Selling on Amazon:

A Beginner’s Guide
Table of
Contents
Why sell on Amazon? 3
Amazon equals big wins for the little guy
Benefits of selling on Amazon for wholesalers

Amazon Vendor vs. Amazon Seller: 7

Which is right for you?
What is an Amazon Vendor?
Amazon Vendor pros and cons
What is an Amazon Seller?
Amazon Seller pros and cons

The costs of selling on Amazon 13

Amazon set-up costs
Amazon fees explained
Amazon FBA fees

Preparing to sell on Amazon 17

Sorting out order management and fulfillment
Defining your Amazon sales strategy

Amazon Integration Spotlight 20

How Amazon and TradeGecko work together
v

Why sell on
Amazon?

Selling on Amazon: A Beginner’s Guide

Why sell on Amazon

Amazon equals big wins

for the little guy
Despite some concerns that Amazon’s enormous eCommerce presence
would squash local small businesses, many savvy SMEs are taking
an “If you can’t beat ‘em, join ‘em” approach, and using the online
marketplace to their advantage.

In fact, more than half of Amazon’s sales are made by third-party

sellers who list their own products.

Amazon reached US$43.7 billion in global sales in 2017, and this figure
is projected to keep growing over the next ten years.

Table of Contents Selling on Amazon: A Beginner’s Guide 4

Why sell on Amazon

Benefits of selling on
Amazon for wholesalers
For small businesses, selling on Amazon offers a number of advantages:

Gain access to an enormous potential customer pool

1.
Building a loyal customer base and audience for your own store
requires time, money, and effort – things many small business
owners don’t have much of. Selling on Amazon allows you to
tap into a veritable treasure trove of potential customers, not
only locally, but all over the globe.

Scale up by outsourcing fulfillment

2.
FBA, also known as Fulfillment by Amazon, offers a straightforward
and cost-effective method of managing shipping and fulfillment of
orders once items are sold through Amazon’s marketplace. Items
sold are stored, packed, processed, and shipped through Amazon
for delivery and customer service is managed by Amazon as well.

Increase customer loyalty, trust, and average order values

3.
A study by Forrester reveals that selling on online marketplaces
is likely to boost customer loyalty, increase average order values,
and build trust. And almost 9 out of 10 customers search for a
product on Amazon even if they find it directly on a retailer’s site
– so it pays to surface your products at every possible touchpoint.

Table of Contents Selling on Amazon: A Beginner’s Guide 5

Which is right for you?

Amazon
Vendor vs.
Amazon Seller
Amazon Vendor vs. Amazon Seller

There are two main ways to

sell on Amazon: as an Amazon
Vendor or an Amazon Seller.

In fact, more than half of

Amazon’s sales are made by
third-party sellers who list their
own products. Amazon reached
US$43.7 billion in global sales in
2017, and this figure is projected
to keep growing over the next
ten years.

For small businesses, selling

on Amazon offers a number of
advantages:

Table of Contents Selling on Amazon: A Beginner’s Guide 7

Amazon Vendor vs. Amazon Seller

What is an Amazon Vendor?

As an Amazon Vendor, you act as the manufacturer/distributor/supplier, and
you are responsible for getting your products to multiple Amazon warehouse
locations. You can also incur fees for products that don’t sell quickly enough.
Although you take a hit on profit per product as a Vendor, you can make up
for it with higher sales volume potential.

There are two ways to sell as an Amazon Vendor:

Vendor Express Vendor Central

Vendor Express is open to
anyone and offers free handling
and storage of products.
You can also opt for direct
fulfillment i.e. drop ship. Bulk
orders are received as soon as
an item sells.
Vendor Central is available by
invitation only. It allows access
to enhanced marketing and
advertising opportunities,
customizable landing pages, and
the Amazon Vine product review
network (for an additional fee).

Table of Contents Selling on Amazon: A Beginner’s Guide 8

Amazon Vendor vs. Amazon Seller

Amazon Vendor pros and cons

Not sure whether selling as an Amazon Vendor is right for you? Here’s
a rundown of the major advantages and disadvantages of this method
of selling.

Pros Cons

Increased advertising opportunities Less control over pricing

More marketing capabilities More complex and inflexible

Access to programs like Prime Now fulfillment requirements

Ability to self-manage promotions Slower payment terms

Typically more expensive

Table of Contents Selling on Amazon: A Beginner’s Guide 9

Amazon Vendor vs. Amazon Seller

If you’re a relatively small business,

you might find that being an
Amazon Seller offers more support
than being an Amazon Vendor.

In fact, more than half of Amazon’s

sales are made by third-party sellers
who list their own products. Amazon
reached US$43.7 billion in global
sales in 2017, and this figure is
projected to keep growing over the
next ten years.

For small businesses, selling

on Amazon offers a number of
advantages.

Table of Contents Selling on Amazon: A Beginner’s Guide 10

Amazon Vendor vs. Amazon Seller

What is an Amazon Seller?

Amazon Sellers use the Seller Central Portal, where you own the products in
your inventory until your customers buy and receive them. You can choose
to manage fulfillment using Amazon’s FBA service, or you can do it yourself.
Typically, being an Amazon Seller is the cheapest way to start selling on
Amazon.

As a Seller, you have two different fulfillment options:

Fulfillment by Amazon Fulfillment by Merchant

(FBA)
With Fulfillment by Amazon,
you ship your products from
the manufacturer/supplier
to an Amazon Fulfillment
Center. They manage shipping
and returns to and from your
customers, and you pay Amazon
for storage fees and fulfillment
fees for each product sold.
(FBM)
With this option, you manage the
fulfillment of orders yourself and
handle shipping, returns, and
customer service. Typically, this
is a good option for businesses
that sell products with a longer
lead processing time.

Table of Contents Selling on Amazon: A Beginner’s Guide 11

Amazon Vendor vs. Amazon Seller

Amazon Seller pros and cons

Like being an Amazon Vendor, there are plenty of benefits to being an
Amazon Seller – but some potential downsides as well.

Pros Cons

Open to anyone Less advertising opportunities

Sell directly to Amazon’s customers Less control over the sales and
Typically cost-effective distribution process

Flexible fulfillment options Potential for high fulfillment costs

Typically lower sales

Table of Contents Selling on Amazon: A Beginner’s Guide 12

The costs of
selling on
Amazon
The costs of selling on Amazon

Amazon set-up costs

Before you get started selling on Amazon, you’ll need to think about
some key set-up costs:

UPC/barcode costs

Although setting up an account is free, Amazon’s terms of

service require that all products sold have a UPC (Universal
Product Code) or barcode to be included as part of the listing.
UPCs can be purchased online through various providers.

Product images and logo

To maximize your sales potential, it’s important to have

clear product images and a business logo. If you don’t
already have an online store with product images, you’ll
need to either pay a professional to do a product shoot
or cut down on costs by doing it yourself.

Buying samples

There’s no point in investing a significant amount of money

on purchasing products only to discover that they’re
not what customers are looking for. When starting out,
set aside a conservative budget for a small test order so
you can gauge customer interest without taking a major
financial hit. Also, make sure to shop around to find a
supplier that can offer a combination of favorable price
points and terms.

Table of Contents Selling on Amazon: A Beginner’s Guide 14

The costs of selling on Amazon

Amazon seller fees explained

Here are the main seller fees you’ll need to pay for selling on Amazon.

If you plan on selling less than 40 products a month, Amazon’s Individual

Selling Plan charges $0.99 per item plus referral fees. A Professional Selling
Plan is $39.99 a month and only comes with referral fees (not per-item fees).

What is an Amazon referral fee, you might ask? Simply put, it’s a percentage
of your total item price paid to Amazon after a sale is made, and the
percentage differs depending on the category of product being sold.

You may also see what’s called a variable closing fee. This fee applies only to
media products (books, for example), and typically costs $1.35 per item. Why
does Amazon charge a variable closing fee? It’s likely to ensure the company
makes a profit on lowpriced items.

Finally, you’ll want to be on the lookout for the Amazon commission if sold.
This is pretty straightforward – it’s the commission fee Amazon will charge if
your item sells, and it represents a percentage of the overall price per item.
Note that this fee changes depending on your location, but Amazon will
provide you a breakdown of the commission fees once you sign up as a seller
and list items.

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The costs of selling on Amazon

Amazon FBA fees

Both Individual and Professional Amazon Sellers can choose to use
Fulfillment by Amazon (FBA) to stock, pack, and ship products – but
there are some costs to consider.

FBA fees include boxes and packaging, and even cover returns handling
if your buyers return items to Amazon.

There are two fees associated with Fulfillment by Amazon:

Picking, packing, and weight-handling fees – covers the entire pack-

through-shipment process, including the cost of shipping.

Monthly storage fees – covers the cost of storing products in Amazon’s

warehouses.

FBA fees are based on the size of the product you’re storing and
shipping. Size include any packaging for your product, such as shoe
boxes, blister packs, or retail packaging.

There are two size categories:

Standard-size products – any fully packaged item weighing less than 20

pounds and not exceeding 18″x 14″x 8″.

Oversize products – any item over 20 pounds or exceeding 18″x 14″x 8″.

As with any business venture, choosing your fulfillment method for

Amazon is all about proper planning and research to ensure it’s as cost-
effective and efficient as possible.

Table of Contents Selling on Amazon: A Beginner’s Guide 16

Preparing
to sell on
Amazon

Table of Contents Selling on Amazon: A Beginner’s Guide 17

Preparing to sell on Amazon

Sorting out order

management and fulfillment
Before you pull the trigger on your Amazon store, make sure you’ve ticked all
of the following boxes.

 UPC/barcode costs
As we mentioned earlier, it’s likely you’ll need to have UPCs for any
products you list for the first time. If you have an approved trademark,
you can skip purchasing UPCs by registering your brand on Amazon.

 Set up Fulfillment by Amazon (FBA)

If you’ve decided to use Fulfillment by Amazon to manage your picking,
packing, shipping, returns, and customer service, remember that you
need to set up an FBA account separately to your main Seller account.

 Create and solidify your shipping & returns policy

Customer satisfaction comes down to shipping quickly and accurately.
You should have a straightforward shipping and returns policy in place
so that customers know when to expect their products, and what to do
if they want to return an item.

 Prepare your inventory for an influx of orders

Make sure you have a plan in place to handle an uptick in orders
coming in from your new sales channel. While you don’t want to be
left with a huge amount of surplus stock, you should have enough
inventory on hand to avoid tockouts and keep new customers happy.

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Preparing to sell on Amazon

Defining your Amazon

sales strategy
Whether your business is a one-person operation or you have a team on
hand to help, it’s important to dedicate time to growing Amazon as a viable
sales channel.

Think of your Amazon presence as a standalone venture that should be

reviewed and improved on continually. For many businesses, this means
testing different tactics and scaling those that work.

As a starting point, follow these steps to give yourself the best chance of
success:

Your business plan should include the following:

• Brand your products – show potential customers that you’re

established and trustworthy

• Register your brand with Amazon – make sure your brand’s

trademarks are protected and increase your credibility

• Use high-quality images and videos - showcase your products in their

best light

• Use your branding on product images, packaging, description, titles,

etc. – stand out from the competition and increase brand awareness

• Encourage reviews – back up assertions about your products with

recommendations from real people

As you begin to grow, consider utilizing a dedicated team with the know-
how and time to implement strategies specific to selling on Amazon.

Table of Contents Selling on Amazon: A Beginner’s Guide 19

Amazon
Integration
Spotlight
Amazon Integration Spotlight

How Amazon and

TradeGecko work together
TradeGecko’s Amazon integration helps you to manage stock levels on
Amazon, retrieve sales orders and process them.

Integrating Amazon with TradeGecko is free, as long as you have a

TradeGecko account and an Amazon Seller account.

Using the two systems together allows you to streamline and automate
operations including:

Creating products

When you publish a product on Amazon, we match it by SKU and create the
respective link in TradeGecko.

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Amazon Integration Spotlight

Fulfillments

TradeGecko checks for updated orders on Amazon every 10 minutes. If an

order has been updated to Shipped on Amazon, it is automatically updated
in TradeGecko.

Pending orders

For both FBM (Fulfilled by Merchant) and FBA (Fulfilled by Amazon),

TradeGecko pulls pending orders from Amazon. Once the payment details
tied to the order have been confirmed, the order will automatically progress
to finalized, and the prices will automatically be updated in TradeGecko.

TradeGecko also integrates with FBA specifically to automate shipping orders

to and from FBA locations, transfer stock records across both systems, and
control stock distribution among FBA warehouses.

In other words, TradeGecko and Amazon work together to help you save
time, work smarter, and ultimately, build a profitable Amazon business.

Table of Contents Selling on Amazon: A Beginner’s Guide 22

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