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How to start up: Selling on Amazon Marketplace

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    Francois Badenhorst

    Francois Badenhorst Deputy Editor Staff Member

    Posts: 86 Likes: 16
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    The necessary evils of selling on Amazon (or other marketplaces) is a frequent point of debate on UKBF. Amazon, in particular, has implanted itself a formidable middle man in the ecommerce game, exacting fees from sellers using its infrastructure.

    “The problem (in my opinion),” wrote HBC, “is that more and more customers now deliberately opt for buying on these marketplaces. This is because they trust them more, they know they can get a refund with no questions asked, and it's all Amazon's fault.”

    As Banksbroo also noted, “However well you do on Amazon, you will always have to abide by their rules, and suffer Amazon placing adverts for competing products alongside your goods. Above all the commission they charge is hefty. Not quite so bad if you aren't VAT registered, but a bigger bite out of your margin if you are”.

    UKBF member Iain Henderson has been selling on Amazon since 2012. His family’s business is Arranview Jewellery, based in Ayrshire, Scotland. According to Henderson, despite its challenges, all online retailers should at least consider Amazon.

    Why? “In 2016, 55% of all product searches began on Amazon compared to only 28% which started on a search engine, so if you only have a website you could double your market reach just by joining Amazon,” he explains. Much like Clinton also said on the forums: “Stop treating platforms as destinations for your customers and start treating them as tools to build your own customer base.”

    To get cracking on Amazon Marketplace, you need to set up a pro seller account (£25 per month), explains Henderson. “Then you either add your offering to an existing product or create your own, new, listing. You can add or create as many as you want for your £25. Some categories (clothing, beauty, jewellery for example) are ‘gated’ and require approval before you can list in them.”

    Here’s where the bureaucratic adventures start. Sellers are subject to all sorts of byzantine regulations – image guides, style guides, description guides. But, says Henderson, “for every rule you find you’ll find at least 10 sellers flouting that rule!”

    Getting a choice spot on Amazon’s product listings

    Once you’ve somewhat successfully navigated Amazon’s bureaucratic maze, you can get selling. “So you’ve figured out enough of the rules to get your listing onto the catalogue and are just waiting for the sales to start.” But, again, it’s not quite that simple, explains Henderson.

    “Unless you are in a niche category the chances are you’ll be waiting a while. Customers don’t seem to go past page two or three of the search results, so if your product listing in not in the top three pages you’ll struggle.

    “You can ‘buy’ a slot on the first few search pages by creating an advertising campaign. Very similar to AdWords in that you ‘bid’ for keywords and pay for every ‘click’. Most searches on Amazon will return a list of products and some ‘sponsored’ ones either on the right or at the bottom of the page. Some don’t and I’ve no idea why not. Also, if you change the sort order from the default of ‘relevance’ the sponsored listing will probably disappear.”

    Buying a slot isn’t the only option, you can also increase your page rank organically. By using your own marketing and media channels, you can import customers from outside Amazon to your listing. “This is potentially a powerful way to increase your listings page rank as you’ve brought a new potential customer to Amazon at no cost to Amazon themselves.”

    Other than the listings pages, there’s also the ‘buy box’. This is the box in the right hand corner that you see when you’re looking at a product. Under the ‘Add to Basket’ button, Amazon will list two other similar products ie. your competitors.

    “Amazon uses an undisclosed and mysterious algorithm to decide which seller will be linked to the ‘Add to Basket’ button,” says Henderson. “I’d assume that being the cheapest should help on gaining a place in the buy box.”

    Big brother is watching

    Amazon keeps an eagle eye on those operating within their marketplace. “Amazon constantly reviews your ‘seller metrics’ such as customer feedback, late dispatch, refunds and A to Z claims,” says Henderson. “If any go outside the accepted values your account goes under review.”

    A review is a purgatorial state for sellers. While being reviewed, they will receive no payments while the issue is being investigated and resolved. Henderson recently got hit with a review after making an error on his own website.

    “I changed a setting on my website which resulted in the previous week's orders being marked as dispatched that day,” he explains. “Despite having been correctly marked as dispatched with Amazon on the correct days there was now a mismatch and my account went into review – no payments for 28 days.

    “Think of Amazon as being like a small child with a ball – it’s their ball and their rules. They can change the rules as often as they want and won’t always tell you what’s changed. Every time you think you’ve got a handle on the rules they will change.”

    Another sore spot for Amazon is redirecting customers to your own site. Your listing will need to be completely cleansed of any marketing that could potentially lead the customer astray.

    That said, many sellers do include some marketing leaflets in their parcels. “After all,” wrote Yellow Square Motor Parts on UKBF: “I imagine the only way Amazon would be aware would be if a customer contacted them to say they received some promotional leaflets from a seller. Highly unlikely.”