Rules and regulations
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.
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.