Selling on Amazon: A Rundown of Merchant Basics

Selling on Amazon: A Rundown of Merchant Basics

SELLING PRODUCTS through Amazon.com, isn’t quite as simple as Amazon would have you believe. There is actually quite a bit to learn. Here are some of the basics.

In terms of its unique visitors, Google claims Amazon.com is the 24th most popular website on the planet (as of July 2011). So, selling product through the Amazon.com storefront certainly has volume-related advantages. In addition to the shear traffic volume of the Amazon site, would-be merchants stand to benefit also from the many e-commerce and sales-enablement services for merchants. The size, scope, and particulars of your operation (and how much growth you expect) will help determine which solutions are right for you.

Basic Selling Plans

As of today, Amazon offers two basic plans for merchants looking to sell goods through its storefront: The Professional Selling Plan and the Individual Selling Plan.

  • Individual Selling Plan—This plan is designed to suit merchants selling 40 or fewer items a month. A $0.99 fee is charged for each item sold. In addition, Amazon.com collects referral fees and variable closing fees (variable closing fees are associated with the sale of media products—books, CDs, DVDs, software, video games, etc.).
  • Professional Selling Plan—This plan is designed to suit merchants selling 40 or more items a month. There are no per-item sales fees, but there is a $39.99/month subscription fee as well referral and variable closing fees (variable closing fees are associated with the sale of media products—books, CDs, DVDs, software, video games, etc.).

Referral Fees

The referral fees currently being charged to merchants by Amazon.com vary depending upon the product sold, ranging from 6 percent on PCs to 20 percent on jewelry. Most products are charged an 8, 15, or 12 percent referral fee.

Amazon Storefronts

In addition to standard product listings on Amazon (and completing the related product details pages), there are other, more exclusive options for Amazon merchants to consider.

    • aStore–Amazon associates (not merchants, necessarily, but promotional partners) can curate their own “shops” with this service. Aggregate your self-endorsed products and spare your customers the time needed to sift through the millions of products offered on Amazon.com proper. Amazon associates can even rewrite product descriptions to better appeal to their respective audience and clientele.

 

  • Private Webstore–Merchants can build their own customized, individually branded e-commerce store (of full e-commerce website, if desired) using the Amazon.com platform. The store is hosted on the Amazon Elastic Compute Cloud. (See more information about this below.)

Webstore CMS

Amazon offers an e-Commerce CMS called Webstore. It’s fully customizable, with complete developer access to the CSS and JavaScript files. Companies can choose to manage their whole site’s content with this CMS or just the e-commerce portion. Webstore offers upgrades that could be of use to manufacturers with distributors and authorized retail partners. For example, it offers Private Access Webstores that grant the ability to set special pricing and exclusive access. Webstore offers all the SEO/SEM basics as well as some Amazon specialties, like integration with Amazon ads and product promotion rules. The only catch: Webstore has to be hosted on the Amazon Elastic Compute Cloud. Monthly fees for Webstore are minimal ($39.99), with most of the cost coming in the form of transaction, processing, and fraud protection fees. Webstore must be hosted on the Amazon Elastic Compute Cloud (Amazon EC2).

Fulfillment By Amazon

One benefit of using Amazon Webstore as a CMS is that it enables easy integration with Fulfillment by Amazon (FBA), a logistics service offered by the retail giant. With this service, smaller manufacturers can outsource the warehousing and shipping of product sold through Amazon. The fulfillment fees charged by FBA vary depending upon size and price.

Product Ads

Whether you’ve set up shop through your own e-commerce website or through Amazon proper, your next step will likely be advertising product. Amazon makes it easy to promote specific products on its website. With a straightforward pay-per-click model of advertising, Amazon enables users to promote product in several different ways: Displayed in search results, promoted on details pages of similar products, in a more forward “Buy Box,” or in a more traditional tower ad.

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