How to Sell Your Product on Amazon Next?

A lot of retailers and wholesalers look to sell their product on Amazon as it is the biggest marketplace in the world. However, it takes a lot of time and patience to manage your Amazon account well.

Step One

Step one asks sellers to set up one account and send Amazon a product feed. Your product will then come in market place listing which users on Amazon’s website can access from time to time if it matches their search query.

Important thing to keep in mind is that Amazon doesn’t direct shoppers to the merchant site as all transactions have to be performed on Amazon.com

Step Two

There are various ways of selling on Amazon to maximize your profits.

A)Sell to Amazon Directly

Selling to Amazon is an Invite Only Program which means that you will sell your entire inventory to Amazon which it will market and sell according to its strategy. It is sold at wholesale rates with Amazon maintaining ownership. The price and shipping options are then selected and quoted to customers by Amazon.

Benefits of Selling Directly To Amazon

  • No hassle of pricing, shipping and other logistics
  • Bulk Purchases
  • Special offers on products can only be selected by Amazon as they have access to the tool
  • Amazon has exclusive access to projection tools

B)Sell on Amazon

Selling on Amazon is more work that selling to Amazon but it allows you more control and helps you get a bigger margin in the price. There are two options available to sellers which are FBM and FBA. Fulfilment by Merchant (FBM) means that the sorting, packaging and shipping will be done by the merchant whereas Fulfilment by Amazon (FBA) states that it will be done by Amazon.

Benefits of Selling on Amazon

  • More exposure for your products as it a huge brand which a lot of unique monthly visitors that means more customers
  • Capitalization on its branding since Amazon is known for its wide range of products and ease of shopping.
  • Bottom line people visit Amazon who are the most likely to buy
Benefits and Disadvantages Sell on Amazon Sell To Amazon
Exposure Chance of getting more users on your website Not Applicable
Brand You get to capitalize on Amazon’s Branding Not Applicable
Fulfilment If you select FBA then you need to handle fulfilment Amazon handles pricing, order fulfilment and logistics
Overstock Not Applicable Amazon can decide they overstocked and return items
Shipping Products can be shipped during FBA or FBM Vendor pays shipping and does not get UPS rates that you get through shipping
Payment FBA payment takes 2 weeks Amazon doesn’t pay vendor for items for 90 days

Cost to sell on Amazon

The listing on Amazon is free but all sellers have to pay to Amazon which varies from product to product. There are two types of seller of Amazon with the first being an Individual seller who has to pay 1 dollar for every item sold and then shipping separately. Moreover if you sell more than 40 products in a month then you should for pro merchant programs where you have to give 40 dollars a month and the money comes straight to you.

Amazon’s CPA Model and Referral Fees

Amazon not only charges you one dollar on every item sold it also charges a referral fee which varies from category to category. For Example if you sell a wheel on Amazon for 100 dollars it will keep 10 dollars (10 percent) as referral fees.

Referral Fees for All Categories

  • Amazon Kindle – 15%
  • Automotive Parts and Accessories – 12%
  • Tires & Wheels – 10%
  • Baby Products (not including Baby Apparel) – 15%
  • Books – 15%
  • Cameras and Photos – 8%
  • Consumer Electronics – 8%
  • Electronics Accessories – 15% for items under $100 (item price + gift wrap charge);
  • 8% for over $100; minimum referral fee of $1.00
  • Entertainment Collectibles – 20% for items under $100 (item price + gift wrap charge);
  • 10% for items $100-$1000;
  • 6% for items greater than $1000; minimum referral fee of $1.00
  • Home & Garden Products (including Lawn & Garden, Pool Supplies, and Pet Supplies) – 15%
  • Industrial & Scientific Products (including Food Service and Janitorial & Sanitation) – 12%
  • Kindle Accessories – 25%
  • Music – 15%
  • Office Products – 15%
  • Personal Computers – 6%
  • Shoes, Handbags, and Sunglasses – 15%
  • Software & Computer Games – 15%
  • Sporting Goods – 15%
  • Sports Collectibles –
  • 20% for items under $100 (item price + gift wrap charge);
  • 10% for items $100-$1000;
  • 6% for items greater than $1000; minimum referral fee of $1.00
  • Tools & Home Improvement Items – 12%
  • Toys – 15%
  • Unlocked Cell Phones – 8%
  • Videos, DVDs, and Blu-Rays – 15%
  • Video games – 15%
  • Video game consoles – 8%
  • Watches – 15%
  • Any other products – 15%

Amazon Variable Closing Fees

Amazon Variable Closing Fees is fixed for media products and varies for non-media products. It is related to the shipping of your product.

Amazon Variable Closing Fees for Media:

This is for domestic standard shipping, domestic expedited and international shipping, except where indicated.

  • Books – $1.35
  • Music – $1.35
  • Software & Computer Games – $1.35 for domestic standard and expedited shipping; N/A for international
  • Videos & DVDs – $1.35
  • Video Games – $1.35 for domestic standard and expedited shipping; N/A for international
  • Video Game consoles – $1.35 for domestic standard and expedited shipping; N/A for international

Amazon Variable Fees for Non-Media Products:

  • Domestic Standard Shipping: $0.45 + $0.05/lb
  • Domestic Expedited: $0.65 + $0.10/lb
  • International: N/A

Amazon Selling Structure for Books

The Amazon fee structure for sold books is pretty simple now that you are aware of all the metrics and the amounts charged. For Example: Say if you sold a book for 20 dollars and the customer paid 4 dollars on that for shipping and he did not want a gift wrap for that so the total amount paid by the customer will come to 24 dollars.

Now the amount deducted by Amazon will be 1 dollars and 35 cents as variable closing fee and 15 percent of 20 dollars which is 3 dollars as referral fee for books. Also since you are not a pro merchant subscriber it will deduct one dollar as item fee and pay you 18 dollars and 65 cents.

Don’t be daunted by these charges as the scope of selling your product on Amazon and making a profit is huge even if you are a knock off vendor or have a high quality product.

(Feature Image Courtesy : Warrior Trading News )

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