Winning Strategies for Selling on Amazon, Part One
By Julia Wilkinson
If you don't sell on Amazon.com, at least as part of a multi-channel strategy, are you missing out? Amazon third-party sellers experienced 50% unit growth on Cyber Monday, and in 2013, they sold more than a billion units worth tens of billions of dollars.
It's no wonder more and more Amazon sellers are packaging up not only books, but all kinds of other products, and shipping them off to Amazon warehouses all over the U.S. in order to participate in Fulfillment by Amazon (FBA). In fact, Amazon said the number of active Marketplace sellers using its FBA service grew more than 65% in 2013 compared to 2012.
EcommerceBytes gathered a panel of Amazon selling experts to ask them about what they sell, how the platform has changed for them over the years, and techniques they recommend. Note that every business is different; be sure to do diligent research while crafting your own selling strategy.
Part One presents an introduction to the panel along with information about how they are using Amazon to sell online. Hint: exploring Fulfillment by Amazon is recommended.
From CD's to Condoms: What Do They Sell?
EcommerceBytes: How long have you been selling on Amazon? Tell us what types of things you sell.
ScanPower's Chris Green: I started selling on Amazon in 2006. We've primarily sold power tools, toys, books, and media.
SellerCoaching's Bob Willey: I began selling on Amazon about 11 years ago, mostly books in the beginning. I started FBA in the early days, over five years ago, also started FBA Rocks in August 2008. Now I sell Books/Media, Toys/Games; just about anything I can make money on.
BookToTheFuture's Nathan Holmquist: I've been selling on Amazon since 2006. I sell mostly books, CDs, and DVDs.
MultiChannel Surfer's Steve Lindhorst: I've been selling on Amazon in earnest since 2007. I sell anything I can make a profit on. I've sold things like condoms and enema kits, but I especially lean toward books and toys.
EcommerceBytes: Sometimes it's hard to believe Amazon started out just selling books. If you sell books, about what percent of your sales are they?
ScanPower's Chris Green: Many Amazon sellers start with books because they are EASY. Easy to identify (barcoded), easy to store, easy to list, and easy to ship. They can also be found for very low prices which can make it an attractive category to start with. Even if a new seller makes some mistakes, they won't be very costly.
I have two Amazon accounts; one for books and media and one for everything else. For the most part, the accounts are split pretty evenly (about 50% books/media).
SellerCoaching's Bob Willey: Early on it was the majority of my sales, now annually it is about 50% of my sales. And during later, Q4, it is less than 25%; mostly toys/games and other items sell during Q4.
BookToTheFuture's Nathan Holmquist: Ninety percent of my sales are media items such as books, DVDs, and CDs. The other 10% are random categories.
MultiChannel Surfer's Steve Lindhorst: I started by selling books - but it was because I really love printing and books. I felt like I was "liberating" them somehow by getting them off dusty shelves and into the hands of readers.
As I've moved more into selling new retail products, my book sales have decreased as a percentage. I would say it's down to around 15% of my total sales now.
Changes in 2013, and the Importance of FBA
EcommerceBytes: What do you think have been the biggest changes in 2013 for sellers on Amazon?
ScanPower's Chris Green: The evolution of the FBA platform. 2013 saw significant changes in warehouse assignments, split shipment, hazmat issues, oversize fee structure, sales tax settings, and even Buy Box rules. All of these changes ultimately benefit the Amazon customer by getting them their items faster and encouraging lower prices. I would expect to see more of the same in 2014.
SellerCoaching's Bob Willey: Finding sources of marketable product and trying to avoid the "seller crowds." Too many sellers flock to the same sources (like ToysRUs), eroding the price quickly.
BookToTheFuture's Nathan Holmquist: The biggest change was probably when Amazon changed the Super Saver Shipping minimum from $25 to $35. (Note from the Editor: see, Sellers Speculate on Impact of Amazon's Shipping Change.)
MultiChannel Surfer's Steve Lindhorst: I believe the addition of Fulfillment Centers is having a good effect on sellers and their overall businesses. I believe the key to my Amazon business is selling through FBA. The better FBA gets at servicing the customers, the more opportunity for sellers.
More and more Amazon sellers are moving to FBA. It sometimes seems there is now so much selling competition on Amazon, a seller needs to send at least some inventory to FBA to be successful. Do you agree with that, and why or why not?
ScanPower's Chris Green: I 2000% agree that a seller has to leverage the FBA platform these days and even more so in the future. The Amazon Prime program has become very successful and 2013 was a "tipping point" year for Prime in my opinion.
In the past, it was rare to run into someone who knew what Amazon Prime was. In 2013, I met numerous people who were huge Prime advocates. I suspect that this will increase.
This quote is directly from Amazon: "50% of all Amazon buyers have never purchased an item from a third-party seller who does not use FBA."
That's a lot of customers that sellers are missing out on by not having their inventory available through FBA! Sellers need to remember that it's not an all-or-nothing thing with FBA; they can use both FBA and merchant-fulfilled. Some items work better on each platform due to geographic demand, product weight, even FBA limitations such as hazmat or international shipping restrictions.
SellerCoaching's Bob Willey: FBA is the way to go, it does greatly improve your selling opportunity, getting the PRIME buyers and also FSSS (Free Super Saver Shipping), plus most buyers see "Fulfilled by Amazon" sellers as basically the same as Amazon.
BookToTheFuture's Nathan Holmquist: I believe sellers will have to move to FBA to survive. There are just too many advantages of using the program, especially from the customer's point of view. They get free shipping, fast shipping, the comfort of knowing that it's coming from Amazon, no hassle return policy, etc.
MultiChannel Surfer's Steve Lindhorst: I am a total FBA convert. The advantages it offers sellers far outweighs any disadvantages in the long run. Better visibility in search results, the time savings by having Amazon handle orders and customer service, the fact that I don't have to pay for a place to store inventory, etc. I can't see why anyone would hesitate to use FBA.
Hiring Help with Sourcing, Listing and Shipping
EcommerceBytes: Many of you have a very high volume of sales. Do you have help sourcing, listing or shipping? And how do you work it so it doesn't cut into your profits?
ScanPower's Chris Green: Every person has their strengths and weaknesses. Sellers should look to hire help or outsource the things that someone else can so that they can focus on the cash-generating portions of their business. A seller should not be spending four hours a day packing up boxes at the expense of sourcing new inventory.
Putting items in a box, then putting tape and a label on a box is minimum-wage work. Outsourcing fulfillment such as using the FBA program from Amazon can help with this. New services will become more popular in 2014 such as myinventoryteam.com, a company that will receive, relabel for FBA, and send to Amazon's warehouses for you.
SellerCoaching's Bob Willey: I do get some assistance with Listing. Sourcing is not a problem, as I love doing that. It can cut into your profits, but you have to list things and get them shipped in, to get them sold.
BookToTheFuture's Nathan Holmquist: I try to use the tools that Amazon offers to expedite the entire selling process. For shipping, I use FBA which basically does the shipping, packing, and customer service for me. There are extra fees for this, but I'm able to price my books (on average) $6 higher than the merchant fulfilled competition. So after all the fees, I make about $3 more per item when I use FBA.
For listing, I use the Amazon FBA Label Service quite often. This saves time because I don't have to manually put the 1 x 2.62 inch labels on every book. This can cut the listing time into half. It does cost an extra 20 cents an item to use this service, but I think it's worth it.
MultiChannel Surfer's Steve Lindhorst: I track down all of my own products, but I use a scouting/listing service that has a monthly fee.
Stay tuned for Part Two of the series where the panelists discusses the role of scanners in Amazon selling, how Amazon compares to other marketplaces, their best tips for sellers, and what they see coming in 2014.
About the author:
Julia Wilkinson is the author of "The eBay Price Guide" (No Starch Press, 2006) and "eBay Top 100 Simplified Tips & Tricks" (Wiley, 2004-6). Her free "Yard Salers" newsletter is at available at YardSalers.net where you will also find her latest ebook, Flip It Again.
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