Selling your food or beverage products on Amazon
1. What are some opportunities for food or beverage manufacturers when it comes to selling on Amazon?
Amazon is a powerful ecommerce site for both new and established businesses looking to expand their sales and revenue. “90 percent of U.S. consumers said Amazon is the ecommerce site they use the most,” according to RBC Capital Markets Survey.
Amazon is a huge marketplace and your customers are probably already there, looking for your products, so you’re missing out on a large segment of the market by NOT being on Amazon. Keep in mind that your products will show up on Amazon eventually whether you want them to or not, so it’s a good idea to protect your brand and do it yourself in order to maintain consistency in price, product information, and customer service.
2. How do you sell on Amazon then?
1) You can wholesale your products to Amazon, known as Vendor Central or Vendor Express, and Amazon sells your products directly to customers. I actually do not recommend this. Amazon doesn’t care about your brand, your product, or your sales – it just wants to be the cheapest and sell through a lot of product.
2) You can create your own account and sell directly to customers by sending inventory to one of its warehouses, known as Fulfilled by Amazon (FBA). With FBA, Amazon charges a higher fee, but handles general customer service and returns. FBA is also the portal for Amazon’s 3-day Prime shipping, which is as close as a customer can get to instant gratification – they don’t have to fight traffic, stand in line, or comparison shop. According to Forbes (June 2017), 64% of households have Prime memberships, so if you want to reach those 40-50 million people, FBA is an important sales tool to utilize.
3) You can create your own account and ship products to customers yourself, known as Fulfilled by Merchant (FBM). With FBM, you pay only Amazon’s 5% commission, but you handle shipping, customer service, and returns yourself. Be aware that Amazon does give priority “rank” (what page and/or where on the page your products appear when a customer searches for it) to FBA sellers, putting FBM sellers at a disadvantage with competitors. However, Amazon recently opened Prime shipping options to FBM sellers who pass certain requirements.
3. Does Amazon allow products that are perishable or expire quickly? If so, what are some of the challenges sellers might face?
With FBA, Amazon is a first-in, first out system and you can sell items with expiration dates as short as 90-days, if you turn them over quickly. 1-year expiration dates are better suited for FBA though, since units are removed 50 days before their expiration date. Also, Amazon charges long-term storage fees on units over 6 months.
Depending on your product, it may be better to sell via FBM, so you have more control over your inventory and how it’s handled.
4. Does Amazon prohibit any specific foods or beverages?
Yes, Amazon doesn’t allow the sale of alcoholic beverages except for pre-approved wines. Many categories on Amazon are restricted or “gated” – meaning you have to apply for and receive prior approval from Amazon to sell products in those categories. Grocery & Gourmet Foods is one of those.
Receiving approval to sell in the Grocery category is a tough process, but it can be done, especially if you have a trademark, a website, food certifications, and strong brand presence.
5. What kind of boost in sales do most food companies see?
It depends on different factors. Everything you do affects where you fall among your competitors and whose products get seen first. Your product pages must convert visitors to buyers or Amazon will push them to the back pages in favor of those that do.
Some things to keep in mind when considering how your products will sell on Amazon include:
1) Your brand presence everywhere else.
2) How similar products are selling on Amazon.
3) How well your products are introduced (“launched”) to Amazon customers.
4) How well the product pages are written:
- Titles – Titles must have the right search term keywords or your product won’t even show up in customer searches.
- Images– Images are what customers see and must clearly show the product, how it can be used, and what’s included.
- Bullet Points – Bullets should be short and to the point, and should focus on benefits to the customer, then sell them on the features. Your keywords should also go here – an expert will be able to smoothly write them in.
- Product Description – This is the least important of all four items on a listing, but still very important. This is where all additional information would go, such a shipping restrictions, brand or company information, etc. Potential customers are less likely to see this section because it is surrounded by a lot of stuff on the page, but it is important for keywords and customer searches.
6. Is there a minimum volume or quantity of product that Amazon requires?
No, but the lower the volume, the fewer the sales and the harder it will be for potential customers to find you. It’s important to keep sales going, inventory moving, and Amazon happy.
7. How long does it take to get started selling on Amazon, typically?
If you already have good images and product information, it can be as short as 24 hours to be up and selling on Amazon, if you sell FBM. With FBA, it can be a few days to a couple of weeks from the time you create your account to the time inventory reaches the warehouse.
8. If you had one thing to tell people before they started working with Amazon, what would it be?
Find an Amazon Expert/Consultant to work with – Amazon can be overwhelming and confusing with a lot of rules to navigate. An expert will be able to analyze your products and give you an idea of the potential for success. A consultant will write your listings, launch your products, handle the advertising, and do everything else you need to boost your sales in a new marketplace.
If you want to be hands-on in managing Amazon, then hire someone to walk you through the whole process as they go. Otherwise, hire someone to do it for you and focus on what you do best – running your business!