ECommerce is the way of the future for businesses, especially after the COVID-19 pandemic. Knowing the profits that you could be making, you may be keen to set up your own eCommerce business but it can seem difficult and intimidating especially if you don’t know where to start.
Amazon is a great platform for ECommerce beginners for a number of reasons:
1. It gives you instant access to customers who are ready to make a purchase. They already know what they are looking for and this is incredibly beneficial for small businesses who want to grow their brand.
2. Amazon is known for its credibility and buyers are more likely to buy from a platform that they can trust.
3. If you choose to sell with Fulfilment by Amazon (FBA), you’ll never have to worry about the logistics aspect of your business as they are able to pack, ship, and provide customer service for all your products.
Now that you know the benefits of this platform, we created this guide with step-by-step instructions on how to start your own eCommerce business on Amazon.
There are many popular ways to source products to sell on Amazon but if you’re just starting out, you might want to consider some of these low-cost options first:
This refers to sellers who buy products in retail stores at drastically reduced prices and resell them on Amazon. Sellers who do this keep a sharp eye out for retail clearance and inventory reduction sales both online and in retail stores. It’s not easy to figure out which products are profitable at first but you’ll get better as you go along.
If you’re planning to sell products that you make yourself, you should take time to understand Amazon’s seller fees for handmade goods to ensure that you’ll be making enough profits. The other challenge is ensuring that you can keep up with production once sales for your products begin to take off.
Dropshipping is a popular method because your vendor only charges you for the item when someone orders it making it a low-cost and low-commitment way of selling. However, dropship products tend to bring in low profits after paying your Amazon seller fees. Apart from that, you also have no control over defective products, inventory shortages or late shipments so make sure that you find a dropship vendor that is reputable and reliable.
There are two types of Amazon Seller Accounts to choose from: Individual and Professional.
• The Individual Plan costs nothing to set up but you’ll have to pay S$1.07 every time you sell an item.
• The Professional Plan offers more features but costs you S$32.05 per month no matter how many items you sell. (Psst, fees for the Professional Plan will be waived until 31 December 2020 so you should take this opportunity now!)
It’s important to take note that for both plans, Amazon also collects a referral fee for each sale, which is a percentage of the total transaction depending on the product category.
With these two plans, Amazon gives you the flexibility to sell one item at a time or as many as you possibly can. Think about which plan is better for your business but don’t worry if you change your mind as you can change plans at any time.
After setting up your account, you need to create your product listing. You can either match an existing listing if somebody else is already selling the same product on Amazon or create a new listing if you are the first or only seller for that product. It’s important to make your listings accurate, concise, and understandable so that your customers will find it easy to find your products and be more inclined to purchase them.
Amazon will actually lower your Seller Rating for not shipping an order for an item that you state as in-stock. To ensure that your seller ratings remain high, remember to keep your inventory updated regularly. Amazon automatically reduces your inventory count as your products sell so it will be easier for you to take note of the amount of stock that you have.
Your Seller Rating will also be affected if you don’t fulfill your orders in a timely manner so make sure that you choose a method that is suitable for your business. There are 3 ways you can do this:
Many Amazon sellers start out by shipping their orders themselves and you can choose to charge for shipping or to offer it for free. However, this means that you’ll have to settle the packing materials and logistics on your own.
Another way is by using an outside fulfillment company that can handle the packing and shipping for you. This is usually for eCommerce businesses that sell in high volume and use other platforms apart from Amazon. It might not be a cost-effective solution for small businesses that are just starting out but it is a good option to know once you want to scale up your business through other eCommerce platforms.
With Fulfillment by Amazon (FBA), you can ship your products to Amazon and they will help to stock, pack, and ship your products for you. This comes with additional FBA fees but you also get to enjoy perks that can boost your sales such as free shipping for Prime members and higher rankings for product listings.
Amazon is an incredibly accessible platform that makes it easy for anyone to cash in on the eCommerce boom. But ultimately, if your goal is to maximize your net profits and grow your business into a full-scale success, creating a business account that allows you to manage your business finances on the go will give you an edge over your competitors.