There is hardly a person who has ever bought something at the Internet and at the same time I would not hear about Amazon. Amazon is the world’s largest online store with its head office in the United States.
It is deservedly considered one of the largest in the world. About 50% of all United States sales go through it. According to the BrandZ rating for 2019, Amazon ranks first in the ranking of the most expensive brands in the world. Apple is second, Google is third. The estimated cost of Amazon is $ 315.6 billion. If you are one of the Amazon sellers, then this information is for you.
In Europe, Amazon’s main warehouse is located in the UK, and there are also warehouses in Germany, France, Italy or Spain. When selling and placing goods in Amazon’s European warehouses, one account in the British Amazon is enough. Selling goods European warehouses Amazon has its own characteristics, but within the framework of this article we will analyze only the features of placement and sales on the American Amazon.
Thanks to the platform’s functionality, it is easy to bring products to the US market, where more than 2 million users will see it. But before you start selling on Amazon, you need to study the rules and recommendations that this platform requires.
Benefits of working with Amazon
- You can cooperate with Amazon completely remotely;
- Amazon trading gives you the advantage of not having to pay for renting a warehouse, a store, for obtaining a trading license, the salary of store personnel, marketing and promotion expenses;
- entering the market which is many times more solvent .
- interaction with customers at the Amazon functional level, seller’s contact information is not provided to the seller;
- Amazon is not responsible for customs clearance, is not the recipient and importer in the United States, Amazon warehouse is indicated and used in documents accompanying delivery only as a place of delivery and unloading of goods;
- the recipient of the goods can only be residents of the United States and Canada;
- strict adherence to the rules of the Amazon, which are constantly updated and if not observed, your account will be blocked;
- if you released a unique Ovar under the personal brand without registering a patent is a high probability it plagiarism by other sellers.
What is FBA (Fulfillment by Amazon)
Availability of the Super Saving Shiping option provides free delivery to customers orders from $ 35; The Fulfillment by Amazon program can be used by selling products on eBay or on your own website. In addition to storage, the FBA service includes labeling of goods, delivery involving UPS and FedEx services, as well as returning goods if necessary.
When choosing an FBA, you need to know many of the nuances associated with trading in the USA and would like to draw your attention to them.
- There are two mechanisms depending on the volume and cost of goods sending. The first is by international courier services, the second is by logistics companies that send commercial lots.
- The maximum estimated cost of a parcel that can be sent to the United States without paying import duties and taxes is $ 800.
- Regardless of whether the consignment is sent with courier services or with logistics companies like commercial party , the cargo is subject to customs clearance in the country of dispatch and customs clearance in the final country of delivery.
- The advantage of sending small batches of goods by courier services is the delivery price, since the price includes the collection of goods from your address and its processing at the warehouse in the country of departure. But keep in mind that there is a significant minus, in case of any questions from the US customs authorities regarding your shipment, all questions will be addressed to the recipient of the goods in the USA and the representative office of the courier company that you sent to the USA will not help you. In this case, the goods will be sent back, you will have to pay for shipping there and back.
- You need to know in advance whether additional permits are required in the United States to avoid possible delays and unforeseen expenses.
< li> With international courier services, it is easy to send small and oversized lots with a total weight of up to 100 kg to Amazon’s warehouses.
Our company delivers consignments of goods, both courier services and logistics companies. In each such shipment, we deal with your cargo individually.
We provide a full range of services, including support for documenting the goods, selecting the best delivery route, tracking the clearance and clearing of cargo at the port of destination, and organizing the last mile in the United States.
Stable relations with partners and government agencies, developed transport routes and full control of the process are our main advantages.
Amazon Sales Strategies
There are two Amazon sales strategies:
- Dropshipping (Dropshipping) – Resale goods at a higher price;
- Private Label – sale of goods manufactured under its own brand.
Business Strategy Dropshipping
Business strategy Dropshipping (from the English drop ship – direct delivery) – resale of producer goods by an intermediary at a more expensive price. The peculiarity of this sales system is that an order is made to the manufacturer only after the intermediary has received an order from the client. The scheme of work is to buy goods from the manufacturer in bulk, order delivery to Amazon and cost with a margin.
- low starting investments;
- with the recipient’s refusal of the goods, it can be returned back to the supplier by receiving your money back;
- no need to engage in advertising. As a rule, popular products are well-known in the market and well in demand;
- low threshold for entering the market. It does not require large financial costs.
- There is a lot of competition between sellers selling the same product. And as a result of this, the opportunity to sell goods only with a low margin.
- You can not track the quality of products and the delivery time of goods that are sold “blindly”. Cancellations of cargo will negatively affect your rating in Amazon and may cause your account to be blocked.
- Due to the ability to sell goods only with a low margin, the cost-effectiveness of this scheme implies putting a large assortment of goods on Amazon. As a result of this, you will have a large amount of work to process all product cards, as well as the need for constant correspondence and negotiations (client-seller, seller-manufacturer).
Private Label Business Strategy
Business strategy creating your own Private Label
Private Label (own trademark) is a brand that does not belong to the manufacturer, but to the supplier or seller that produces products under its own trademark under a direct contract with the manufacturer . It is this option that is suitable for obtaining large volumes of sales and, accordingly, significant profit.
Stages of creating a Private Label business
The term for starting a business under the Private Label scheme from idea to first profit may already begin in 3-4 months. The steps to creating a Private Label business are
to the following algorithm:
- Choosing a niche / product that is close to you, is understandable, interesting and in demand by Amazon, for this you need to study the market in detail.
- Think over and register a name trademark, slogan, logo, think over the packaging.
- Find manufacturers who can manufacture these products and order samples from them.
- Prepare for the manufacturer a detailed terms of reference and production scheme according to The appropriate standards needed to create a product. Production of goods without an agreed TK can significantly affect quality. Collaborate on the conditions when the manufacturer receives the money after checking the goods for quality. Evaluate the quality of the products you plan to work with. Ask him to improve the product, eliminating the found weaknesses of competitors.
- Choose the best manufacturer and conclude a contract with him.
- Produce a batch of goods (from 300 to 1000 pcs.) Under your own Private Label.
- Delivery of goods to the Amazon warehouse (USA)
- Register and place the product page after the goods arrive at the Amazon .
If the sample does not shine with quality, then it is better to refuse cooperation with such a manufacturer in advance .
< li> Promotion and promotion of a product page using Sponsored Products .
To deliver batches of goods to Amazon, you can use the Fulfillment by Amazon (FBA) , which allows you to send products directly from the manufacturer to Amazon warehouses. The disadvantage of this scheme is that Amazon commission and fulfillment will be about 30%.
The second option is to delegate the delivery of Cargo Support. In this case, the carrier company takes responsibility for the delivery of goods from Ukraine to the United States at the lowest rates and on time. This is usually 7-12 days.
What to sell on Amazon
- The first goods should be simple to the maximum eliminating the risk of marriage. If the production process is not fully established and there is a high risk of delivery of defective goods, this will negatively affect your rating and may lead to account suspension.
- Choose a niche with low competition. You can rate your competitors by searching Amazon for similar products. The products with the largest number of reviews, as well as conversions from sales, get into the top issue. The more companies that sell products similar to yours and have a large number of reviews, the harder it will be for you to compete. The best product is considered to be in the top with no more than 200 reviews.
- Do not choose products that few people sell. This suggests that buyers are not ready to spend money on this type of product. Indicator – there must be at least 5 sellers with a turnover of $ 10,000.
- It is not recommended to sell seasonal products.
The search for a product takes place in two stages:
- The selection of goods available for sale and determination of their cost.
- Comparison of their average cost for Amazon with the purchase price.
You can calculate the commission using the Amazon calculator
How to become a seller on Amazon
To become a seller on Amazon you need the following:
- open a dollar bank account with a card link;
- dollar a card of one of the Ukrainian banks with at least $ 40 and no limit on online transactions;
- create a separate e-mail for the online store.
When registering Amazon account , there are two options for Individual, Professional Sellers.
Individual. (individual seller)
- no monthly payment.
- for each item sold an additional $ 0.99;
- 40 p limit sales per month.
Benefits Professional Sellers :
- there is no limit on the number of sales per month and access to all categories of Amazon products;
- no additional commission;
- access to advertising, analytics and other chips Amazon Advanced Account
- Monthly payment $ 39.99.
Account registration steps Amazon
- creating an account “Your Seller Account” (Email, password);
- choosing the type of seller’s account Individual, Professional;
- registering the form- the name of your company, bank card details;
- standard confirmation password entry with SMS on your phone.
The easiest and most convenient way to withdraw funds with Amazon – payment system Payoneer (Official partner of PrivatBank Bank).
Receiving an incoming transaction 1%
When withdrawing: payoneer charges a fee of $ 3.15 , Master Card-1.8%, and a bank in the region of 3%
Money from sales Amazon pays out every two weeks. When calculating the profit from sales on Amazon, you can count on profits from 20% to 25% (cost of purchase or production, commission and related costs).
Payments on sale on Amazon
Let’s say you have a Professional Sellers account
Monthly payments :
- Monthly payment Professional Sellers $ 39.99.
- FBA monthly storage fee (fee for storing goods in Amazon warehouses) depends on the size and time of the year.
- Referral fee. It is charged immediately after the sale of the goods. Its size depends on the category, but in most cases it is 15% of the purchase price. Referral fee rates see here
- Long term storage fee (fee for long-term storage 2 tariffs: more 6 months, or 1 year.
- Inventory Placement Service fees (Amazon distribution warehouse fee) Amazon online store determines and cannot affect this.
- Removal fee (payment for removal of goods from Amazon’s warehouse)
- Returns processing fee (fee for organizing the return of goods) in case the buyer returns goods from the category for Amazon arranged a free shipping.
- Referral fee – depends on the category of goods, on average 15% of the purchase price.
- Fulfillment fee – order processing fee. Depends on product dimensions and time of year (October-December below).
- Unplanned Prep Services (unscheduled fees for services). If the product is improperly packed or the barcodes are incorrectly pasted.
- FBA Label Service Fee (payment for sticking barcodes). Upon delivery to Amazon, the barcodes generated by Seller Central must be glued. If not available, a fee of $ 0.20 per unit of goods.
- FBA Prep Service Fees (packaging fee).
What can’t be sold on Amazon
Here is a list of products that are forbidden to be sold in the Amazon:
- materials promoting violence, racial, religious or sexual intolerance, a change of power, as well as propaganda of organizations that hold such views;
- prohibited substances, drugs, as well as drugs that are licensed;
- gambling, coin operated slot machines, lottery tickets;
- alcohol and excise stamps for it . An exception is the sale of wine (previously agreed with the administration);
- hazardous substances, fireworks, mercury batteries, etc .;
- are limited to the sale of product categories. The prohibition of products containing meat from China, milk mixtures containing goat milk;
- products that contain nudity on the label.
For the sale of certain categories of goods requires additional approval administrations. For example, you need to be certified in the USA so that you can display the following products on Amazon:
- children’s beds;
- medicines ;
- the sale of toys imitating weapons requires additional approval from the administration.
A complete list of special Amazon products
Amazon administration requires prior approval to place the following categories:
- animals and animal products;
- art is a fine art;
- art – home decor;
- composite wood products;
- cosmetics and skin / hair care;
- currency, coins, cash equivalents and gift cards;
- food additives;
- drugs and drug accessories;
- explosives, weapons and related items;
- export ntrol;
- food and drink;
- gambling and lotteries;
- dangerous and dangerous objects;
- parts of a person and burial artifacts;
- jewelry and precious stones;
- laser products;
- lighting devices;
- hacking and blocking devices;
- offensive and controversial materials;
- pesticides and pesticidal devices;
- plant and seed products;
- postal meters and stamps;
- recall products;
- electronics recycling;
- sex and sensuality;
- subscriptions and periodicals;
- monitoring equipment;
- tobacco and tobacco products;
- warranties, service plans, contracts and warranties;
- other products with limited access.
< li> medical devices and accessories;
Delivery of goods to Amazon
Delivery of goods to FBA Amazon fulfillment warehouses can be carried out in the following ways:
- the first is through international courier services;
- the second is the logistics companies that dispatch commercial lots.
In each such dispatch we deal with your cargo individually, calculate the costs, depending on the volume, weight, lay the most optimal route. We check in advance whether it is possible to clean in the USA, whether additional permits are required in the USA to avoid possible delays and unforeseen expenses. Also in this case, sending can be done both from an individual and a legal entity.
Documents required for customs clearance
From the documents for customs clearance in Ukraine you will need to make:
- an invoice stating the price per unit of goods in US dollars, the total number of units and the amount of goods;
- packaging, in which to indicate what the goods are packed in, the number of seats and the size of each place;
- an invoice for the goods written in the name of the sender, a check, or if you are a manufacturer of the goods costing.
Amazon Delivery Features
Due to the fact that Amazon (USA) is engaged only in delivery from the actual address in America to its warehouses, and does not deal with tax issues in the country of departure and customs clearance, it is necessary to take these points into account. To deliver goods to a warehouse in the United States from which it is possible to deliver to Amazon warehouses, you need to use the services of freight forwarder – agent .
When sending small batches of goods worth up to $ 800 (duty-free limit in the USA), you can use express courier services. Our campaign can help organize such delivery, and you can also use the npshopping service, which generates a virtual address in America for you and from where Amazon delivers to your warehouses (in the United States, shipments are tracked through UPS service ).
It should be noted that the product does not fall under the list of banned for import into the United States, as well as under the list of goods for which there is restrictions for sale on Amazon. In addition, the packaging and labeling of the goods must comply with the requirements of Amazon.
The quality of the cardboard of the standard box of the Ukrainian postal services wants the best, and if they are damaged during transportation it will not be suitable for the requirements of Amazon and will have to shell out for FBA Prep Service Fees (packaging fee).
Another of the requirements of the postal services of Ukraine for labeling – there should only be marking label of the postal service. And according to the requirements of Amazon all products must contain a scanned barcode generated by the system when creating the listing.
Therefore to avoid misunderstandings when sending it is necessary to wrap a box with a barcode marking in a dark opaque film. When sending a large consignment of goods worth more than 800 US dollars , it is necessary to carry out customs clearance in the United States.
Our company can help with the organization of delivery, finding an agent to deal with Customs clearance in the USA and delivery to Amazon FBA fulfillment warehouses .
How to sell on Amazon
Listing on the Amazon platform:
Product cards created on the Amazon platform must meet certain requirements.
- The background of the image is white, without additional objects.
- Product at least 85% frame area.
Title and description requirement:
- Copy-paste prohibition (full copy of competitors’ product description ).
- In the description and backend, indicate the keywords by which your product will be indexed and located on the Amazon platform.
- Cost. It is recommended at first, until your profile is hyped to establish a cost less than that of competitors.
- Reviews. On the Amazon platform, searching for positions where more reviews are more relevant. Therefore, to increase sales, it is recommended to order paid reviews on freelance exchanges.
Communication with customers on Amazon is supported exclusively through the personal account on the site during business hours, according to the American time zone, therefore, it will be necessary to adapt your work schedule to it.
There are 2 types of advertising on Amazon:
- Sponsored Products – an ad is shown in the search results for similar products, one ad is one product.
- Sponsored Brands – available to sellers who have registered the brand in the register Amazon Brand one ad can contain up to three products .
By analogy with Google Ads payment for advertising on Amazon takes place on the model < span class="strong_ce"> pay-per-click , this means that you pay only for a click, not for impressions. Ads are displayed for keywords. It is possible to configure the automatic targeting function, but to avoid showing ads on keys that are irrelevant for your topic, it is better to use “manual targeting” – which allows you to add keywords yourself.
First of all, you will need to select a list of keywords by which your ads will be displayed. To do this, use the product listing, as well as the product listing of your competitors and through the keyword planner Google Keyword Planner to select the keys necessary for your topic.
Ads are displayed according to the Amazon auction algorithm, when the first ads are displayed at the highest bid, as in Google Ads. To set up Amazon’s advertising campaign , enter the name of the campaign, set a daily budget, select keywords (broad match, exact and phrase) minus words.
Guidelines for filling out product cards
Product cards on Amazon are automatically generated for the keywords specified when filling out the card. You cannot fill in the text of the announcement yourself. The service automatically generates an ad display.
To increase the traffic on product squat pages on Amazon, it is recommended to use external advertising sources, for example, through Google Ads to direct the buyer to your personal site, and from it redirect goods to your cards on Amazon .
This will increase the number of visitors to your pages, as well as the number of purchases made and, as a result, the rating of the issue of your cards Amazon will grow.