The Amazon seller marketplace is one of the most discussed topics in eCommerce consulting.
Sure, the world’s largest retailer (by market capitalization) has impressive sales and growth figures – nearly $233 billion in revenue generated by more than 100 million members in 2018 – but these metrics usually aren’t relevant or top of mind for early and middle-market retail brands.
Instead, the topic of greatest intrigue for many merchants is Amazon’s share of product searches – more specifically, how to leverage that volume to create an opportunity to win customers.
This interest is coming at just the right time: according to a BloomReach survey, fifty-five percent of all consumer shopping trips begin on Amazon’s search engine, an increase of 25% over the previous year. This figure dwarfs both Google (28%) and first-party branded websites (16%).
Such volume presents a sizable opportunity for small and mid-sized retailers to extend their reach and build a loyal customer base for products sold both on and off-platform. In this article, we detail the steps to create your Amazon product listing, choose the best fulfillment options, manage your customer reviews, and analyze your channel performance.
In order to sell your products on Amazon, you’ll need an Amazon Seller Central account. There are two seller plans available to merchants:
- Individual accounts: For merchants planning on selling less than 40 items per month
- Professional accounts: For merchants planning on selling greater than 40 items per month
Of Amazon’s 35 available product categories, 10 require specific approval before they can be listed and sold. Certain categories such as Shoes, Handbags, and Sunglasses do not require specific approval but do require a professional seller account. Other product categories such as Grocery and Gourmet Food may have separate seller, product, and listing requirements.
To determine whether your product category requires approval, refer to Amazon’s product category page.
Merchants have two options for creating product listings in Amazon Seller Central:
- If the product that you are listing is already available for sale on Amazon (e.g., commodities, resale items): You simply provide condition, price and fulfillment options. After that, focus on winning the Buy Box.
- If the product is new to Amazon (e.g., a private label): You’ll need to provide UPC(s), SKU(s), and create a product description that includes features, descriptions, prices, etc.
The Buy Box
Amazon limits the number of product listings for certain products by providing its customers with reseller options in a region of the product detail page called the Buy Box – a mechanic responsible for about 90% of all Amazon sales.
Some liken Amazon’s Buy Box to Google’s organic ranking algorithm in the sense that both attempt to provide users with the best possible experience. From Amazon’s perspective, this generally means displaying purchasing options that maximize customer value.
While Amazon doesn’t guarantee that sellers will be selected in the Buy Box, all vendors must meet a few minimum requirements:
- Only vendors who have a professional seller account (a.k.a. Pro Merchant) are eligible to be shown.
- Vendors must elect products for Buy Box eligibility.
- The items for sale must be new and available (in stock).
In addition to these requirements, there are several variables at play which can influence your chances of being chosen by Amazon’s algorithms (listed below in no particular order):
- Fulfillment method: Amazon believes that FBA or Seller-Fulfilled Prime are the most reliable ways of order fulfillment; therefore, it stands to reason that these are the preferred methods.
- Landed price: The total price of the item including shipping (from a customer perspective, lower is better).
- Shipping time: Related to fulfillment method (≤2 days is probably preferred).
Other impact variables include order defect rate, feedback score, customer response time, inventory depth, refund rate, and more. Merchants should consider these variables from the customer’s perspective to maximize performance against each relevant metric.
Unlike Google SERP results, the Amazon Buy Box is rotational; however, vendors whose performance with these metrics are thought to be given a more favorable proportion of the rotation.
Product Listing Content
In order to maximize your likelihood of a sale, you’ll need to craft rich, compelling content that outlines the benefits, unique selling points, and details of your product.
Start by outlining a basic understanding of your audience: who will want to purchase the item, why they’d choose it over alternatives, and how they’ll benefit from it (features, etc.).
It’s also important to optimize your content for Google SEO to increase the likelihood that your product listing will rank in Google SERPs. As a general rule of thumb, this means including enough keyword-optimized for the algorithm to properly index and serve your listing in a search result. Avoid using images to display text; instead, use images for product shots.
Amazon sellers have several fulfillment options available to them, including Fulfillment by Amazon (FBA) and Seller-Fulfilled Prime.
Fulfillment by Amazon
Fulfillment by Amazon is the 3PL solution that enables Amazon Prime. Merchants using FBA send inventory to an Amazon fulfillment center and pay per cubic foot for storage and per unit for fulfillment (picking, packing, shipping, returns, etc.). Amazon provides FBA pricing options on their Fulfillment by Amazon page.
Orders fulfilled through Amazon FBA are eligible for Amazon Prime, which can impact Buy Box eligibility.
For some merchants, margins may be too narrow (or the product too specialized) to accomodate FBA. In these cases, Seller-Fulfilled Prime allows merchants to use the Prime badge by committing to two-day delivery at no additional charge for Prime customers. Sellers electing to use this method must:
- Qualify for Seller-Fulfilled Prime and complete a trial period
- Store inventory in their own warehouse
- Process orders and buy shipping labels from approved carriers
- Pick, pack and ship orders same-day
- Deliver orders in two days
- Keep metrics such as cancellation rates below a certain threshold
Be sure to check Amazon’s Seller-Fulfilled Prime page for the most up-to-date requirements.
Ads dominate Amazon’s search results. To illustrate this point, consider the typical SERP below for desk chair. In this example, all but one chair shown is sponsored.
Amazon offers a range of advertising products from product ads (shown above) to display, video, store ads, and its own demand-side platform. Amazon’s DSP is the only way to reliably access Amazon’s exclusive audiences off-platform.
Although it’s possible to use other advertising platforms to send traffic to your Amazon product listings, there are a few caveats:
- The audience is less likely to be purchase-ready compared to someone already on Amazon.
- You won’t have exclusive access to Amazon’s audience; therefore, you should plan to refine your targeting over time.
- You won’t be able to place tracking ‘pixels’ on your Amazon product listing for retargeting.
- You cannot split-test the post-click experience (e.g., create two different versions of the Amazon product listing to optimize for conversions).
With that in mind, LandingCube offers an interesting workaround by creating an intermediary between the DSP and Amazon. The premise is that advertisers can use a middle step between the ads and Amazon to incentivize customers with a promo code. Those in your audience who are not Amazon customers are less likely to click an ad for an Amazon promo code, which can help mitigate the risk of audience mismatch.
Amazon Seller Central provides access to a sales dashboard that displays top-level metrics such as daily orders, sales, UPT, and AOV. Merchants also have access to business reports that indicate inventory availability (stock), brand performance, page views and more.
Third-party analytics platforms such as the Plura Data Platform use Amazon’s API to display KPIs alongside other channels such as your eCommerce platform (e.g., Shopify, BigCommerce).
By pulling these metrics into a platform like this, you can easily compare LTV across sales channels to help you understand where to allocate your advertising budget and send web traffic.
As its share of product searches approaches saturation, Amazon has become an increasingly important sales channel for online retailers of any size. Our brief Amazon seller checklist includes five key dimensions to consider when launching your products on Amazon: Operations (‘Getting Started’), Product Listings, Fulfillment, Advertising, and Analysis. With these aspects in mind, you’ll be better-suited to bring your products to market on one of the world’s largest sales channels.
There are many things to consider when selling products online which include, but are not limited to, tax and regulation. The contents of this page are subject to change. The contents of this page should not be considered tax, legal, or financial advice. Always consult with professionals before starting or operating a business. Amazon seller pricing and eligibility are subject to change. We are not affiliated with Amazon.