To Sell (Or Not to Sell) on Amazon


 
Because Amazon has become the ultimate one stop shop, it makes sense for any seller to contemplate using the online marketplace to peddle their wares. But is it the right move for you? Here are some things to consider.


First and foremost, make sure there is an online demand for your merchandise. The sales estimator tool, provided by Amazon, was designed to provide sellers with guidance as to how well similar products to theirs have fared on the site. While the sales estimator tool does not take into consideration factors like how effectively a product was marketed or if the seller chose to advertise, it can (very, very roughly) estimate your monthly sales.


If selling on Amazon makes sound financial sense for your business, you will then need to address how exactly to fulfill orders. Fulfillment by Amazon (FBA) is an excellent choice if you are dealing with a ton of merchandise. It eliminates the need for renting a warehouse, hiring employees, and fretting over lost packages. Furthermore, all aspects of shipping is handled and the items are eligible automatically for Amazon Prime. There is a fee for these services but more often than not, FBA proves to be the cheapest alternative.


Sellers with a minimal amount of merchandise sometimes choose to handle order fulfillment on their own. This often works best when there is no competition for your product(s). However, if there is a competitor out there heralding free Prime Shopping, this factor alone could very well cost you in sales.


Setting up shop on Amazon, big or small, does cost money. Sellers will need to decide on purchasing either the Individual plan or the Professional plan. The Individual plan is designed for sellers who expect to sell fewer than 40 items per month. While there is no monthly subscription fee with this option, sellers will pay $0.99 per item as well as a referral fee and a closing fee with every sale. The Professional Plan is meant for those who expect to sell more than 40 items per month. Under this plan, there is a monthly subscription fee of $39.99, and the $0.99 per item fee is waived. Check out Amazon’s fee chart for a more precise breakdown. It’s important to figure out where you stand after the various deductions hit, and if the endeavor ultimately makes financial sense.


Be sure to ask yourself these questions ahead of time in order to make the best decision for your business and yourself.

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