The Amazon Marketplace is a great tool that allows companies to sell their own products on Amazon, set the pricing they choose and this way grow their business significantly.
The seller is responsible for getting the product to the customer and controls their inventory unless they are using the fulfillment by Amazon service (FBA).
Amazon Australia comes with great selling potential but how can it make things easier for you, as a seller?
Is it worth joining in early or should you wait to see how things develop?
This complete tutorial will answer this and more questions you might have like how much does it cost to sell on Amazon or how to sell on Amazon.
1. Why Selling on Amazon Australia?
Amazon Australia went live with more than 500 Australian sellers registered to sell but this small number is expected to explode in a short time.
Thousands of Australian businesses already sell their products on other Marketplaces and they are expected to join the local market.
The Australian Marketplace is expected to be flooded by international sellers also, especially Chinese, who will take advantage of the later launch of Fulfillment by Amazon, which will give them all the logistics support they need to sell in Australia.
A total of 51% of all Amazon sales were made through third-party sellers. While in Australia only 2% of total sales are online, this is mostly due to long waits for shipping, huge shipping fees, inflexible delivery options and poor return policies that turn Australian customers to local stores.
All these problems have kept people from buying online in Australia, but Amazon comes to fix all these issues especially with its fulfillment by Amazon service that guarantees a short delivery.
Amazon Australia will compete on the local market with several giant marketplaces: Catch of the Day, Alibaba, MyDeal Marketplace and eBay Australia.
eBay only has over 40,000 Australian business that sells on the platform.
Amazon Australia will most likely attract sellers with its Fulfillment by Amazon program, the renowned service that puts Amazon in charge of the warehousing and shipping of the products.
This is a great benefit for any business that wants to sell in another country.
Amazon comes with a set of services that will benefit sellers. These services relate to fulfillment, lending, payment and advertising and this makes it a great choice for Australian sellers.
2. The Cost of Selling on Amazon Australia
The selling company is responsible for delivering the product to the customer and they can control their own inventory.
The system is similar to eBay, but Amazon will also launch an FBA Service
(Fulfilment by Amazon).
This service will allow companies to both stores and dispatch the goods by using the Amazon platform.
This service, however, is not available yet.
Amazon will charge you two fees for using their Marketplace:
· A $49.95 fee (plus GST) for sellers who want to list their products on Amazon.
· A 6-15% commission on any sales generated through the Marketplace. This fee depends on the type of product you are selling.
3. What Should You Prepare Before Starting to Sell?
You can easily sign up for an Amazon seller account but the clock starts ticking from day one. In just 30 days, you will have the first monthly account charge and you should meet all Amazon’s performance metrics from the first day.
Thus, before you jump to creating your account, you first have to prepare the document information and have a plan for the day-to-day operation.
You will need all the information below to get through the registration process successfully and become an Amazon seller:
- Company information: You will have to provide your legal business name, a correct address and valid contact details.
- Tax ID: This can either be your social security number or the company’s tax ID number.
- Email address: This is the official email address that Amazon will use to send you important information regarding your account. The email address has to be created before you begin the Amazon registration process.
- Credit card: You will need an internationally-chargeable credit card. If Amazon can’t validate the credit card number, they will cancel your registration.
- Phone number: You will need to provide a phone number to be easily contacted by Amazon during the registration process. Make sure the phone is nearby in case you receive any calls.
In addition to having all these details ready, you should also make a very good logistics plan.
Thus, prior to creating your account, you need to have answers to questions related to returns, the use of the FBA service, or the possibility to use a DBA name.
Who Handles the Returns?
Here, you can choose either to receive the returns yourself or to send them to a different company that will test the returns and will make them available for sale again.
If you opt for FBA, Amazon will handle this for you.
You will also need to assign a specific team member to answer all customer inquiries.
Amazon requires the sellers to respond to every single customer inquiry within 24 hours, regardless of the day
of the year.
You need to assign this task to a member of your team from the very beginning and also make sure there are backups.
What Is the Name of Your Store?
You can use a DBA (Doing Business As) name instead of your company name.
There are a few legitimate reasons to use a DBA.
For example, your company might be known to the public better by a brand name.
However, there are many sellers that choose to hide their real identity, like a reseller who uses a hidden identity to hide from its retail partners that it sells directly to end customers.
What Products Will You Sell?
You should know before you create your account that Amazon has imposed restrictions on various categories.
If you want to sell products in gated categories, you will need to be ready to apply immediately to get ungated.
If you do intend to sell products in gated categories, you will need to be familiar with the process and make sure you meet all the requirements before you begin.
4. What Should You Sell on Amazon Australia?
Amazon will allow you to sell various products. A wide range of products is available for purchase. Up to this point, there are 19 product categories found on Amazon Australia.
However, your choice of products will determine the success of your business. For example, if you try to sell a product that is not very profitable or can’t be sold in a big enough market, you will
waste your time and even your money. On the other hand, if you opt to sell in a niche that is very competitive, you may not be able to compete with the other sellers.
You will only be able to make a good choice if you research both Amazon and the market before you become an Amazon seller.
First, you need to be able to understand and use the complete data Amazon provides as it will help you predict if a certain product or category is likely to bring you profit.
You can do this research before you spend money on stock.
The following product categories can be managed easily and will most likely sell well on the online Australian market:
- Baby products: You can sell baby products from baby wigs to toys and nursery decorations and furniture. These products usually come at a fairly low price, they won’t break when are being
shipped and are needed all-year round. Stay away from bathing products or wipes & accessories as people prefer branded products. - Home improvement: You can sell DYI products like lighting, kitchen & bath fixtures, building supplies, and hardware. Keep in mind that your shipping charges will increase if you choose
heavy items. Keep things small and light and as much as possible try to avoid electrical appliances as there are many branded products. - Sports and outdoor equipment: You can choose to sell the lightest items like tent accessories, backpacks, backpack accessories, flashlights and lanterns, and so on. Stay away from clothing and footwear as many times people prefer to buy branded products as they are certain of the quality.
- Office and school supplies: Have the benefit of being unbreakable and are always needed. Even though there are a few brands that sell them, people don’t care about the brand. Be aware that you will have to sell a large amount to make a decent profit.
There are a few things you should keep in mind when choosing a product:
· An ideal product will have a sale price of $10 to $50. This is not an arbitrary amount.
This is a small enough amount so that people will most likely buy the product without doing too much research or worrying that the product is bad, but it is high enough for you to make a profit.
· You want to choose a product that weighs less to reduce any shipping charges.
· Check the demand on Amazon Australia for a specific product.
Amazon uses a great indicator, the best selling rank (BSR) that tells you how well the product is selling on Amazon Australia.
For example, a product with BSR of 5,000 will sell a lot better than a product with a rank of 20,000.
· You don’t want to compete with established brands. Thus, is a bad idea to try to sell products if there are established brands in the same category. You can find categories where nobody cares about the brand of the product, such as LED lamps.
Here you can sell without being worried you will have to compete with established brands.
· Choose a product that can’t break easily. This is very important: you don’t want your product to arrive at the customer damaged because it will cause additional problems and expenses.
· You won’t want to sell any seasonal products, or products nobody will buy in six months.
For example, Halloween costumes, Christmas decorations, and even smartphone cases, as new models appear every month.
You can learn more about how to sell things on Amazon if you want to handle every aspect of the delivery yourself or you opt to pay for FBA.
5. Using Amazon FBA
Through FBA, Amazon handles a great portion of the selling process for its sellers.
One of the main reasons sellers choose to use FBA is that it allows them to offer free 2 days shipping on every product they sell.
FBA is more than that. The service allows you to store your products in an Amazon warehouse and they do everything related to packing and shipping your products.
The advantages of Amazon’s fulfillment program are numerous:
- It frees up time you will be able to use to grow your business instead of handling the packing and shipping of your products.
- You don’t have to worry about storage space and related expenses.
- You take advantage of Amazon’s great reputation.
- You don’t need to know all the customs regulations or familiarize yourself with the shipping protocols.
- You qualify for Amazon Prime, which will gain your store confidence among the customers.
- You don’t need to worry about the returns, as Amazon will take care of the whole process, including communicating with the buyers and sending them new products.
- You’ll increase your sales volume.
While FBA is not cheap, the many great benefits make it worth it.
While not having to deal with all the shipping problems that might occur, the greatest advantage is the automatic Prime eligibility.
If you are selling prime products, you will benefit from the intense marketing campaign Amazon is doing to convince its customers to join the Prime Program and thus get the free 2 days shipping.
When using Amazon FBA, you will go through the following steps to sell the products:
- You decide what to sell on Amazon
- You list the product on Amazon
- You prepare the products and ship them to the Amazon warehouse
- Amazon checks and stores the products
- Your product goes live as a Prime eligible purchase
- Your customer will place an order
- Amazon finds and ships your product to the customer
- Your customer received the product within 2 days if they are a Prime member.
Therefore, all you have to do is find the product you want to sell, list it in your Amazon store and send it in bulk to Amazon’s warehouse.
When you’re using Amazon FBA, there is virtually no limit to how much you can sell.
If you have to handle the shipments for every single customer separately, you will have to either reduce the sales volume or hire additional employees to do this task.
When you’re choosing FBA, Amazon does everything for you.
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