It’s hard not to get enticed about starting a business on Amazon. After all, it all looks incredible on paper when you do your research. Turning a few bucks into hundreds of dollars and being a part of a company that earns billions – a huge portion of which goes to sellers – is enough motivation to get people signing up for a seller’s account. Yet, wanting to sell and knowing how to sell on Amazon are two different things.
As in any business, you can’t afford to get your excitement to get the better of you and cloud your judgment. Starting is the easy part. But, if you want your business to have a long future, you must pair your passion with practical knowledge.
Here are seven things you must know before you start selling on Amazon:
- It’s Not a Get-Rich-Quick Scheme
Have you ever heard of income opportunity offers wherein you are presented with business deals that can make you earn money fast? Invest a few dollars and watch your capital double. Follow a certain strategy, and you’re guaranteed to succeed in 2 weeks.
As enticing as these ideas sound, they’re just a scam to get money out of your pocket most of the time. Amazon isn’t one of these schemes. Instead, it’s a business endeavor that will demand time, hard work, patience, and the discipline to follow the rules set by the company.
- Amazon Releases Pay Every 2 Weeks
You can expect to receive your funds from your sales revenue to your bank account every two weeks if you meet the following requirements:
- Fulfillment of valid bank account information. This will be the bank to where your funds will be transferred to.
- Fulfillment of valid credit card information. The information you provide will be for account verification and billing reasons.
Knowing when you can expect your funds will help you prepare your budget and replenish stocks accordingly.
- Fulfillment by Amazon Will Save You a Ton of Trouble
Fulfillment by Amazon or FBA is a program wherein the sellers ship their products to an Amazon fulfillment center to be stored away. When a shopper buys from you, Amazon takes care of shipping. Aside from this convenient order handling, other perks of FBA include the availability of the product to Prime members and better customer service.
- Amazon Fees
Amazon isn’t like Facebook or Instagram, wherein you can sign up for free and start posting pictures of your products without paying anything. It is, after all, an online retail hub, and just like conventional marketplaces, you’re required to pay fees if you want to start selling. Although individual sellers have free subscriptions, referral and closing fees are required, along with a $0.99 charge for every item sold.
Professional sellers subscribe for $39.99/month but have access to wider selling perks such as the authorization to sell in gated categories. Other fees you’ll be considering include the charges for FBA’s handling, storage, and packing. The charges depend on the product size and can be calculated using the FBA’s Revenue Calculator.
- Competition is Tough – And Even Encouraged by Amazon
It’s important always to have enough inventory if you’re selling on Amazon. Then, when you run out, your competitors can grab your potential customers before you can even pick up your phone to contact your supplier.
Amazon sends an automatic alert to FBA sellers when a fast-selling item in their niche runs out. So don’t be surprised if other sellers take up your initially unique product on Amazon. To be on top of your game, work with an Amazon seller VA (virtual assistant) to keep your rivals from snatching your customers.
- Amazon Controls Your Content
As a seller, it’s your task to write keyword-driven product descriptions and post quality photos. If you want your products to land on the first page of Amazon search results, you must work to produce a quality copy.
Yet, ultimately, Amazon reserves the right to determine if your listing content can be displayed or not. When signing up, the Participation Agreement you consent to states that Amazon has the right to decide if a listing’s design, content, or appearance can be published.
- Amazon Retains Immunity Over Disputes Between Users
Whether it’s because of a bogus customer or a seller that rips you off, you can’t file a lawsuit against Amazon for disputes with other users.
The retail company or employees working in Amazon can’t be liable for complaints of any nature that may arise between a seller and a buyer or between two sellers. This is also stated in the Participation terms that Amazon users agree to.
Learning the seven things you must know before you start selling on Amazon ensures you’re grounded and starting on the right track. Did this knowledge change anything in your business plan?
Catherine vanVonno, the author, is the President and Executive Director of 20Four7VA, a global Virtual Assistant (VA) Service Provider. She holds a doctorate in Applied Statistics, Research Design, and Program Evaluation from Virginia Polytechnic Institute and State University. In addition, she has over ten years of experience facilitating evidence-based strategic planning, product development, brand management, legislative communications, and medical policy. She is married and has four children. You can reach her at [email protected]