The article below originally appeared at http://www.psloveblog.com/writing-services/sell-products-amazon on 3/11/2014 and is not the property of 5NorthMarketing.com. We believe, however, that it contains wonderfully written and insightful information worth sharing.
There are two ways to sell products on Amazon. You can list your products on the Amazon website and ship them yourself when they sell or you can ship your products to Amazon and they will sell them for you. Either way gives you a lot of exposure but you may find one way to be far better than the other.
The way to maximize your product's exposure on Amazon is to sell products on Amazon as an FBA seller. FBA stands for Fulfillment By Amazon. This is when you label all your products, put UPC codes on them and then ship the whole bunch to Amazon's warehouse. There are big advantages to selling your products on Amazon in this way. Listing your products on Amazon as a regular seller certainly gives you exposure to new customers, but FBA will do a lot more for you.
When you get approved to sell products on Amazon, you will list your products, upload photos and wait for sales. When you get a sale, Amazon will send you the sale information so that you can ship the order to the customer. You will need to pack the order and pay to have the product shipped to the customer. You will receive your money within a couple of weeks and it will include the shipping charge that you had specified on your listing. Amazon will deduct their fee from that amount and give you the rest.
The advantage to registering to sell your products on Amazon is that you will receive a lot of exposure that you have not been able to get elsewhere. Your product will be seen by possibly thousands of people every day. Obviously, you are going to make sales. Amazon will charge you a per item charge, like $1 plus a percentage up to about 15%. It is well worth it for most companies because without Amazon they would not have made the sale at all.
The downside is that you cannot afford to ship as cheaply as Amazon. The cost of your packaging supplies like boxes, tape and stuffing plus the cost of UPS or USPS shipping fees is going to put you at a serious disadvantage over the sellers who use Amazon's fulfillment program.
Selling your products on Amazon as an Amazon FBA seller gives you some serious advantages. How this works is that you package and label your products with a UPC code. Then you pack up your entire inventory and ship it to Amazon. You fill out an Amazon spreadsheet with all your product information and send that in. When something sells, Amazons ships it to the customer. If a customer doesn't like it and sends it back, then Amazon handles all of that. All you do is get the inventory to Amazon, list your products and answer the occasional customer question.
The best part of selling your products on Amazon as an FBA seller is it is the FBA seller that gets the massive amount of exposure by Amazon. Amazon does play favorites and the FBA seller is their favorite. Amazon will display the products of FBA sellers far more often near the top of the list than regular sellers. So, there is a lot more chance for a sale because it is the FBA seller that is usually listed near the beginning of the category.
Another huge advantage is that Amazon will offer free shipping on the products of an FBA seller. You will be charged a shipping fee, but if it is less than a pound the charge is only about fifty cents. You would not be able to ship first class for fifty cents on your own!
What Amazon will charge when you sell products on Amazon as an FBA seller is a pick and pack fee of about $2.50 and a commission of about 15%. Some categories are charged less, but most are in that 15% range. If you are selling a product for $19.95, the seller fee can run around $5.50 or so. There is also a storage fee and if you are selling smaller products like a shirt, let's say, it'll cost maybe a cent or two each month. There is also a monthly fee of $39.95 a month.
When I was contacted by Amazon and asked to sell products on Amazon.com, I looked at both programs very carefully. It became clear right away that the FBA seller had a real advantage. I told Amazon that I would list my products and give it a try, but I would only do it as an FBA seller. They quickly approved me and I was selling products in just a couple of weeks.