Category Archives for "Amazon"
It’s a great question and the first answer is going to depend on what you plan to sell. If you want to sell your used/new unwanted items just to get them out of the way or raise some extra cash, then Ebay is the best place for this.
However, if you plan to make a regular income selling new items that you source and then sell to make profits, Amazon is without question your best bet.
Amazon has twice as many shoppers as Ebay. So more potential customers to tap into. 300 million to be precise!
Amazon customers buy and spend more than Ebay shoppers do. Figures show that Amazon buyers are spending at least double on average per annum, than Ebay buyers.
The average Amazon shopper has a higher annual income than the average Ebay shopper and is willing to spend more on an item.
On top of this, Amazon has it’s own loyalty scheme called ‘Prime’ membership where customers pay an annual fee in order to gain certain benefits such as free shipping. This brings Prime customers back to shop on the platform over and over again because they naturally want to get the most bang for their membership buck. According to recent reports, the number of Prime members in the US is more than 60 million!
Why is this good for sellers? Because these Prime customers are frequent shoppers and will often purchase several items in one session. AND, because of their above average annual household income, they will readily pay more for an item than the average Ebay shopper. This means that you, the seller, don’t need to sacrifice your profits by selling at ridiculously low prices in order to make enough sales.
In order to fully benefit from this as a seller, you should be selling via FBA (Fulfillment by Amazon). This is where Amazon warehouses your items and ships your orders to your customers. In any case, you’d be crazy not to take advantage of FBA because it cuts your workload down and takes away the headaches of packaging and shipping orders to customers.
So providing you sell through FBA, all those Prime customers will see a little icon beside your item listings, letting them know that your item qualifies as a Prime purchase. Many Prime customers will ONLY buy items that qualify, putting you at an advantage over other non-FBA sellers.
There one really BIG advantage of choosing Amazon over Ebay if you plan to sell items regularly…
It’s less work!
When you list an item on Amazon, you don’t need to keep re-listing it. Nor do you need to take the payments for customer orders. Amazon do that on your behalf. FBA sellers don’t need to deal with refunds either, because once again, Amazon does this.
In summary, if you are in thinking about selling on one of the big online marketplaces, Ebay or Amazon, the only time that Ebay would be your best bet, is when you want to sell some unwanted personal items or perhaps a one-off lot of stock. Otherwise, Amazon is a much better option over all.
Amazon selling fees are quite low when you take into account the fact that as sellers we use their platform, leverage their trust and credibility, and make use of their registered customer base of close to 3 million shoppers.
Shoppers on Amazon tend to be prepared to pay a little more for items than they would on say, Ebay for example. Therefore we can set our prices that little bit higher, which helps to offset some of the fees.
That being said, we still need to know what these fees are so that we can work out whether or not it’s possible to make a profit on an item we want to sell. Sometimes new sellers simply look at the wholesale cost of an item, compare it to the selling price on Amazon, and think they can make a great profit. They completely overlook the fact that Amazon needs to make money too!
Amazon Referral Fee
This is a percentage of the selling price of each item sold on Amazon and it’s usually 15%, although there are some categories where this percentage is a little higher or a little lower. Generally though, you can expect your referral fee to be 15%.
For example. If you were selling a dog lead for $22.99, Amazon would take $3.45 (15%) from each sale.
This only applies if you are using ‘Fulfillment by Amazon’,. This is where Amazon stores your items at their warehouse and then ships them out to customers as your orders come in. It’s a great service because it takes away the headache of packing and shipping out orders.
For most items this fee is around $2.60 If the item is large and bulky, it will be a little more than this and if your item is classed as ‘small and light’, it will be less.
If you are not using FBA, this fee does not apply.
Both the Referral Fees and the FBA fees are taken from your earnings. You don’t need to pay either of these fees from your own pocket.
FBA Long-Term Storage Fees
Again, this only applies if you are using Fulfillment by Amazon and these fees don’t kick in unless you have stock at the FBA warehouses for longer than 6 months. Meaning, your stock is slow selling. There are ways to avoid this happening, but if it does happen, then you need to factor in around $0.55 per item per month
Professional Seller Account Fee
As an seller, you can either open an ‘Individual Account’ or a ‘Professional Account’
There is no monthly fee for an Individual Account, but you will pay Amazon $0.99 per item sold in addition to the costs listed above
The Professional Account has a monthly fee of $39.99 (first month is free), but you do not pay the $0.99 per item sold.
Generally, if you intend to sell more than 40 items a month – which hopefully you do – then the Professional Account is the one to go for.
Even when factoring in the fees, there’s good money to made as a seller on Amazon providing you do your calculations first. Of course there’s more to it than just making sure you can turn a profit. You also need to know how to choose the right items to sell, where to get them, how to create listings that convert to sales and more. Even so, Amazon is still a great place to sell. New sellers can still make their mark and it doesn’t require a big start up budget either 😉
As a new seller on Amazon, you may be feeling a bit uncertain about which categories to start selling in. When I started selling back in 2013, I had no idea which categories were the most popular or which were the most competitive, and I know from my student’s feedback that choice of category can be a sticking point.
With that in mind, I’ve sectioned out some of the main categories on Amazon.com into high, average and low volume:
Updated February 1st 2017
Health & Personal Care*
Sports and outdoors
Toys & Games*
Cellphones & Accessories
Kitchen & Dining
Home & Kitchen
Patio Lawn and Garden
Art Craft & Sewing
Camera & Photo
Computer & Accessories
* Categories that require approval from Amazon (restricted categories). Note that Toys & Games only requires approval to sell over the Christmas shopping period. The rest of the year Toys and Games does not require approval.
So what does this mean that selling in low volume categories is a waste of time?
No, not at all! However, you should expect to sell less in these lower volume categories and if you plan to use FBA (Fulfilment by Amazon) to store and ship your items to customers, then you should definitely consider selling in a category with a higher turnover.
Generally, when starting out, it’s simpler to sell in a ‘medium volume’ category. There are literally 10’s of 1000’s of suitable products to sell in these categories and you won’t face the same fierce competition associated with the highest volume categories.
However, even the high volume categories have sub-categories with less volume and less competition. So it’s a good idea to ‘drill down’ a bit and uncover some of these potentially very profitable sub-categories.
Amazon offers endless possibilities, but that’s part of the problem! Don’t let too much choice hold you back. Choose a category and stick to it until you have your first product listed and selling on Amazon. Action is the key!
Want to supplement your income by selling on Amazon?
Today, more and more sellers are fulfilling their ambitions and earning truly life-changing incomes.
Nova Smith started selling on Amazon four years ago after borrowing money from relatives for a few units of stock. In 2014 she generated 3 million in sales. That’s pounds sterling by the way, the equivalent of about $5,000,000 US at today’s exchange rate.
Nova had found herself down on her luck and struggling to pay the mortgage after her son was born with serious health complications and had to spend two years in and out of hospital. Fast forward to today and her Amazon selling venture has probably exceeded her wildest dreams.
The fact is that Amazon is open to almost anyone who wants to begin an online venture. Whether it’s just to earn some regular extra cash, or, like Nova, to build a multi-million dollar empire. Or anything in between!
In the UK alone (which is a much smaller marketplace then the US), the number of sellers generating over £1,000,000 in sales annually on Amazon, grew by 33% in 2014. That’s a massive increase and goes to prove that the opportunity to profit on Amazon is still very much alive and kicking!