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Amazon as a Resell Channel

Pros, Cons & Fees of Amazon

Its name is synonymous with buyers – and lots of them. Bloomberg even reported in September of 2016 that more than 50% of shoppers now turn to Amazon first for product searches, over Google and Yahoo. They are a powerhouse marketplace aimed at returning and high-value buyers.

To get started with reselling on Amazon, a seller account needs to be created. If you already have a personal account, you can sync the two by accepting the terms and conditions of their seller agreement. Amazon will ask you to select the type of seller you’ll be: Professional or Individual, which can be switched between the two at any given time.

A professional seller is when you plan to sell more than 40 items in a month.
An individual seller is when you plan to sell less than 40 items in a month.

Amazon will ask for some additional information to help get the seller account set up, but this should take a few minutes and then the account will be ready for listing!

However, before listing any items, always recommends planning and research first. From ensuring the item is priced competitively to identifying if Amazon is selling the same item – these are all important aspects of reselling that could impact the profit margin.

If Amazon is currently selling the same item, chances are they’ll be selling it for less, but this shouldn’t be a deterrent from using Amazon as a resell channel. Depending on the product, Amazon may run out of stock on the item and give your listing a big opportunity to sell.

When Buyers are shopping for a product, they primarily check for the main, featured price followed by shipping costs, if applicable. In order to improve the chances of getting your item listed as the main price there are a few factors. You must:

Have the cheapest price, AND
Ship via Fulfillment by Amazon (FBA), AND
Have a rank of 100

Easy to list as they have their own database of products
Chargeback protection for sellers
Very large buyer base
Limited interaction with buyers
Easy fee structure
Customer service is taken care of for you
Ship it and forget it

Lack of branding opportunities
Long wait for your money
More returns
Competing with Amazon sales
Strict levels of service for sellers

Selling as a professional, you’ll incur a monthly costs of $39.99 and other additional selling fees
Selling as an individual will incur a fee of $0.99 per sale and other additional selling fees

FBA (Fulfillment by Amazon) can be a huge help to a reseller as Amazon handles all the customer support, but it can increase the volume of returns compared to other marketplaces. Amazon has a 30-day window for returns, and returned items are reviewed by an Amazon fulfillment center to see if the item can be resold or if it needs to be sent back to the seller as unfulfillable. It’s important to note Amazon does accept opened or damaged packaging merchandise. If the item is deemed as unfulfillable, the product can still be listed on the site, but it must now reflect the imperfections and would result in a lower price.

Many resellers have found success with Amazon by taking the time upfront to find the right items to sell. Merchandise with high reviews counts and high approval ratings are the safest items to resell as the probability of returns is lower and the buying pool is larger. If you are using FBA, and have a high seller rating, make sure to price it as low as possible – this will ensure you get the prime slot for purchasing as noted above.

As your business grows, and Amazon will grow with you. Source merchandise by building your own truckloads to reduce shipping costs and use the Amazon FBA program to have Amazon store your products until they’re sold to give you the ability to list and sit back while Amazon handles the rest.

Before listing, research each marketplace to determine where you’ll get the highest return for your item, or items. At this point, research was done on the initial investment of the liquidated merchandise, now take the time to research your reselling channel to find the one able to give you the return you need to maximize profits.

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