Things to Know Before Selling Your CPG Product on Amazon
Amazon has revolutionized the online marketplace, becoming the top e-commerce platform in the United States. In 2018, the online retailer’s dollar share of the U.S. e-commerce market reached 49 percent, making it responsible for 5 percent of all retail spending across the country. CPG brands are expanding their sales channels to include Amazon marketplace because of Amazon’s dominance in online retail.
If you are thinking of selling your product on Amazon, consider the following:
First-Party & Third-Party Sellers
There are two ways you can sell your product on Amazon – first-party or third-party. If you choose first-party sales, Amazon will directly purchase your product inventory at wholesale and resell it online. Since the online retailer purchases your products, they will manage product pricing, warehouse distribution, fulfillment, and customer care. Currently, first-party sales through Amazon are only granted to brands by Amazon invitation-only.
Third-party sales allow you to sell your products on Amazon with the company taking a cut of your sales. If you choose this route, you will have the option to sell in more than 20 product categories and will have to choose an Amazon selling plan that best fits your goals. Since this method is self-managed, you will be responsible for listing products, inventory management, fulfillment, and shipping. In the fourth quarter of 2019, 53 percent of paid units were sold by third-party and independent sellers.
If you are selling a chilled or frozen product you will have to be registered as a seller under the Professional Selling Plan and will have to go through a validation process. To validate the chill chain, you will need to demonstrate how the product temperature will be maintained in unexpected conditions like delayed delivery and inclement weather. From there, an independent laboratory will assess and test your product to determine validation. You will also have to go through a verification process to define the frequency that products arrive at or below the targeted temperature in real business conditions. If you are selling on Amazon as a third-party seller you can either ship products using Fulfilled by Amazon (FBA) or you can ship the product yourself.
Reviews on Amazon are vital to a brand’s position on the platform and its growth. Every business knows that positive customer reviews and recommendations can help gain new following and increase sales. With Amazon, reviews are extremely useful as the platform carefully vets them to ensure there are no fake or sponsored reviews. With Amazon’s easy shopping layout, your future consumers will investigate your reviews before making a buying decision, so it is vital to get your online customers to leave reviews. Not only will it help increase your new customer base, but more reviews can result in higher search rankings on Amazon.
Beautiful product photography is important for multiple reasons aside from selling your product online. For Amazon specifically, it is ideal to have clear product photography with multiple angle shots. While meeting Amazon’s guidelines, your brand must offer compelling imagery that will stop consumers from scrolling past your product. Consider playing with lines and spacing to create engaging images. Amazon does outline photography guidelines for a seller to oblige by. Learn more about the guidelines by visiting amazon.com.
Consumers are utilizing Amazon services like Amazon Fresh and Prime Pantry to shop for their groceries and goods with ease and convenience. In 2018, the food and beverage category experienced 40.1 percent sales growth on Amazon’s marketplace. Expanding your online retail efforts into Amazon can result in increased brand awareness and loyalty, alongside aiding in lifting e-commerce sales for a CPG brand.
Ready to launch your product on Amazon?