Certified Amazon Expert Brenda Crimi helps product launchers and business owners like you determine if Amazon is the right platform to sell your product. From the lens of an experienced and successful Amazon seller, she starts with the reasons why you should consider launching your brand on the e-commerce giant’s platform because it brings great exposure, builds brand awareness, and the data availability from product to market, which will automatically give you customer feedback so you can adjust your marketing strategies accordingly. She then dives into reasons not to sell on Amazon, which mainly touches on product fit for the platform. Do not go into your business industry blindly and let experts like Brenda guide you on how to best plan your tactics and launch your product.
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We’ve got another great Office Hours for you. This one is with Brenda Crimi. She is our Amazon seller expert in all things on how to sell on Amazon, how to learn, how to know if your products are right.
It’s Brenda Crimi coming from Phoenix, Arizona. I want to talk to you a little bit about, “Is your product right for Amazon?” It seems like there are a lot of mixed emotions out there with product owners. Oftentimes, I’ll be walking around events, I’ll approach a booth or maybe at a farmer’s market and I see a really cool product and I’ll ask, “Are you on Amazon?” I get a ton of different responses. Some people are like, “No, it’s too complicated or it’s too expensive or Amazon’s going to steal my ideas.” What it comes down to is people don’t have the right information to make a choice and they feel overwhelmed. I’m going to touch on a few of those reasons why you should or shouldn’t sell on Amazon because not every product’s right for it. After I’m done, then maybe you’ll have a little bit more clarity.
Let’s start off with why you should even sell on Amazon. Why should you sell on Amazon? The first and most obvious reason I believe is exposure. You’re going to reach millions of shoppers already sitting in a platform ready to buy with their credit cards on file. That’s pretty exciting to me. In days gone by, there were just websites. Amazon didn’t exist. It was your responsibility as a product owner to drive all that traffic there and that’s very costly. Isn’t it very exciting to know that you could sell your product to shoppers already with their credit card in hand, ready to buy? Exposure is one of the biggest reasons to sell on Amazon.[Tweet “Exposure is one of the biggest reasons to sell on Amazon.”]
There’s very low barrier to entry. Anybody can sell. You just fill out an application on Seller Central, give all your banking information and so forth, pay your membership dues of $39.99 a month, and you’re in business. There’s no pre-qualification for it and you don’t have to have thousands of units to test the market. If you were trying to get into one of the big-box stores, they’re going to require you to have some inventory behind you before they’re going to allow you to sell on their marketplace. Amazon’s a great way to get into the marketplace with the low barrier to entry.
Another point for why you should be selling on Amazon is brand credibility. People are going to look for you there. A lot of new product owners are out there at these events that I was talking about earlier at home shows and farmers markets, have been trying to gather some exposure for their product and people aren’t always going to engage with you. Maybe your booth is full and they had questions so then they’re unable to talk to you at the event or maybe they did talk to you but they didn’t make the purchase. However, I bet you’re going to stay in their mind and when they go home they’re going to look on Amazon for you. You better be there because it used to be like a website. If they went to look you up on a website and didn’t find a website, they’d be questioning whether or not you really were a serious product. That thought has transferred into the Amazon marketplace where people are going to look for you on Amazon and if you’re not there, they’re going to question whether or not you’re really serious about selling your product.
Another point to why you should sell on Amazon is brand awareness. If you can rank amongst this competition, people are going to start seeing you as a choice in that marketplace. It’s already ready there. If somebody types in “spatula” and your product is sitting next to the Rubbermaid option, they’re going to be, “I wonder what this product is?” You can start gaining some brand credibility by piggybacking off the traffic for other products like yours.
There’s also some convenience to selling on Amazon. It’s a built-in fulfillment center. If you are a busy person and you’re out there hitting the pavement, trying to build awareness of your product, you may not have the time to sit there and fill orders off of your website. Amazon can act like a built-in fulfillment center where you send all your products into Amazon’s warehouses and they take care of the shipping and packing and so forth. It certainly adds an element of convenience. Also, the key maintenance of it being a built-in call center for customer support so as they’re selling and they’re fulfilling those packages for you, if any customers have any questions, Amazon can help them. You’re not having to worry about being on the phone servicing your customers.
The most important thing that I like to drive home to product owners and the reason to be on Amazon is at the very least the data. The data that is available to you is over the top. When you brought a product to market in the olden days, you had to pay these market research companies thousands of dollars to give you some insight as to what the market is doing for a product like yours. On Amazon, you have the ability to dig deep into that database and extract information simply by putting your product for sale. Customers are going to tell you what they like and don’t like. Let’s say you’re selling your new widget and you’ve got it in red. Maybe customers are saying, “I like the red,” but in their comments and reviews they’re saying, “Maybe a green would work better because of X, Y, Z reason.” That’s valuable information to know before you mass produce thousands of units and fill up your garage.
Another point is buyer feedback. Like I just said, they’re going to tell you what they like and don’t like about the functionality of the products. Maybe you start off with your prototype and you sell it and you gather some feedback from customers as to what they like and don’t like about the product before you go into the final patent stage. It gives you an opportunity to work out some of the kinks with the products before you’re spending lots of money on molds and high inventory volumes.
Most importantly, available to sellers on Amazon are third party services that extract the data. We can get in there and find out how many units a month your top competition is selling. That’s huge. If you’re creating the new widget or a variation of the new widget, wouldn’t you like to know if your top competitors are only selling $100 a month or $100,000 a month? Wouldn’t that be important to you? What is available to us now is what we call a product analysis. That’s available to you. Make sure that you request a product analysis on your product before you even go into investing a lot of money. The product analysis will give you what your top competition is, how many units they’re selling, what’s the average price point, and then will be able to give you some idea what it’s going to take to compete on the Amazon marketplace. We believe the Amazon marketplace is a good sampling of what the retail market’s doing as a whole. People and shoppers on Amazon will respond differently than they will at a big-box store, that’s for sure, but it’s going to give you some great data as to what to expect so you’re not going into that industry blindly.
Those are some of the reasons why you should sell on Amazon. Something to be aware of is your product messaging is going to show up differently on Amazon than it is going to on a website. On a website, you have tons of flexibility for your content. You could have little videos, you could have images. You can show people interacting with your product, it’s spinning around and gives images. You just can go as deep as you need to in the content to explain what your product is.
While on Amazon, you’ve got little one and a half inch boxes of images, six of them for most product categories. Some have the ability to add a few more, but you can only tell your story through some images. Then you have the content where you get five bullet points and a paragraph or two of descriptions. That’s, in general, all the area you have to explain what your product is and why that shopper may need your product or that product is right for them. Keep that in mind. You do have some limited messaging for selling on Amazon when you’re creating your Amazon listing.
What are the ideal products to sell on Amazon then if you are limited that way? Just like that product set are familiar, if it’s not a new industry or it’s not too complicated, it doesn’t take a lot of explaining. It’s perfect for Amazon. If you have a product that you’re going to be the new improved widget, there’s already a market out there for widget A, but you’re making the new and improved widget B, there shouldn’t be a whole lot of explaining to that. There are people out there. There’s a market already out there for that type of widget. You just need to show the consumer that there’s a better option. Those are great products to sell on Amazon.
Products that take a little bit more of a challenge are completely new industry. The limited space for content that you have on Amazon limits your creativity and explaining any type of a new product or a new industry you’re trying to create. We got schooled in that one time because a few years ago, we owned a franchise that was a brand-new concept. I will tell you, it takes a lot of marketing dollars to educate a consumer that they need your product. It’s so much easier to sell to somebody who already thinks or already knows that they need your solution. It doesn’t mean that if you’re creating a new industry that’s fantastic but be realistic in the marketing budget that you’re going to have to educate the consumer. Certainly, that product can be very successful on Amazon with a marketing plan that includes Amazon and outside marketing and education. Keep that in mind.
Other products that are ideal for Amazon or e-commerce in general are small and lightweight products. E-commerce has shaken up the interest a little bit with retail. It used to be that you’re putting your box or your packaging out on the retail shelf, and your packaging is having to sell your product. On e-commerce, it’s not necessarily that. What eats up your margin is your shipping costs. In fact, this is a little plug for Tom and Tracy and the product development side. You have to develop products with an awareness of how big the box is going to be for shipping. You start getting over a pound on a product, if you’re shipping goes way up, that eats into your profit. You’re going to want to take into consideration the size of your product. It doesn’t necessarily mean if you have a big and bulkier product that it’s not going to sell on Amazon. Mattresses sell a lot on Amazon and furniture as well, but they have the margins to accommodate that. You’re going to want to be very aware of your box size because of shipping when you’re selling on Amazon specifically and in the e-commerce platforms.[Tweet “What eats up your margin is your shipping costs.”]
Another side point to selling on Amazon, people would say to me often it’s too expensive to sell on Amazon. That may be true. Amazon does take 15% of your sale right off the bat so that can eat up a little bit of your profit. If you’re doing Fulfilled By Amazon where Amazon’s shipping the packages to the shopper, then there’s the shipping fees and so forth. The good news about that is that when you’re shipping utilizing Amazon, you’re getting Amazon shipping rates which are phenomenal, that’s a big class to it. The margins of selling, if they take the 15% referral fee, then it is a custom marketing. If you are selling in a big-box store, if you are selling on your website, you’re going to have to pay money to market to get those shoppers to your website. If you think about that 15% that Amazon charges as a referral fee, it hurts a little bit. You’re like, “I wish I had a little bit more.” However, think about what you’re paying for. They’ve already done the marketing for you to put those shoppers there and make them available to you for just signing in and paying your membership fee. Think of those 15% not necessarily as a negative, but as a ready-made market place for you.
We talked a little bit about if your products are a little bit bigger, there could be some obstacles with selling as far as logistics go, but there are other obstacles to selling on Amazon that you might want to be aware of. First of all, category approval. Topicals, supplements, food, automotive, there is some barrier to entry with that. Amazon wants to keep their platform clean, and by clean, I mean legitimate products. If you’re selling food products, the FDA certificates have to be in place, topicals, and so forth. They are scrutinizing those products. If you’ve developed those products, most certainly you would have the certificates to support the chemicals and things used for the product and you’d be able to get through category approval. However, there is that obstacle. There’s hazmat. There are limitations to what you sell and what the postal carriers will take. Similar to that is on Amazon. They don’t want a bunch of flammable things within their warehouses like aerosols, certain gels, batteries, the list goes on and on as to what they may consider as hazmat. You might be aware that that exists. Can you overcome hazmat? Absolutely, with the right documentation, but it is a little bit of a barrier to entry.
One of the biggest obstacles I will say is competition. As Amazon has become more and more popular and because it’s a low-barrier entry, you just pay your $39.99 a month and you too can sell, there’s lots of competition. How to get through that competition can be an obstacle. Your listing will be side-by-side with others selling products just like yours just like it would be on a retail shelf, so that’s not any different. You can get into price wars. The competition may lower theirs by $5 and so you have to be aware of that. Unfortunately, there are some nasty competitors out there that aren’t necessarily playing by the rules. That does happen. I’ve heard some horror stories, but not often. There’s usually ways to correct that so those solutions are out there to overcome that; but know that it’s a Wild Wild West and you need to be on top of your listings when you’re selling an Amazon.
One of the other obstacles similar to that is the control of your product listing. If you are selling a product wholesale to a couple of boutiques around in your area, they can also sell that product on Amazon. You want to make sure that you put into place with your vendors a clause in your contract that maybe you don’t want them selling on Amazon. If you are going to sell your product yourself on Amazon and put the money into creating a great listing and ranking it up and marketing that, your business plan may be to retain ownership of that listing. You want to retain the control over that listing. If you’re selling a product to somebody wholesale, they may decide to sell it on Amazon as well, so it may be in your best interest to make sure that you have a clause in your contract saying that they’re not allowed to sell on Amazon or whatever other platforms that you’re trying to maintain control of.
Similarly, you could get those rogue sellers that don’t honor the map pricing that you’re trying to set in place for your brand. One of the disadvantages to a brand owner is controlling rogue sellers. We talked just a moment ago about having some mom-and-pop boutiques maybe in your area. They can create an Amazon selling account under XYZ Toy Store and their store might be called Mom and Pop’s Toys. You would have no way of knowing that Mom and Pop’s Toys was XYZ Toy Store if they were selling on Amazon. There’s a little bit of a difficulty in controlling that but putting some mechanisms in place to help avoid that and staying on top of your listing and in managing will help diffuse those situations.
The other piece that’s an obstacle is Amazon’s inventory management. They’re not the best in the reporting and you think about all the millions of products that they’re moving, I’m thinking more like billions of products, inventory does get lost. It can be frustrating if you have products that you’re sending into Amazon and Amazon loses some of that inventory. We’ve had that happen lots. We’ve had clients that that’s happened to. It’s not uncommon with all the moving pieces and parts. The good news is as long as you have an inventory control system in place and you can stay on top, you know exactly what you’ve sent, and what it should be and what it shouldn’t be, you can submit to reimbursement for Amazon. If they lose any inventory, customers are refunded over the 30-day window. You can get reimbursed for some of that.
Those are just a few points that I wanted to talk about. In summary, I truly believe that Amazon’s still one of the best platforms to get in front of shoppers. It’s ready-made and ready for you. It’s a very exciting opportunity and you don’t have to have a lot of inventory. The biggest point that we want to drive home is that when you’re bringing a product to market, you don’t have to invest thousands and thousands of dollars and units sitting in your garage to test the market. Amazon’s opened up a wide opportunity for you so that you can do it with just a small sampling of inventory. Outside of sales potential, there are other big benefits to having your product on Amazon. I talked about the data. Even if you don’t expect to sell a lot, the information you can extract from consumers whether they like it, whether they don’t like it, the pricing, do they respond better to this price or this price, that data is huge and so you want to take advantage of it. It’s right there at your fingertips. All the obstacles that I had touched on can be overcome. You just put boundaries in place, you stay on top of your listing, and you can have success selling on Amazon.
Thank you for joining me. I did have a couple of questions that were sent to me. I wanted to make sure I address them because they were great ones. Somebody was saying that they noticed that some products have videos and some don’t and why is that. Amazon had a change in terms of service several years ago when they stopped allowing videos on their website. You would still see products with videos. Those were grandfathered in. Also, people who sell their products to Amazon directly and Amazon manages that listings, they had the opportunity to have videos put on their listing. There are pros and cons to selling your product to Amazon directly. People who sell their product directly to Amazon as an Amazon vendor and they had the opportunity to do the video, that was all who were able to use videos for the longest time and then recently they started unfolding. I don’t know if you’ve noticed at the bottom, you have the video shorts. There are people that are able to put in those video shorts right up above the product description piece of the listing. It’s moving towards adding videos back in which is very exciting so stay tuned for that. It will be coming around more often.[Tweet “You just put boundaries in place, you stay on top of your listing, and you can have success selling on Amazon.”]
Another question I had is, “I heard Amazon will just rip off my product and make it their own. Have you seen this happen?” I advise people not to be afraid of that. How many times have you seen As Seen on TV products ripped off? Does it happen? It happens in the industry. I’m not going to say that it doesn’t. I don’t see specifically where Amazon does that, but here’s the thing, I get very excited when I see Amazon selling products similar to mine on Amazon because they’re creating the market. They’re not going to be able to dominate if somebody’s searching in the search bar for a certain type of widget and a page of sixteen to twenty options show up. Sure, Amazon’s going to be one of those, but also, I could be one of those. I can piggyback on all of the traction that they’re creating, the movement that they’re creating in that industry, so I wouldn’t be afraid of it. Certainly, I don’t think Amazon’s out there shopping the marketplace trying to knock off products. That’s just my opinion. I wouldn’t be fearful of that. The opportunity that Amazon presents is far greater than that.
I had one more question, “Selling on Amazon seems a little complicated. Is it possible to do it myself?” Absolutely it is, but I will say that just like building a website, you could go to Wix.com and create a website and certainly you’ll be up and selling, but will shoppers go there? It’s the same thing with Amazon. You need to create an optimized listing with images that convert. There’s information around that. Absolutely do it yourself but set yourself up with some education. We help and support and consult people who they want to do it themselves or partner with them on their product and do from A to Z for them if that’s what they want. Those options are out there.
I hope it’s been helpful for you and you’ve gained some information and insight to help give some clarity around what products sell on Amazon and if you think it’s a great platform for you. If you have any questions, certainly reach out to me. I’m here to help you. In the meantime, happy selling on Amazon. Hope it’s a prosperous one. Thank you.