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If you’re looking to start selling online, there’s one platform you’re likely to be considering: Amazon.
The online retail giant is a major player whether you’re after books, kitchenware or digital products. And thanks to Amazon Marketplace, it’s open to other ecommerce businesses besides Amazon itself.
This is your guide to how to get started selling on Amazon, with a focus on amazon.co.uk, but with some information on international markets as well. It’ll also offer some useful advice on how to receive international payments without losing out on the exchange rate, thanks to Wise’s multi-currency account.
Here’s an overview to how to get started selling on Amazon.
- Get a few details ready before you begin. As well as basic information about your business (where it’s based, is the business publicly or privately owned, and so on), you’ll need to provide contact details, payment details, and personal ID information.¹
- Head to Amazon Seller Central, pick the marketplace you want (probably Amazon UK, if that’s where you’re based), and sign in. You can use your Amazon customer account to do this.
- Check through the terms and conditions² and fee schedule³. Note that you’ll actually have terms and conditions for several different marketplaces to look through - not just the UK, but also Germany, France, Italy and Spain. Amazon has streamlined its European marketplaces so that it’s easier to sell across them all.
- If you’re happy with the terms and conditions, and prices - accept them and then complete your registration.
- You will also need to know what sort of seller account you want: do you want to register as a Professional, or as an Individual?
If you’re a UK-based business, starting out on amazon.co.uk makes total sense. But Amazon makes it relatively easy to branch out into selling in its other European markets: France, Germany, Italy and Spain: you can do all of that from within the one account.⁴ It’s possible to sell in other Amazon marketplaces too, including the USA, via Amazon Global Selling.⁵
Once you’re all signed up, congratulations - you should be able to start listing and selling your products pretty soon.
Selling online is a very different from selling in a shop, because you’re immediately up against a huge number of leading retailers - possibly including Amazon itself. It can feel like being a corner shop located right next to a huge shopping centre, surrounded by all of the leading supermarkets, bookshops, clothes shops and so on.
But, of course, that can be an amazing opportunity. You just need to get it right. Here are a few tips about how to make a success of your online business.
- Do your market research. Is there an audience for your products online? Are similar product ideas already available? What do they cost - how do your prices compare? Don’t forget that social media can be an amazing tool for finding out what people want.
- Know your marketplace. Do people come to Amazon to buy things related to your product? It’s fairly likely, as people come to Amazon to buy pretty much everything. But still, make sure that Amazon is the right place for you.
- Know your competitors. Type your product’s name in the Amazon search, and see what comes up. Those are probably going to be your main competitors. Check other sites like eBay too - don’t forget that potential customers might be looking elsewhere.
- Get your pricing right. With almost unlimited choice, online customers have the option to shop around for the best deal. If you can’t offer a competitive price, you’ll struggle to sell anything. So look in detail at what you can afford to charge - after factoring in all of the Amazon seller fees, of course.
- Have a unique selling point. Why should your customer find a product of yours better than that of a competitor? The answer could be as simple as the price, or as complex as the technical aspects of running your store. But if you can’t answer the question yourself, you may miss out on opportunities to reach customers.
There’s another basic decision you have to make when you decide to sell on Amazon. Do you want to handle “fulfilment” of your orders yourself, or do you want Amazon to do it? Doing it yourself is what’s known as “Fulfilled by merchant” or FBM, while if Amazon handles it it’s called “Fulfilled by Amazon” or FBA.
It’s worth mentioning here because it has a big impact on costing, as well as on how you operate your business. As you’d expect, FBA does come at a cost. You’ll have to pay a Fulfilment fee as well as a Storage fee, both of which vary depending on the sort of stock you have and how much there is of it. Optional services fees cover other things like returns handling.⁶
FBA might mean you have to pay more to Amazon, but don’t forget that if you do opt for FBM, there will still be big costs to your business - not only for things like shipping and storage, but also for the sheer time it takes for you to handle the process. The convenience of FBA is a big point in its favour.
There are a lot of fees to sell on Amazon, but many of them may not apply. Here’s a look at some of the most important ones, though be sure to check if there are any more that might apply specifically to your business.⁷
|Amazon seller fee||Amount||Notes|
|Subscription fee||£25/month||Only for Professional sellers - there is no subscription fee for individuals|
|Per-item sales fee||£0.75/item||Only for Individual sellers|
|Referral fee||Varies according to sale category. E.g. books, music, videos, DVDs: 15%; computers, 7%||This amount is deducted from your sale and goes to Amazon. It’s a sort of transaction fee or “finder’s fee”|
|Closing fee||£0.50/media item||Applies to sales of books, music, DVD, video, video games and software|
|FBA fees (Fulfilled by Amazon)||Various - see below||These are the fees that apply if you choose to have your orders fulfilled by Amazon. See below for more information|
In order to get paid by Amazon, you do of course need to give them your bank details. For sales in the UK, that’s all nice and easy - just use a UK account.
For international sales, you can simply use your UK account again if you want to: you’re actually allowed to use a bank account in any of the countries in which Amazon operates.
The problem is that if you do that, any foreign-currency payments you receive will need to be converted into pounds sterling. And Amazon will use its own Currency Converter to do that. What will it cost? It’s hard to say, because all the fees Amazon charges for this service are folded into the exchange rate it offers.⁸ So you may not get your money at the real mid-market rate.
To avoid having to have your money converted at Amazon’s own exchange rate, you would need an account in the relevant foreign currency - perhaps euros or US dollars. If you sell on multiple Amazon marketplace, you can withdraw your different currency earnings directly into your Wise multi-currency account. This way, you’ll avoid paying high currency conversion fees.
And the good news is that you can get these details without going through the hassle of setting up foreign bank accounts. It’s a great solution for selling internationally on Amazon.
International payments and converting between currencies can be expensive, and if you want to make your online marketplace profitable - it may be beneficial to consider services such as Wise.
Wise is different. Its smart new technology skips hefty international transfer fees by connecting local bank accounts all around the world.
Wise’s borderless multi-currency account for business allows you receive and send dozens of currencies all from the same account. Providing you with local bank account details to which you can receive payments directly without the need for international transfer fees.
All currency conversion is done using the mid-market rate - the one you’ll find on Google - with no hidden costs to worry about.
Amazon offers the opportunity for you to start selling to an established-base of buyers, and maximise profits. Although, when considering if this platform is right for you, you need to consider the associated costs involved, and what you are going to sell. Planning is key, and will determine how successful your online marketplace is. In order to maximise your profits, services like Wise could make a difference by giving you access to low fees and the mid-market exchange rate.
All sources checked 11-April 2019
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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