Amazon continues to be the top marketplace globally, with more than 300 million active buyers on the website and 1,029,528 new third-party sellers in 2020 alone. While it is a behemoth in the eCommerce industry, Amazon makes space for smaller online businesses to thrive on their platform. They have various programs, which includes their Fulfillment by Amazon service.
This article serves as an Amazon seller guide that takes a detailed and comprehensive approach in guiding a new retailer through the complexities of eCommerce order fulfillment and selling through the world’s top marketplace.
Amazon Seller Guide Topic 1: How to Set Up an Account
Establishing an Amazon store is straightforward and setting up an account entails only three steps:
- Choosing a Seller Plan
When signing up as a seller on Amazon, retailers choose the seller plan that fits the scale of their business. Amazon offers three seller programs:
- Individual Seller
Individual sellers are allowed to list 40 products on Amazon. With this account, the retailer pays Amazon $.99 for every item sold.
- Professional Seller
For more extensive operations, there’s the professional seller account. This option requires a flat fee of $39.99 every month, excluding transaction fees for every sale. Retailers that avail of this option can list more than 40 items on their account.
- Amazon Vendor
This invitation-only option allows Amazon to purchase products directly from a seller. High-purchase stores, as well as manufacturers and wholesalers, get this option.
- Creating an Account
Aside from the selected seller account, Amazon requires several pieces of information to complete the setup. It includes:
- Business Name
- Seller’s Legal Name and Address
- Contact Information
- Product Origin, or a Seller’s “Ship From” information
- Bank Account Information
- Shipping Preferences
- Setting Up the Store
Once Amazon has verified the account and associated contact information, it is time to set up the actual Amazon store profile. The store profile includes information about the seller as well as the listed products available for purchase. Retailers have the option to sell products already on the marketplace or list new products. Amazon requires the following information from a retailer if they list new products:
- UPC/EAN Number
- Product Title
- Product Description
- Product Images
- Search Terms
Amazon Seller Program vs. Amazon Vendor Program
Amazon offers several seller programs to retailers that are interested in selling their products on the marketplace. The choice depends on the scale of the operation, however, below are two of the major categories that sellers can fall under:
Amazon Seller Program
Most small and medium online businesses operate on Amazon’s Seller Central. Retailers have the choice to sell their products on the marketplace as a third-party seller or sign up for the Fulfillment by Amazon service.
This option is a good fit for smaller operations looking to list a few products on Amazon and maintain a separate eCommerce presence. It is also the best option for newer eCommerce businesses trying to test the waters without investing too much.
Amazon Vendor Program
Unlike Seller Central, Amazon’s Vendor Program isn’t open for all sellers on the marketplace. Instead, it is an invitation-only service that entails purchasing a retailer’s products and creating a listing for these items.
The Vendor Program is often open to sellers who get high volume orders every month. Because Amazon purchases their products, they lose control over the development and the product’s branding overall. However, these sellers no longer have to pay for inventory storage or referral fees to enjoy Fulfillment by Amazon.
Amazon Seller Guide Topic 2: What is Fulfillment by Amazon and How Does It Work?
Fulfillment by Amazon, or FBA, is an Amazon program that allows the marketplace to store, pick, pack, ship, and handle customer service for a retailer that sells on the platform. This fulfillment option is available for single items or a seller’s entire inventory. The cost of this service depends on the number of products stored in Amazon’s fulfillment centers and its dimensions.
Like setting up an Amazon account, signing up for the marketplace’s FBA program is simple:
- Determine and Upload Product List
As mentioned earlier, retailers choose to enroll selected products or include their entire inventory on the FBA program.
- Ship and Store Inventory in Amazon’s Fulfillment Hubs
Choosing the FBA service allows retailers to forgo storing and managing inventory from their warehouse. Through FBA, Amazon stores products for sellers in one of their 75+ fulfillment centers. The marketplace charges a storage fee for each product, and the seller remains the owner of the items listed with the service. For an extra cost, sellers can choose which warehouse to put their products.
- Amazon’s Pick, Pack, and Ship
Once an order comes in, Amazon picks, packs, and ships the product directly to the customer.
- Pay Per Piece
Amazon requires no minimum unit count to avail of the FBA program. On top of the monthly storage fee, retailers only pay for the number of items stored and shipped from Amazon’s warehouses.
- Receive Payment from Amazon
After shipping the order, Amazon collects payment from the buyer. Then, the marketplace deducts their fees for the FBA service and deposits the amount directly to a retailer’s bank account. Payments get deposited every 14 days.
Amazon Seller Guide Topic 3: Advantages of Amazon FBA
The logistics side of eCommerce is often overwhelming, especially for newer online sellers. There are plenty of moving parts, and figuring out how they all fit into your business plans can be a headache.
Amazon FBA provides a relatively low-cost means for retailers to store inventory and ship packages efficiently. Aside from the ease, sellers that opt for FBA are automatically eligible for Amazon Prime. Likewise, this option increases a store’s chances of bagging the coveted Buy Box listings. With more eyes on a listing, a retailer’s products become more visible.
Getting your goods on Amazon is challenging. Between the fees, the processes, and the different seller programs, it takes deliberate planning to maximize what the marketplace offers. That said, choosing Amazon as a third-party seller can do wonders for a retailer’s profit margins.
If you’re eager to start your Amazon journey but don’t want the extra challenges, then Let ZhenHub help you through the transition. Our tech-based logistic products offer ample support for your Amazon FBA goals. Request a free quote, sign up now, or get in touch with us, and our team would gladly elaborate this Amazon seller guide with you!