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How eCommerce Brands can Stimulate Growth by Selling on Amazon

Written by Sandy Mitchell P. | May 14, 2021 7:54:51 PM

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If you’ve been successfully selling your product direct to the consumer from your Shopify website, there’s a chance you’re looking at adding Amazon to your marketing mix. 

After all, each month, nearly 200 million people shop on Amazon from their laptops, tablets, or mobile devices. 🤯

That's a difficult number to ignore. 

On top of that, a majority of regular online shoppers start their product search on Amazon. 

So, how does selling via Amazon work? Is it expensive? How much control over your fulfillment will you lose? Is it really worth the effort?

Those are questions that most entrepreneurs have about adding Amazon selling to their marketing mix. We’ve got the facts you need to make the right decision for your business growth. 

How Does Selling on Amazon Differ From Selling on a Platform Like Shopify?

As a digital marketing agency, at EmberTribe we often suggest that eCommerce brands use direct-to-consumer (D2C) platforms like Shopify to gain better control of their inventory, sales, and data. However, many of our clients and potential clients tell us they want to use Amazon as a supplementary marketplace. 

There are distinct differences between the two sites—and it’s important to know how selling on Amazon could change the way you do your everyday business. 

With Shopify, you set up your own eCommerce store with the tools Shopify gives you. Shoppers visit you on your own website, and you do your own marketing to attract shoppers to your site. With Amazon, you sell to shoppers who search for items like yours directly on the Amazon site. This allows you to leverage the popularity of Amazon, but it also means you have a lot of competition on the same site.

When you use Shopify, you handle the fulfillment of your orders. With Amazon, you have the option to ship a supply of your product to an Amazon warehouse and have them fill your orders. This allows your customers to take advantage of Amazon Prime shipping and other perks, such as gift wrapping and the option to consolidate your product with other Amazon items for shipping. 

This is no small advantage. 

There are currently 90 million Amazon Prime members in the United States. Prime members have the option to search only for items that offer Prime shipping, a tempting option for budget- and time-conscious customers. 

What Does It Cost To Sell on Amazon?

Amazon offers several ways to sell your products using their platform. Each option has a unique set of fees and opportunities. These options are...

  1. FBM or MF (Fulfillment by the merchant or merchant-fulfilled). With this option, you list your item on the Amazon platform, but you ship the item to the customer from your own location. Items sold using this option are not eligible for the Prime logo, Prime searches, or Prime shipping. Fees for this option start at 99 cents per item or $39.99 per month (for unlimited items). There is also a "referral fee" for using the platform of between 8% and 15%, depending on the type of item.
  2. FBA (Fulfillment by Amazon). Using this option, you ship a supply of your items to an Amazon warehouse, and Amazon fills your orders and ships them to your customers. These items ARE eligible to use the Prime logo and carry all the benefits of the Prime program. For this option, you pay the $39.99 monthly fee and the referral fee plus a shipping fee of between $2.50 and $5.42 per item for items that weigh less than three pounds. Surcharges apply to items that weigh more than three pounds. Monthly storage fees are $.75 per cubic foot in January through September and $2.40 per cubic foot in October, November, and December. There are additional storage fees for oversize items and for those that are stored with Amazon for longer than 365 days.
  3. SNL (Small and light). This option applies to items that are under a certain size. Some SNL items are eligible to use the Prime logo. Fees for this option include the $39.99 per month fee for selling unlimited items and the referral fee plus between $1.97 and $2.39 per item for fulfillment. Storage fees and long-term inventory fees also apply.
  4. SFP (Seller Fulfilled Prime). When you use this option, you ship your products directly to the customer within the Prime shipping parameters. Amazon only allows carefully screened merchants to use this option and merchants must audition to be a part of this program. Depending on the size of your product and where your customers are located, this can be an expensive option. However, you regain more control over fulfillment than you do with FBA. Contact Amazon for current fees for this option.
  5. SNL-SFP (Small and light - seller fulfilled Prime). This option, available for smaller and lighter items, is similar to standard SFP but has lower fees. Contact Amazon for current fees for this option.

(Note: Amazon sellers' fees are subject to change without notice. We suggest you use the figures provided above as a guide, not as an absolute. You can get current information on Amazon sellers' fees by visiting the Amazon website.)

How To Get Started With Selling on Amazon

Amazon makes it easy to get started selling using most options on their platform.

1. Set up an account.

The first step is to set up an Amazon seller account. (This is different from the Amazon account you use to purchase items.)

2. Decide on a selling plan.

Next, you decide which of the selling plans you want to use. (See the options above.)

3. Upload descriptions and product images.

Amazon will then walk you through the process of uploading your product information to their platform. They'll also give you examples and templates to use to write your product descriptions.

4. Ship your products.

If you are using the FBA plan, you'll be instructed to ship your products to one of Amazon's warehouses. Your product pages won't be live on the site until Amazon receives and logs in your merchandise.

5. Track your sales and collect your money.

Amazon offers excellent reports to help you track your sales. You can tell which items are selling, what the customers were searching for when they landed on your product page, and where those customers live. Once your sales are fulfilled, your sales revenue will be deposited into the checking or other account that you linked to your Amazon account when you set it up.

How To Sell on Amazon’s FBA Program: Best Practices

It's our opinion that if you want to use Amazon as a primary or secondary platform to sell your products, it's best to use Amazon's FBA program. To make the most of this selling opportunity, we recommend the following best practices... 

  1. Calculate your fees before shipping your inventory to Amazon. That way you won't be surprised at the end of the selling cycle. Amazon fees can be tricky. Make sure you're prepared.
  2. Send only the number of items you estimate you will sell in 30 to 60 days. Otherwise, storage fees can dip dramatically into your profits.
  3. Make sure that you send enough items to always have items in stock. While you want to avoid incurring storage fees, being out of stock of an item will hurt your search results dramatically on Amazon. 

3 Resources to Read Before Selling Your eCommerce Brand on Amazon

Tips for Advertising on Amazon (Without Wasting Ad Spend) - TribeTalk EP 81

Watch this TribeTalk to learn about some tips our own growth specialists use to maximize client sales on Amazon. 

7 Data-Backed Steps to Optimize Your Amazon Listing

Sellerly, a marketing suite for Amazon Sellers, shared their top seven tips for optimizing Amazon listings, backed by data. 

6 Insider Tips for Selling on Amazon from eCommerce Growth Experts

Read up on actionable tips from growth marketing experts for selling your products on Amazon.

To learn more about whether selling your D2C products on Amazon is a good choice for your business, contact us at EmberTribe! We've been helping eCommerce entrepreneurs like you grow their businesses since 2015.
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