The Dana Guide to open an online shop on Amazon and sell on the marketplace without having proprietary e-commerce. After the boom during the COVID-19 pandemic, e-commerce has continued to grow, despite the reopening of physical stores. According to data from Netcomm, the Italian Digital Commerce Consortium, online purchases in India will reach 45 billion euros in 2022, an increase of 14% compared to last year.
In short, Italians have become accustomed to buying online and never want to go back. We must roll up our sleeves to make the most of new opportunities. Amazon is undoubtedly the essential symbol of online commerce, and small and prominent entrepreneurs are approaching this platform to start selling their products.
Register As A Seller And Choose Your Sales Plan
To become a seller, you need to access Amazon Seller Central, the platform through which you can create your product catalog, define offers, manage orders, communicate with buyers, analyze sales data, and use Amazon’s advertising tools.
To register as a seller, you need the following:
- a postal business address or an Amazon customer account;
- to credit cards;
- current account number associated with the legal contact person;
- a valid identity document;
- company registration data (including VAT number);
- Chamber of Commerce profile updated in the last six months;
- credit card issued by a bank or virtual institution (e.g., N26) – (NO debit cards);
- bank account (IBAN, BIC, Swift);
- the dedicated email and different from that of a buyer account;
- utilities (electricity/gas) with a suitable address for the registered office;
- The mobile phone number of an internal company employee will be used during access to receive a numeric security OTP code following login.
You are also asked to choose a name for your shop on Amazon, which can also be different from your Registered Brand. Amazon offers two specific sales plans, dedicated respectively to occasional sellers (Individual sales plan) and continuous sellers (Professional sales plan).
Individual Selling Plan (Occasional Sellers)
Anyone can start selling on Amazon as an Individual seller. In this case, Amazon will retain a prepaid rate of 0.99 euros on each item sold without a monthly subscription. Amazon will automatically set the shipping costs for orders and determine the terms of service sellers can offer buyers.A referral fee is also applied, i.e., a transaction management fee, which varies according to the type of product and its price.
It ranges from 7.21% (e.g., Electronics, Large Appliances, Tires, IT) to 46.35% for Accessories for Amazon devices, with an average of 15.45% for other product types. You can view the complete table on the dedicated page on Amazon Seller Central for more details. If no sale is made, the Individual Seller will not have to pay Amazon fees. The individual sales plan, therefore, allows you to add new products to the Amazon catalog and take advantage of Fulfillment by Amazon, with a sales limit of 40 items per month.
This solution is dedicated to those who may have, for example, a sales volume subject to seasonal fluctuations, to those who want to take their first steps into the marketplace, or to those who intend to use Amazon as a simple alternative sales channel, perhaps to dispose of surplus stock. Discontinued items etc. Also, as described by Amazon, the plan is ideal for an individual seller who doesn’t plan to advertise products or use advanced selling tools.
Professional Sales Plan
The Professional sales plan provides a subscription fee of 39.00 euros/month, regardless of the sale or publication of offers. No fixed closing rates are applied to sales, but there are commissions on the item price, precisely the same as for Individual sellers.
A Professional seller has access to inventory features that allow you to upload multiple files at once or manage orders via feeds and reports and is, therefore, best suited for those who:
- sells more than 40 items a month;
- wants to advertise their products;
- wants to be eligible for placement at the top of search results;
- wants to use advanced sales tools, such as APIs and reports;
- wants to sell products that fall into restricted categories.
In addition to being able to add products to the Amazon catalog and use Fulfillment by Amazon, therefore, the professional Seller will be able to:
- Request authorization to sell in additional categories ;
- save time by creating offers in bulk ;
- oversee stock with feeds, accounting sheets, and reports ;
- gain placement eligibility at the top of search results ;
- increment deals effectiveness on account of Programming interface mix ;
- set shipping costs ;
- attract new customers thanks to internal advertising tools;
- manage promotions and free shipping ;
- manage your account using multiple users.
Amazon Brand Registry
For brand-owned sellers, Amazon uniquely offers tools to protect their brand, intellectual property, and advertising options to improve traffic and conversion.
To access the benefits, you must create a professional account and meet the following requirements :
- The trademark must be registered actively in all countries you want to register, or a request for trademark registration must be submitted through the Amazon IP Accelerator program.
- The mark must consist of text (word mark) or an image containing words, letters, or numbers (figurative mark).
You can enroll in the Amazon Brand Registry and enjoy the reserved benefits if you meet the requirements. Further information can be found on the dedicated page on the Amazon Brand Registry.
Fulfillment By Amazon: What It Is And How It Works
As we have seen, individual and Professional sellers can use Fulfillment by Amazon. All sellers have two options available for delivering the purchased products to customers: either by personally managing the inventory and shipping of the products (Amazon FBM, Fulfillment by Merchant) or by relying on Amazon Logistics, which will take care only of the packaging, labeling, and shipping of the products, but also the customer assistance and the rendered service. Relying on Fulfillment by Amazon also comes with additional benefits, including Prime eligibility and free shipping.
FBA has two different types of fees:
- Handling fees (charged per unit sold and include order picking and packing, shipping and handling, customer service, and product returns);
- Inventory storage fees (charged for all items stored in an Amazon fulfillment center; fees are calculated based on average daily inventory volume measured in cubic feet).
Among the functions and services offered by Fulfillment by Amazon, we can mention:
- FBA customer support – Multilingual phone/email support for your store’s customers.
- FBA Returns – Manage all customer service for returns via the Online Returns Centre.
- Amazon Affiliate Courier Program, to take advantage of discounted rates for shipping products to storage centers throughout Europe.
- Multi-Channel Management manages orders for inventory sold on the company website and other channels.
- Small and Light, a program specially designed for light and small products, is characterized by reduced logistics management costs.
There are also numerous other services (e.g., barcode labeling, restoring of return packaging…), all subject to a commission on the single item sold. For a more detailed overview of FBA services and fees, please refer to the dedicated section on Seller Central.
Amazon Prime Program
The success of Amazon Prime is one of Amazon’s strengths, which over the years, has reached over 100 million registered customers who make purchases every day, benefiting from discounts, offers, and, in particular, fast and free shipping.
Prime Days also take place every year. According to Amazon, Prime Day on July 12-13, 2022, was the most successful ever, with more than 300 million products sold and savings for Prime members of more than $1.7 billion (source: Amazon press release ). To join the ” Seller Fulfilled Prime ” program, it is not necessary to rely on Fulfillment by Amazon (FBA), but it is necessary to meet some requirements, including:
- Have an Amazon Professional seller account,
- Have a national warehouse from which to manage orders,
- ship over 99% of orders on time,
- Have a request crossing out the pace of under 0.5%.
Internal Advertising In The Amazon Platform
Amazon also offers several advertising solutions to reach and engage users, including ads that appear on the first page of search results or product pages. In particular, through Seller Central, Professional sellers can choose between the following:
Ads involving individual product offerings on Amazon are displayed to users within search results and product detail pages. They are handy for reaching buyers who are highly prone to purchase and actively looking for products related to yours.
Ads showcasing the Seller’s brand and product catalog, with brand logo, custom headline, and product selection. Sponsored Brands ads help you quickly increase consideration of your brand and product collection from shoppers who have shown interest in similar products.
This is a recent self-service advertising solution based on ad placements on and off Amazon. This allows advertisers to reach relevant audiences during the purchase journey with easy-to-create visual ads and manage.
Multi-page, personalized shopping destinations on Amazon dedicated to individual brands, highlighting the brand history and product offerings, allowing professional sellers to build their e-commerce site without coding skills or design. To access advertising services, you must have an Amazon account, be a Professional seller, and be registered in the Amazon Brand Registry.
Other Amazon programs And Initiatives
Amazon Made In India
Amazon Made in India is a unique showcase dedicated to Indian products classified as “Made in India” according to current regulations, made by large companies, SMEs, and artisans. The store’s goal is to help customers discover a wide range of items that best represent India, thanks to a selection of products belonging to the following categories:
- kitchen and cellar ;
- home and furniture (furniture, household items, textile products, and interior decorations);
- clothes and accessories (clothes, shoes, bags, jewels, and watches);
- beauty and wellness (personal care products).
To sell in the Made in Italy showcase, authorization is required.
The Amazon Handmade section allows artisans from over 80 countries to sell their handcrafted creations by creating a personalized profile on the market place.
To join the program, you need the following:
- Be an individual craftsman or a craftsman who works with a small group of up to 20 individuals, including family members, employees, and members of a non-profit or charitable association.
- All items must be designed and manufactured by the individual craftsman or small group to which he belongs.
- The articles cannot be produced through an automated mechanical process, and it is not permitted to entrust their production to third parties.
- Products sold will be deducted at a 12.36% referral fee.
Amazon Store And Proprietary E-Commerce: Differences And Opportunities
Now that we have explained in detail how to open a store on Amazon, here are a few words about the real reasons that should push you to use this platform rather than a site you own. Suppose you want to sell online using your e-commerce, first of all.
In that case, you have to get it found by users and, to do it in an acceptable timescale; you need to invest time and money in rather expensive services such as, for example, positioning and Google advertising (Google Ads) which, however, hardly guarantee equal visibility to that offered, precisely, by giants of the caliber of Amazon.
Opening an online shop in a vital marketplace ensures visibility and indisputable guarantees, but even selling on Amazon as on other platforms can prove tiring. To win the fierce competition, it is essential to sell exciting products at very competitive prices with inevitable repercussions on each Seller’s margin from selling a single product.
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