How to Get Started Selling on Amazon Marketplace
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In this digital world, e-commerce is here to stay. One of the biggest platforms for this is Amazon. So have you considered selling your business’s products on there?
Many businesses think of Amazon as their competitor, but what you may not realize is that it’s actually more of a partnership relationship. You can build brand awareness, market your web page, and even encourage reviews by selling on Amazon, all by plugging into their already massive traffic stream.
Rich: Shannon Jones studied business at Takeo Post University. She is recognized as an influential leader with strong strategic vision. With an entrepreneurial spirit her retail and e-commerce expertise helps brands come to life in the digital marketplace. Shannon, welcome to the show.
Shannon: Hi Rich, how are you today?
Rich: I’m doing great. Although as we were just discussing it’s freezing cold right now no matter where it seems you are in the country. But we’re staying warm. I want to know a little bit more about your journey to how did you become an expert in helping businesses enter the Amazon marketplace or other online digital marketplaces?
Shannon: I became an expert by assisting a car company I was working with grow through the pains of e-commerce. Ecommerce is an evolutionary platform and it’s ever evolving, and as it evolves you kind of have to adapt with it. And how we’re able to adapt is if we’re able to survive in this marketplace. And learning these fundamental platforms and to put your products in the right places is how I’ve been able to help products launch on e-commerce.
Rich: Alright. And so obviously today my main questions are around Amazon. So when we’re thinking about using Amazon as an e-commerce platform, a lot of people that are listening, maybe they’re already selling their products online. Do they need to also consider selling them on Amazon or are they all set?
Shannon: Amazon is the site that people go to, 55% of all searches start on Amazon, and 44% of all e-commerce sales are on Amazon. If your product isn’t on Amazon, you’re not getting the eyeballs.
Rich: That’s a crazy number, 55% of online searches. Is that like product searches?
Rich: Ok, so 55% – more than half – and then 44% of products sold are through Amazon. That just seems like such an incredible number for us to focus on.
Shannon: Correct. So the eyeballs are there, the traffic is going towards Amazon. So if you want your products to be seen by the public, Amazon is the platform.
Rich: And as much as I promote small business and I promote local business and I do everything I can to support local businesses here in Maine – or wherever I’m traveling, really – it’s impossible to ignore Amazon. I have the Amazon Prime, if I forgot to buy deodorant and I know it’s going to be a couple days before I hit my local store, I know that I’m just going to go onto Amazon and this can be delivered to my office or home. So it makes a lot of sense that so many of these sales are happening. And of course now we’ve got the Amazon Dot and the Amazon Echo which make it even easier for us to reorder from Amazon.
Shannon: Yes. It is evolving around the ease of use for the consumer and Amazon has made it extremely easy. And if you are able to partner with them – and that’s how I like to position companies to partner with Amazon – look at it as a partnership.
Rich: As opposed to a competition, or competitor?
Rich: Alright. So now one question I have is, and I’m sure some people are already selling products for a retail store maybe online, do I need to sell my own products to get onto Amazon or can I sell products that maybe I didn’t manufacture or didn’t create but I sell in my store – or maybe I don’t even sell in my store?
Shannon: Do all of the above. You can sell your own products and you can sell other products as well, other brands.
Rich: So if so many sales are going through Amazon and so many product searches are starting at Amazon, why do you feel that small businesses in particular hesitate to get on Amazon? And what do you say to the people who are like, “It just seems like too much work” or “They’re my competition”, or whatever the excuse might be?
Shannon: So a two-part question is one, if they’re feeling the hurdle to get into Amazon, I’d love to be able to guide them through that. It is not as complex as you may think it is and we all should be able to compete in this market share space of commerce because that is where all transactions are happening. So I would like to be able to guide them through the steps so they feel comfortable in achieving and building on that platform.
Rich: What are some of the questions that you get from businesses who are starting to think about selling their products through Amazon, or “partnering” with Amazon, as you say?
Shannon: Some of the questions I have are what are the costs, how do we save our brand integrity, how do we do our advertising. So those are very, very key points when our business is listing their products on Amazon. The first thing they want to think about is how they want to be in the marketplace, what kind of market account they would like to have.
Rich: What are my choices when it comes to the different types of accounts that merchants can have through Amazon?
Shannon: So there are several different merchant plans. So there would be a seller plan and a vendor plan. And in both the seller plan and the vendor categories of that, you can either sell directly to Amazon and use Amazon as a platform and sell your product through there to the consumer. Or you can sell your products to Amazon and have Amazon fulfil it, that would be Amazon FBA , fulfilled by Amazon. Or you can sell it to Amazon and let Amazon vend it for you, which would be a vendor program.
Rich: So what are some of the pros and cons, like how do I decide? There seems to be a lot of options there.
Shannon: There are a lot of options. Ultimately it comes down to where you are operationally, what you can and cannot handle and what you want process and don’t want to process. So one of the key things is taxes. So where your warehouses are, state taxes are very important because that can come into play when you’re a seller merchant and you have your taxes, in certain states you have to pay all the state taxes and keep records of that. So if you vend to Amazon, Amazon manages all that for you. So if you’re a small business and you don’t have the capability to manage that for CPA agent, then I would highly recommend a vendor program.
Rich: Where you’re selling directly to Amazon and then they just turn around and sell the products as their own, so to speak?
Shannon: It would still be your brand and it would come in as Prime, but you would wholesale it to Amazon and Amazon would then sell it from there.
Rich: And that I guess would be similar in the real world to me selling product to Walmart if I have an invention that maybe ended up on Shark Tank or something like that. I’m going to sell to Walmart, Walmart turns around and sets the price and handles all the returns and everything like that.
Shannon: That is exactly correct.
Shannon: So if you’re in the vending program you also don’t have to manage any customer service or returns because Amazon will manage all of that for you.
Rich: And in the vending service, can I still sell my own products or somebody else’s products to Amazon?
Shannon: Yes you can.
Rich: Ok. And then the seller, I’m going to take on more of the ownership of the entire thing and there’s going to be more work for me, but I assume that the expectation is I get to keep a bigger piece of the pie.
Shannon: You do, but at this point then you’re looking at the time versus profitability.
Shannon: And here’s another “con” for this, you have to manage all the returns. And as we all know Amazon is very consumer-centric, which means that they will accept any return for any reason. Which means that you have to follow that policy as well. So if the consumer wants to just return it because they don’t like it, you have to honor that and you have to pay for the shipping. And those fees and charges can add up in overhead.
Rich: Especially if you’re a small business, I can see one bad Christmas can crush you. You mentioned cost, so what are some f the costs that we might run into as we’re trying to get on the Amazon platform?
Shannon: So depending on the program there’s generally a subscription fee. To start out most businesses will probably have a $40/month subscription fee to start their seller platform. Then after that you have your entitlement fees, so there will be entitlements which will be the charges to host the product on Amazon. If you’re vending that will include your defectives and your returns and your shipping charges.
Shannon: So you can expect about 30% in the vender program for entitlement fees, and about a 15% in the seller marketplace.
Rich: Ok. And you mentioned also “brand integrity”. So that’s not something I would have thought of. What does that mean and what are people asking you when they say they’re concerned about their brand integrity on Amazon?
Shannon: They’re concerned about how their brand is being positioned. So anybody can sell anything on Amazon. So if I were to sell an iPhone and list it on Amazon for $40 and my pictures and description were not the greatest and the copy wasn’t well written, then other marketplaces are going to match that $40 price for the iPhone. So now it’s decreasing the value across the global board. So that’s where it’s very important to how you position your product on Amazon because it will really create a shotgun effect as to your other marketplaces where you pitch your product.
Rich: Ok. And then you mentioned advertising. So this kind of gets me to an interesting part. Obviously if I can sell my own products and I can sell other people’s products, it also means there’s a very good chance that if I’m selling somebody else’s products I’m going head to head with small, medium, and large sized companies around the world. I was just online looking at some X-Men calendars for 2018 – don’t judge me – and there were the same ones by plenty of different vendors out there. Tell me a little bit about what I should consider when I’m thinking about sponsorships, promotions, or basically anything that’s going to get people paying attention to my product rather than somebody else’s.
Shannon: So there’s 2 parts to it. One, it’s the product page. And two, is directing the eyeballs to your products. So first we want to make sure that your product page has great copy, is completely optimized, has images and videos, great callouts, and really describes your product so the consumer can clearly understand what you’re selling. That coupled with driving the traffic to your page using Amazon Marketing Services – which is short for “AMS” – so when they say “AMS” they’re saying “Amazon Marketing Services.
Rich: Alright, I want to pause you there for a second because like you said, there’s 2 parts to this. Let’s talk first about optimizing the page. So is it like a WordPress experience where one site got my account all set up and I can just go in there and start uploading products and uploading videos? What are some of the things that I need to know to be able to really optimize this page for Amazon? And the second part of this question, when I hear the word “optimized” when it comes to the web, I think about search engine optimization. So is there some of the words that we’re using on the page, does that have a direct impact on how well we’ll be found in Amazon-based searches?
Shannon: Yes. So when you first start there are some key categories that you need to fill out. You need to know product description, dimension size, weight, copy, images, videos and media. And then you also need to have what keywords you would want to apply. Once your product is listed and you see how consumers are viewing it – and this is a fun fact – sometimes consumers can’t spell correctly or type things in wrong, you want to change your keywords on the backend later to add that. So that way it can direct the consumers there when they’re typing it in wrong. And this will segue into the pay per clicks, but once we get into the Amazon Marketing Services, it will show you what consumers are typing in when they’re searching for this type of product.
Rich: Ok, so they’re going to give us some reports that will give us some nice feedback just like Google Analytics would on our website.
Shannon: Absolutely. And then you can apply them to re-optimize your page. As I said, this is always evolving so it’s not a “one and done”, it’s constantly massaging because you always want to drive traffic to your page, you always want to drive reviews to your page. As you get more reviews and more traffic and more purchases, your ranking increases. And as your ranking increases then you become first in the marketplace. If you’re on the top three pages, your product is on the shelves.
Rich: So if I understand correctly, in paid search on Google if you get a lot of click throughs, if people respond to your ad, you actually pay less for each one and then it’s kind of a virtuous circle. Is it similar with Amazon, and as soon as you start getting some good traffic to your page and people are buying it, Amazon rewards you by sending you even more traffic?
Shannon: Similar, yes. It’s all about conversions so they want to see people clicking on it and then converting to purchase. So if you have a great page, great images, the person wants to buy it, they buy it, they review it. We all base our purchases on reviews – I do – so you read the review, you love it, someone else reads the review, and then you add an “add” or a banner to it, that boosts the ranking. So it’s a complete cycle.
Rich: Alright, so tell me a little bit more about some of our advertising and other things that we can do with within the Amazon universe to drive traffic to our page. Because I know I’ve seen things like sponsored ads within a page for, say, the X-Men calendar. You might see sponsored ads and you see calendars about the Avengers, or the DC Universe or Walking Dead, or whatever it may be. And those – because they say “sponsored” – I assume somebody paid for that placement. Tell me more about that and tell me about some other options I might have to get in front of more eyeballs.
Shannon: So there are a lot of different ways to play in Amazon Marketing Services. So as you mentioned there are sponsored ads which will target based upon keywords that you’re typing in, and you gather those keywords through your ads. But there’s price discounts, lightning deals, there’s promo codes, there’s targeted ads, there’s giveaways. So what we were talking about here when you were mentioning seeing the X-Men calendar and now you saw a Spiderman calendar, those are all targeted ads, they’re pay per click and they might have a headliner banner and you kind of bid on these keywords.
But there’s also other ways to promote the product as well. You can do a product display ad, this will advertise the specific ASIN – which is the “Amazon Specific Identification Number” – that’s the product ID and how Amazon communicates all of the products and it applies that to keywords. So that will associate the keyword to it, so if you’re looking for the X-Men calendar and you’ve got that keyword locked into yours, every time someone types in “X-Men” it’s driving that traffic to your product. You can also add banners.
Rich: When you say “add banners”, where are those banners appearing?
Shannon: So it’s a little hidden and you might not have noticed it at first, but when you search for a product you will see a little black banner at the top and it will say “Amazon’s best choice”. It looks like it’s an organic search but it’s really paid to be at the top. And it kind of drives that traffic there, so it kind of builds awareness and brand recognition.
Rich: And I’m sorry Shannon, did you say those were the Amazon choice? Because I’ve noticed sometimes – especially with commodity products like an HDMI cable or whatever – there is very often an “Amazon Choice” near the top. Is that paid or is that curated and they just thought this is a good value and we want to push this?
Shannon: They’re paid.
Rich: That’s sneaky, I did not know that those were paid. Now I know.
Shannon: That’s why they make it seem organic.
Rich: It does. And they don’t even appear necessarily at the top, sometimes they do, but they appear scattered throughout. Interesting, ok.
Shannon: And when you click on them, as soon as you click the merchant is charged for the click, even if you don’t purchase this.
Rich: Interesting. Alright cool. So is there anything we can do after the sale? And what I’m thinking about is like I know sometimes when I bought stuff on Amazon I get emails from a merchant who I assume has some sort of relationship with Amazon that says, “We’d love to get you to review our product or service on Amazon”, with a link back to the product page. Is that pretty typical, are there other things that we can do to maybe, A) get more visibility for our products when people are saying good things about us, but also, B) maybe start a relationship with the customer? Because I’m guessing I don’t get the customer’s email address if they’re buying through Amazon, correct?
Shannon: That is correct. To be honest – this is just my personal preference – and this would be my recommendation, but include the paperwork in your product when you ship the product out. I’m sure we’ve all done the unboxing at home and there’s a little flyer in there that redirects saying, “If you’d like this again you can go to this website”, or a coupon code. Include the marketing material in your product, because I’m flooded with spam and I get the email from Amazon that I purchased the product, and the follow up email, and the review email. I’m tired of talking about the product that I just bought. But when I open it and I see it and am actually happy with it, then I do follow up because I might need to buy it again, especially if it’s a consumable item.
Rich: Right. Although from a consumer standpoint I might want to go back through Amazon because I have free shipping and stuff like that. If you can cut them a better deal or give them a reason why they want to come back to you – maybe there’s some value add you can throw in there – then you can start a relationship with that person rather than having them just talk to Amazon directly.
Rich: Because you may be Amazon Choice this month, but you may not pay them enough next month and somebody else swoops in and suddenly they’re getting all that traffic.
Shannon: That is correct. So including it within your product itself, if you know your product and you stand by your product – and I always believe this is king – if you know your product and you believe in your product, include the message with your product and drive them to your site and give them inclusive awareness about your brand through the product.
Rich: Shannon, this has been helpful. Is there any last minute ninja trick or mistakes you see people do all the time, just one more thing you can leave us with, what would that be?
Shannon: I would say the biggest thing that you can do before, if you’re a new business and you want to launch your product on Amazon, is to be worried but to organize – believe it or not – it’s all about the data. And I know this sounds scary because you’re all about products and operations, but it’s all about the data because we’re now in an internet world that’s all about the data. So get your data together, organize it, put it in an Excel sheet. You need the product codes, the model numbers, the copy, what makes your product stand out. If you have this in advance, you can launch your product in a week, in a day. If you have your images all ready you could be live in 24 hours.
Rich: This has been great, and one of the biggest takeaways I think that hopefully some small business owners are listening to is the idea that Amazon does not need to be your competitor, they can be your partner, and they can just help you reach a wider audience. And yes, like with any big partner you sometimes have to play by their rules but there are some great opportunities there for those people who want to partner with Amazon.
Shannon: Yes, and that is the biggest message I would love small businesses to know, is working with Amazon and working with different hybrid accounts as well, is a great way to increase your revenue stream.
Rich: Shannon, I’m sure there are a few people out there listening who are interested in doing this, maybe they want a helping hand or maybe they just want to check out more stuff about you, where can they find you online?
Shannon: Well if you’re looking for some advice you can find me at www.she-bang.com, because we like to help you out for the whole shebang from start to finish.
Rich: Awesome. Well Shannon this has been great, thank you so much for sharing your expertise and sharing your time and I appreciate it very much.
Shannon: No problem, it was great to speak with you, Rich.
Shannon Jones loved to help businesses increase their revenue streams by partnering with Amazon, and proves that it’s not as confusing or as daunting as it seems. Check out her website to learn more about what she has to say about brand scaleability.
Rich Brooks is the President of flyte new media, a web design & digital marketing agency in Portland, Maine. He knows a thing or two about helping businesses grow by reaching their ideal customers, and to prove that, he puts on a yearly conference to inspire small businesses to achieve big success. You can also head on over to Twitter to check him out, and he just added “author” to his resume with his brand new book!