Amazon boasts as one of the most successful multinational companies in online retail, having made a significant mark in the digital world. It was founded by Jeff Bezos in 1994, and at the time no one dared to imagine that this company could become one of the most influential in the world. Today we can say that Amazon is the largest online retail giant, which in 2020 generated 386 billion US dollars in sales. By selling on Amazon, you too can cut yourself a slice of the pie, exposing your products to millions of potential buyers from around the world.
With the help of an exceptional business model, Amazon has made things much easier for sellers, as its Fulfillment Centers take care of most of the work on your behalf – product storage, packaging, customer support, product shipping, and returns. And there’s another very friendly fact that enables you to earn faster – you don’t even need a website to start selling on Amazon.
Is selling on Amazon still worth it?
Perhaps you have only just begun exploring the many ways to earn money online and couldn’t overlook Amazon. Since it is already well established throughout the world, it is nearly impossible to ignore. You are certainly not too late to join the many who are already generating high profits on Amazon – including from Slovenia! Regardless of which country you are joining from as a seller, you can choose from numerous different Amazon marketplaces – US, UK, German, French, Italian, Spanish, Dutch, and more.
The answer to whether it is still worth starting to sell on Amazon lies in the numbers and statistics. The growth trend prevailing in online sales will continue going forward. More and more people are increasingly choosing online shopping over visits to shopping centers. The Covid-19 pandemic also turned the tide in exactly this direction and further boosted online shopping.
On Amazon, sales during the aforementioned pandemic increased by as much as 44%. Many people could not or did not want to leave their homes, and online purchases consequently became even more convenient and flexible. During this period, Amazon saw sales increase across all categories. The greater the demand, the more sellers and products Amazon also needs. Demand for online shopping is expected to grow even further, presenting a real opportunity for all those who wish to sell and earn money through the internet.
On Cyber Monday 2014, Amazon sold 300 products per second. Cyber Monday is considered one of the most profitable days in online sales.
What investment do you need to start selling on Amazon?
Whenever you start any business, you need a certain initial investment amount. Selling on Amazon will be a kind of partnership, and it makes sense to view such collaborations with a long-term perspective. Amazon is expected to continue growing, developing, and expanding, making this type of partnership very positive and favorable for earning from the outset. On the other side is you as the seller, entering with a certain investment and the knowledge you have and continue to acquire. The recommended minimum initial investment is at least €1,500.
For a solid sales foundation, a great deal will depend on you and how much time you are willing to invest in launching an Amazon business, just like any other. Once you have gained some experience, preparing listings will also go faster and the entire sales process will be quicker. Over time, you will be able to automate certain things and it won’t be necessary for everything to depend solely on you – this way you can also create a nice stream of passive income.
In 2013, Amazon accidentally crashed for 49 minutes and it is estimated that $5.7 million worth of sales were missed during that time. In nearly one hour they lost that much traffic, so you can only imagine how much Amazon’s daily traffic amounts to.
What fees does Amazon charge and how much are they?
You should expect Amazon to take 25 – 40% of your product’s selling price with FBA (Fulfillment by Amazon). The Amazon referral fee is paid with every item sold and averages 15%. For storing your products held in stock at an Amazon warehouse, you pay the Amazon inventory storage fee, depending on the size, category, and weight of the products. The less time you keep them in stock, the less commission you will pay. The long term fee is paid for inventory stored in an Amazon warehouse for more than 12 months. The Fulfillment fee is what you pay Amazon for packing and shipping your products. In addition, Amazon advertising (PPC) within the platform itself is also paid.
You will open and register your Amazon selling account on Amazon Seller Central. You can choose either the Individual or Professional plan. The difference is that if you open an Individual plan, you pay $0.99 per sale, while the Professional plan costs $39.99 per month regardless of sales.
In Slovenia, registration requires a translated and court-certified bank statement as well as verification of your Amazon Seller account.
How does Amazon FBA work?
Amazon FBA stands for Fulfillment by Amazon. Once you find a profitable product, you find a manufacturer who will produce it in larger quantities. Most sellers typically find their supplier on Alibaba. Your chosen supplier will then send your products to an Amazon Fulfillment Center – a warehouse.
When an order is placed, Amazon will then take care of everything, meaning packing and shipping the products to the buyer’s address on your behalf. If you were to do all of this yourself – handling storage, packing, and shipping of products – that would be Amazon FBM – Fulfillment by Merchant, which is therefore completely different from how Amazon FBA works.
How to find a profitable product to sell on Amazon?
First and foremost, there must be demand for it – how many people search for your exact product per month? The larger your market, the more buyers exist for your product. It is worth noting, however, that more competition also exists. Therefore, it is best to find a product that has medium to high search volumes but low competition.
Choose a product that is simple to use. If it is complicated and buyers struggle to get it working, they may simply return it or, on top of that, leave a negative review on the listing.
Avoid seasonal products for which demand exists only on a few days of the year. Try to find something that people need every day or as frequently as possible.
Absolutely take into account the regulations regarding the sale of prohibited products on Amazon. Check them here.
In your search for a winning product that will bring you profit, the invaluable tool Helium 10 can help you. Every day, its benefits are used by numerous already successful Amazon sellers who are generating high profits. You can read more about it here.
A glossary of important terms that you, as Amazon sellers, need to know
BSR stands for Best Seller Rank. The lower the number, the better the product is selling. Example: BSR: #1 belongs to the product that sells best in a given category. Amazon updates this product ranking every hour.
ASIN stands for Amazon Standard Identification Number. Absolutely every product sold on Amazon has its own unique 10-character alphanumeric code. This serves as a completely unique identifier to distinguish it from all others.
Listing is the sales advertisement or catalog of your product on Amazon. It includes a photo, title, description, bullet points, and price. You create it in your Amazon Seller Central account. How your listing is structured is of utmost importance, as it has a decisive impact on product sales.
Buy Box is the box on the right side of a desired product that allows customers to add your product directly to their cart. The Buy Box is a top priority for many successful Amazon sellers, as it generates the most conversions and sales. More than 80% of all sales on Amazon happen through the Buy Box.
Given that there are often multiple sellers for the same products, competing for the Buy Box position is a very common practice. For Amazon to display your product there, one of the main criteria is a low price. Then there are other conditions, such as having an open professional account, the best possible customer ratings, timely shipping, adequate product inventory, and condition – new/unused. It also takes into account how long you have been an Amazon seller and whether you have a long-standing presence on the platform. Amazon’s algorithms also review the method by which you fulfill sales and prefer FBA.
Hijacker is a term for a seller who “steals” your listing and starts selling the exact same product as you, usually at a slightly lower price, thereby even taking your place in the Buy Box. You are left with a diminished number of sales and a reduced number of positive reviews. In this situation, it is of great help to have your own brand and prove this to Amazon, which will then impose appropriate sanctions on the hijacker.
FNSKU stands for Fulfillment Network Stock Keeping Unit. This is a unique code that your supplier sticks onto the packaging of each individual product. They typically charge $0.10 for this, but if you leave it to Amazon, the cost is $0.20 per product.
UPC stands for Universal Product Code. This is a barcode used for scanning products, primarily for sales outside of Amazon. It is of great help to manufacturers, suppliers, sellers, and distributors for easier and immediate product identification.
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If you’d like to learn even more about selling and earning through Amazon, you are welcome to download a completely free e-book here: https://zannekrep.com/brezplacna-eknjiga/.
