14 Things I Learned About Selling On Amazon from Two Amazing Experts
If you missed the conversation I had a few weeks ago with two people who know all about succeeding on Amazon – Chris Marantette the co-founder, President and CEO of Netrush Inc. and Adrienne Kosewicz, the founder and owner of Play it Safe World Toys – don’t worry about it. You can view the recorded webinar here. I know it's tough to retain all of the great information shared. So, I went back and re-watched the webinar, took a few notes and created a summary of the 14 great things I learned about selling on Amazon from our two guests.
1) Retail agencies exist to help Amazon sellers.
Both Netrush and Play It Safe World Toys are retail agencies. They do the heavy lifting (branding, marketing, listings, descriptions, logistics, etc.) for customers who want to sell on Amazon as their agent. If you’re looking to really make Amazon a channel for your products, you can hand over the responsibility to retail agencies like these to run with the ball. Firms like Netrush and Play It Safe Toys generally build their fees into the prices of the products.
2) It is important to determine if you are a "brand" or a "merchant."
These are two different things. According to Chris, "a brand is someone that manufacturers their products and markets through retailers instead of directly to customers. A merchant buys other people's products and sells them directly to customers on the Amazon marketplace. We are an extension of the Amazon platform and handle everything. We are the retailer for the brand."
3) You can sell your products directly to Amazon.
If you want, you can avoid a lot of headaches and just sell your products to Amazon. It’s called 1P, or first party, or Amazon Vendor. This is just one of a few ways to sell your products on Amazon. Here’s a good download that will dig deeper into these options.
4) FBA allows entrepreneurs to outsource all inventory management to Amazon.
Fulfillment by Amazon, or FBA, is Amazon's logistical service. With FBA you let Amazon do all the warehousing and shipping of your products instead of you having to maintain a warehouse and staff. The number of sellers using this service grew by 70 percent in 2016 alone and the company has sellers from 130 countries fulfilling orders for customers in 185 countries, representing about 55 percent of the total third party products sold by Amazon. "Rather than you having your warehouse and your warehouse people handle all of your inventory, send it out to customer, field returns, Amazon does all that for you,” Adrienne said.
5) The costs of FBA are known in advance.
Chris thinks this is a huge benefit. "Amazon takes a piece of every sale but you know what the cost is going to be, including shipping so it's a very calculated way of selling any product,” he said. “If you had your own warehouse you would have to deal with the variable costs of operating it. With FBA you know this cost up front. We're kind of control freaks here and this gives us more control. "
6) There are some big upsides to FBA.
According to Adrienne, “everything in an Amazon warehouse is Prime eligible. Prime is Amazon's member service and your products may be eligible for free shipping. FBA is also great because your good are in place and ready for shipping right away from different parts of the country. For our retail customers who sell a lot of product in the fourth quarter, this is a huge plus." Chris agrees, adding that “you can also sell products from your website and use FBA as the logistical back end for delivery which allows you to be ‘multi-channel’. That lets you focus your efforts on sales and marketing while Amazon worries about the logistics and shipping.”
7) However, FBA doesn't do everything.
Adrienne warned "for example, even though FBA will collect sales taxes but you're still responsible for remittance and filing (see below). “Invoicing, payment, customer service - that's all on you."
8) Amazon can be one of many channels for brands to sell their items.
"I work with brands who create their products, put together a catalog and then work with manufacturer representatives around the U.S. and sell their products through retail outlets – brick and mortar, distribution and online marketplaces like Amazon,” said Adrienne. “They want their online brand to be strong and we make sure that their brand can be found."
9) You definitely need an expert to do this.
Someone has to put in a lot of time to really learn the system. "There are a lot of aspects to learn,” said Adrienne. “You have to know the fee structures and how to use FBA. You have to know pricing. You have to ask if you're bringing something new to Amazon and how do you describe that to people? Someone will need to spend a lot of time on both the search engine and the front end, trying different things, thinking as the customer does. There's no book on that, nothing straightforward. It's just due diligence. It's not going to happen magically overnight. Amazon is not something where you set it up and you're like 'woo' and you go to the beach."
10) Success on Amazon requires an ongoing investment.
"You really have to think long term,” Adrienne continued. “Amazon's search engine background is setup for a really long-term solid customer experience. They want people coming back again and again so they have many parameters that they plug together to watch behaviors around products and people's buying habits and if customers are happy after the purchase."
11) To succeed, you have to always be managing the customer experience.
Chris: “You need to always be managing the messaging and the whole customer experience. You need to make sure your listing represents you on and off the marketplace. As yourself what is it you want that customer to think of when they come to your listing or your brand page? Does it represent you?”
12) Do not, do not, do not ignore sales tax.
Chris again: "Amazon has accelerated its move to having warehouses as close to the customer as possible. If you're using FBA then it's your inventory in their warehouses and there are tax implications. Amazon provides tools for you to easily see where your inventory is, and then you really just follow process for registering in those states. Amazon will collect the tax for you but it's your responsibility to remit and file in all the states where you're selling product. Services like Avalara will take care of all of this for you.”
13) Don't ignore the reports that Amazon provides.
Adrienne relies heavily on the Seller Central dashboard, particularly to help her project sales. Chris likes to frequently look at inventories by location.
14) There really is no equal to the Amazon marketplace.
Chris sums it up: "Amazon IS the marketplace. Amazon is an amazing platform and we've found that brands that engage it in a healthy way – managing the whole customer experience – benefit from it tremendously. Something like 55 percent of all searches start on Amazon, so the numbers are staggering. Where we might be aware of what's happening on eBay or Jet or any of the other marketplaces, our focus is on making sure the horse pulling the wagon, which is Amazon, is actually healthy and directionally correct along the way."
Again, you can watch a recording of our webinar conversation here.
The 2021 sales tax changes report: midyear update
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