What is it and who is it suited to?
Essentially, Amazon Marketplace allows retailers and distributors to tap into Amazon’s infrastructure, in exchange for a fee. Amazon Marketplace allows other companies to sell their products under the Amazon banner.
Marketplace divides its sellers into two principal categories: casual and professional. Casual sellers are defined as those selling 35 items per month or less, and are asked to pay only a completion and referral fee for each item sold. Professional sellers, those selling at least 35 items per month, are able to sell a greater range of products than casuals and are given bulk listing tools to make it easier to sell high volumes, but there’s a monthly subscription fee in addition to the individual completion and referral fees.
Quick, simple and affordable
If you’re just starting out, and finding it hard to drive traffic to your own site, Amazon’s global reach and brand identity can ramp up your online business. At present, around two million people sell items on Marketplace; although this means there’s lots of competition, it also enables you to find out how your rivals are pricing and marketing their products, boosting your own business strategy.
Furthermore, the simplicity and affordability of Marketplace provide genuine benefit for entrepreneurs who don’t know much about web development, and don’t have much money to spend on their own site. However, it’s worth noting that the site expressly forbids the trade of several types of item, so your line of business might not be suitable.
Planning and preparation
First, you’ll need to decide on your Amazon classification. If you anticipate selling only small numbers of items, or don’t have much money to spend, you’ll probably want to go with the casual classification; however, if you anticipate selling in bulk, or want greater range in the products you can sell, you’ll need to go professional.
Then you’ll need to register on Marketplace, by providing the following information:
- Your business name
- Address and contact information
- A UK or internationally-chargeable credit card with valid billing address
- A phone number where you can be reached during the registration process.
If your business is VAT-registered, you’ll need to provide details of this. Additional rules apply for sellers from outside the UK – further information is available on the Amazon website.
Registering products
Once you’ve decided on your classification, you’ll need to register your products – thankfully this part of the process is extremely simple. If you’re a casual seller, on each Amazon.co.uk product page you'll find a blue box called ‘More Buying Choices’ on the right-hand side of the page. Click on the ‘Sell Yours Here’ button; you will then have to enter details regarding the condition of the product, its age, and an additional comment.
If you’ve registered for professional status, you can use Amazon’s web-based interface or its bulk listing tools to list your products. The specifics of the procedure depend on whether or not your products are already in the Amazon.co.uk catalogue.
If your products already exist in the Amazon.co.uk catalogue, you can list them individually using the site’s web-based interface, simply by entering the name of the product, the price and your available stock. Alternatively, you can use Amazon’s bulk listing tools, which require the EAN, ISBN, or UPC code (barcodes) for each product. If you need a barcade, you can source one online by clicking here.
If your products do not exist in the Amazon.co.uk catalogue, you can create them using either the web-based interface or the bulk listing tools. For each new product, you will be required to provide product information, including: EAN, UPC, or ISBN code, product title, product description, an image of the product, price and available stock. Note that you might be required to input additional information to list your products in some categories.
Adding images
Any images you use to accompany your product must be in a tif or jpeg format and sRGB or CMYK colour mode, with pixel dimension of at least 1280 pixels on the longest side. File names must consist of the product identifier (Amazon ASIN, 13-digit ISBN, EAN, JAN, or UPC) followed by a full stop and the appropriate file extension - for example: B000123456.jpg or 0237425673485.tif. Spaces, dashes or additional characters in the filename will prevent a seller’s image from going online.
For more information on how to upload an image of your product, go to the Amazon Marketplace page.
Rules and regulations
Permissible products
Most products are allowed, but you need to consider a number of key restrictions before you begin the Amazon registration process.
Amazon forbids anyone from selling any of the following on its site:
- Mobile phones (including service)
- Magazines and newspaper subscriptions
- Tobacco and alcohol
- Adult toys
- Gift cards and gift certificates
- Prescription medication
- Guns and ammunition
- Photo processing
Both casual and professional sellers can sell in all remaining categories. However, all items you sell must be in Amazon’s existing online catalogue – you cannot add new product ranges. Furthermore, products in a limited range of categories, such as watches, jewellery, groceries and health and beauty, require authorisation.
Shipping and payment
Amazon has also developed strict rules governing distribution. You must ship your product within two days of receiving notification that it has been sold, and you must send confirmation of dispatch for funds to be credited to your account.
Once you have sent confirmation that the item has been sent, Amazon deposits your earnings into your seller account. Funds are then transferred to your bank account on a 14-day cycle.
Costs
As a casual seller, you are required to pay a completion fee of £0.86 per product sold and a referral fee of 17.25% of the sales price (11.5% for electronics and photo items) in each case.
Professional sellers pay a monthly subscription fee of £28.75 per month (£25.00 for sellers that qualify for VAT-exclusive fees), plus a referral fee and closing fee on certain products, such as books, music and DVDs. Referral fees and closing fee vary by category and whether you qualify for VAT-exclusive fees. Check out the Amazon website for more information.
There are additional fees for the addition of bespoke Amazon services to your core Marketplace package. These services include Fulfilment by Amazon, a packaging and shipping facility; see ‘Shipping and Storage’ for more information.
Shipping and Storage
The management of products and orders is done via the Seller Central account, and each seller has full access to this facility – all orders are visible on the interface, so you can track the progress of your transactions. When your item sells, Amazon will send an e-mail to notify you that payment has been taken from the buyer. You must dispatch the item to the buyer within two days of receiving this e-mail.
You can either manage the product delivery process yourself, or let Amazon take ownership. If you are going to retain responsibility for the delivery, Amazon will notify you by email when an order has been placed. Once this is done, all you’re required to do is pack and deliver the item.
If you don’t want to manage the package and shipping process, then you can utilise the Fulfilment by Amazon (FBA) feature – whereby you sell it, and Amazon ships it. With FBA, a customer stores their products in Amazon’s fulfilment centres, and the site directly picks, packs and distributes them, as well as offering customer service.
There are no additional set-up charges or subscription fees when you add Fulfilment by Amazon to your seller account, but you’ll need to pay fulfillment and storage fees. Fulfilment fees vary depending on the type of item (media or non-media), its dimensions and weight, and the shipping method used.
There are two types of fee per month for inventory storage. From January to September, customers can expect to pay £0.30 per cubic foot, per month; between October and December the fee rises to £0.40 per cubic foot per month, taking into account the extra stock over the Christmas period.
The FBA service can be cost-effective, but ultimately it depends on the amount of items you are selling and shipping each month. To see whether the service would be beneficial, you should add up the costs of overhead you could be spending on warehouse space, packing supplies, postage and labour, dealing with customer service inquiries and returns handling, and from there work out whether the Amazon charges work out cheaper.
Amazon has a handy FBA guide that you can download and refer to for more information.
Tips and useful contacts
When working out your price, you should factor in the condition of your product, the price of similar prices on Amazon, and the potential impact of Amazon’s referral and variable fees, as well as your delivery costs.
To help gauge a reasonable price, and gain some insight on the competition, you might choose to use Amazon’s on-site Pricing Tools. These include the Low Price feature, which allows you to compare your listing against products of similar type and condition. If the Low Price calculator deduces that yours is the lowest-priced listing for that particular item, a green checkmark will appear in the Low Price column.
You can also click on the listing ID for your items to view your listing information in a single detail page. On this page, you'll see a box marked ‘This Item Also Available To Buy’, where you can see the lowest-priced Marketplace items offered by other sellers in each condition available.
For more information on the specific requirements of Amazon Marketplace, visit the site’s useful help pages.