Selling on Amazon India is one of the best ways to make money online today through ecommerce. As long as you are smart about what products to sell and know exactly how things work, selling on Amazon can be very profitable. Whether you are looking to set up a full-fledged business or a side income for your family, becoming a seller on Amazon is one of the best ways to make it happen. This article will give you a detailed step by step guide on how to sell on Amazon India. So that you are ready to start your journey as an individual seller on Amazon today.
Why sell on Amazon
Amazon is India’s largest online marketplace and has the kind of reach to customers that is almost impossible to imagine.
It has more than 3 lakh Amazon sellers. Imagine getting access to millions of customers the moment you make your product live on Amazon. Amazon sells more than 3 billion products; that is the kind of power the platform has today.
Add to that the ease of use and reliability of payments, and Amazon is probably one of the best places to sell products online.
To get a better idea of what Amazon has to offer, you can start by checking out the best selling products on Amazon. You can see this here. This will give you a good idea of what items on Amazon have become popular over time and the huge volumes of sales that they generate.
Over the past few years, there has been a tremendous change in India’s shopping patterns with more customers going online. Here are some of the current best selling categories in Amazon right now with high demand. This would give you some insight into the market and see where the demand is.
Best selling categories on Amazon– Electronics, mobile and accessories; home and kitchen; books; beauty and health products; fashion and apparel; baby products.
Start Selling on Amazon
You need to start the process by registering on Amazon Seller Central.
Go the link- https://sellercentral.amazon.in and click on Register Now.
They will ask you to sign up to Amazon; unless you already have an Amazon account in which case you sign in.
You will be asked to verify your mobile number. It’s better to use a number that you will use exclusively for your business.
You will then be asked to submit basic details about your business and some details like PAN card. You will then have to link your bank account in order to receive payments from Amazon. In the initial stages, it is better to sign up as an individual seller in which case you will pay Amazon per transaction instead of a monthly fee.
After this, you will get a confirmation call from Amazon, and then you’re ready to start selling! It’s actually that easy and doesn’t take more than 5-7 minutes to set up.
How to Create Your First Product Listing
Amazon provides easy-to-use listing tools that will help you create your first product listing.
There are two ways to list a product- either you are adding an existing product or creating a new one.
Obviously, given the number of products on Amazon you most likely you will be going the first route.
Here is a step by step guide to list your product on Amazon:
1.Go to your seller account, go to inventory and click on “Add a Product”. Choose from the categories to search for the matching product. Suppose you want to sell Books. You can select Top Sellers and go to the Books section.
2. If you are trying to list a product for the first time, the Listing tour will help you with step by step instructions to complete the listing.
3. Choose the book you want to list (Eg. Word Power Made Easy by Norman Lewis). Click on the List Button at the bottom right corner of the App. You can also edit the product pricing.
4. Enter product details
5. Review your listing before submitting
And voila! Your product listing is ready. Your customers can start viewing the product in as less as 15 minutes.
You can also check out the video for understanding advance steps.
The video talks about more advanced features like how to use a Bulk Upload or Product Feed to Add & Manage Listings which you will need as you progress in your journey as an Amazon seller.
An agency can also help you provide a network of professional services (photographers, writers, etc) who can help you create a high-quality catalog. But in the initial stages, it is better to do it yourself and learn the ropes. Once the product is off the ground and there are good initial orders, you can invest in creating a high-quality catalog.
What If You Want to Sell Your Product Without Actually Owning Any Inventory.
If you want to reduce your risks as a new seller, there is a special provision in Amazon known as drop shipping.
Dropshipping is a situation where you don’t actually own the inventory of the product. The inventory and carrying costs are borne by a third party, usually the manufacturer.
As the seller, your main task is to ensure that you are listing and marketing the products well on Amazon. And taking care of all the administrative aspects like returns, customer service, taxes and so on. This is especially important if you are a reseller/wholesaler and don’t wish to take complete control of inventory.
Here’s what the Amazon website says about drop shipping (You can see the detailed version here).
“ Drop shipping, or allowing a third party to fulfill orders to customers on your behalf, is generally acceptable. If you intend to fulfill orders using a drop shipper, you must always:
- Be the seller of record of your products;
- Identify yourself as the seller of your products on all packing slips and other information included or provided in connection with them;
- Be responsible for accepting and processing customer returns of your products; and
- Comply with all other terms of your seller agreement and applicable Amazon policies. “
So while drop shipping seems like a heaven send for those looking for a risk-free way to be an Amazon seller, it has some restrictions. And in India, Amazon requires that you do dropship through something known as Fulfillment by Amazon or FBA which we will discuss in the next section.
What is Fulfillment By Amazon (FBA) and Why Should I Know About It.
To put it simply, fulfillment of an order means making sure the order gets to the customer after it has been placed. This includes packaging, sorting and shipping the product. If a seller chooses to have Amazon fulfill the orders for their product, this is known as Fulfilment by Amazon or FBA. Sellers can choose to use this option for one or some or all of their product categories.
This image by Amazon clearly explains what FBA is.
As a first time seller, you need to make the decision as to whether you would like to fulfill orders yourself or use Amazon fulfillment. If you don’t want to use FBA, the only other option is to “merchant fulfill” the products you sell. This means you will have to hold your inventory for sale at your location and will be responsible for delivery to the customer when an order comes.
Here are some of the pros to using FBA:
- Less Hassle since you don’t need to focus on things like warehouse management and logistics. Amazon takes care of these; all you need to do is focus on finding the right products to sell and marketing your listings.
- Customer Service: Amazon offers customer service along with the handling of customer returns which can be a huge boon for you as a new seller, especially if it’s not something you’ve done before
- The brand tag of “Fulfilled by Amazon”: Amazon has taken great pains to ensure it builds good logistics, delivery support, and customer service. When a customer sees fulfilled by Amazon next to a product it gives them confidence that the delivery will be hassle-free. And that’s a huge boon for you as a new seller.
- The speed of shipping fast is Amazon’s expertise and will probably be much more professional and efficient than if you were handling it yourself. Amazon has 34 fulfillment centers across 10 states in India so obviously, it has super fast shipping and much lower delivery time. It also allows you to offer things like credit card payments, free shipping and other attractive incentives to customers.
- Prime– Amazon Prime delivery is available through FBA and this is a great benefit you can pass on to your customers.
- Drop shipping or a situation where inventory and carrying cost is not borne by you, the seller, is only possible with Amazon fulfillment.
Please note that there are some things you need to keep in mind as you decide whether or not to use Fulfillment by Amazon:
Amazon charges you a fee in return for the FBA service. And this fee is in the form of a percentage of your sale profits. The closing fee percentage charged by Amazon:
Amazon also charges an extra fee which varies depending on things like item weight, handling fees, pick and pack, storage costs and so on.
So in short, while Amazon Fulfilment has many advantages, it does cost you more than it would have your own fulfillment facilities. And so reduces your margins on each product sold.
However, given the fact that FBA through its many advantages gives you access to more customers, the drop in margins per unit sold could be offset by the increase in sales volume.
That’s why it’s important for you, as a seller, to decide whether you want to go for FBA or not.
How to Decide If I Should Use Fulfilment By Amazon
One thing to keep in mind is the fact that as a seller you can choose which of your products you want to use FBA for. So it may be the case that for some of your products, using FBA might be profitable and for some, it may not.
Let’s take the example of a product you want to sell; Product A. Say for product A, your cost price(the price you are getting from manufacturer) is 50, and as per your research you can price it on Amazon at Rs. 150. Say your item is a small size item (400gm) and is going to be shipped all over the country. And it is a special category item, for example, a health care item.
Amazon’s FBA fees would look something like this:
- Closing Fee- 15% of selling price which would be Rs. 22
- Packaging and handling fee – Rs. 55
So, your total FBA fees would be Rs. 77 still leaving you with a margin of Rs. 23.
If that is enough to cover your marketing and other costs and still leave you with a healthy margin, then FBA would be the way to go. If not, then it would be better to explore the costs of delivering the product on your own.
How to decide what products to sell on Amazon
This is one of the most critical questions that you need to answer before you start on your journey as an Amazon seller. Before you start selling on Amazon, you need to identify the products that are selling well but have less competition. How do you do this?
Here’s how you decide what to sell on Amazon.
Step 1 – Brainstorm
Make a list of products to sell that you think customers would be interested in. Start with as many as possible; keep brainstorming with people; and then bring the list down to about 50-60.
At this stage, don’t try to sell products that no one is selling because that might become too risky and you don’t want to start with a high-risk product as a new seller.
Step 2- Competitor Research
Do a search for your first product and analyze the first ten listings for that product keyword. In the ideal case, at least 8 out of the top 10 results should have less than 100 reviews. This is because if you go for products where some sellers already have 1000s of reviews, it will take you a lot of time to compete with that.
So do your analysis, and make sure you have the right product- where competition is neither too much nor too less.
Step 3- Demand Analysis
There are 2 things you should know about demand for your product- 1. Is there enough sales/demand for the product for you to become a seller 2. Are you sure that the demand for your product is not seasonal but consistent throughout the year?
One of the best ways to analyze this is Google Trends. Google Trends gives you the trend for searches for your product over time.
If you see a healthy increase in the demand in the recent few years and especially in recent months then you know that the product is a good bet. Of course, Google Trends talks about people who have to google searched for the product and not about people who have searched or purchased on Amazon. Nevertheless, it is a good indicator of overall demand trends and you can use this to make your decision about which product to sell.
The second thing you need to ensure is that demand for your product is not seasonal- which means check the trend over 2-3 years, especially last 12 months. This is because some kinds of products (eg. festive lights during Diwali) will only have a seasonal demand and checking data only for a few months may show misleading results.
So once you are sure that your product does not have too many sellers and has a steady, increasing demand, you’re all set!
How Do I Price My Product
Pricing your product on Amazon follows the same rule of thumb as any pricing. First, make sure you are able to negotiate a good deal with your suppliers and try to keep your cost price as low as possible.
Then, check out prices offered by other sellers of your product on Amazon. If your product is unique and has some differentiation, you may be able to charge a higher price point. If not, you will have to price it at a similar range to your competition. Maybe even at the lower end in the beginning to attract more customers.
But of course, your pricing should keep in mind your original cost price plus all other costs from shipping, warehousing, delivery to marketing and promotional costs. And then factor in a healthy profit margin based on your product type and your expected sales volume.
How to Acquire Reviews For Your Amazon Account
Keep in mind that one of the major factors for customers when it comes to buying from a listing is reviews. So the number of good reviews you have the more likely your product is to be sold.
So it’s important to keep aside some money as part of your promotional budget. And use that in the initial days to generate high order volumes and good reviews.
Here are two of the most effective ways you can use the promotional budget:
- Creating promotional campaigns providing your product at 50% off or more. Use couponing and deal sites to promote this campaign. They generally do not charge an agency for promoting a product on their website. Eg coupondunio.com, couponraja.com etc.
- Using Amazon’s Advertising- You can do this through seller central. There are currently 3 options for promoting your product on Amazon. You need to understand what combination of the 3 would work best for you:
- Amazon Store – Amazon Stores is a merchandising and advertising tool that allows sellers to leverage to showcase their brand’s product through a storefront like a webpage. It’s a self-service tool gives sellers plenty of customizable features to showcase their product in a unique way.
- Sponsored Products – You identify keywords related to your product. When customers search for those keywords on Amazon, your product ad appears alongside the search results. You only pay when the customer clicks on the ad.
- Headline Search Ads (PPC) – This works similar to Sponsored product except that Headline Search Ads are placed prominently above search results on Amazon. This placement is very attractive and can help you get more traffic.
Just remember, Amazon has just scratched the surface of the Indian market and still has a long way to go. So if you’re the person whose dreaming of being your own boss or leaving your boring 9-5 job, here’s your chance. Become an Amazon seller by understanding the tips and tricks in this article and start a massive business from the comfort of your home.