How to Start a Thriving, Cost-Effective Amazon Business
With millions of buyers and sellers, Amazon is the Goliath of eCommerce marketplaces. Amazon empowers individuals and small-business sellers to make a profit while doing what they enjoy. If you’ve ever wondered how to start (or improve) your selling experience on Amazon, here are some helpful tips to becoming a profitable, cost-effective seller, as told by a ten-year Amazon veteran.
You’ve bought random things on Amazon for years. It seems like it would be simple and smooth-flowing process to be a seller. Well, it is; or at least it can be if you are fulfilling each of the following steps:
- Have a Good Product. Crazy, huh? You need a product to sell on Amazon before you can really begin. BUT, there are products that sell better than others on Amazon. Unique, rare, or specialized products sell best on platforms like Amazon. While Amazon has been pushing towards becoming the supplier of all necessities and commodities, most people aren’t going to look-up or buy your package of pens; however, they will search and apparently pay $276 for your “Walt Disney Signature Fantasia BlueAgate Rollerball Pen.” You would be taking baths in PayPal money if you had a constant supply of those.
- Sign Up Correctly. While signing up to sell on Amazon, they will ask you if you want to sell as an individual or a professional. This really depends on your preferences and business size. If you have enough inventory and think you can sell more than 40 units in a month, then sign up as a professional ($39.99 a month)! If you are just starting out, see how you do during your first month as an “individual” ($.99 a sale). Also, make sure to check the lists of what you can sell as an individual or professional before you start!
- Decide How To Operate. All sorts of websites will tell you hundreds of things about the “best-kept” Amazon secrets, such as promotions, winning the “buy box” and Fulfillment by Amazon, where you pay Amazon to store your inventory and fulfill your orders.), promotions, winning the “buy box,” and several others. Each of these things can be good and worthwhile, but if you’re just starting, it’s likely best to focus on the basics and DIY operations.
Listing & Winning the Price War
Compared to sites like eBay, Amazon has streamlined the listing process. If your item is well-known, simply type in the product name while on the “add a product” screen. The same item you want to sell should be there.
Selecting your condition is KEY. Condition is everything to a buyer. If they chose the item “new,” it’s apparently worth it to them to have everything perfect. If they asked for a used item, cosmetics may not matter as much. The in-between “Like New,” “Very Good,” “Good,” “Acceptable,” and other descriptions are vital. Do not short the customer. Obviously, you want someone to buy the product at a higher price, but if the customer buys a “Like New” interactive Elmo toy from you that had been in a fight with your terrier (as seen by a large hole on his foot and missing patches of hair that weren’t specified in your condition description), be prepared for some negative feedback and scuffles on return policy. You must avoid negative feedback. Amazon adds major account restrictions for the slightest negative feedback disputes.
If you’re selling a one-of-a-kind product, you may not need to worry about Amazon price wars. However, for most products, you’ll have to out-duel your competitors. In these common scenarios, you need to stay on top of market variances within your product category. This means that you need to understand what customers are willing to pay and manage your pricing strategy accordingly.
By and large, customers want the lowest price. If your products fall within a competitive category, should this impact your strategy? Of course. Afterall, you’re probably not selling a rare 276-dollar Disney roller ball pen.
Holiday Season, Holiday Paycheck
The Holidays are yours for huge sales. If you are having trouble selling throughout the year, don’t give up or change until after Christmas. On average, third-party sellers on Amazon will sell 3-5 times as many products during November and December than any other part of the year.
In October and November, try to list as many products as possible. Items that didn’t sell all year might start flying out of your garage. Remain competitive in your pricing and listings, but increase your quantity. Great results will follow.
If your items don’t sell at Christmas, then you’ll have to rethink your product and strategy.
Money-Saving Shipping Strategies
Every Amazon seller knows that a true revenue-killer is shipping costs. Customers love seeing ‘free shipping’ on their purchase, but on your end, it can feel like a dagger to spend so much on getting your product to their doorstep.
Other than making packaging modifications, an easy way to save money on shipping is using a shipping software that helps you optimize your shipping operations. Of course, we’d promote ShipCaddie.
With ShipCaddie, you can sync orders from any marketplace (including Amazon), ship with great commercial rates and compare pricing between FedEx, USPS, UPS, DHL and others. In simple terms, ShipCaddie empowers Amazon sellers to be more efficient and cost-effective.
Amazon.com is the premier eCommerce marketplace. If you’d like to join the Amazon market, you’re not too late! Just make sure to start strong, win the listing and price battles, own the holiday season, and ship effectively.
Follow these basic steps, and you could be on your way to bathing in PayPal cash.