Winning Strategies for eCommerce & Selling on Amazon
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Amazon Store Setup – Frequently Asked Questions
Q: What is Fulfillment by Amazon (FBA)?
A: FBA is a service provided by Amazon to give its sellers an easy way to fulfill orders. You simply make a shipment to your designated Amazon Fulfillment center, and they will ship your individual products your individual customers.
Q: Is FBA free?
A: Yes and no, while it is free to sign up and use FBA, they will charge you fees that vary depending on the type of product you have. The fee amount is mostly affected by product weight and dimensions.
Q: What percentage of my sales does Amazon take?
A: Amazon takes a percentage cut between 6% & 25% dependent on the category your product is in. For most products Amazon take a 15% cut (This does not include FBA fees). Click here to view the list of percentage cut by category.
Q: Do I have to use FBA?
A: No, if you have the proper facilities and infrastructure in place, you may save money by shipping your products to your customers yourself. But you will have to monitor sales daily to make sure you ship your products in a timely manner. Once you ship the product to your customers you must notify Amazon immediately.
Q: When will Amazon pay me?
A: After every sale Amazon will add that money to your seller account balance, and every 14 days, Amazon will disburse that money to your chosen bank account.
Q: If I fulfill products myself, how much does the shipping cost?
A: When you fulfill orders yourself, Amazon platform shipping rates apply to media products (books, music, video, DVD, software, and video games) sold by Professional Sellers, and to all products sold by Individual Sellers. They charge these shipping rates based on the product category and shipping service selected by the buyer, and then pass the amount on to you.
Q: How do my products become Amazon Prime eligible?
A: You must be a member of the FBA program to be Amazon Prime eligible. If you self-fulfill your products, they will not be a part of the Amazon Prime program.
Q: Should I create my own site, or just create Amazon Store?
A: You need both. If you’re selling through your own site, then you are missing out on the massive opportunity that is Amazon. However, if you are only selling on Amazon and not your own site, you are putting your business livelihood in Amazon’s hands. While Amazon is a fantastic platform that has built many multi-million-dollar businesses, they are also very unforgiving and will kick you off without warning and for little reason.
If you have your own eCommerce store already but aren’t selling on Amazon, you’re missing out. Half of all eCommerce revenue in the US goes through Amazon which means they have a massive customer base that you are not currently accessing. In addition, if your product is successful resellers will begin selling your products on Amazon anyways, but you will not have control of the customer experience. Resellers will not take the same care to uphold your brand values that you do. It’s better to sell on Amazon and ensure that you control that customer experience.
In summary, the answer is both. Your site is the home of you brand and where you have ultimate control. Think of Amazon as just another retailer. Just like you might want to get your products in Walmart, Target, Costco, etc. to access distribution and new customer bases, the same principles should be applied to Amazon.
Q: Should I offer all products on Amazon or have some that can only be purchased through my site?
A: This is one of the best strategies to become independent of Amazon. You can have most of your product line on Amazon, but you should reserve some exclusive items for your own site to give customers a reason to leave the Amazon ecosystem and to give you access to their first party data.
Q: Should I use FBA or self-fulfillment?
This is another common question. In most cases we recommend FBA because it means your products are automatically Prime eligible and you don’t have to deal with day to day fulfillment yourself.
Now, some of our clients have the resources to do self-fulfillment, which is great because they can save money on FBA fees. But most who do this are already selling in large volumes on their own eCommerce site.
Plus, if you self-fulfill you are not automatically enrolled in Prime. You have to apply for it and pass strict testing from Amazon to prove that you can provide two-day free shipping. If you don’t pass this then it will hurt you because non-Prime products have a lower conversion rate than products that are enrolled in Prime.
Q: How do I sell internationally?
The easiest way to do this is to simply enable international shipping to the countries of your choice, which takes just a few clicks in your Seller Central account. This will allow you to sell to anyone in the world to purchase your products through Amazon.com, without you needing to have a presence in their country.
However, if you want to sell on foreign Amazon sites such as Amazon.co.uk, Amazon.jp, other European Amazon sites, or any of the other place Amazon has a presence in, it’s more complicated.
Each country/region has different requirements to be listed on their local Amazon site. Often you will need be operational in those countries. That means you will need any business licenses, tax IDs, and be following any regulations those countries have.
Our recommendation is this, if you have the sales volume to justify going through all of that hassle, then yes, it’s worth it. But for a lot of sellers who do not yet see demand from those countries it’s probably better to wait and just offer international shipping through Amazon.com.