Amazon Seller Cheat Sheet: What are the ways you can sell on Amazon?
Friday, February 8, 2019Lindsay Hampson
We all know, Amazon is taking over the retail world, posting record-breaking stats with more items ordered worldwide than ever before
. I promise this is not yet another blog on how massive Amazon is, by the way.
The truth is that Amazon IS taking over the world. People and businesses are selling on it. It is no secret that it is a lot of work to get your product up on Amazon, and even more work to get sales and meet high-bar requirements.
There is no local Amazon Seller Information kiosk (wouldn’t that be ideal?) that you can walk into. No human that can share exactly what it takes to sell and be successful on Amazon.
I hope our Amazon Cheat Sheet: The Ways You Can Sell on Amazon video
and this blog help answer some of your questions around ways you can sell on Amazon.
Amazon seller types - Let’s open that can of worms
Pop-quiz: What do all these eCommerce Managers and Business Owners have in common:
- “I’m selling to Amazon. They buy in bulk from me and they sell and ship.”
- “Yes. We’re selling on Amazon. We decide price and inventory.”
- “Our batteries are ‘white labelled’ on Amazon.”
- “I ship to my customers that order on my Amazon store.”
- “We have a Seller Central Amazon account…”
Simple answer: They sell on Amazon. Anyone confused? [all hands raised] Let me break the ways you can sell on Amazon.
Amazon seller type cheat sheet
The draw to sell on Amazon is that you can grow your bottom line, and your base of satisfied customers. Amazon has 2 main options for brands, merchants, businesses, sellers, or entrepreneurs.
1) Sell TO Amazon: Vendor Central
Let’s say you have a warehouse full of drink coasters. The coasters are innovative and well made. It must be your lucky day because Amazon wants to buy them from you and sell them for you.
Selling TO Amazon can work in two ways:
- Ships from and sold by Amazon.com <-- this is most common and materials go through Amazon Warehouse
- Vendor Central Direct Fulfillment <-- Amazon does not stock the items but still sells it in its own name
Either way, selling to Amazon is invite-only. It eliminates your need for marketing, pricing hunting, competitive analysis and more. You sell in bulk pricing to Amazon, and they sell for you. Then, they pay you.
The details of selling to Amazon:
- Bulk pricing (sell more, but at a reduced cost)
- Invite only
- Standard payment terms
- Less control over prices
- Potential for larger volume
- Payment to you by 90 days
2) Sell on Amazon: Seller Central
The opposite of selling to Amazon is selling on Amazon, as a third-party seller. It is significantly more work, but in turn you get more control on pricing, marketing, and inventory. “Sold by seller.”
The details of selling on Amazon:
- Anyone can sell
- Quick payment
- More control over inventory and prices
- Potential for higher margins
- Control over listings, inventory and shipments
Within “Selling on Amazon” your next decision is whether to ship (fulfill) yourself, or let Amazon ship (fulfill) for you by sending your products to Amazon Fulfillment Centers.
- a) Fulfillment by Amazon (FBA) – Sellers leverage Amazon’s fulfillment for products sold on the Amazon Marketplace
- Payment to sellers come in every 2 weeks and millions of third-party sellers do this. FBA adds up to 50% of what Amazon sells.
- This is how FBA flows: You send Amazon your inventory, they receive it and store it, customers order the product, Amazon picks/packs/ships, Amazon covers customer service and returns and then you are paid.
- b) Fulfilled by Merchant (FBM) – Sellers handle fulfillment for their products sold on the Amazon Marketplace
- Payment still comes every 2 weeks for Amazon sellers.
- This is how FBM flows: You store inventory, customers order the product, you pick/pack/ship, Amazon covers support and returns and then you are paid.
In each case, Selling on Amazon is a fancy term for you placing your product on the Amazon marketplace. If you sell TO Amazon, Amazon oversees making sales and controlling price, shipping, returns, and customer support.
How much does it cost to sell on Amazon?
Everything sold over the Amazon Marketplace makes Amazon money. This money is called an Amazon Seller Fee. While this topic would take us on a sidebar tangent, I’ll touch on it for just a moment now.
Amazon Seller Fees break down into two groups:
1) Flat Fee ~ $1 for each item sold OR $40/month for the Pro Seller
2) Sales Percentage Fee Based on item’s category (Sporting Goods, Electronics, etc), Amazon will take a cut of the sale price
Missed the video on ways you can sell on Amazon? Click below to watch it.