Selling your own original product on Amazon is one way to generate early sales with greater profit margins than via brick and mortar retail outlets. Learn how you can easily become a successful Amazon seller.
Traditional brick and mortar retail stores expect to sell any new product for at least double what they pay to purchase it from a distributor or directly from a startup or company.
Getting your product into large retailers also takes time, and proof of previous sales success. This can be tough in the early days of a startup, when your product is ready for sale but hasn’t yet generated enough sales buzz to be appealing to large retailers and distributors.
This is the perfect time to begin to sell your product yourself.
If you sell online, you can eliminate this large cut into your profit margins from retailers and distributors. Selling on your own website obviously has the best profit margins – you essentially take all the profits.
Selling on amazon is a logical second choice, because you can start selling on the platform right away, and their commission on sales is considerably less than traditional retail outlets.
Here’s more good news. If you’ve already done the heavy legwork of developing your product, you’ll probably find bringing it to market on Amazon neither a lengthy nor difficult process.
When broken down as 4 relatively easy stages to complete, you’ll see that selling your product on Amazon doesn’t require painstaking effort to achieve.
Instead, there are a number of sensible criteria to meet, after which anyone can normally begin distributing their products to the public.
Stage 1: Preliminary Prep Work
By this point, you’ve probably done the bulk of work needed to prepare your product for sale. Now’s the time to give your new technology some finishing touches, if you’ve not done so.
It’s important to understand from the start that there are many talented entrepreneurs competing in the Amazon marketplace. Be certain that you’ve done all you can to create the most highly polished final product before entering the public arena.
Making a great first impression with target consumers can quickly pave the road to success for your product. It’s hard to recover from delivering a faulty or defective product, so be diligent about quality control of your first units for sale.
Product Images and Videos
High quality images showcasing your new product are one essential element that’ll be expected.
If you aren’t in a position to produce these images yourself, then definitely hire a pro to photograph your product for you. You can easily and affordably hire professional product photographers on places like Upwork.
The images need to be at least 500 x 500 pixels. A resolution of 1000 x 1000 pixels however, will render a much higher quality image. The product should cover at least 80% of the image, set against a plain white background.
Also, showcase your product in different situations visually. For example, include a photo of the product in use.
If you’ve enrolled your brand in Amazon’s Brand Registry, then you can upload videos that show the product you’re advertising in use.
To add product videos, you’ll go to the Upload and Manage Videos page, and simply click ‘Upload Video’ at the top right of the page.
As well, all relevant technical data will need to be organized and presented when you submit your product to Amazon.
If regulatory laws apply to the sale or shipment of your product, then Amazon requires that all legalities are complied with, prior to listing the product. This may include FCC, UL, RoHS, and other electrical certifications.
This step might involve a learning curve, in making sure that all legal barriers are overcome before going further.
Last but certainly not least, you’ll need to know a few ground rules Amazon has about selling items on their platform.
If you’re selling electronics, then exact policies can be found at Amazon Seller Central. Be prepared to do some research ahead of time regarding any regulations that Amazon may have, which apply to your product.
Stage 2: First Steps Selling With Amazon
First you’ll need to have an account with Amazon. They allow the use of any existing account for buying and selling, but they’ll also let you set up a separate account just for selling.
Setting Up A Seller Account
If a separate selling account is what you want, follow this link. You’ll need to provide Amazon with your business email address in order to set up the selling account.
Here’s what you’ll need to have ready when you open your new selling account: your business email address or Amazon customer account; an internationally chargeable credit card; your government ID (identity verification protects sellers and customers); your business tax ID number; a business phone number; and the bank account where Amazon can transfer proceeds from your sales.
Secondly, you’ll need to choose from two possible selling plans, individual or professional.
An individual plan will cost $0.99 per item sold, and is only suited for sellers who don’t sell many items per month.
The professional plan will set you back $39.99 per month, regardless of how many items are sold. So, if you sell more than 40 units a month, this is the affordable choice.
Also take note that the two plan fees only cover the cost of your having a selling account on Amazon.
Each time you make a sale, you’ll also pay a referral fee based on your product category and certain variables.
In the category Electronics Accessories, for instance, you will pay 15% of the total sales price up to $100, and 8% of any portion of the sales price that is greater than $100.
You can view the full list of referral fees by product category here.
Stage 3: Get Product Listed & Start Selling
Now the fun starts. You want to be putting sales first when you get to this point, because that’ll help sharpen your attitude to a fine edge.
Think like a marketing strategist when you decide on things like the wording you’ll use in your product descriptions. Everything you decide on from this point forward will affect the number of product sales you’ll receive, so craft your pitch very carefully.
As always, there are a multitude of freelance and other professionals waiting to assist, should the need arise.
Creating a product listing
To create a product listing, you’ll either select from a catalog of products and choose one that’s the same as your product, or else you’ll create a new product listing.
If no products in the catalog match yours, then it means you’re selling something that Amazon hasn’t seen before. In this instance, a new product listing needs to be selected and defined.
Next, there are some identifiers of your product that need to be sorted out. In general, all products will need a Global Trade Item Number such as a UPC code for identification.
If your product matches an existing catalog listing, then you’ll get a Product ID automatically. If not, then you’ll need to buy a new UPC code, or ask for an exemption.
A UPC bar code can be obtained from a supplier such as GS1, at prices starting around $30.
GS1 has several package options available, depending on how many products you need to have bar coded. All you need to provide is your product’s name and a product description.
Choosing a sales category
Browse nodes refer to which sales category you place your product into. If you were selling men’s running shoes, for instance, you wouldn’t want to simply toss your product under the generalization of “shoes” only.
You’d want to put your product where it belongs more specifically, listed under “men’s sneakers,” for example.
You’ll also upload your high quality product images at this point, as well as entering in your product description, bullet points and search keywords.
There is a lot of nuance to choosing the best sales category, as well as analyzing the best customer categories and subcategories. Luckily, there are a lot of articles and videos devoted to optimizing your sales category and product listings.
How to best describe your product
Your product descriptions will be of utmost importance in setting up how your product will resonate with consumers. Here’s some quick pointers on things to keep in mind when choosing the wording for these.
Keep your sentencing short, concise, and to the point. This will help keep things extra simple for customers, when they’re shopping.
Make your statements about your product informative, impacting and meaningful.
Sometimes it can be helpful to sell the dream of what the customer can use the product for.
Be as descriptive as you can be about the uses and especially the benefits of using your product. If you’ve developed a new kind of product the world hasn’t seen before, then you’ll need to tell everyone all the important aspects of it.
Be sure to describe in detail what this new product actually does. Leave no room for customer confusion.
Include several search keywords including phrases that might apply to your product.
Search keywords are of high importance. They act like hooks, embedded into your product.
When someone searches for a product using the exact phrase or word you have as a keyword, your product is pulled into their search results by association.
Amazon customers tend to favor product descriptions that are concise, accurate and easy to understand.
If you imagine yourself in the position of customer instead of seller, it should help. It’s easy to understand how someone might have certain questions that need answering and so on, when looking at your product.
Shipping costs are a serious aspect of order fulfillment and can impact your profitability. It’s important to gain a real understanding of Amazon’s process in this regard.
Fixed shipping rates, dictated by Amazon, apply to all items, depending on your Selling Plan. If it somehow costs you more than this amount to have your item shipped, you’ll bear that added expense out of pocket.
If you are shipping your own product yourself, you can use Amazon’s Buy Shipping tool to purchase prepaid shipping labels. But once you reach any significant volume of sales, you should consider having amazon handle the shipping.
In satisfying order shipments, you can choose to ship the goods directly to the customer yourself, or have Amazon fulfill the orders for you. If you go with Fulfillment By Amazon, FBA, then you’ll have some additional fees to deal with.
With FBA, Amazon warehouses your inventory, fulfills all orders, and provides shipping on demand to your customers.
There are a number of benefits to using FBA, the biggest two being your products will be eligible for Amazon Prime free shipping and customer concerns and returns are managed by Amazon Customer Service.
There are multiple service options available, like FBA Small and Light, FBA Subscribe and Save, to accommodate your business should it scale up quickly.
To get more into the details, you can download the FBA getting started guide here.
Stage 4: Promoting your sales
If you’ve followed the steps we’ve discussed, it shouldn’t take long to see your first orders come in. Congratulations, you’ve made it to game day. Time to dance.
To maximize your sales, you may find it useful to watch sales tutorials and read relevant articles.
‘Always be closing’ is a term that’s been a long standing mantra in sales circles. It refers to the proven connection between having a focused sales mindset and achieving an impressive volume of sales.
Advertising and promotion will likely be needed in order to drive your sales to higher levels. This is why I always emphasize building an email list of potential customers from the very beginning stages of your startup.
This way, once your product is for sale on your website or on Amazon, you can direct these people through email to make a purchase.
You can also use your own social media accounts to reach out to potential customers.
Selling products other than your own
As you progress through the logistics of higher and higher sales volume, it may cross your mind to carry more than one product. Great! Excellent idea, and it’s one that can apply to your own products or another supplier altogether.
In order to maximize how recognizable your brand is, it’s a good idea to source products similar to your own, when deciding on which products to add to your seller pages.
Purchasing and subsequently reselling another seller’s merchandise is perfectly alright. If you have a good eye for bargains, you may find deals that leave enough room to resell the items at a profit.
If your product is a home security camera, consider selling other security or home safety related products. If your product is a novel new toy, consider buying other toys in bulk and reselling them.
These products might bring in customers who will want to buy your product in the future.
Alibaba and other similar sites may prove useful in sourcing other products to carry.
Keep in mind that there may be local manufacturers near you who will be willing to sign a deal with you. If you’re persistent, you might even be able to acquire the exclusive rights for distribution on certain merchandise.
Always apply due diligence in finding out ahead of time what Amazon’s restrictions may be, concerning any item you’re looking at selling. Electronics is a category with various limitations.
Things like alcohol and fine arts are both examples of product headings which fall under Amazon’s list of restricted products.
Setting up a storefront on Amazon
At some point you might want to consider setting up a store on Amazon. A store allows multiple seller pages and enough space to elaborate about your brand’s story or manifesto.
In addition to your professional seller’s account, you’ll need to officially register your brand first, before opening your store. You can do this easily with Amazon Brand Registry.
Your product needs to have an active trademark or a pending trademark application filed through Amazon IP Accelerator. Your brand name or logo must be displayed prominently on your products.
Once your brand has been approved by the Amazon Brand Registry, you are permitted to add A+ content to your seller pages. A+ content allows you to add visually appealing multimedia content, like high definition videos, on your seller pages.
If it’s time to build your Amazon store, all you have to do is follow this link, and you simply complete each required step as they are shown.
Becoming an Amazon Vendor
Up until now we have talked about selling your product as an amazon seller. However, there is one other way to sell on Amazon, which is to become a vendor on Amazon. This means that Amazon would purchase your products directly, and then distribute those products themselves.
This is what I did for my own product.
The fundamental difference between Vendor Central and Seller Central is who will be selling your products.
With Vendor Central, Amazon’s retail team buys and resells your products to their customers. With Seller Central, you are selling directly to Amazon’s customers and you’re considered a marketplace or third-party seller.
There are benefits of being listed as a vendor. Using the Amazon brand name creates a higher level of trust with customers, which can lead to more traffic to your product listing.
Vendors also have more ad features on the Amazon platform itself, which also boosts traffic to your amazon listing.
As a vendor, you don’t have to deal with customers directly since you only need to fill a purchase order from Amazon directly. Having a purchase order from a huge retailer like Amazon can open up new funding opportunities, like purchase order financing (PO financing).
PO financing works as a type of loan that can cover the cost of the purchase order while you are waiting for payment from the customer.
Approval for this type of loan is based on the retailer’s credit score (Amazon’s) and not your own score, since technically they are on the hook for the cost of your merchandise that they ordered.
Back when I was selling my own product, my lead sales rep was able to score us a vendor agreement with Amazon. He had an existing relationship with the Amazon buyers since he was already selling several products directly to them.
Sales reps and others with an existing relationship with Amazon is one avenue for becoming a vendor. But you may need to attract some executive attention to yourself through seller excellence.
Extraordinary sales volume combined with stellar business ethics, applied over a meaningful duration, should do the trick. It takes time to get there, yes, but the returns can be high in the end, as well.
To become a Vendor, Amazon recommends that you start by building your own impressive seller page and shoot for maximum sales volume. If they like your performance, then they will consider inviting you to join their Vendor’s Program.
If your desire is to become a mighty merchant on Amazon, the door is wide open. It’s easy to get started and can become incredibly profitable.
Success in sales of this type generally hinges on marketing and advertising, so target those areas especially vigorously.
Just because a product is sold on Amazon does not mean that people will be able to easily find it, so you always need to be marketing.
Other content you may like:
- Why You Need to Stop Over-Focusing on Your Product
- How to Price Your Product for Various Distribution Channels
- Lesson 2: The Strategic Way to Develop and Sell Your New Electronic Hardware Product
- The 6 Parts of a Hardware Startup You Must Conquer to Succeed
- 8 Tips to Ensure Your Hardware Startup Will Succeed
Thank you again John for a highly informative, highly readable article. I looked into selling through Amazon about one year ago. However, I concluded that it was too risky given a low star rating could easily cause reputation damage which may be difficult to ever heal. In other words, I want to know that the product succeeds in the eye of the customer before listing on Amazon. It is a shame, given Amazon would have exposed the product to more customers and avoided the need to build my own in-app shop. One other quick point about getting product photographs – consider getting a local photographer to take the photographs, but then get the image preparation work done by a separate online specialist.