How do big companies sell to Amazon
Everyone is talking about Amazon for a number of reasons: For one, founder and CEO Jeff Bezos recently became the richest man in the world. In addition, Amazon has the throne as the top-selling Internet giant on the globe - yes, even ahead of Google. Changes are also happening internally: Amazon has just raised the minimum wage for its employees from USD 7.25 to USD 15.
Internet-savvy marketers and web enthusiasts, on the other hand, keep talking about “selling on Amazon”. This is about the possibility for third-party providers to use the Amazon marketplace to sell their own products. Amazon FBA is also used as a synonym, which is not entirely correct, but more on that later.
Anyone who deals a little with the topic can quickly come to the conclusion that everyone can make money with Amazon overnight. But what is it?
How does Amazon work for third parties?
Amazon basically offers everyone the opportunity to sell their own products via its platform. The registration process is very simple and costs just 39.00 euros per month. Anyone who has dealt with it and has provided all data and products can start selling in a few hours.
The simplest variant is to initially only use the platform for sales and to take care of everything else yourself. In other words, if a buyer has placed an order through Amazon, the seller packs the product himself and brings it to DHL (or another delivery service).
The second variant runs via the so-called Amazon FBA, which stands for “Fulfillment by Amazon”. The process here is such that the seller hands over the entire sales process to Amazon. When you place an order, Amazon takes care of the shipping. This has particular advantages in that Amazon can usually ship more cheaply, is much more effective and the seller can concentrate on other areas. But this is only worthwhile if a certain amount of sales can be generated, since Amazon also charges money for storage.
In general, English terms are mainly used in German-speaking countries. For example, the term “seller” and “seller account” is used instead of the seller. In the following, Amazon FBA is almost always equated with “Selling on Amazon”, which is not exactly the same as I pointed out in the last section. However, the term has caught on, also in German.
Here one makes millionaires on the treadmill | Source: screenshot reddit.com
Become a millionaire with Amazon
If you are interested in selling products on Amazon and have googled it before, you will undoubtedly have stumbled upon a few articles with this or something similar:
- Amazon FBA in 24 hours
- Become an Amazon seller in 3 steps
- 10,000 euros with Amazon in 3 months
Some of the “make money online” gurus have shifted their focus to Amazon in recent years, and for good reason. It's a lucrative business to do again. Especially because Amazon doesn't put any obstacles in your way. A look at the Amazon site shows it - you are greeted directly with the "Sell Now" button. Registration is very easy and does not require any special knowledge. Absolutely anyone can do it!
One click - it's that easy to start selling on Amazon | Source: Screenshot Amazon.de
I could also tell you here that you could just make the big bucks with Amazon. But we would not be targetable if we suddenly presented you with guru tactics.
Rather, I like to compare the whole thing with experiences that I have here in Costa Rica. Selling on Amazon is often similar to emigration. I keep having the experience that someone emigrates to Costa Rica and opens a hotel. It can't be that hard, right? Many fail because they have never run a hotel and have no idea of any of the skills required. So why someone thinks that they can become a businessman just because they know how SEO works ... one should understand that.
So you can see in which direction I would like to give food for thought. Selling on Amazon is more than just registering and delivering a product.
How to start selling on Amazon - step by step
The following instructions are aimed at both sellers who already have a product and those who do not have their own product. Sellers who already sell their own product can go straight to step ten.
- General preparations - The following things are required to sell on Amazon: Register a business, set up a business account at a bank, apply for a VAT number, possibly an EORI number for importing products.
- Find product ideas
An interesting and worthwhile product has to be found.
- Market analysis
Compare competitors and prices, find out purchase prices.
- Find manufacturer / supplier
The selected product has to come from somewhere.
- Test manufacturer / supplier / product
Before the product goes on sale, it must be tested.
- Order product
Order final product for sale.
- Make a brand
A corporate design and logo must be created.
- Get EAN
Only products with a valid EAN can be sold on Amazon.
- Preparing Shipping
Clarify how the shipment is to be made and which packaging material is required.
- Plan your initial doctorate
No sales without a promotion.
- Set product details
Set price, create product description.
- Create an Amazon Seller Account
Simple registration at Amazon as a seller (39.00 euros / month)
- Enter product
Register the product in the Amazon seller account.
- Start promotion
Carry out the planned start-up doctorate.
- Dispatch / advice / fire extinguishing - Send orders, answer customer questions, solve general problems with orders, Amazon, competitors and so on.
- Reorder products
Get more supplies before the warehouse is empty.
- Permanent doctorate
Run Amazon advertisements, campaigns with test bloggers and so on.
- To repeat
Selling on Amazon is a "never ending story".
Now, if you look at each of these points in detail, you will quickly find that it is pretty much impossible to do all of this in a few days. At least if you've never done it before. Even if a product is already available and you can go straight to point number ten.
Answer these questions before getting started
Before you give further thought to whether selling on Amazon is an option for you, you should answer the following questions honestly.
Do you have the time
How much time you need to get started on Amazon can already be deduced a little from the step-by-step instructions. And watch out! That is exactly the greatest challenge, the start! Selling on Amazon isn't something you did in ten minutes a day. Especially not if you send the products yourself at the beginning.
In addition to shipping, there are many other tasks that need to be done. This includes, for example: placing advertising, answering customer questions, creating invoices, establishing contact with suppliers or manufacturers and much more.
Do you have the capital to get started?
Registering at Amazon as a seller costs you - as already mentioned - just 39.00 euros per month. But of course that is not all. Even if you find a product that you can buy very cheaply, you have to count on at least 1,000 euros starting capital (and this with a cheap product).
Keep in mind that there will be various costs in addition to the purchase prices. For example for delivery to you and for customs duties.
Another critical point concerns the doctorate. Without a promotion, you won't sell anything. Searching on Amazon is similar to searching on Google. The first results get the most clicks. For new products, there is hardly any way around paid advertisements within Amazon.
Do you want to become an Amazon seller in the long term?
Your answer must be a resounding “yes” here too! Because it is not worthwhile as a small additional income. The effort is simply too high.
In order to make selling on Amazon a worthwhile business, you have to reach a certain level and that can only be done via the crowd. Only then can certain processes be simplified and the business becomes more lucrative.
This includes, for example, the switch to Amazon FBA. However, this is only worthwhile with a certain amount of sales, otherwise the storage costs at Amazon will be too high.
Can you handle the pressure
Selling on Amazon is no picnic. The competition on the platform is extremely high. You won't be alone in any niche, and some of the competitors won't shy away from any tactic to maintain their market dominance.
One false accusation from a competitor can put your product out of circulation for several days and destroy good rankings. Two or three bad reviews from customers (or competitors) can ruin your rating. A supplier can drop out or double its price. Amazon can change its policies.
Inquire once! Almost every Amazon seller has had these or similar experiences. It is part of everyday life as a seller.
Do you have the necessary knowledge?
As I have already described above, an SEO professional or marketer definitely does not automatically become a good Amazon seller. It takes more than marketing experience to be successful. Even if marketing is (as is so often the case) a critical factor. The know-how in sales and distribution as well as a precise knowledge of what makes Amazon tick as a platform is also essential.
Are you ready to start as a seller on Amazon?
Hopefully with my contribution I have helped you to get an impression of what to expect if you want to sell products on Amazon. My idea is to show you that it's basically relatively simple. But I would also like to sensitize you to the fact that a seemingly uncomplicated entry does not automatically lead to success. Achieving an extra income yourself means a lot of effort, both financially and in terms of time.
If you should decide to start with it anyway, you have to look at each of the points I mentioned in detail. In particular, keep in mind that Amazon is a huge machine in which many processes are automated. Even the smallest mistakes can ruin things for you. So prepare yourself well before you open your account and start selling.
Article picture: Martin Mummel / GRVTY
Hello Mr. Rudloff,
Thanks for your comment.
I don't see any way around the credit card.
Keep in mind that Amazon is a huge company that usually looks for the easiest route for itself. In the case of monthly subscription payments, this appears to be the credit card.
Unfortunately, Amazon's support is also very clumsy (to say the least). Accordingly, an inquiry regarding payment options will not be worthwhile here.
Unfortunately, I am not aware of the problem. I might try one of the various Amazon retailer forums. Thousands of other salespeople are active there and something like this may have happened to one or the other. For example sellerforum.de ...reply
Thank you for your comment!
I am glad that you liked my article.
Without a doubt it was my intention to show that it is not quite as easy as one or the other "guru" portrays it ;-)
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