How many times have you thought about selling your products or services online? Maybe you’ve taken the leap and looked into registering yourself with an Amazon seller account on amazon seller central and faced the user portal. Next comes the decisions – an individual or professional selling plan? Seller fulfilment or Amazon fulfilment method? Taking these steps as a new seller can be confusing. We’ll take a look at simplifying these choices to enable you to make the most informed decisions regarding the placement and position of your online presence and get an awesome seller experience right from the start.
How do I get started on Seller Central?
Starting your own e-commerce business and making a decision to sell your products in the Amazon marketplace requires planning, overcoming logistical hurdles and most probably learning some new online skills. To begin however, make sure you can tick the following three points off your list:
- basic knowledge of e-commerce
- a drive to become an expert on the Amazon Seller Central platform
- easy-to-reach financing
Is it better to Choose Individual or Professional Selling Plan?
Once your business planning stage is set and your business is registered with Amazon UK, you’ll now need to choose your account set up level. Within seller central there are two levels of account available:
- Individual (no subscription fee)
- Professional plan (with monthly subscription fee).
What is the difference between an individual or professional seller account?
Individual Plan Features:
- designed to sell little – up to 35 items a month
- doesn’t have monthly subscription fee
- charges per-item fee of £0.75 for each product sold on Amazon.co.uk
Professional Plan Features:
- designed to sell a lot – more than 35 items a month
- has monthly subscription fee of £25 excl. VAT
- charges per-item fee of £0.75 for each product sold on Amazon.co.uk
To most efficiently make you account decision, it is important to consider how you will manage your inventory and your cash flow. Do you have the means to purchase large amounts of stock in advance or will you be purchasing on a supply demand basis? What kind of items are you selling and how do you plan on fulfilling the orders? Do you have warehouse access? Amazon will not be able to give you a direct answer on this, however each plan is designed to meet an individuals needs so take some time to make this decision. A business may choose an Individual selling plan if they have a small number of items to sell or they’d like to test their product with an audience online. On the other hand, if you are serious about selling your products online and want to squeeze the best juices from Amazon Seller Central features, we believe the Professional account would be preferable. The reason being that some of these features, such as keeping track of your Inventory and Orders or using feeds and various reports, are critical for making business decisions and are available only for Professional Sellers.
Choosing the Professional Plan may increase your products Buy Box eligibility. The Buy Box refers to the white box on the right side of the Amazon product detail page, where customers can add items for purchase to their shopping basket. Not all sellers are eligible to win the Buy Box. Thanks to stiff competition and Amazon’s customer-obsessed approach, only businesses with excellent seller metrics stand a chance to win a share of this valuable real estate. This means that if you go for the individual plan, your fulfilment must be top-notch to keep you in the running against sellers who’s items are Amazon fulfilled.
Clearly, this is a game changer – with the possibility of increasing your product sales dramatically. You can learn more about Pricing and Plans in Seller University by logging into your Amazon Seller Central account or clicking here.
Regardless of your initial decision, all accounts may be upgraded or downgraded so if you decide an alternative option is a better fit for your business later down the line that’s absolutely fine.
Which fulfilment option is best?
After deciding upon your subscription level, next comes the fulfilment options. Should you take the fulfilled by merchant option and pick, pack and deliver all orders yourself? Or choose the FBA – Fulfilled By Amazon as your fulfilment method?
In theory, you can keep your products at home in the garage and go to the post office every other day and ship products yourself. But be honest whether this will work for you in practice.
Hopefully, your orders will come in fast and furious and you’ll need to ensure delivery is met no matter your circumstances.
FBA shipping costs may be lower than a personal shipping account so take all costs into consideration before making your decision.
When is FBM a good option?
If your product is large and falls under the category of “oversized” items, it is worth considering FBM. When you add a product in Amazon Seller Central, you will need to fill in its package dimensions and shipping weight. By doing so you will know if it’s considered to be standard or oversized. Amazon storage and shipment costs for large items can be very high depending on the weight and size, leaving a merchant with very small or even negative margin when all costs are considered.
In general, handling the fulfillment yourself gives you a better control over your inventory and prevents warehouse damage at Amazon premises. It is especially true for hand-made and fragile items.
What are the drawbacks of FBM?
Customers who purchase with Amazon are used to products being delivered to them fast. They may then be disappointed in your potentially slower service and turn their anger to your product instead. Sellers in this situation do often receive nasty or low star rated reviews posted against their product. Several bad reviews with 1 or 2 stars can potentially damage your listing, resulting in a low performance score from Amazon and a downgraded ranking.
Amazon is also very strict about customer service and will penalise sellers who are not compliant with its policy. Bear in mind that fulfilment by merchant (FBM) requires consistent quality control and timely delivery.
Just a few clicks on the Manage Inventory page of Amazon Seller Central can convert your listing to FBA allowing Amazon to take care of storage, packing and shipment.
If you choose Amazon fulfilment, your listing may become eligible for their Prime next day delivery service. The addition of the Amazon Prime feature to a listing has been shown to increase the visibility of your listing and attract more buyers. Moreover, the Amazon algorithm favors FBA products over non-FBA ones on product search, which leads to higher ranking and more sales. This option is very hard to obtain for non-FBA sellers. You can find the eligibility criteria in your Amazon Seller Central account under the performance tab.
You can find even more benefits of using FBA in the Seller University and Seller Forums available in your Amazon Seller Central. However, when it comes to numbers, it is always recommended to check the profitability of both methods using the Revenue Calculator below and make the best decision based on your business needs.
Financial Planning or How to Smooth out a Cashflow Dip
If you have the stamina of a pro sportsman for negotiations with your suppliers and the charisma of a superstar in customer service then your chances of building a successful, sustainable business exponentially multiplies!
At some point during your business growth however, you may seek additional funds to fill a cash flow gap or invest in additional stock depending on the season, for example before Christmas or Black Friday. Never miss the deal! Some sellers say that these two occasions together pay back for the whole year of hard work and provide up to 40% of the total yearly income.
If you proactively search for announcements about up-coming events, regularly monitor your inventory in Amazon Seller Central and place orders from Suppliers in advance, you can manage your company finances very efficiently.
At Mycashline, we believe in opening up business capital to small and medium sized business to power them towards quick and fluid growth. If you need an instant cash injection to power your profits further, apply today with us and see if your business is eligible. MyCashline’s customer success team understand the up’s and down’s of selling on the Amazon marketplace and the challenges of running a start-up in general. Talk to us today for free.