What is Amazon?
Amazon is an e-commerce company based in Seattle, USA, and is the world's largest shopping site that sells various products such as home appliances, food, clothing, and household goods. Amazon.com（headoffice）operates local marketplaces in Japan, the United Kingdom, Germany, France, Canada, China, Italy, Spain, etc. in addition to the United States. By setting up distribution centers (FBA) in more than 175 countries around the world, you can start EC sales using the Amazon Marketplace without in-house delivery.
The world's largest
Online Shopping Service
According to a survey in 2018, Amazon's share of the top 10 EC sales in the United States has reached nearly 40%, far ahead of other companies, and it reigns as the world's largest online shopping service.
The Merit of Amazon
Ease of product listing
You can start selling on Amazon by using existing catalogs so you can reduce the trouble of creating each product page. Your product can be shipped from the Amazon warehouse, so once you get used to it, you can easily list the product and deliver it.
Even though Amazon is good, but it is not the best e-commerce mall. In general EC malls, there is a concept of "stores", but in Amazon, it is just a place to "list products.
Therefore, the same products tend to be price-matched. It is not suitable for businesses that want to sell good products meticulously, branding the product, and set up stores to keep in touch with customers.
There is a monthly fee but no initial cost
To list products on Amazon, first you have to register as a seller . There are two types of listing plans: "Large listing service" and "Small listing service". The fixed cost for the "Large Listing Service" is the monthly registration fee of USD39.99 (about 4,500 yen) whether it sells or not, while the "Small Listing Service" is free of charge (in the case you choose to utilize FBA, it will automatically become Large listing service).
Utilization of Amazon Warehouse (FBA)
There is FBA (Fulfillment by Amazon), which is a warehouse system unique to Amazon. FBA is a service that Amazon handles all the work such as inventory management, packing and shipping of products. You have to pay the fee to Amazon, but it is an advantage if you have a lot of items and you can not hold a large amount of inventory, or if you want to throw the troublesome packing and shipping.
In addition, if you are using FBA, your products will be recognized as a product for prime members, which is very advantageous in terms of SEO, and as a result, there is an advantage that the product becomes easier to sell. From this point as well, FBA is a very important sales function in obtaining Amazon sales.
Easy to attract customers
With Amazon, by selling to prime members using FBA, there is a high possibility that your product will be ranked high when buyers search, as an SEO measure. Although it is not limited to Amazon, if you have your online shop at your own domain including eBay, it is important to take measures to attract customers to sell products. You can attract customers through SEO measures, social commerce using SNS, listing advertisements on Google, etc., but it costs a lot of time and money.
The Demerit of Amazon
There will be a fee for the payment
When your product is sold, you will have to pay a commission to Amazon and PayPal, so we recommend that you calculate the commission to determine the selling price before listing your item. Fees also vary on Amazon depending on the product category. Please note that sales and commissions are exchanged in US dollars, so profits may fluctuate due to exchange movements.
You can't make your own customers and repeaters
By selling on Amazon, it is difficult for buyers to recognize it as a "store", and it is difficult to create unique colors and contents. Therefore, the repeater strategy and customer acquisition theory of ordinary EC sites do not work at all. Not only is it not possible to repeat, but consumers who buy on Amazon are considered as ”Amazon repeaters."
It is said that the game depends on whether or not you have acquired the right to “Cart Box". It's very simple, but you have to realize that if you don't get a “Cart Box", it's going to be a pretty tough Amazon sale.For those who want to create a shop full of originality of their own, Amazon is not suitable, and it can be said that it is suitable for eBay.
High sales commission (royalties)
At Amazon, there is a sales commission paid to Amazon every time a product is sold, and the rate is not cheap at all. For a flat rate of 10% on eBay, Amazon charges a commission of 8% to 20% of the selling price. For example, 17% for accessories and sports clothing, and 15% for shoes and handbags (as of April 2020).
Most of time, the products sold from Japan are about 15%, which are not many. In addition, for products in the media category such as books, CDs, and DVDs, a category contract fee of USD1.8 (about 200 yen) is required for each product.
Also, please note that the "small listing service" will cost more. Basic contracts concluded fee as a normal large sales commissions of 100 yen per item, it will cost you more on warehouse fee if you use FBA, and if you did not calculate the price with the selling fee, etc. in advance, it may result in a lower profit or a deficit than you think.
If you want to take a quick look, I think it's a good idea to look at a total of about 40%, including sales commissions of 15%, FBA costs of 15%, monthly costs and other costs.
It is essential to collect reviews and evaluations
In Amazon, the product pages with a lot of reviews are recognized as being trusted by users, which naturally has an advantage for SEO on Amazon. This is because a collection of reviews motivates consumers to buy and helps them understand the pros and cons of their products. At the same time, the seller can analyze problems and needs from the reviews gathered, make improvements and repeat PDCA (verification), resulting in a reliable listing page.
The number of transaction evaluation (feedback) is also important. Since each of the feedback received in a single transaction will be added to the total number of customers’ feedback, a strategy to firmly acquire this number is required, it is necessary to slowly grow accounts over time like eBay. 。
You must sell your products according to Amazon's policy.
If you violate Amazon's own rules, you will be suspended from selling (suspending your account). You will not be warned, just a one-sided notification that your account will be deleted and you will be asked to withdraw within 48 hours. If you do not comply with this, the sales on hold will be confiscated and the products you have deposited are likely to be destroyed, which is dangerous, so you will need to withdraw promptly.
Amazon has stricter rules than eBay, and since detailed NG rules are not announced, in most cases you may not clear why it was deleted, so you are required to watch the latest rules and information from those currently operating on Amazon, and list correctly according to the rules.
Once the account is deleted, it cannot be restored. This is also the reason why Amazon's overseas sales are said to be difficult for beginners, so if you are not familiar with it, it is is better for you to sell on eBay instead.
Amazon sales flow
In order to sell on Amazon, it is common to use FBA (Fulfillment by Amazon). The operation process is very simple because Amazon handles all the tasks such as inventory management and packing / shipping of products.
Create an account
Get an overseas Amazon account.
Deliver your products to Amazon warehouse
Transport and deliver your products from Japan to overseas Amazon's warehouses. An agency is recommended.
When your products arrived at the Amazon warehouse, you may create product information and start selling.
The buyer buy your products.
Packing and shipping of goods
Amazon packs the products and ships it to the buyer. Amazon also handles returns and refunds.
Collection of sales amount
Deposit from Amazon. It's a 14 days cycle。
Difference between corporate sales and B2C sales (Amazon business)
In Amazon sales, B2C is basically considered to be the center, but in fact, since 2015, the service development for B2B called Amazon business has started. It is intended for corporations or sole proprietors to become its members, and various conveniences are provided for transactions between businesses.
As for the usage method, when a company or sole proprietor wants to purchase a certain product in bulk, it can be purchased at a lower price than the selling price for B2C. Therefore, when mass sales are expected in cross-border EC, it is necessary to assume to sell with Amazon Business together with B2C.
The good selling products on Amazon
The products that sell well on Amazon include books, CDs, DVDs, Blu-ray discs, as well as daily necessities and consumables such as well-known skincare and cosmetics, and home appliances from famous manufacturers. Products that meet the demand are selling well.
On the other hand, traditional Japanese crafts, rare products sold only in Japan, limited items, one-of-a-kind items, branded items, and other exclusive products are purchased on eBay, and it is best to use them according to the purpose overseas, become common at overseas.
List of prohibited items on Amazon
Before listing on Amazon, you should carefully check that the item is permitted by the laws of that country and Amazon. Even if it is legal to sell in the seller's country, it may be illegal overseas, and if you do not list according to the policy, the listing may be deleted or your Amazon account may be deleted so you need to be very careful.
An example of listing prohibition
(There are many others prohibited items)
※As of April 2020
- Illegal and potentially illegal products
- Recall target products / materials that cause discomfort (nude, adult products, adult media, media including images under the age of 18)
- In-game currency for online games
- Amazon.co.jp limited TV game
- Doujin PC software, Doujin CD part streaming media player
- Amazon Kindle products, promotional media
- Some foods, imported foods and beverages
- Pet veterinary drugs
- Supplements, cosmetics, and example ingredients that Amazon does not permit to sell
- Medical devices, pharmaceuticals, cosmetics subdivided products / overseas medical devices, pharmaceuticals
- Health & beauty products shipped directly from overseas
- Electric bicycle with pedals
- Picking tool, stolen goods
- Credit card cashing
- Unlicensed and illegal wildlife products
- Firearms, ammunition and weapons
- Discomforting products
- Sanctioned countries, groups and individuals
What can j-Grab do?
Amazon is a very large-scale global shopping mall, and you can get various sales opportunities by opening a store, but when it comes to overseas sales, there are not only advantages but also many disadvantages, it is not easy to operate.
At J-Grab, Yamada, our representative who is also a founding member of eBay, Yokokawa, a cross-border EC senior consultant, and Amazon Chief Advisor Hayakawa, etc. are familiar with overseas Amazon sales methods, latest rules, policies, etc. so we are possible to offer individual and accompanying sales support plans exclusively for Amazon.
We provide support for beginners who are new to Amazon, sales and customer attraction consulting for rapid growth with accounts that have already opened stores in Amazon, and tips on how to avoid troubles. We also have a special advice support plan that allows you to become independent in one year for those who cannot afford it. Please contact us for the use of small-scale sustainability subsidies and IT introduction subsidies.
For those who want to open / sell on Amazon, those who have already opened an Amazon account but have been deleted or suspended and sales do not increase, those who have lost the competition and are selling on Amazon without profit, those who want to succeed in the head office strategy by linking Shopify, Magento with Amazon, J-Grab's cross-border EC consultant provides consultation on sales increase from opening and store construction, and individual consultation, so please feel free to contact us from inquiries.
In addition, we will hold a Cross-border EC free seminar to succeed in Amazon sales, and provide special materials regarding the unique research method and important technique that are necessary to win the competition so please download and use them for Amazon sales.
Please feel free to contact us.
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