To make sure your products are primed for success on Amazon, check out this post to see nine things you should know before you get started.
Amazon is a big, exciting place for online business owners to broaden their customer bases and boost their sales. But before you start your journey into the Amazon treasure trove, let’s answer some questions about the basics of this platform to prepare your business up for success.
The basics of selling on Amazon
To get a good idea of how your business will perform in this marketplace environment, you’ll want to get a clear picture of what selling on Amazon entails.
1. What is the Buy Box?
When browsing on Amazon, customers will navigate to a product’s main page and click on the “offers” links below the product description (as indicated by the red circle on the screenshot below) to see the majority of available sellers.
However, Amazon also gives merchants the ability to compete for the coveted “Buy Box” – the CTA button in that familiar shade of yellow. $56 billion of Amazon’s $62 billion sales happen right here, so it’s important to understand how it works.
This is the Buy Box. Understand it, and live by it.
The Buy Box is the box on a product detail page where customers can begin the purchasing process by adding items to their shopping carts.
2. How does Amazon determine who wins the Buy Box and the order of the merchant offers list?
Because a key feature of the Amazon platform is that multiple sellers can offer the same product, becoming the featured seller who wins the Buy Box is very difficult. In fact, it’s pretty unrealistic to think that your site is ever going to get ranked high enough to become the featured seller. But even if you never win the Boy Box listing, it is still important to understand how it works and how different parts of your site are weighted. Many of the things Amazon values fall in line with ecommerce best practices, so it’s in your best interest to be doing these things anyway.
A number of factors affect where a merchant appears in the offers list, including:
- Competitive pricing. This includes not only the product cost, but shipping costs as well. Many shoppers expect to see low prices while browsing Amazon.
- Competing offers. Generally, the more sellers there are, the harder it is to climb to the top.
- How much history the merchant has on Amazon as a seller. Merchants who have long, positive selling histories with Amazon have better chances of obtaining one of the top spots.
- How many Seller reviews the merchant has on Amazon. Online reviews have a huge impact in driving sales, and can really end up making or breaking your business.
There are many other factors as well, and there are some pretty good articles out there about how to optimize your sales. As a general rule of thumb, the most effective solution is to ensure that any transactions you receive through Amazon run as smoothly as possible. That means delivering your product in a timely manner and communicating with your customers along the way.
However, if you’re looking to break into the market a little quicker, here are two shortcuts that can help:
Start by selling a low-competition item to boost your seller ranking. This will increase the probability that the offer will show higher for more competitive products.
Try offering a very competitive price on a popular product. This draws in bargain shoppers and can increase your seller ranking. You can check out Amazon's "Most Wished For" list to see the most popular items by industry if you need some inspiration.
3. What is Fulfillment by Amazon (FBA)?
Fulfillment by Amazon is a program where you send your merchandise to one of the many Amazon fulfillment centers to be stocked; then customers buy products from you, and Amazon ships them. This sort of arrangement allows you to focus on other aspects of running your business while Amazon handles many facets of shipping and customer service. Other benefits include extending the reach of your products to Amazon Prime members, and gaining an extra push towards winning the Buy Box, even if your products have a bit of a higher price. With Volusion, merchants have the ability to set up different shipping options including dropshipping, which allows flexibility to try using FBA. You can learn more about Fulfillment by Amazon here.
4. What types of merchants tend to benefit the most from selling on Amazon?
Three kinds of merchants tend to perform particularly well on Amazon:
- Merchants selling unique-to-them products. (e.g. companies who produce their own products, such as a company that designs its own jewelry)
- Merchants who sell hobby or niche products. Amazon generally won't start fulfilling or carrying hobby or niche products, so there's less of a risk you'd have to compete with Amazon itself.
- Merchants selling refurbished or used products. Amazon has a huge market for these products, as they attract shoppers whose main concern is price and don’t mind waiting on shipping. It is worth noting, however, that used products cannot win the Buy Box spot.
That said, the benefit of owning your store’s URL and fully branded website cannot be overstated; this gives an extra level of credibility and authority, and visitors are more likely to remember you versus someone else. Many merchants who achieve popularity on Amazon still find it essential to have control over their own ecommerce website and branding. This allows them to achieve a fully independent store presence and market to large audiences outside of Amazon through other marketing channels.
Other frequently asked questions about selling on Amazon Marketplace
Now that we have the basics covered, let's get into the nitty-gritty. Here are a few common questions about the details of selling on Amazon:
5. Why should I associate one of my products with an Amazon product that's already listed?
Products are only allowed to be listed once in the Amazon catalog, so creating a second product detail page for an existing product will result in your listing being removed. By matching your product to the product detail page that already exists, your offer has a chance to be seen.
6. Why can’t I use certain shipping methods at first?
Amazon doesn’t allow new merchants to offer certain shipping methods right off the bat, such as two-day shipping. These shipping methods have to be earned by establishing a history of reliable shipping at the slower shipping speeds.
7. Why aren’t I being compensated correctly for shipping?
Amazon determines how much they think it should cost to ship a product based on the merchant’s origin, the customer’s address and the given weight of the product. However, oftentimes the amount of money that Amazon reimburses merchants for shipping won't match the actual shipping cost.
8. How can I increase the number of reviews on my Seller account?
Please note that merchants are forbidden from soliciting or paying for Seller Account reviews. Any sellers who engage in these practices risk having their accounts suspended. Your best bet is to give customers a great shopping experience (including aspects like product price, clear and informative customer communication and shipping reliability) so they want to vouch for you on their own. If your business is hurting for reviews, we have some advice to help you out.
9. Are there any policies I should look over before I start selling on Amazon?
Here are some policies you may want to review before selling on Amazon:
- Product detail page rules
- Shipping policies
- Policies and agreements
- Selling Policies
- Prohibited seller activities and actions
When deciding to sell on Amazon, the best advice we have is to know your business, and know what you're getting into. A new Amazon integration means a lot of new opportunities. By doing your homework and focusing on your business' needs, you'll be taking your online success to the next level in no time. If you're interested in checking out what Volusion can offer with Amazon integration, click the button below to start your free trial today!