9 Things You Need to Know Before Selling on Amazon

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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.

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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.

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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.

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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.

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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.

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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.

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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:

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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.

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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.

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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.

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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.

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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:

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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!

 

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37 Responses to “9 Things You Need to Know Before Selling on Amazon”

  1. Shahid

    Right now I am trying to be on Amazon here in India. In process to get VAT (value added tax). If I need to have bar code for my products as well?

    Reply
    • Anjuli Desai

      Hi Shahid, Thanks for reaching out! Based on our research, VAT and CST are required to sell online in accordance with Indian laws. You need to provide VAT and CST numbers to Amazon at the time of registration. However, if you are selling only VAT exempted categories, then this may not be required. Note that if you start selling any taxable goods, you need to register for VAT and CST as per sales tax law and provide VAT and CST to Amazon. You can contact Amazon directly for more details here: https://services.amazon.in/standards/contact-us.html. Good luck!

      Reply
  2. matt mikaelson

    These all points are really important but trends are changing frequently so every amazon seller now days wanna know which is product is best and what is the keywords ranking. So I am recommending them to use AMZInsight Amazon Market Research Tool.

    Reply
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  5. Jonathan

    Can anyone tell me how the shipping in Amazon works, like do you ship it to Amazon and they switch out your box with one of their boxes or do I need to buy an Amazon box or do they send you one to ship their product in?

    Reply
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  7. JAY

    HI THERE CAN ANYBODY TELL ME HOW TO FIND OUT THE SELLING HISTORY OF ANY PRODUCT ON AMAZON,LIKE ON EBAY U CAN SEE UNDER ANY PRODUCT IT SHOWS YOU HOW MANY UNITS OF THIS PRODUCT HAS ALREADY BEEN SOLD AND WHEN U CLICK ON SOLD IT SHOWS YOU ALL THE DETALS ABOUT PRICING AND DATES ETC. SO COULD ANY BODY PLEASE TELL ME IF THERE IS ANY THING LIKE THAT ON AMAZON ALSO WHERE I CAN CHECK THE HISTORY OF ANY PRODUCT OUT, MANY THANKS .

    Reply
  8. Melanie James

    There are a lot of ways to profit from selling on Amazon. Even if you don’t have your own product, profitable inventory is everywhere if you learn how to find it. But it is important to do your research and learn about sales rank and sales history. What I love about Amazon is that it takes a lot of the guess work and risk out of choosing products to sell because it provides so many helpful stats. We make our living selling on Amazon doing arbitrage (buying low at retail stores to resell on Amazon) and have branched into wholesale as well.

    Reply
    • Alex Cornelson

      how do you know which products are selling well and which aren’t??

      Reply
    • meera kharbanda

      How do you find items to sell on amazon??? Im trying to buy from retailers at cheaper price and then sell onto amazon but anything i find isnt cheap enough or the sales rank is low. help please !!!! thanks!

      Reply
  9. Heather

    Wow! Great feedback and great article. It is a really helpful to hear from other Volusion customers their experience with Amazon. These responses may have just saved me a bundle of money and lots of my time! Thanks so much to everyone who told their story.

    Reply
  10. Scott

    Can You Please help me to list my Product on Amazon?

    Reply
    • Sharanya Srinivasan

      Hi Scott,

      Here is a helpful article on how to sell on amazon directly from your Volusion store. If you are looking to advertise your products on Amazon with Amazon Product Ads, you can learn more about that service here

      Thank you.

      Sharanya

      Reply
  11. Mike WiLL Made-It

    Thanks for posting this! It is almost exactly what I was looking for. Keep the great content coming!

    Reply
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  13. Marilyn

    I have sold on Amazon since 2006. Slowly but surely Amazon has taken over selling the same new products I have offered and essentially dominated each product listing (of course they will give themselves top positioning – right?). My business has declined dramatically over the last few years because Amazon is a tough competitor. As long as you sell something Amazon doesn’t sell, you might have a chance, however there’s plenty of competition from other large third party sellers in this very large marketplace. I’m grateful for the sales I’ve had but you really have no identity – it’s all about Amazon.

    Reply
    • Karen W.

      I hope a lot of people see you reply, Marilyn.

      DO NOT, I REPEAT: DO NOT SELL On Amazon unless you manufacturer what you sell! If you do well they will go around you and buy direct from your source and cut you OUT.

      Reply
  14. DANIEL SERVERN

    Thanks for the opportunity to have read this and I will consider it and I’ll come back in the future, to look at what others are saying about the subject.

    Reply
  15. LENTSCH

    Hey there, You’ve got done a wonderful job. We’ll undoubtedly digg the item along with professionally suggest in order to my pals. Most likely they’ll be taken advantage of this site.

    Reply
  16. Subbu

    I can understand your comments. I tried to sell a book through Amazon which weighs 2.4kg. Amazon offered 4 GBP as shipping charges and after my exhaustive check , i found the minimum shipping charge is 20GBP from UK to Sweden. Amazon’s commission on top of my shipping loss of 16GBP is 13 GBP.Total loss is 29 GBP. The maximum price of our product is defined by competition and how much we loss is decided by Amazon.

    Reply
  17. Charlie

    yeah, i agree with Fionnuala Keen as well

    Reply
  18. Fionnuala Keen

    Absolutely agree with Mary Ann. Amazon is not a valid platform for building a customer base for your own business it just adds to Amazons already huge empire. They have just pinched my best -selling line – not impressed!

    Reply
  19. John

    The points mentioned by other customers are definitely valid. We sold on Amazon for a couple years. What Amazon is banking on is you doing all of the work to add descriptions, products, pictures etc. to their site. If any of those items are a success they will start selling them and even though you are listed as a vendor you will never get another sale. You are doing all of the leg work and they will, in the end, get all of the benefit. And they get a 15% cut of your sales before they cut you out.

    I’m not sure how the Volusion integration works but beware when providing Amazon with the same descriptions you have on your website. Those descriptions will not only be on Amazon but hundreds if not thousands of other sites will pick them up and use them. This will be a disaster for your SEO work and can make your site look unoriginal and customers will think you ripped there work off and not the other way around.

    If you make your own products and can make sure Amazon can’t sell the product themselves then I think it is a great place to sell your product. If not then stay away or learn the hard way.

    Reply
  20. Roger

    We have used Amazon for many years and our experience is similar to those above. Amazon are great at getting footfall but the cost for that is 15% of your selling price including shipping!!! This is fine if you are a manufacturer or wholesaler selling at full retail but difficult as a retailer when buying at wholesale and still wanting to be competitively priced. We have also experienced the problems of Amazon “stealing” the best sellers by enticing suppliers to sell direct. In all good for Turnover, devastating for profit – Hence we have moved to our own Volusion website.

    Reply
  21. Gary Turnbeau

    Hi Marry Ann, thanks for your frank insight into Amazon’s practices. I’ve been reluctant to sell my products on another store (Volusion + Amazon) because of the costs to maintain them both. It’s getting tougher and tougher to advertise one’s products since Google went to a paid model and it stings even further to keep paying other sites to help us sell. Even though I know that Amazon is an amazing shopping venue, and I purchase there from time to time, I’ll probably never sell there.

    Reply
    • Mike

      Mary Ann makes some very valid points. Unless you’re selling something very unique or have exclusivity, you’re basically working for amazon. Even if you do we’ll in the short term through very low margins, you very soon get into a bidding war with other retailers or amazon themselves selling your products. I would not recommend it to any business looking for a long term customer base.

      Reply
      • Matt Winn

        Hi Mike, thanks for your insight. Definitely important to figure out how selling on Amazon, or any other channel for that matter, impacts your business strategy in both the long and short term. Thanks!

        Reply
  22. Mary Ann

    Your article should be titled “10 Things You Need to Know…”
    All of your points are valid, but you didn’t mention the most important thing merchants should know about Amazon – They are not a good partner – they are the competition. We started out in their marketplace over 5 years ago, and we did so well that we ranked one of their top sellers. However, over time, Amazon started paying attention to our stats and realized that there was money to be made. At that point they systematically started offering our top sellers to the customers themselves. Who can compete with Amazon’s free shipping and miniscule margins based on volume? Not us. People reading this post should also read the post announcing this new feature. It will open their eyes to how Amazon really works. After years of telling me about how I should be building my brand, it shocks me that Volusion promote the use of Amazon as away to build business. They use the merchants in their marketplace like a bank. The merchant gets to invest their money in product so that Amazon doesn’t have to. A Volusion merchant could pay customers to shop with them in the marketplace, and those same customers will still think the products came from Amazon! I’m sure you mean well, but you’re overlooking the downside of sacrificing brand identity for exposure.

    Reply
    • Gracelyn Tan

      Hi, Marry Ann. I appreciate your insight, and I’m sorry that you didn’t have a good experience with Amazon. However, it’s our hope that our new integration will be able to help merchants expand their customer base and grow their businesses. Again, thank you for sharing your experience and staying engaged in our community.

      Reply
      • Mary Ann

        Gracelyn, my experience with Amazon is not the point. Volusion customers who have never sold in their marketplace deserve to know the downside of selling on Amazon. Your illustration should be the first clue that Amazon is not interested in creating an even playing field. If you’re selling the same item as they (or one of their “fulfillment” customers) are selling, your only chance at the sale is IF the customer notices that the product is being offered by someone else, and IF the customer takes the next step and clicks on the link. Again – the point is that we are making the investment in the inventory, not them. You expand your business find new customers by investing in your own platform – not theirs. If you have to sacrifice profit to gain a customer you hope that the customer will come back to you. However if that customer found you in the Amazon marketplace, that’s where they will go to shop again – they won’t be going to your store, so what have you accomplished as far as building your own brand?

        Reply
        • Tamara

          I have to agree with Mary Ann, that customers need to know what it means to sell on sites like Amazon. It is a huge marketplace where consumers can comparison-shop and find better deals. While the hope is they go to your store and buy more that’s not always the case if they see the same item elsewhere at a lower cost. Though sometimes they will go to your store, see all you have to offer and remember you, follow you on fb etc. That is where you have the chance to take them away from Amazon by offering incentives etc.

          Selling unique products is one thing on these sites, but selling competitive items can lead to disappointment and Volusion store owners need to know this before jumping in right away.

          Reply
          • Mary Ann

            Tamara, we’ve had customers shop with us for 5 years on Amazon. Despite doing everything short of delivering the purchase in person, they’ve repeatedly written reviews thanking Amazon for bringing the product to the marketplace! The typical Amazon customer doesn’t realize – or in most cases, care who you are. They found it in the marketplace and they associate the product with Amazon – not you. A better investment of your time is networking with bloggers and forums that are focused on what you sell. Get your name out there and be a giant killer – not a giant enabler 🙂

  23. Cassidy

    I have products that are age restricted (e-cigarettes) and so i know they cant be sold on amazon. but can they be listed on amazon as a product from an external website?

    Reply

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