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Mon Mar 5 2012 13:00:48

Skip McGrath on Getting Exclusives to Sell Merchandise on Amazon

By: Julia Wilkinson

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How do you branch out to selling merchandise other than books and media on Amazon.com? And wouldn't it be nice to get the "buy box" for a given product on that site?  We spoke with online selling expert Skip McGrath about how he has successfully moved new types of products, and the specific thing he did to make his sales skyrocket.

Q: Although you have now moved on to other types of merchandise, can you talk a bit about how you got started selling on Amazon. Was it with books, and/or other media? When did you start selling on Amazon?

A: We started selling on
eBay in 1999 and branched out into Amazon a few years later -- I think it was around 2006.  I collect books on nautical and maritime history subjects and often end up with a lot of duplicates and extra books when I buy a box.  I had been selling them on eBay and half.com, but decided to give Amazon a try.  Sales were fairly slow but steady.  In 2007, I added our line of Firepits that we sell on eBay.  Again – sales were somewhat slow but steady. 

I think we sold about one or two a week versus five to eight a week on eBay.  But since there were no listing fees, and the firepits were drop -shipped for me, there was no inventory cost, so I just looked at Amazon as another sales channel that only cost me money when something sold.

Q: When did you branch out to selling other products on Amazon? What type of product was your first non-media product to sell, and how was the approval process?

A: Around that same time (2007) we expanded our line of products solidly into housewares – mostly kitchen gadgets and cutlery. And the next year we moved into gourmet foods.  We were doing pretty well on eBay, and like the other things I was also offering them on Amazon.  We didn’t really have any issues being approved.  By then I had a track record with Amazon so no real issues. 

Amazon launched Fulfillment By Amazon (FBA) around then, but I didn’t really pay any attention to it – Big mistake! We finally moved into FBA last year and my Amazon sales have skyrocketed – We are now selling almost ten times the product on Amazon as we sell on eBay.

Q: Can you talk about Amazon's requirements for selling in non-media categories? Does a seller have to be a certain size (in terms of volume of merchandise), have a certain track record, etc.? 

A: There are a few departments such as computers, clothing and jewelry where new sellers need to get approval, but they are pretty open as long as your feedback scores are good and you don’t have any A to Z guarantee claims. 

Amazon doesn’t really publish exact requirements.  But we were recently approved to sell in jewelry.  I applied and it was approved in about 3 days.  Our overall scores are good –but not perfect.  I do know that it's easier to get approval if you are going to sell the items via FBA (Fulfillment By Amazon) because Amazon knows they will control the fulfillment for a better customer experience.

Q: Tell us how you negotiate exclusive deals with manufacturers. What tips can you give to other sellers who may want to do the same?

A: Karen and I go to a lot of wholesale trade shows. When I am there we look for small manufacturers and products that are not currently being sold on eBay or Amazon.  A lot of time this is the policy of the seller – they don’t want their products online for various reasons.  So I have developed a sales pitch that goes something like this:

“Mr. Vendor, I agree with you about not selling on eBay.  If you offer your product to eBay, sellers pretty soon they will all be competing with each other and driving prices down and then your retail customers will get all upset.  The same thing happens on Amazon too.” 

At this point the vendor usually nods his head in agreement so I go on.  “But you know, there is a way to access those marketplaces without angering your retailers.  What retailers hate is when someone walks into their store with a smart phone and looks up your product and sees it selling cheaper on eBay or Amazon.  But we have a solution for that.  We represent several companies online on an exclusive basis where we agree to hold your retail or MAP ("minimum advertised price").

"Since we are the only seller, we can control the price.  And you will still sell the same with one seller as you would with many.  After all, if the market for your product is six units per day, you would still sell the same number of units with six or seven sellers as you would with just one.”

At this point I show him some of the other products I am selling exclusively online and try to close the deal.  I am only successful about 25% of the time, but I now have six deals and all of them except one are pretty profitable.

Q: Can you talk about your source (or type of source, a wholesale co., etc.) for the jewelry line?

A: Just like I showed you above, a few weeks ago we were at the Seattle Gift Show, and saw a company selling a very nice line of sterling silver jewelry.  They had a pretty strict policy about selling online and would not permit selling their products on eBay or Amazon.  They would not budge on eBay, but I did negotiate a deal to sell on Amazon.  We just sent our first shipment off to FBA a few days ago.  They haven’t been received yet so I can’t tell you how they are doing, but I am pretty confident they will sell well.

One of the books I publish is called
The Wholesale Buying System. I have whole chapters in there about wholesale trade shows and negotiating with wholesalers.

Q: What are the various advantages of having the buy box on Amazon, aside from the obvious visibility?

A: The visibility is everything.  Amazon has two types of shoppers – careful, and impulse shoppers.  Being in the buy box gets you the impulse shopper every time.  They almost never click on the link to see all the offers.  The careful shopper will look at other offers, but if you are the exclusive seller of something, then there aren’t any other offers to look at.

If you are the only seller of a specific product then you will always be in the buy box. So when I negotiate an exclusive with a manufacturer to be the only Amazon seller - that is what I mean by "exclusive." You don't have to be an FBA Seller to get the buy box, but its a distinct advantage.

Q: How difficult has it been to create the listings? e.g. are their specs you have to meet in terms of product photos, prepare and ship merchandise to Amazon, etc.?

A: I struggled with this at first, but it's actually easier and faster than eBay.  I think it took doing about five or six listings to get the hang of it.  I got together with Chris Green, Suzanne Wells and Jim Cockrum to create an Amazon selling course.  Jim Cockrum took the lead and organized everything and well as hosting it on his website. It's called
The Proven Amazon Course and has videos that show you all aspects of creating listings and doing everything you need to do in Amazon Seller Central to sell.




Comments (2) | Permalink

Readers Comments

Skip McGrath on Getting Exclusives to Sell Merchandise on Amazon   Skip McGrath on Getting Exclusives to Sell Merchandise on Amazon

by: bacpro This user has validated their user name.
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Wed Mar 7 13:06:56 2012

I was a seller on Amazon a few years ago. I was terminated because I listed Academic Software no questions asked out of the blue I got a noticed that I was terminated and my funds would be held for 90 days for pending refunds. So I waited and finally received my money. I tried to get re-instated but I could not. Three years later I moved to another state and tried again,and could not get re-instated. My question: Is it possible to ever get re-instated or this forever.
Thanks
John

Skip McGrath on Getting Exclusives to Sell Merchandise on Amazon   Skip McGrath on Getting Exclusives to Sell Merchandise on Amazon

This user has validated their user name. by: Ming the Merciless

Thu Mar 8 15:22:18 2012

The exclusivity arrangement would last as long as the product performed poorly enough not to catch Amazon's eye.

How long would such an agreement last once Amazon focused their greedy acquisition laser on it?



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