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Introduction
Become a seller with Amazon’s Fulfillment-by-Amazon (FBA) program.
With FBA, you can sell products to Amazon’s 300 million customers. Amazon handles the fulfillment, while you build your business and earn money.
In this guide, Jean Perri, along with a team of ecommerce experts, provide the most comprehensive, step-by-step guide to selling on Amazon FBA.
Contents
Chapter 1: Should You Sell on Amazon FBA?
Selling products online is a great way to start or grow a business and make money.
And if you’re going to sell anywhere, it should be on Amazon.
The Amazon Marketplace
ཛཛ The Amazon market is massive, and it’s growing more than ever as people shift to shopping online for almost any type of product. Amazon was responsible for 45% of U.S. ecommerce spending in 2019 — a figure which is expected to rise to 50% in 2021.
ཛཛ 52% of U.S. consumers say that if they were only able to buy products from a single store, it would be Amazon, and more than 121 million Americans are Amazon Prime members.
ཛཛ And despite a global pandemic disrupting much of the world’s economy in 2020, Amazon is not only surviving — it’s thriving. 2 out of 3 American consumers shopped on Amazon at least monthly in 2020.
A key reason Amazon is so successful is the success of FBA and third-party selling.
In fact, more than half of Amazon’s $280 billion revenue was fueled by its third-party sellers in 2019. You can be one of them!
80% of Amazon sellers wish they had started selling on Amazon sooner.
How Much Money Amazon Sellers Make ?
Many Amazon sellers say they sell on Amazon for the freedom the income provides.
They’re looking for a new job or to “be their own boss.”
Many are looking for extra money to support their kids, pay off debt, or even travel the world.
Selling on Amazon gives you the opportunity to achieve your goals.
New Amazon Sellers Can Earn 6 Figures in a Year!
Most Amazon sellers make at least $1,000 per month in sales, and some super-sellers make upwards of $250,000 each month in sales — amounting to $3 million in annual sales!
More than half of Amazon sellers have reached lifetime sales of more than $100,000 (and most have only been selling for a few years)!
So how much of these sales do sellers get to take home?
Average profits:
Among small businesses, typically about 40% are profitable. Among Amazon sellers, the vast majority (about 86%) are profitable, and 67% are profitable within their first year selling.
New Amazon sellers are earning between $26,000-$810,000 per year in profits!
Amazon sellers also see comparatively high profit margins: 67% sellers see profit margins above 10%, and — better still — nearly half of those sellers see profit margins above 20%.
What You Need to Sell on Amazon: Time & Money
Before you get started selling on Amazon, it is important to note that you have to be willing to put some time and effort. If you do, you can be enormously successful!
69% of Amazon sellers say that selling on Amazon takes some effort and is not a “get-rich-quick” tactic.
Amazon sellers say that the primary factors that contribute to their success are having the time to commit to their business and having the necessary tools and information to help them.
How much time do you need to spend on your Amazon business?
Amazon sellers say:
Most Amazon sellers spend fewer than 20 hours per week managing their Amazon businesses, though this can vary depending on the size of your business, the tools you have, and other factors.
How much money do you need to get started?
Amazon sellers say:
Depending on whether you have a product to sell already, start-up costs for selling on Amazon can vary. In fact, you can make as large an investment as you want or you can start selling on Amazon practically for free.
Learn more about how much it costs to sell on Amazon here.
Chapter 2: How to Sell on Amazon FBA: The Basics
In the most basic terms, to sell on Amazon, you simply need a product to sell, an Amazon seller account, and a means of getting your product to your customer.
Whether you have a product to sell or just want to get in the game but don’t yet know what to sell, there’s a business model that works for you to sell on Amazon.
We’ll review the many options and choices you have when building your business, and focus on one that has proven to be a profitable, scalable method: private label.
Amazon business models
Private Label: Creating your own product label/brand (we’ll explore this in great detail in this guide)
Wholesale: Buying products in bulk directly from a brand or from distributors with extra stock in order to sell on Amazon
Reselling/Arbitrage: Buying discounted products through retailers or online to resell on Amazon
Dropshipping: Buying products directly from a manufacturer who fulfills the order and ships directly to the customer
Handmade: Creating/crafting your own products to sell on Amazon
You can run your fulfillment through Amazon’s Fulfillment by Amazon (FBA) program, in which Amazon handles all the storing, packing, and shipping of your products. We’ll explain this process in detail.
Alternatively, you can sell through Amazon’s Merchant-Fulfilled Network (aka Amazon Fulfillment by Merchant, or FBM), and you would be responsible for all fulfillment.
How to sell private label products on Amazon FBA:
Private label, or the practice of sourcing or producing bulk products to sell under your own brand or label is used by 71% of all Amazon sellers.
What you do:
ཛཛ Product research: Research products that have high demand and low competition on Amazon to find the most profitable opportunity.
ཛཛ Product sourcing: Find a supplier or manufacturer to create your product at the right cost. The supplier can ship your products directly to Amazon’s warehouses.
ཛཛ Product listing and branding: Create your Amazon seller account and listing(s) for your product, including branded graphics and quality photography.
ཛཛ Promotion: Launch and advertise your product to stand out among Amazon’s catalog of millions of products and rank in the product search results.
ཛཛ Sales management: Monitor your inventory and sales, and scale your business to keep those profits coming in!
After a customer orders your product, you can keep track of its progress on its way to the customer, but you don’t need to do anything yourself.
What Amazon does:
- Amazon receives your products (from you or your supplier) and stores them in one or more of their million-acre fulfillment centers, which are massive warehouses run by robots and Amazon employees.
Your products are inventoried and sorted. (It’s in Amazon’s best interests to take good care of your products, but if they are somehow damaged in one of Amazon’s warehouses, Amazon will reimburse you the full retail price!)
- When a customer places an order on Amazon for your product, Amazon processes the transaction automatically.
Your product is picked from its place on Amazon’s warehouse shelves, packed into an Amazon box, and shipped to the customer.
- Amazon manages communications with the customer, including shipping notifications and tracking, reviews, and even returns.
How Amazon FBA Works
- Product Research: You find a high-demand, low-competition product to sell
- Sourcing: You find a supplier or manufacturer to create your product
- Amazon receives and stores your products in their warehouses.
- Listing & Branding : Set up your product listing on Amazon
- Promotion: Advertise your product on Amazon
- When a customer orders your product, Amazon packs and ships it to them.
- Amazon manages all shipping notifications and tracking, reviews, and even returns
- Sales Management: Manage your inventory and grow your business!
Chapter 3: How to Set Up a Seller Account on Amazon
Once you know you want to sell on Amazon, your first step should be to set up your Seller account.
You can have an account without a product or any active listings.
It’s important to get your account set up first because it can take several weeks for Amazon to go through the identity verification process and you want to make sure you’re approved by the time your products are in Amazon’s warehouses.
Having an account allows you to check whether certain products are gated by Amazon or whether they require additional information or verification in order to sell them.
What do you need to do to set up your seller account on Amazon.
1/Provide documentation:
Amazon requires you to provide various documents, including:
- Proof of identity: Drivers license, passport, or other government-issued ID
- Billing information: Credit card
- Address (Amazon will mail a postcard to that address with a code so you can verify your address)
- Phone numbe
2/Set up your business:
During the seller account registration, Amazon will ask you for your tax information.
- If you are an individual, you will enter your social security number (SSN)
- If you own a business, you will enter the employer identification number (EIN)
- If you are located outside of the U.S., you will need a valid internationally chargeable credit card, bank account, proof of residence in one of Amazon’s approved countries for seller registration, and tax information (W-8BEN as a non-U.S. taxpayer)
Do you need an LLC?
When first setting up your Amazon business, it is not required to have a Limited Liability Company (LLC). If you are a U.S. citizen, you can register as a sole proprietor.
We recommend forming an LLC for your brand once you know your business is viable, as it protects your personal assets as well as provides you with added tax benefits.
If you are an international seller and not a U.S. taxpayer, you will still need to complete a tax interview. IRS regulations require non-U.S. taxpayers to provide form W-8BEN to Amazon in order to be exempt from U.S. tax reporting requirements.
You can also register an LLC in the U.S. in some states. Be sure to consult appropriate legal counsel to remain compliant with U.S. law.
Consider setting up a separate business checking account
You may want to create a new checking account for your Amazon business particularly to avoid commingling funds and have cleaner books come tax time. As a sole proprietor, this can be as easy as setting up another personal checking account with your current bank. For an entity, you may need to have a business account.
3/ Select either a Professional or Individual account
Simply put, if you plan to sell more than 40 products per month, select a “Professional” account, and if you expect to sell fewer than that, select “Individual.” Here’s why:
An individual account is free, but sellers will have to pay a $0.99 per-item fee once a product sells. A professional account is $39.99 per month, but there is no per-item fee.
So if you plan to sell more than 40 units per month, the professional account would be more affordable. Plus, Amazon will refund you 100% of the $39.99 fee for months you’re not selling.
So if it takes you a couple of months to make your first sale, Amazon will refund you the fee for those months.
If you don’t have a product ready to sell yet, we recommend setting up an individual account.
Then we recommend upgrading to a professional account once your product is ready to be shipped into Amazon’s warehouses. (It’s easy to change — you just upgrade or downgrade within your account settings and pay the difference, if applicable.) Plus, you will have access to more features and tools within Seller Central such as:
ཛཛ Buy Box eligibility
ཛཛ Coupons
ཛཛ Amazon advertising
ཛཛ Inventory feeds
ཛཛ Business reporting tools
ཛཛ Enhanced brand content (*requires trademark and brand registration)
4/ Choose your Amazon Storefront name
Your storefront name will be the name that is shown on your Amazon listing as “Sold by [Your Storefront Name] and Fulfilled by Amazon.”
Your storefront name is different from the brands you sell as well as your entity name (which is related to your tax information).
We sell multiple brands under that storefront. Ex. Jungle Stix, Jungle Snugs, etc.
Make it something simple and generic such as, “ABC Retail.”
We advise making your store name distinct from your entity name. For example, if your business entity is called Brian Enterprises, LLC., don’t make that your storefront name.
Don’t get too hung up on this step as you can always go back and change your storefront name at any time
5/ Create your product listings
Once your account is set up, it will then be time to create your product listings. We will go into this topic in depth in the next section.
You’re set up to be an Amazon seller! All you need is your product — and a plan for getting it in front of potential customers.
Chapter 4 : What to Sell on Amazon: Finding a Profitable Product
What product should you sell on Amazon? How do you know if consumers will buy it? How do you know how to price it so you make a profit? We’ll cover all these questions and more, and we’ll show you exactly how to search for winning product ideas.
First, a few best practices that will help you enormously in your product research quest:
ཛཛ Let data guide you, rather than picking a product to sell simply because it’s something you like. Trust us on this. (And if you do have an idea of what to sell, you can validate that with data on how similar products are performing on Amazon.)
ཛཛ Don’t rush it. Product research is essential preparation that requires some time and analysis to be successful.
ཛཛ Use a tool, like Jungle Scout, that can mine massive amounts of Amazon data to find a product with the trifecta of: high demand, low competition, and positive profitability. We’ll show you how.
Seller Tip:
“Set aside 30 to 60 minutes each day to do product research. Consider all your best options and move forward to sourcing multiple products at the same time. You may find product cost or quality will stop you from choosing a certain product, so you want to learn that early. A lot of people get hung up on finding the perfect 10 opportunity score, but you don’t have to find that perfect golden needle in the haystack! There are plenty of great options.”
How to find a profitable, high-demand, low-competition product to sell on Amazon
For all products you’re considering, analyze them for profitability, demand, and competition. We’ll break down how to assess those important factors.
1/ Profitability
Of course you want to make sure you can earn a profit on the products you sell. So for every product you’re evaluating, ask yourself: can I source and ship this to Amazon for substantially less than it’s selling for?
Costs:
Landed costs: The collective costs to produce and transport your product to Amazon’s warehouses
ཛཛ Cost of inventory
ཛཛ Any preparation or inspection fees
ཛཛ Shipping (not typically included in cost of inventory because costs vary depending on whether you ship via air or sea methods)
ཛཛ Duties (these will vary based on where you’re ordering from and where you’re shipping to, and they may change over time)
ཛཛ Promotional costs such as packaging and advertising
Amazon fees:
ཛཛ Referral fee: Essentially Amazon’s “commission” for each item you sell on the platform, this is typically a flat 15% which you pay when a product sells
ཛཛ Selling plan fees: For professional Amazon sellers: A monthly fee of $39.99 – For individual Amazon sellers (those who typically sell 40 units or fewer per month): $0.99 per sales transaction (but no monthly fee)
ཛཛ Fulfillment fee: For FBA sellers, this per-product fee covers Amazon’s cost for packaging and shipping products, and it varies based on weight and dimensions of your product and what marketplace you’re selling in
ཛཛ Storage fees: Monthly storage fee: Inventory fees based on the daily average volume (measured in cubic feet) for the space your inventory occupies in fulfillment centers (*Note that fees increase October through December for the holiday season) Long-term storage fee: For inventory that has been in a fulfillment center for more than 365 days, you will be charged a monthly long-term storage fee (LTSF) of $6.90 per cubic foot or $0.15 per unit, whichever is greater
ཛཛ Refund administration fee: If your customer requests a refund, you pay either a flat $5 or 20% of the refunded charge, whichever is less
ཛཛ Removal order fee: If you need to have excess FBA inventory returned to you, the fee, which includes packing and shipping, is $0.50 per item for standard size items and $0.60 per item for oversize items.
Revenue:
Of course your take of any sale will depend on how much you can buy the product for, and what fees come out along the way.
As a general rule, you want the product to sell for $20-$50 to allow for healthy profit margins. Below $20, profit margins are minimal and possibly not worth your effort.
These are also typically the types of products that become oversaturated quickly because they are so inexpensive to source.
On the other hand, if you price your products above $50, know that customers may be unwilling to spend higher amounts on a brand they don’t recognize.
Simply calculate your profits by subtracting fees and costs from your potential revenue.
We also recommend using Amazon’s Free FBA Fee Calculator to find out exactly what Amazon’s fees would be for a certain product.
Simply plug in an ASIN that is similar in weight and dimensions to your product, the selling price, and your cost, and it will break down all of the selling fees and profit.
Seller Tip:
“These numbers are more guidelines than rules! If you found a product that would sell for $100, but you could source it for $6 (if you find that, please let me know!) then go for it! All the ‘rules’ can be bent or broken once you factor in all the variants.“
2 / Demand
The key component of a good product to sell on Amazon is demand. Do people want this product? Are they looking for it or is there a need or pain point this product could solve? We use data to answer these questions.
The key metric that helps us determine demand on Amazon is sales.
3/ Competition
Next, we want to evaluate the competition, determining how many similar products exist and whether there is opportunity in the market for a newcomer.
The key metrics that help determine competition are the number of products and the number of quality reviews and ratings they have. In other words, are the products already listed on Amazon any good?
Start your product research
To demonstrate best practices in product research, we’ll show you how to create and narrow down a list of product ideas based on the main criteria above: profitability, demand, and competition.
Search Amazon’s product database
Using Jungle Scout’s Product Database, you can explore Amazon’s entire catalog (hundreds of millions of products), easily searching products based on specific filters to narrow down your product ideas.
Filters:
Price (for profitability): Aim for $20-50
Sales (for demand): Aim for at least 300 units per month (~10 sales per day)
Number of reviews (for competition): Of the top 10 listings of a particular product, we want 3-5 of them to have fewer than 50 reviews
Rating: Find products with low star ratings, aiming for a maximum of 4 stars (these will give you the opportunity to improve products and beat the competition)
Listing Quality Score, or LQS: Find products with listings that have room for improvements, aiming for a maximum of 5 to 7 LQS
Other factors you’ll want to evaluate should include:
ཛཛ Size and weight of the product
Try to find a product that falls within the standard product size. When fully packaged, the product should weigh no more than 20 lbs and not exceed:
— 18 inches on its longest side
— 14 inches on its median side
— 8 inches on its shortest side
You will also be able to see whether a product is standard size in the Product Database results, and you can filter your search results by Standard or Oversize product tier.
If you find a product that is considered oversized, keep in mind your FBA fees will be higher and will take up more storage space within Amazon’s warehouses.
ཛཛ Ease of sourcing/manufacturing the product
For your first product, ideally you’ll want something that is going to be easier to source and manufacture — something that won’t require too much modification or be too heavy for standard shipping.
Once you have some Amazon selling experience, you can more easily venture into more difficult product opportunities.
ཛཛ Seasonality
Ideally, you want your product to be in demand year-round. Try to avoid seasonal products at first as they’re only in demand for a short period of time, whether it’s the end-of-year holidays, summer, back-to-school, or a different seasonality range.
ཛཛ Marketability
Think about how you’re going to market your product. Take a look at the best-selling products in your niche and figure out how you can make improvements to your listings so your product stands out.
You may want to think about whether or how you can build a brand around this product (and similar products that might be good opportunities in this niche), or you may want to focus on one product. Either way, if you can create better images, infographics, more informative bullet points, etc., you have a much stronger chance to compete.
ཛཛ Uniqueness
Your goal is to differentiate and improve your product and provide something unique to the market, so try not to sell the exact same product as your competitors.
If the market is already dominated by an existing product or brand, you won’t be able to compete if your product doesn’t offer anything new or unique because the existing product or brand will have the benefit of reviews and sales momentum that would take you time to earn.
Seller Tip:
“The other half of product research is outside of the data. It’s focusing on branding and marketing. Ask yourself: what story do I want to tell? How do I want to market and differentiate my product? Go through all the best-selling products in the niche (their title, images, review pros and cons, photos, etc.) and take note on what they are doing right, and where you can make improvements.”
Find improvement potential
Your goal is to find a product opportunity with proven demand and profitability
— but one in which you can compete. To do this, you’ll need to make your product better or different enough to appeal to buyers looking for unique features. There’s no need to reinvent the wheel, just differentiate yourself enough to stand out. (You’ll work with a supplier who will take care of all these changes for you — more on that below.)
Find improvement ideas by examining the reviews and the “Customer Questions Answers” section of existing product listings. What do customers like or dislike about it? Consider all factors including color, material, size, usability, functionality, packaging, etc.
If you’re serious about a product, buy the competing products to learn first-hand about any potential pain points you could improve upon. Take notes (you can even save notes in Product Tracker).
Check for IP or other legal concerns
Selling products on Amazon means you’re creating a real business, and no doubt there are boxes to check and rules to follow, particularly when it comes to intellectual property (IP). Amazon cracks down on “black hat” behavior such as counterfeit products and trademark infringement, so do the necessary research ahead of time to make sure you find products that you have the right to produce and sell.
Patents
The most important thing to check when evaluating a product you want to replicate is whether there are any existing patents on it. You cannot sell something that
is patented as it means someone else owns the rights to the design, the way it functions, or another fundamental quality of it.
How do you know if there is a patent? The only way you can know for sure is by hiring a lawyer, but here are some basic steps you can take on your own:
ཛཛ Google “patent” + [your product idea].
ཛཛ Check listings on Amazon for that product and see if they mention anything regarding a patent.
ཛཛ Check if there are many other people selling a similar product. If there are, it’s unlikely the product is patented as patent holders typically enforce their patents.
ཛཛ Purchase a similar or competing product and look for any patent/patent-pending marks on the packaging or item itself.
Trademarks
A trademark is a symbol, word, or group of words that a company legally registers or establishes use of to present their brand or product.
You can’t put another company’s trademark on your product. For example, if you are selling a private label shoe, you cannot use the name “Nike” or Nike’s logo.
Generally, you cannot sell counterfeit products. Not only is it against Amazon’s Terms of Service and will get you suspended as a seller, but it is against the law.
Before settling on a brand name, logo, or slogan for your Amazon business or a particular product, you should conduct a Trademark check with the United States Patent and Trademark Office (USPTO).
Other restrictions and liabilities
Research whether Amazon has any restrictions or necessary certifications you need to have for a product or product category. For example, there are certain subcategories within Toys & Games in which you need a Children’s Product Certificate (CPC) to sell. Or if you are selling a product that is considered a pesticide, Amazon requires you to take a training course.
A good way to check if you are gated in a specific category or subcategory is by creating a new product listing in Seller Central, and as you select through the subcategory level, Amazon will let you know if it is gated.
(You can check out Amazon’s help page regarding restricted products or our article on restricted categories.)
Also consider if someone could easily get hurt or sick using your product. If so, and if you’re deemed liable, the individual could sue you for damages. Examples of products with greater chance of liabilities are electronics, products that go in or on the body (including cosmetics, lotions, and dietary supplements), some toys and outdoor games (swings), and other obviously dangerous products (those that are flammable, sharp, etc.).
Disclaimer: We are not lawyers, so be sure to seek legal counsel for any specific questions or concerns you may have.
Do you need business insurance? All professional Amazon sellers must have a business insurance policy with at least $1 million in commercial general liability insurance coverage that protects them (and Amazon) in the event that someone decides to sue them (if they get hurt or sick using your product, for example). According to Amazon’s business agreement, sellers also need product liability insurance if their sales exceed $10,000 per month for three consecutive months.
Consider ease and practicality of sourcing
Especially for your first product, you want to find something that is going to be rather simple to produce and ship. Keep these variables in mind when narrowing down your product ideas:
Sourcing
Look for a product that will require simple changes — this means you’ll have fewer details to work out with a supplier and will have more supplier options. Try to avoid products with multiple moving parts, and if there are multiple components, it’s better if they are of similar material, so it’s more likely the components can be sourced from one factory.
Shipping
Smaller, lighter products are easier to ship, and you want sturdy material to survive the shipping process. You don’t want a product that is easily broken as your primary means of getting it to your customer is shipping through FBA. Make sure your supplier provides the proper protection for your products and packaging.
Importing
Every country has certain regulations on what you can and can’t import. You can work with a freight forwarder for free for information regarding importing any unconventional products before you place your order (more on this below).
Tip: Your product idea doesn’t have to meet every criteria mentioned. As long as you let the data guide or validate a product idea, it’s important to keep your momentum. Don’t get stuck in analysis paralysis. Start getting samples of products and continue powering through the process!
So, how do you find someone to make your product?
Check out the next chapter to find out!
Chapter 5 : Finding a Supplier: How to Source Products for Amazon FBA
Now that you’ve found your product, or narrowed your list to a few final product options, it’s time to find a supplier.
If you find this step a little intimidating, you’re not alone. Many successful sellers today say they initially had no idea how to find or work with suppliers. However, with enormous advancements in technology, communication, and services to help facilitate international trade, it’s truly a simpler process than ever.
We’ll walk through 3 steps to find and source your products to sell on Amazon:
- Research and compare relevant suppliers
- Evaluate product samples and refine your product
- Order and ship your products to Amazon’s FBA warehouses
How to research Amazon suppliers
There are hundreds of thousands of manufacturers around the world that can create any product you can imagine. You’ll want to narrow your list of potential suppliers to those who can produce the highest-quality product for you at the best price.
And there are a number of ways to find these suppliers.
Alibaba is the largest business-to-business platform in the world. Using Alibaba, you can find a manufacturer for almost any type of product to order in bulk and have them imported into their country. How to search in Alibaba:
ཛཛ Alibaba’s search function works just like Amazon. Simply search for a specific keyword or set of keywords for a product, and it will yield a number of results.
ཛཛ Filter through the various supplies that appear in the search results.
ཛཛ On the left hand side, check ‘Trade Assurance” and “Verified Supplier” to ensure you are dealing with a reputable supplier and that all purchases will be protected.
ཛཛ Using Alibaba, you are also able to filter by origin country. Depending on the type of product, you may also see an option to source from the U.S., for example, which would make shipping less expensive for U.S.-based sellers (though the products themselves might cost more).
For this example, we’ll search for a backpack.
Next, take some time to go through the search results and start identifying suppliers you may want to work with. You can narrow your search results for Verified suppliers, among other factors.
Google may also be a resource for your supplier research. Here are some tips to yield the best results:
ཛཛ Conduct your search using quotation marks. By doing so, you tell Google to search that exact phrase. For example, enter “private label backpack” or “backpack private label usa” to narrow down your search to relevant results.
ཛཛ Sometimes when doing this type of private label supplier research on Google, you may see Alibaba pages in the search results. If you want to exclude Alibaba, enter: “-site:alibaba.com” in your search, along with your keywords, to prevent any Alibaba site results from appearing.
Sourcing agents assist companies in sourcing products with the best quality and price. They often speak the language in the country from which you are sourcing in order to make the process much easier on you. This may give you a competitive edge in finding more affordable pricing. You can find reputable sourcing agents online, and Alibaba also offers a limited sourcing agent service.
What you should look for in a supplier:
As you’re researching and comparing potential suppliers, make sure to evaluate them based on some key criteria:
High-quality products
Did you know that Amazon shoppers care just as much about reviews as they do about price? Selling high-quality products is the best way to keep your Amazon reviews high and get continued sales.
Experience
Look for a factory that has been producing your type of product for a certain amount of time (we recommend at least 3 years). You can see a supplier’s import history in the Supplier Database.
Communication
You’ll want to make sure you can find a factory that is easy to communicate with and responds to you in a reasonable amount of time. A way to judge this is how clearly they answer all your questions when you initially contact them for a quote.
Price
Of course you want your supplier to give you a fair price. A factory that quotes a much higher or much lower price than other factories can be a red flag.
Contact suppliers for a quote:
- Compare suppliers to create a list of 5-10 that you’d be interested in working with.
- Send an initial contact email to your potential suppliers using some specific guidelines. You can use Jungle Scout’s Supplier Database to find a supplier’s contact information. Often, your outreach is as simple as sending an email — more on this below. If you have not narrowed down your list, you can also send a broad request for quotation (RFQ) out to a large list of suppliers.
- Vet your suppliers based on their responses and communication to narrow down your list to your top 3 options.
Email Tips & Template
Hello,
My name is Greg from Jungle Creations. Nice to meet you!
My business is expanding our brand of bamboo products for home and baby. We are looking to purchase baby hooded towels for the U.S. market. (See attached photos.)
For this baby hooded towel, we estimate an annual purchase volume of 20,000 to 30,000 pieces after a trial order of 500 pieces and sample evaluation.
Product specifications:
ཛཛ Size: 34in x 34in (92cm x 92 cm)
ཛཛ Material: 100% bamboo (organic preferred)
ཛཛ Color: white (no dyes)
ཛཛ Quality: high thread count, very soft, no loose threads
ཛཛ Hood should have “ears”
Do you manufacture these types of bamboo baby towels with hoods?
If so, please provide the following information:
- Photo, specifications, and EXW quotation
- Are you a manufacturer or trading company?
- What is your lead time for samples and trial order?
- Can we add our logo to this item? If so, where can the logo be added? (Please provide options and photos.)
- What is the cost for a sample with express shipping to the U.S.?
We appreciate your help.
Thank you,
- Introduce yourself! To make yourself stand out in a sea of email quote requests, use your initial email to make a friendly introduction. Giving a little background on yourself, your business, and your goals will go a long way.
- Include as much product detail as possible, such as product measurements, material, specifications, packaging, and any other critical notes. If you demonstrate your product knowledge and ask the right questions, you’ll establish yourself as a serious and trustworthy business owner.
- Use clear formatting. To make sure all of your questions are answered as thoroughly as possible, number each of your questions, space them apart, and even bold the font to call their attention to reply with complete information. This will not only save time, but also (hopefully) provide helpful answers in the responses that will enable you to quickly and easily evaluate which supplier would be a good fit.
- Don’t forget to attach photos! Even if they are generic, images of similar products will help illustrate your requests and help break down any potential language barrier.
- End with specific steps. To conclude your RFQ, include a numbered list of specific questions that you want answered such as: “Can you handle my suggested product modifications?” and “What is your EXW quote?” (EXW stands for Ex Works. meaning the buyer is responsible for the transportation and all costs and liability from the supplier to their location.) “What is your MOQ (minimum order quantity)?” You can also request a price for a certain volume order and a product sample.
2/ Evaluate and modify product samples
Once you’ve narrowed down the list of suppliers to the ones who can offer you what you want based on your initial outreach above, it’s time to order samples. This is an important step to ensure you’re making the right investment and purchasing a quality product.
You should expect to pay $50-$100 for a sample, and have it sent to you by air. Once shipped, you should expect your samples within 1-2 weeks.
Typically when ordering samples, you will pay the supplier via Paypal. The supplier will give you their Paypal address and you simply just tell them the physical address to send the samples to.
But when using Paypal, make sure you send money with a linked credit card. That way, in case anything goes wrong or you do not receive the sample, you can dispute it.
You can also pay with Alipay if you buy through Alibaba. We recommend only using a wire transfer for very large orders with established suppliers.
Tips: When ordering samples, ask the supplier to send you more than one item. That way, you can make sure their quality is consistent.
Some suppliers will credit the cost of a sample to you if you end up purchasing a bulk order from them, so ask if that is possible at the time you order the sample.
How to examine your samples:
Once your samples arrive, you’ll want to check them carefully and compare products from different suppliers side-by-side.
Consider the following:
ཛཛ Specifications: Do the features, specifications, and overall quality match what you were expecting from the supplier’s images and description? Are there any missing elements?
ཛཛ Quality: If you were the customer, would you be happy with the quality of this product? Are there any components that bother you even in the slightest? (If so, it’s better to address them now because Amazon customers are sure to reference them in their ratings and reviews!)
ཛཛ Marketability: Is this a product you can confidently market to shoppers on Amazon? Does it adequately solve a consumer pain point or add value to their lives?
ཛཛ Utility: Does the product work as intended? Try using your product in different ways and circumstances and consider how your customers might use them.
Request any modifications
If your product isn’t exactly what you’re looking for, you may request modifications to the sample. (Just note that the supplier will most likely charge you extra for any customizations made.)
Modifications can include adding a logo, changing the dimensions, adding or removing components, etc.
Consider packaging
Before you place a large bulk order for your product, you should consider whether you want to have branded packaging for your products (ie. the box or bag that encases your product inside Amazon’s boxes).
If you’re a new seller, you may want to skip the packaging to make things simpler and to give yourself time to craft your brand. In this case, tell your supplier you would like to use the blank stock packaging that they provide.
But if you do want branded packaging, you should have the design for it ready for your supplier at this stage.
Here’s why we recommend branded packaging:
ཛཛ It helps your product stand out on Amazon. You can show off your packaging in your listing photos, which may add to the appeal and differentiation of your product from another’s and increase your sales.
ཛཛ It enhances the customer experience. Your packaging gives a shopper a more positive first impression of your product, which will affect their overall experience (and reviews). It also feels more special than cheap bags or boxes. (Take that lesson from the “Apple box effect” — when customers love the packaging so much, they keep the box!)
ཛཛ It helps you craft a brand identity. Great packaging will help your product come across as a “real” brand, which can be hard for new, unknown products on Amazon to achieve.
The supplier or manufacturer you’re working with should give you the exact dimensions of your packaging so you can pass that information along to a graphic designer.
Work with the designer to craft exactly what you would like your packaging to look like.
ཛཛ Consider colors that will stand out in the product listing results and make sure any font or logo is easy to read.
ཛཛ Make your branding clear and simple. You don’t want to overload the packaging with lots of distracting graphics. Let your customers know exactly what is inside.
ཛཛ Use a specific font or style on your packaging that you would for any other graphics or marketing. That way, customers can learn to recognize your brand.
ཛཛ If you are doing some type of flip top box packaging, you can add something to the interior of the box such as your branding, a fun message, or some additional and useful information.
ཛཛ Consider including the main selling points or uses of your product on the packaging (in text and/or images), as well as a slogan to help create brand identity.
You can also ask the designer for some suggestions based on their experience, or look on Amazon to see how similar products (or even competing products) package their goods. (Then make yours more attractive!)
Check out these packaging designs for inspiration:
Send your final design back to the supplier. (You can certainly ask multiple suppliers to create these designs, but it will cost extra.)
Ask your supplier to send you a few images of the completed packaging so you can make sure everything is up to your standards. You may also want your supplier to send you physical samples of the finished product including your packaging so you can inspect it. Just be aware, this will slow the production of your products and may incur an additional shipping charge.
Tips: If your product is going to be sold exclusively on Amazon, you may also send your supplier your FNSKU barcode to print on the packaging. (You will only be able to receive the FNSKU barcode after creating your product listing, but the listing can be brand new and inactive. This is another reason it’s important to set up your account early!) With FNSKUs, you won’t have to label your products every time they’re sent to an FBA warehouse.
When working on your packaging, make sure it meets Amazon’s packaging and prep requirements. Review Amazon’s Terms of Service before finalizing your packaging so you can make sure you have the required packing materials or other elements and no other prep will be required once your products arrive at the port.
At this stage, you may also want to consider adding a UPC or similar code to your product packaging. We explain these codes more in the next chapter.
Negotiate your price and payment terms
Once you’re satisfied with the product, you can begin negotiations with suppliers to find the right deal. Don’t let pricing and negotiation intimidate you! One of the main reasons you contact multiple suppliers is so you can get a good idea of the acceptable range of pricing available for the type of product you are seeking to create.
Price
Don’t settle on the first price that a supplier proposes. See if there is some room to work on pricing by asking if the supplier can lower the minimum order quantity (MOQ), or if you can get better pricing per item by ordering a higher quantity? Can the supplier help cover shipping costs?
It will help your negotiations to indicate that you are a worthwhile customer the supplier will want to keep. State how you want to build a long-term business relationship and plan on reordering from them every couple of months.
Be as direct and clear as possible. For many FBA sellers, there are language and cultural barriers when communicating with global suppliers, so be sure you are very clear about your pricing terms.
After contacting multiple supplies, you will have a good idea of your pricing options, and can compare by average cost per unit from one supplier to another.
Tip: While most suppliers state an MOQ of 1,000, sellers sometimes get that number down to 500 or even 250. However, if you plan to ask for modifications outside of a simple logo, 1,000 is standard MOQ.
Payment terms
You may be able to negotiate paying 30% for your entire order up front, and then the remaining 70% before the supplier ships the product. Or, sometimes you might pay 50% up front and 50% after. Some of the team at Sino Shipping have worked with suppliers that have charged 100% up front, but only after building enough trust with them to be confident in those terms.
We recommend paying 50% up front and the other 50% once your product is completed and the supplier sends you photos of your products packaged and ready to ship.
Payment methods
Paypal is a good payment method for samples, but it may incur a 5% fee for larger orders. Some sellers choose to use PayPal to pay for a large order because you are able to open a dispute if anything goes wrong with the order. If the supplier does not want to pay the fee they will incur, you can offer to pay it for them if this is the payment method you’d prefer to use.
Telegraphic transfer (TT) is a common payment method similar to a wire bank transfer. You can make a TT payment using Trade Assurance on Alibaba, keeping the payment safe and secure. There is typically a $25-$50 fee per transfer and the funds may take 5 to 7 days to be received by your supplier.
If you’re using Alibaba, you can pay through Alipay, the platform’s secure payment service. This method allows you to use credit card, debit card, TT, bank transfer, or other payment types, and your money is not released to your supplier until you confirm delivery.
Some suppliers you find through Alibaba may also offer trade assurance, which essentially insures your shipment in case anything goes wrong.
Many sellers recommend avoiding Western Union because there are limited means of recovering your money if anything goes wrong.
Order and ship your Amazon products
Place an order with your top supplier
Once you’ve settled on a price, we recommend creating a purchase order to send your supplier, and then paying their invoice.
Run an inspection to ensure the quality of your product
You may be asking yourself, “If I received a sample from the factory, why do I need to have an inspection done?”
Sometimes, in the manufacturing process, there may be flaws or defects in some of the units. Whether the supplier used cheaper materials to mass produce your order or took other shortcuts, you want to be 100% certain that all of your products are in good, working condition before being sent to Amazon.
You can contract with an inspection company to check on your product’s quality. Some common inspection companies include Qima and VTrust, or you can search for another.
Essentially, these companies will send a representative to the factory where your product is being produced. They will typically review overall product quality, quantity, proper function of the item, and correct packaging and labeling, or you can ask them to check for specific things.
If paying a third party to run your inspection is out of your budget, you can also ask your supplier to send you pictures of your items throughout the production process, or potentially even video chat with you so you can see the products yourself.
Get your product to Amazon’s warehouses
You have a number of options to get your product from your supplier to an Amazon warehouse.
Go through your supplier
For most FBA sellers just starting out, your supplier is likely to have their own partners and relationships with shipping companies that they want to use. They are very familiar with selling on Amazon and can make shipping very easy for you.
Going through your supplier is easier and more cost-effective if your order is considered small (fewer than 200 kg, or about 440 lbs). You’ll work with your supplier to arrange express air shipping (using DHL, Fedex, UPS, etc) and have your products shipped directly to your home or warehouse, or to a third-party preparation center that will prep and ship the products to an Amazon warehouse for you.
You can get quotes from your supplier on the costs.
Use a freight forwarder
As you scale your business with larger orders and multiple products, we highly recommend using a freight forwarder.
This is a better option if your shipment weighs more than 200 kg in total. (Your supplier can tell you the exact weight and dimensions of your shipment.)
What is a freight forwarder?
A freight forwarder is a professional third party that arranges the entire international shipment process, dealing with a number of complicated steps including customs, packing, labeling, and more.
You can find and compare freight forwarders on a site like freightos.com. Evaluate your options by price, whether they have worked with sellers of your size or imported your type of good before, how well they communicate with you, and whether they are knowledgeable on all of Amazon’s requirements.
Shipping and preparation
Step 1: You choose Air Freight or Sea Freight shipping.
ཛཛ Air freight is a much faster option than shipping by sea (typically 5 to 10 days), but will be much more expensive (usually about $5/kg).
ཛཛ Sea freight takes longer (typically 2 to 4 weeks) but is much less expensive (about $1/kg).
Step 2: Your freight forwarder or supplier will make sure your products are delivered to the port of entry of the country you’re shipping to and begin going through customs clearance.
Step 3: You pay your customs duties. Note that your supplier will typically build this cost into your shipping invoice, so you don’t have to worry about calculating or paying duties separately. You can estimate your custom duties and taxes by using an Import and Customs Duties Calculator.
ཛཛ Typically, if the value of the shipment is under $800, duties are free. Otherwise, the tax rate depends on the value of the shipment, country of origin, and what type of product you’re shipping. (For example, cotton products might be taxed higher than, say, a toy.) Each product has an “HS Code” which determines the type of product/use. The supplier should have this code.
Step 4: Have your products prepped for Amazon. Find out the packaging and prep requirements for your products set by Amazon. For example, you might be required to provide your products in bubble wrap, polybag. etc. You have several options for this:
1- If possible, have your supplier prep the products for you as it will be much more affordable, if not free of charge. (You should do this when discussing packaging and negotiating pricing. For example, ask your supplier to polybag each unit with your FNSKU. The supplier may charge extra for prepping or additional materials used but the cost is typically low — around $0.10/each, and you can usually negotiate it for free as part of your order).
2 – If your supplier did not get your products “Amazon ready,” you will need to have your goods prepped for Amazon, including labeling and palletizing. A third party logistics (3PL) company can help prepare your goods for Amazon. They will label, pack, and ship directly to Amazon’s warehouse for you.
3- You may also have Amazon prep for you at an additional charge.
Step 5: Create your shipping plan in Seller Central.
ཛཛ You will set your “ship from” address as the freight forwarders’ warehouse address or prep center’s address that you used. (If you did not use a prep center, the address would be your business’ location or home address.)
ཛཛ When you have all your shipping labels, you will send those to your freight forwarder or 3PL prep center to ship to Amazon.
ཛཛ Once your inventory is prepped, your freight forwarder will have everything shipped to an Amazon warehouse!
Chapter 6 : How to List a Product on Amazon
Your listing is how customers will find and purchase your product on Amazon, so this step is incredibly important! We’ll review a seven-step process for setting up a successful listing:
1 – Research keywords to include in your listing
Keywords are the way customers find your listing. If you have the right data to tell you which keywords to include in your listing, you’ll get your product in front of relevant, ready-to-buy customers and set yourself up for success.
In Amazon, search for the top competitors for your product, and enter their ASINs into Keyword Scout to see all the keywords they are ranking for. Add these to your list as well. (We recommend adding at least their top 10 keywords.)
Do this for as many competitors as you would like. You’ll now have quite a robust list of keywords to use for your listing.
2 – Draft your listing’s title
For your title, it’s very important that you include the top keywords that are most relevant for your product and also have high search volume (meaning more customers use these search terms when looking for a product like yours — without keyword stuffing).
ཛཛ Include the top high-volume keywords (those with 1,000+ searches/month) for which your competitors are ranking
ཛཛ Make sure the title flows and is easy to read — not jammed with random keywords
ཛཛ Include punctuation such as commas or hyphens between keywords to make it flow better
ཛཛ Use as many characters as are allowed (this goes for your title as well as the other sections of your listing)
ཛཛ Capitalize the first letter of each word (except for prepositions, conjunctions, or articles)
ཛཛ Use numerals instead of writing out numbers
ཛཛ Avoid using subjective commentary, such as “hot item” or “best seller”
Listing Builder can also automatically pull information from Amazon.
3 – Draft your listing bullet points
While your title is all about your keywords, the focus of your bullet points should be to inform your customers about the main features and uses of your product. You want to do this while including the rest of your highly relevant keywords that couldn’t fit in your listing title.
Again, use as many characters as you are allowed. Different categories have different character limits, so make sure to find out exactly what those limits are in Seller Central.
What to include in your bullet points:
ཛཛ Explain in detail the main selling points of your product. Why should your competitor buy from you over the competition?
ཛཛ Begin each bullet with a main feature or benefit followed by a more detailed explanation. To stand out, you can place the main point in all caps. For example, “NATURAL- LOOKING ARTIFICIAL PLANT – Our beautifully designed artificial plant will add a realistic look and natural style to any room…”
ཛཛ Try not to fill your bullet points with fluff that no one cares about. Get to the point and clearly explain how they will benefit the user, what the product does and/or solves, and answer any commonly asked questions.
ཛཛ Set the right tone of voice for your product. For example, if your product is a tool, just explain what it does, how it works, how it is better, what it’s made of etc. Make it more informative and to the point. Or, if you are selling a toy, you want to make the copy fun and exciting. Paint a picture of how it works or how much kids will enjoy it.
ཛཛ Make sure to include relevant information such as sizing, quantity, materials, etc., if applicable.
Other tips:
ཛཛ Offer a money-back guarantee. Amazon will always give customers their money back for a return, so you may as well message this benefit to your advantage.
ཛཛ Don’t copy what your competitors have written — focus on making your listing more compelling.
ཛཛ If there are any complaints customers have expressed on your competitors’ listings that your product overcomes, make sure to include this! Ex. “These straps are weak and cannot hold 1,000 lbs of weight…” Explain how your product is stronger and solves that issue.
ཛཛ Answer common questions that customers are asking on existing similar or competing product listings. For example, if you see “Is this product waterproof?” on your competitor’s listing, and if your product is in fact waterproof, make sure to include this important information in the bullet points.
ཛཛ Emojis are also a nice touch to add creativity and visual punch to your listing!
Remember, you can always go back and edit this section!
4 – Draft your listing description
This section is farther down the page of your listing, so while it’s slightly less likely to be read by your potential customers, it is still very important.
Use the description section to include additional keywords, talk about your business, or share anything else about your product that you want your customers to know. This is a good opportunity to reiterate the key messages you referenced in the bullet points, while using different keywords, as well as additional information that did not fit in the bullets.
You are allowed up to 2,000 characters within the description, so be sure to use as much of it as possible.
You may use simple HTML such as line breaks (<br>) or paragraph (<p>) to break up the large block of text, making it easier to read.
Add A+ Content
If you are brand registered, you can replace the description section with an A+ content product description.
This allows you to add more images and text that highlight what makes your product stand out with more customization and branding. Amazon also has different modules you can use.
You can find A+ content in Seller Central under Advertising > A+ Content Manager.
5 – Purchase the UPC barcode for your product
In order to create your listing in Seller Central, Amazon requires you to have a universal product code, or UPC. This UPC barcode is what you see on essentially all packaging.
You are required to have one UPC barcode per product you are selling, including one per variation.
UPC barcodes can be purchased directly from GS1, the agency that manages this.
ཛཛ In order to purchase, go to GS1.org and click on “Get a GS1 barcode.” The site will then walk through the process of purchasing your barcode.
ཛཛ We recommend purchasing the GS1, but not printing it on your packaging. (We recommend printing the FNSKU directly on your packaging instead if you are only selling on Amazon because the FNSKU is unique to your product and Amazon will usually require a new product to be tracked by the FNSKU).
You may also apply for what’s called a GTIN exemption. This exemption allows you to list your product on Amazon without a UPC code, and can be useful for selling handmade products or products from certain categories that don’t often have barcodes. To apply for this exemption, you will show proof to Amazon that your product nor the packaging contains a UPC code.
6- Get quality images for your listing
Photos and other pictures are incredibly important for marketing your product as customers tend to look at your images first (especially on mobile) before looking at your description. So make sure your images are high-quality and informative!
You have two options:
ཛཛ Take the pictures yourself
ཛཛ Hire a professional (recommended)
You want your images to be very high quality and to present your product to potential customers better than your competitors.
If you are looking to hire a professional, check out fiverr or freelancer.com.
Whether you take the photos yourself or hire a professional, make sure know
Amazon’s photography requirements:
ཛཛ Your main product image needs to feature your product against a plain white background, without any props or watermarks.
ཛཛ 85% of the main image has to be taken up by your product.
ཛཛ Your image should be at least 1000px by 500px in order to be zoomable, which is very important.
ཛཛ You are allowed to include up to 9 pictures, and we recommend having as many as you are allowed.
Use your photos to present your product optimally, clear up any confusion a user may have (about how it should be used, for example), as well as allowing the customer to picture how life would be better if they had your product.
Include lifestyle photos
These are images that show your product being used by your customers, giving your customer a way to put themselves in the model’s shoes. These should hit on emotions.
Lifestyle photos take more effort to produce, but are definitely worth it! If you work with a professional photographer, they may be able to help you find models to model the product for you.
Include infographics
Infographics feature additional design work on your pictures that highlight the main benefits of your product.
You can create something like a competitive matrix, show dimensions, add arrows that point to the main benefits, or anything else that calls out your benefits or whatever sets your product apart.
Keep in mind that many customers will be browsing on mobile devices, so keep designs simple and clear.
Graphic designers can help create these assets
Other tips:
ཛཛ Include backgrounds that are unique and specific to your product. For example, if you are selling an outdoor toy, include a park in the background.
ཛཛ Take a look at your competitors’ images and think of ways you can make yours even stronger and give customers a clear reason to buy from you.
ཛཛ If you’re brand registered, you can also include a video in the photography section, which helps enhance your listing and stand out from your competition. Adding a video is one of the best ways to promote your product and increase conversions.
We strongly recommend finding a professional photographer and/or graphic designer who knows Amazon and knows what your images should look like to convert a visitor into a buyer.
Note: you can change your images at any time, so consider testing and evaluating how yours work and continuing to optimize!
7 – Create your listing in Seller Central
Now that you’ve prepared all the elements of your listing, it’s a simple process to create your listing in Seller Central.
ཛཛ To start, hover over Catalog and click on Add products.
ཛཛ Click “I’m adding a product not sold on Amazon.”
ཛཛ Select the category to list your product in. Choose a category that’s most appropriate for your product, and select as specific a subcategory as possible.
ཛཛ Under product ID, add your UPC code. (If you were approved for a GTIN exemption, leave the product ID blank and enter your brand name exactly how you applied for the exemption.)
ཛཛ Under product name, enter the title you created.
ཛཛ Under brand name, enter your brand name.
ཛཛ Manufacturer will be the same as brand name (as you are the manufacturer).
ཛཛ On the next page, set up any variations your product may have (sizes, colors, patterns, etc.).
ཛཛ You can enter a SKU or just leave it blank. Amazon will automatically generate a SKU for you if you do not enter one. (The SKU is specific to your account and is a sort of “model number” to help you keep track for your inventory.)
ཛཛ On the next page, under the fulfillment channel, select “FBA.” If you leave this as FBM, or “merchant fulfilled,” you will have to convert your listing to FBA when you are ready to ship your inventory.
ཛཛ Upload your images.
In order to add more information, such as your bullets and description, you’ll have to select “advanced view.”
ཛཛ Fill in your bullet points, description, and the dimensions and weight of your product. Depending on the category you are selling in, you may have some additional fields to fill in. For example, if you are selling a toy, you will be required to enter the minimum age recommended. If you’re ever unsure about what a field is asking, hover over the question mark and Amazon will give you more information.
ཛཛ Add your keywords. These are your backend keywords, which Amazon uses to help index and rank your product listing. Never exceed the allowed character count here or your keywords will not be indexed in Amazon’s search.
ཛཛ In the “search term” section, add keywords that couldn’t fit within the listing or are not relevant enough to have in the listing but are still related.
ཛཛ Fill in as many of the optional fields as possible as they will help you show up in search results.
Once you click “save changes,” your listing will show up in Seller Central under “Manage inventory.”
You can return to edit this listing at any time.
Chapter 7 : How to Launch a Product on Amazon
It’s important to start getting sales for your product as soon as your listing is live on Amazon as this will help your best seller rank (BSR) and improve your product’s visibility on Amazon.
Some sellers are also convinced that Amazon gives new products a boost in their first month on the platform, but Amazon has never confirmed whether that’s true. Either way, you want to start gaining sales momentum as quickly as possible once you launch your product.
To make sure you have a launch strategy and get strong sales from the start, you need to get your product to rank well. While we don’t know exactly what Amazon uses to determine ranking, we’ll briefly walk through three factors that definitely play a role. Then, we’ll walk through ways to improve your ranking.
Of these, you as a seller have the least influence over sales history, but you can influ-ence your conversion rate (which should affect your sales velocity), so let’s start here.
What affects your Amazon conversion rate?
ཛཛ Price — a lower price will most likely convert at a higher rate
ཛཛ Reviews — these serve as social proof for why another consumer should buy your product
ཛཛ The listing itself — images, keywords, mobile optimization, etc.
We discussed the listing in the last chapter, so now we’ll focus on pricing and reviews.
Pricing
One key factor we mentioned that affects your product’s conversion rate is price. How should you be pricing your product when first launching? Here are a few methods to consider:
1- Offer a lower price than your competitors
Check out the price of the top, non-sponsored listings for competing products, and then consider making your offer lower so people are more likely to choose your product. For example, if the top products are listed for $13-$16, consider pricing your product at $10-$12.
2- Offer a discount
An alternative to lowering your price is offering a discount inside of Amazon. This is different from using a deal site (more details on that below), as this adjusted price will actually be shown on your Amazon listing.
You can find this option inside of Seller Central under Coupons. This is a great way to get your customers’ attention on your listing as it will display a bright orange coupon under the price
Is it better to just lower the price, or keep a higher price and offer a discount? We’ve seen varying results, so it can be a good idea to try both and see what works best for you. Like with any Amazon strategy, you need to test what works best for your products.
Another common question is how long you should keep your price low? The best thing to do is to monitor your sales on a day-to-day basis. Once you’re getting the organic sales (not through coupons or PPC) that meet your expectations, you can slowly start to raise the price. In our experience, this is typically once you’re getting around 10 to 15 organic sales per day.
Reviews
Just think how often you’ve bought something on Amazon and not looked at the rating or reviews — not often! Reviews have a major impact on your conversion rate — so how do you get (good) reviews?
With no effort to increase the number of reviews on your product, the average rate of review you’d see is around 1%, meaning 1 out of 100 people who purchase your product would leave a review for it — positive or negative.
However, by creating a strategy to get reviews, you can potentially improve your rate of review to about 4% (meaning 4 out of 100, or 1 out of 25 people who purchase your product would leave a review), which can have a huge impact on your future sales.
Here are our top four tips for getting reviews:
1 – Automate your review request
Amazon has a “Request a Review” function on every order detail screen. This allows you to indicate when Amazon should send your customers an email requesting a review for a product purchased within the last 30 days. Amazon will send an email to the customer, asking them to leave a review.
This is an incredibly valuable and effective method of getting more reviews because customers (who would often opt out of emails from individual sellers) trust the Amazon brand and are more likely to leave reviews after receiving an email from
2- Participate in the Early Reviewer Program
The Early Reviewer Program is a platform within Amazon that incentivizes shoppers to leave reviews for new products. (Remember that only Amazon can offer incentives for reviews, not you.)
After someone purchases your product, Amazon will encourage the customer to leave a review in exchange for a small gift card credit. This program is valuable because it helps brand new products gain an initial 5 reviews, which are otherwise very difficult to earn on a brand new product.
However, these reviews are often short and not very detailed as customers don’t need to meet high standards to review.
To enroll in this program, you must have fewer than 5 reviews, and the SKUs must also be priced above $9.00. The program continues to run until you have received 5 reviews through the program, or after 1 year.
The cost to you is $60 after you receive your first review. (You will not be charged if you do not receive any reviews from the program).
2- Participate in Amazon’s Vine Program
Amazon Vine allows you to get trusted reviews on your products within days and without sales. The Amazon Vine Program is made up of a group of Amazon’s most trusted reviewers who post their unbiased, honest opinions about products. Amazon Vine invites customers to become “Vine Voices” based on their reviewer rank, which is a reflection of the quality and helpfulness of their reviews as judged by other Amazon customers.
You set aside up to 30 units that reviewers will receive for free in return for an honest review. You will receive very thorough, honest reviews about your product, which add credibility for your product and can help persuade other products. (But note that Amazon cannot guarantee a positive review and will not remove a review unless it violates their terms of service).
Currently, the Vine program is open to brand registered sellers and free to enroll in. Once you enroll, Amazon’s trusted Vine reviewers can request your product. Once they receive your product, you should expect a review within a couple of weeks. (On average reviews are posted 22 days after requesting, according to Amazon.
3 – Run email campaigns
You may also want to send a more personalized email to request a product review from a customer. You can do this through your own email campaigns as long as you do not also use Amazon’s Request-a-Review feature.
Amazon will not provide sellers with customers’ contact information, so you still need to send the email through your Seller Central account. As long as you abide by Amazon’s rules, this is a great way to connect with a customer and request a product review.
What to say: We recommend including the following in your email to ensure the customer continues to have a positive experience with you and your brand:
Thank them for their purchase and for supporting your business.
Ask them to leave a review of your product, and tell them how:
— Go into Your Orders on Amazon.com, select the product, and click “Write a product review.”
What NOT to say: Amazon has some restrictions around buyer-seller communications, so make sure you know the rules before contacting your customers:
- Do not ask for a positive review
- Do not offer any promotions
- Do not ask a customer to update their review
- Do not try and filter happy or unhappy customers
- Do not include any attachments
- Do not include any links
- Only send 1 email per customer per order
Plus: Product Inserts
Many sellers have used a card inserted into their product packaging as a means of communicating with a customer about how to use the product — and to request a review.
You can work with a designer to create branded product inserts and typically have the supplier add them to your product packaging very affordably, so these are a great way to connect and communicate with your customer.
Note: These product inserts are not expressly prohibited by Amazon, but be very careful about what you say on the inserts so you don’t violate Amazon’s Terms of Service. For example, if you do decide to include these, you have to send them to all customers (not only happy customers).
What NOT to do to get reviews: If you attempt to manipulate reviews in any way, Amazon will suspend your account, so make sure you abide by Amazon’s Terms of Service:
ཛཛ You are not allowed to direct an unhappy customer to contact you instead of leaving a negative review.
ཛཛ Never offer any discount, free product, or any other form of compensation in exchange for a review.
ཛཛ Do not use manipulative language such as “If you feel this product is worth a five-star rating, please leave us a review, otherwise contact us.” Even mentioning something like “We are a small, family-run business” or “We make our products in America, so please support local businesses” is considered to be manipulative.
How to get your first sales on Amazon
We recommend two strategies to use at launch to get initial sales: promoting your product through a deal site, and using Amazon PPC.
First, though, you need to determine your target daily units sold.
Figure out the main keywords that you want to rank on the first page for.
Each specific keyword will yield different search volumes.
For example, the main keyword for your product is “artificial plant” with 1,000 exact searches per month. The number one competitor for that keyword is selling 20 units per day from that keyword search. You will need to sell at least 20 units per day over a period of 7 to 14 days in order to rank in the top 3 for that keyword.
You can achieve this by running some type of promotional giveaway by providing a steep discount.
The other main strategy we recommend for getting initial sales is by using pay-per-click, or PPC, advertising. PPC is a big topic, and something we recommend always running (not just at product launch), so we’ll cover this separately in the next section.
Another consideration to help you get initial sales (but is not typically as effective as promotions and PPC) is leveraging social media:
- Create a Facebook and/or Instagram account for your product. Ask family and friends to like and share these pages to help establish your brand.
- Ask social media influencers to promote your product to their audience (likely for a fee). For example, find some popular Instagram accounts in your niche or somehow related to your product, and send them a free product or offer to pay-per-post/story.
- Find Facebook groups that might be interested in your product.
What should you NOT do when working toward initial sales?
ཛཛ Ask friends or family to purchase your product. (This is against Amazon’s Terms of Service and Amazon may be able to track accounts from the same household.)
ཛཛ Drive paid traffic to your product using Google, Facebook, or Instagram ads. (For products and brands just starting out, this can be expensive and difficult to convert visitors, especially because your product has few reviews. Consider this later when you’ve built some traction for your product and brand.)
PPC
“Pay Per Click” or PPC is a method of internet marketing in which you pay for consumers to click to your product listing. This advertising is a way of driving traffic to your product (in addition to the organic clicks, which you don’t pay for and are based on algorithms that help a consumer find the most relevant product for their search).
PPC is a more effective method of paid advertising on Amazon than other advertising like Google or Facebook because you’re targeting shoppers who are already on Amazon for the purpose of buying.
As we mentioned when discussing product launch, PPC will help you rank, and will ultimately lead to sales.
People find PPC intimidating, but we’ll walk you through the different types of campaigns, how to set them up, and how to optimize them for sales.
*Note that in order to use PPC you have to have a professional seller account.
So first, what are the three different types of PPC on Amazon?
- Sponsored Products
- Sponsored Brands
- Sponsored Display
Continue reading for more details about each PPC option.
Sponsored Products
This is the most common ad type on Amazon, and in our experience, the most effective.
How it works: These appear at the top and bottom of Amazon’s search results page, as well as in the product carousel on a competitor’s product listing They appear on desktop, mobile, and the app.
A consumer can click on your ad and be taken to your product’s listing. As with all types of PPC, you are charged every time someone clicks on your ad (not when your ad is displayed or if someone buys your product).
Sponsored Brands
You have to be brand registered to use Sponsored Brand PPC ads.
These ads appear on the top and bottom of Amazon’s search results, and will show for both Amazon’s desktop and mobile site. Sponsored Brand ads display your logo, a headline, and up to three of your products.
When a customer clicks on your logo, they are taken to your Amazon Store or a dedicated landing page that only shows your brand’s products. When they click on a product, they are taken to the product listing.
Sponsored Brands works best when you have multiple product offerings within your brand.
Sponsored Display
You have to be brand registered to use Sponsored Display PPC ads.
Sponsored Display ads help expose consumers to your product outside of Amazon. com and help bring more people to the site. Amazon displays an ad for your product on external websites and target customers who have looked at either your listing (to bring them back) or a similar product within the last 30 days.
Reminder: PPC ads are based on either the keywords that Amazon thinks are relevant, or keywords lists that you have come up with, so before you run these campaigns, make sure you have done proper keyword research.
Let’s dig into these PPC sponsored product ads further.
How to create a PPC ad
To create a new ad campaign in Seller Central, go to the Advertising tab > Campaign Manager. Click on Create Campaign > Sponsored Products. In here you will name your campaign, set a daily budget, and choose the campaign type — automatic or manual.
Automatic: You allow Amazon to decide which keywords to display your ad for. Amazon chooses keywords based on your listing’s title, bullet points, description, back-end keywords, and other listing details, so make sure you’ve done your keyword research properly!
Automatic campaigns are also a great way to discover new keywords that convert well for your product. Amazon will show you the keywords they target during the duration of your campaign in your search term report.
*These campaigns are the easiest to set up, and therefore a great place to start!
2- Manual: You choose the keywords you want your ad to appear for.
For this, you’ll use the keyword list you’ve made in Keyword Scout. Amazon will also suggest keywords that you can choose from.
- Choose “Manual targeting” when setting up your campaign in Seller Central.
- As you scroll down, you will be able to choose the product you want to target, then choose between Keyword targeting and Product targeting. Select Keyword.
- Below that you will see a large list of suggested keywords as well as a tab to enter your own list of keywords. This is where you will enter in the keywords you found during your keyword research.
- You’ll target keywords by three different match types: broad, phrase, and exact.
Broad match: Keywords that are targeted can be in any order, and additional words can be included in the keywords.
— For example, if your product is a set of marshmallow sticks, your ad will be shown for any search results that contain marshmallow sticks and any words before, after, or in between (ie. marshmallow stick, sticks for marshmallows and hot dogs, roasting stick for marshmallow).
— Your ad may also appear for a close variant of your keyword such as the plural form, acronyms, abbreviations, etc.
— This type of targeting can often be more expensive as it targets a broader range of keywords. It is less targeted and is used to expand your keyword coverage and customer reach.
Phrase match: In this type of targeting you need to include your phrase exactly as it’s entered, but can include other words before or after. So in our marshmallow sticks example, as long as you have “marshmallow sticks” without any words in between, you can have any additional words in the search (ie. campfire marshmallow sticks, marshmallow sticks for campfire).
— This type of search can be more specific than broad, but leaves room for some longer keywords.
Exact match: In this type of targeting, the keyword needs to be entered exactly as you want people to search for them. So for “marshmallow sticks,” only “marshmallow sticks” will be targeted — no words before, after, or in between.
How to set up an automatic campaign within Seller Central
- Click on Advertising > Campaign Manager
- Next, click on Create Campaign
- Now, click on Sponsored Products
- It’s time to set the ad campaign up! Start by giving your campaign a name. (For simplicity, consider naming your campaign “[Your product] – automatic targeting.”)
- Under Portfolio, select your product, or create a new portfolio.
- Here, you can set an end date if you want, but you may want to leave these running so you can collect as much keyword data as possible from Amazon (since Amazon may target keywords that you haven’t found). Check the data in your search term report to see which keywords are performing the best in your automatic campaign.
Keywords that are above your target advertising cost of sale (ACoS), you can move as a negative keyword so they no longer show up and cost you money.
As long as your automatic campaign is profitable, there is no reason why you should shut it off.
- Next, you’ll set your daily budget. If you have the money, we recommend $50 to $100 per day, otherwise start lower at $30 (but your budget probably won’t last through the day).
As your campaigns run for the first week or two, you will have a better understanding of your average ad spend. If your ads are spending up to your daily budget, you should increase your budget, as long as the campaign is profitable.
- Select Automatic Targeting
- Next, pick your campaign bidding strategy.
What is a bid?
Your cost-per-click bid is what you are willing to pay when shoppers click your ad. Note that what you bid is not necessarily what you’ll have to pay — it’s just the maximum you’d be willing to pay. (And as a reminder, you’re paying for clicks, not impressions.)
For example, you are targeting “marshmallow sticks.” You set the bid at $0.50.
That means the most you are willing to pay per click for that keyword is $0.50.
— A few strategies you could use for determining how much to bid:
— Amazon will provide a suggested bid, and you could just go with that!
— You can adjust your bid based on placement (whether your ad is shown on the search page or on a product listing).
— You can select dynamic bids. This gives Amazon a little bit of flexibility in terms of bidding. You tell Amazon that they can bid more or less depending on how likely you are to get a sale.
- Now, create an ad group. (We’ll get into campaign structure more later. For now, just call this “Automatic.”)
- Select the product you want to advertise.
- Now, select your default bid.
- [Optional] Now, you can choose to set up negative keyword targeting. This allows you to pick any keywords you don’t want to show for. For example, if you’re advertising drinking glasses, you don’t want your ad to display for eyeglasses.
- Click Launch Campaign, and you’re all set!
How to set up a manual campaign within Seller Central
- Click on Advertising > Campaign Manager
- Next, click on Create Campaign
- Now, click on Sponsored Products
- Give your campaign a name. For simplicity, consider naming your campaign “[Your product] – Manual targeting.”)
- Choose the portfolio to add this to or choose no portfolio.(Portfolios enable you to group and organize campaigns for the same product.)
- Choose an end date if you’d like, or leave this at “no end date.” You can always pause the ads if needed.
- Select a daily budget (we recommend $50 to $100).
- Select manual targeting.
- In this next section you’ll select if you’re using Product or Keyword targeting:
- Product: You can choose either an entire category, or specific products to show your ad for. You can use categories Amazon suggests, or you can add your competitors’ ASINs or categories that you’d like to specifically target.
- You’ll want to use this to potentially target competitors’ products, specifically products where you offer a better price or higher value.
- Enter in the ASINs of your competitors and Amazon will show your ad on their product listing.
- Keyword: There’s a variety of ways you can get keywords to target. Amazon can suggest keywords under “related,” or you can enter your own list that you previously researched here, which we recommend.
- In order to get this list, go to Keyword Lists in your amazon account.
- If there are keywords in Amazon’s suggestions that you do not have in your list, add those as well if you think they’re relevant to your product.
- Before clicking “Add keywords,” select the match type you’re targeting (broad).
- Next you’ll select the bid. Again, this is how much you are willing to spend per click. You can go with Amazon’s suggested bid, do a custom bid, or a default bid. If you use Amazon’s suggested bid amount, we recommend bumping up the keyword bid by 25% since Amazon’s suggested bids may be conservative. The reason you would increase the suggested bid amount is to get as many impressions as possible, especially for a new product launch.
PPC Best Practices
Structuring your campaigns
As I mentioned briefly before, campaign structure can really help you keep your campaigns organized, especially as you keep adding more. Here’s our recommended structure:
2/ Portfolio: This is the top level of your advertising structure. We recommend this being your product, or product variation. This is so you can organize all your campaigns for a specific product in one place.
3/ Campaign: This is how you will name each campaign type. We recommend this using the same keyword list or targeting type. So, for example, here you’d have:
- Automatic targeting campaign
- Manual keyword targeting campaign
- Others might include a manual product targeting campaign, a sponsored brand campaign, a sponsored display campaign, etc.
4/ Ad group: This is the bottom level where the match type comes into play. This
is where you can organize each match type and even organize by variation. For example, if you are running a manual keyword targeting campaign, you’d have a:
- Broad match
- Phrase match
- Exact match
Optimizing your campaigns
The next step is to optimize your campaigns so they perform better and become more profitable.
The first thing to note here is that you don’t want to make changes till at least one week after you launch your campaigns (maybe even longer). At first, it will look like you’re just losing money and not making any sales, but that’s totally normal. Your campaigns also need some time to gather data before you can start making changes.
Before we start optimizing your campaigns, you should figure out what your break-even ACoS is. (Remember, your ACoS is a metric used to measure the performance of an Amazon Sponsored Products campaign.)
You can calculate your break-even ACoS by dividing your profits by your revenue. Find your revenue by taking your sales and subtracting the landed costs and Amazon’s fees. Now you know how much of your sales price you can spend on PPC before you’re losing money.
When you’re first launching, you may be comfortable spending more than your ACoS as you’re just trying to get sales.
Optimizing your automatic campaign
In campaign manager, go to your automatic targeting ad.
At the top, you can see a summary of your campaign, including how much you’ve spent, how much you’ve made in sales, the ACoS, and impressions.
- Further down, you can see how many clicks your campaign has gotten and how many orders you’ve received.
- Once you click on your one automatic ad group, you will see the search terms tab. This will show you all the search terms Amazon has been targeting for your product.
- You can see a breakdown of how many clicks, spend, sales, and ACoS for each individual search term.
As you scroll through the list, you’ll see not only the keywords that Amazon has been targeting, but also the ASINs they may have been targeting. You may see competitors’ ASINs because Amazon will also show your ad on a competitor’s product listing.
Two things we want to find now: Our worst-performing keywords, and our top-performing keywords:
Worst-performing keywords: These are keywords that you’re spending a lot of money on, but not getting any orders.
To find out which ones these are, sort by clicks or spend descending to see which search terms have the most clicks or that have spent a lot.
If you see terms with lots of clicks but no sales, these are the ones you want to stop targeting. The general rule of thumb is any keyword that has 10 clicks but no sales is one you want to remove.
Make a list of these keywords, click on negative targeting, and add these keywords here. Amazon will no longer target these keywords.
Over the next week or so, you will begin to see your ACoS go down for your automatic campaign since you added negative keywords.
Best-performing keywords: These are keywords that have a low ACoS. We want to find out which ones these are, so we can remove them from this automatic targeting campaign and instead put them in a manual targeting campaign so we can increase our spend and control over them.
Sort your list by ACoS, find the search terms with a high number of sales but a low ACoS.
Make a list of these, and again, go into negative targeting and add the list there.
Then, you’ll want to add these keywords to your manual targeting campaign where you can adjust the bids for each individual keyword.
Optimizing your manual campaign
Once you pull the high-performing keywords from your automatic campaign, you should add those keywords in your manual campaign. We suggest adding them into your exact campaign since you know those exact keywords already perform well.
The way you optimize manual campaigns will be a little different than automatic ones.
- First, click into the manual campaign you’d like to optimize and sort by spend. The goal is to decrease spend on keywords that aren’t performing that well and increase spend on keywords that are performing well.
- Earlier, you determined your ACoS (what you are willing to spend for each keyword). If your target ACoS is 30%, then you want to be sure we are spending no more than that amount.
- Go through each keyword in your campaign and adjust bids accordingly.
- If you want to continue spending up to 30% for each keyword, for any keywords above that number, we can begin lowering the bids or removing that keyword completely.
- If you see a keyword with a high number of impressions and clicks but a low amount of sales, this is a keyword you would want to lower the bid amount on.
- If you see a keyword with low impressions but also a low ACoS, you should increase the bid on this keyword in hopes to gain more impressions and sales.
- If a keyword has little to no impressions but is highly relevant to your product, increase the bid and check back in a couple weeks to see if anything has improved.
- If you see a keyword with high clicks but a high ACoS, your best bet may be to just pause that keyword.
- Repeat this process every week or so to ensure your campaigns are performing at the highest level. You’ll have more to do when you first launch your campaign, but you’ll see that over time, this process becomes easier, and after a few months, there won’t be many changes to make because it becomes more and more optimized each time.
A few final PPC reminders:
ཛཛ Start running PPC campaigns as soon as you can. Start with an automatic campaign as soon as you’ve optimized your listing to get started quickly.
ཛཛ Once you’ve set up your automatic campaign, also set up a manual campaign, and create an ad group for the three targeting types: broad, phrase, and exact. Yes, we recommend setting up all three from the start!
ཛཛ Sponsored product ads are the most effective for most sellers, but once you’ve set these up, feel free to try out sponsored brand and sponsored display ads as well.
ཛཛ Remember: don’t jump into your campaigns every day and make changes! You want to give them some time, and maybe make changes once a week
Chapter 8: Advanced Seller Strategies
Selling on Amazon is not a set-it and forget-it type of business, but if you prepare and have the right data and tools, you’ll be in great shape for successful growth. Consider the following tactics to ensure your business is running smoothly, efficiently, and profitably.
LISTING MANAGEMENT
Check in on your listings both within Seller Central and on the live listing itself regularly. Review all your images and description details and make sure they appear as they should, answer questions from customers (you should also receive email alerts about these), and keep an eye on any new reviews, which may give you helpful guidance to improve your product in the future.
ADVERTISING OPTIMIZATION
Continue to optimize your PPC campaigns every couple of weeks to ensure you have the highest-performing ads possible. Run search terms reports to get a better understanding of how each individual keyword is performing, then remove poorly performing keywords and increase bids on winning ones.
BRAND BUILDING
By focusing on your brand, you can build a loyal customer base to help drive more traffic to your products on Amazon. Make sure to produce a well-designed and packaged product and consider creating social media accounts to highlight and promote your product in a more customizable environment. You can also become brand-registered on Amazon, which gives you access to enhanced marketing features to help your brand stand out on Amazon and improve conversion.
EXPANDING YOUR PRODUCT LINE
Whether you’ve started with a single product or multiple, you may want to continue leveraging your Amazon selling experience to expand your product line.
INVENTORY MANAGEMENT
You want to find the right balance of inventory to keep up with demand but not have too much supply in Amazon’s warehouses. We recommend keeping about 3 to 6 months’ worth of inventory in Amazon’s warehouse at a given time (with exceptions around the holidays) to monitor your inventory needs and keep storage fees in check.
ACCOUNT HEALTH
Keep track of your Amazon account health to ensure your business is in compliance with Amazon’s Terms of Service and prevent any risk of account suspension. Make sure you comply with product policies and avoid any product authenticity or safety complaints, and focus on providing positive overall customer service.
HIRE A VIRTUAL ASSISTANT
By hiring a virtual assistant (VA), you can have them focus on day-to-day account management while you focus on more high-level tasks to grow your business. Use a VA to handle customer service, create new content, source products, optimize your PPC campaigns, as well as daily administrative tasks such as reconciling shipments or handling any listing issues. Check out Sino Shipping experts to find reliable VAs for your Amazon business.
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THANKS FOR YOUR TRUST
JEAN PERRI
