily find your product.
- Upload high-quality images that give customers a feel for the size of the product and its packaging. You are allowed to upload one main product image and up to eight alternative images. A white photo background is required for main product image and recommended for the other images. The company also says the additional images should show different sides of the product, the product in use, or other details that aren’t visible on the main image.
- Check out products in your category that are selling well relative to others, Masters says. Products that sell the most in a category are ranked higher in the “best-seller rank” of each category. You can also download browser plugins such as JungleScout, which helps you determine how competitive a product is and how much it’s selling each month.
- Customers are less likely to buy a product if it has no reviews, Masters says. Consider pricing your product lower initially to get orders. Provide great customer service and then ask satisfied customers for a review, she adds.
- Consider paid advertising to get to the top of search results, if your budget allows, Masters says. Your product would appear at the top of an Amazon app or website search as a “sponsored” result, and you would be charged only when a customer clicks on an ad.
3. Decide how to fulfill orders
You have two options: Handle fulfillment and shipping yourself when an order comes in, or go with Fulfillment by Amazon, or FBA, a form of dropshipping.
When you handle it yourself, you store products in your home or business, and you’re responsible for packing and shipping orders.
With FBA, you ship products to Amazon and they are stored in its fulfillment centers. The company handles all packing, shipping and returns from there. Using FBA makes your products eligible for Prime free two-day shipping, which can help you reach more customers and speed up the sales process.
The cost for FBA depends on the size and weight of your product. It may not be worth it for products priced under $10 due to low margins, or heavy or oversized products due to the cost of shipping the product to Amazon and the FBA fees, Masters says.
Businesses can use Amazon’s FBA revenue calculator to compare costs and profit margins for fulfilling orders yourself or using FBA.
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