Developing, prototyping, qualifying and manufacturing a product is a major undertaking, and that is before a startup team ever gets to the point of selling it. A quiver full of engineers and industrial designers can take innovation to the next level, but it does not do any good if 1000‘s of units of the final product sit dormant in the garage of a team member. When the product development is nearly complete, it’s time to sell, and this is usually where things can get very tricky. Getting the customer to separate with their hard earned money becomes a quest and is key to the survival of the company, and it’s dependents.
The sales process of yesteryear was very much that of the door to door vacuum cleaner salesman. However, things have changed, and people have embraced technology and therefore are far more impatient with the sale and fulfillment process.
If a startup team can meet the demands of the marketplace in terms of product development, sales, and fulfillment, there is a lot of opportunities to make a decent profit and build a great business with these new customer behaviors and technologies. Good businesses have been built overnight by embracing and innovating with these changes in consumer expectations. Great businesses have defined the experience.
This article focuses on Amazon.com as the e-commerce site of choice simply because the author of this article has direct experience with selling through Amazon.com among others.
What Amazon has to offer the fledgling startup with one or more products to sell to the world is nothing shy of amazing. A startup team now has a global marketplace that can be managed and scaled with a relatively small team in place.
In an effort to help educate, the following is a process breakdown that the author experienced while setting up, marketing, selling and shipping product using Amazon.com
It needs to be said that the most useful information that pertains to being a seller on Amazon.com comes through a very helpful website that the Amazon team has put together. To get all of the details, sign up for an Amazon Seller account.
A Seller Account will give you access to more information and specific details. Setting up a seller account is not rocket science and should not take more than a half hour.
• Take your time and read all of the fine print to avoid any surprises.
• Familiarize yourself with the difference between FBA and Non FBA transactions before listing your products
Research similar products BEFORE LISTING YOURS:
By doing your homework prior to listing your products, you may find valuable keywords, answer customer questions with product descriptions and get a better understanding of what customers on Amazon.com are looking for. This can have a big impact on how you market your product and how your product shows up in Amazon search. If there are products similar to yours, check them out in detail and explore what other products show up in the “Related Products” and “Customers also bought” sections of the product pages. The trick is to have titles and descriptions unique to the value proposition of your product, but not so different that the product cannot be found using basic search terms.
Example: Don’t call your spill proof BPA free water bottle a horizontally improbable Bisphenol-A liquid containment device. Call it what it is and tell people why it is better.
Listing Your Product – Understand the differences in fulfillment:
To understand the true cost of what Amazon.com will charge you for their services means that you need to decide how the order will be fulfilled. Will you ship it direct to the customer, or will Amazon?
If you are unfamiliar with “Fulfilled by Amazon” or “F.B.A”, this is where the seller ships product to Amazon either individually or in bulk. Amazon will warehouse the product(s) in one of or all of the three major warehouse locations in the USA, pick, pack and ship the item to the customer. It’s not the cheapest option, but it is arguably the best option to sell the most product and be sure that the customer is a happy one. The big advantage to the customer is the option of being a Prime member which includes shipping charges. This is possible thanks in part to Amazon’s negotiated shipping rates with major carriers.
The other option is the “Shipped By Seller” – this is a process that as the name suggests, describes the process of the seller (You) shipping an item direct to the customer. It works when you receive an order from Amazon and then ship the item direct to the customer. Depending on your logistics handling abilities and negotiated rates with companies like UPS, FEDEX, and others, this can be a good or bad thing. Ask yourself, do you want to be spending time completing orders and shipping product or focusing on new product opportunities, the latter will build a better business.
It is important to keep in mind that returns are also handled by Amazon. From a vendor perspective, returns can get very expensive since Amazon will back charge your company for the return shipping. Additionally, they will charge you to ship the product back to your facility if you request it. This author requested that the defective items be returned for evaluation but had yet ever to see the products arrive. If you do not request a return, Amazon will destroy the item after a fixed period.
On that note, it needs to be mentioned that shipping items in bulk to Amazon.com via pallets can work out nicely. The rates that Amazon has negotiated with major carriers like UPS are very hard to beat.
Shopping for a deal has never been easier for the consumer, so price sensitivity is more important than ever before. Most customers will shop by price, and user reviews on Amazon.com, so low pricesand high ratings carry a lot of weight. While doing business with Amazon.com is a great value, it needs to be understood that it is not cheap. Shipping, chargebacks, packaging, and warehouse storage can add up quickly. Be sure that your numbers add up and make sense in your favor.
While there are a lot of things to be considered when selling your products on Amazon.com, there is little doubt (at least in this authors mind) that Amazon.com is a great proving ground for your product. If you are confident that you have a great product with a unique value proposition and quality to match, Amazon.com is a no-brainer to test and tweak your market viability.
Author Tip – It was noted that when larger shipments of product were sent to Amazon to fulfill the order, the product ranked higher in search on Amazon’s site. Large quantities of product and high customer ratings of the product allowed this author to increase prices slightly above the competition and to continue to grow sales. This makes sense because Amazon favors sellers that have a supply chain that can keep pace with demand.