Selling on Allegro is a familiar topic for Polish e-commerce companies. However, a growing number of them are considering expanding their horizons and reaching a wider customer base. One place to start selling is the Amazon marketplace. Learn more about it and see how you can do business there.
Amazon, what is it?
The Amazon brand is one of the most recognizable in the world – there's no doubt about that. It was founded in 1994. Initially, Amazon operated as an online bookstore, but over time it has grown to become a massive sales platform, present not only in the US but also in Europe, Asia, and Australia. Shopping on Amazon isn't yet popular in Poland, in part because there's no strictly Polish version of the service yet. Only the Polish-language version of the website, amazon.de, is available, with shipping options to Poland.
Despite this, there are 4 Amazon distribution centers in our country , and e-commerce entrepreneurs have the opportunity to join this marketplace and sell their goods throughout Europe.
Why sell on Amazon?
Amazon is a massive marketplace, an online store that showcases offers from suppliers around the world. In recent years, Poland's Empik.com has also begun operating on a similar principle (but on a much smaller scale). Like Amazon, it acts as an "aggregator" of offers from various online stores and acts as a sales intermediary.
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Why is it worth cooperating with Amazon?
- This is a way to enter European markets
Shopping on Amazon is extremely popular in Western Europe – for example, in Germany, France, Scandinavian countries, and even the UK. Each of these countries has a target audience that might be interested in your products. You gain the opportunity to reach millions of users.
- You cooperate on transparent terms
It's important to understand that Amazon's terms and conditions are extremely restrictive (especially compared to selling on eBay or the Polish Allegro), but sellers know right away what they're getting into. You know upfront what the commission system looks like, what fees to expect, and what the service requires of you.
- You gain access to convenient tools that support customer service
You can use, for example, Amazon's Fulfilment service, which shifts the burden of end-customer service (more specifically, product delivery and handling of possible complaints and returns) to the store's branches in the regions where you intend to sell.
It is worth knowing that:
- Sales on Amazon can be coordinated with order fulfillment from your own online store – most e-commerce platforms, both those operating in the SaaS and Open Source models, allow this,
- The Amazon sales platform is available in the Polish language version, so you can manage it even if you are not a fluent English speaker.
How to start selling on Amazon?
To gain entry to the Amazon platform, a seller must first meet several entry requirements. As mentioned, the site imposes very restrictive conditions on its partners for cooperation. The basic thing you need to know is that sellers operating on Amazon must be in the form of a company . Neither individuals nor sole proprietorships are accepted. This is due to the site's security policy, which focuses on ensuring customers can work with reliable partners.
Each potential contractor is also thoroughly vetted by the service. Registration requires the submission of a number of company documents, such as:
- translations and original documents from CEiDG or KRS – extracts from CEiDG can be downloaded in English, while those from KRS require a sworn translation into English,
- a two-sided scan of the ID/passport of the company owner or beneficial owner and the contact person, if different from the owner,
- confirmation of the company address and contact person – this may be, for example, a bank statement.
When registering, you must also provide:
- e-mail adress,
- telephone number with Polish prefix,
- full company name,
- VAT-EU number or Tax Identification Number,
- credit card details and account number for payment transactions – please note that credit cards are the only form of payment accepted on Amazon,
- the seller's name on Amazon – ideally, this would be the name of your online store, for example. This will make branding much easier.
Registration and what next?
Registering on Amazon.com is just the first step. Now it's time to list your products on the marketplace. How is this done? The site's rules are very restrictive. As a seller, your task is to submit a product listing —a complete list of the entire product range you want to offer customers. You can add them manually, in bulk (e.g., via an Amazon template), or using an integrator, such as the one on your e-commerce platform.
Importantly, if the product you want to offer customers through Amazon is already distributed by other vendors, your offer will not appear separately . It will be classified into the appropriate category and displayed alongside the main offer with a description, in the so-called BuyBox, along with other items available on Amazon. The BuyBox always features a long product description and a button allowing you to purchase the product from the promoted seller—the one who won the BuyBox. Offers from other sellers are listed below, and customers receive information about the minimum price they can pay for that particular product. This allows them to decide which seller to choose.
Select account type
Listing products on Amazon, as you might imagine, requires paying a commission on goods sold to customers via the platform. However, that's not the only fee. The second factor is the type of account you'll maintain on the marketplace. You can choose from:
- free basic account (Basic) – allows you to sell up to 40 products per month, and for each product sold you have to pay Amazon (apart from the commission!) 0,99 euros or 0,75 British pounds,
- A Pro account allows you to sell an unlimited number of products and eliminates per-sale fees. It also allows you to add products in bulk and create manual product listings. It costs either €39 or £25.
For obvious reasons, the paid Pro account is much more popular among all those customers who want to take selling via this channel seriously.
Select your product shipping method
Amazon places very strict requirements on sellers when it comes to shipping times – they expect their goods to arrive within two business days of placing an order. This is a significant challenge, especially when you're just starting out in the European market. At least 90% of all shipments must be delivered within this timeframe. Failure to meet this requirement may result in your Amazon account being suspended – initially for 17 days, and then for up to 90 days.
That's why a significant portion of companies using the Amazon marketplace are abandoning their own warehouses and shipping their goods themselves (although, of course, using this model is entirely possible). Instead, they're using the Fulfillment by Amazon service . How does it work? You, as the seller, ship your products to one of Amazon's distribution centers (in the country where you primarily want to sell), and Amazon itself is responsible for the efficient and timely shipment of these products to the local customer. The company then also takes over customer service, as well as handling complaints and returns.
This is, of course, a beneficial and secure solution that allows you to avoid the stress of meeting shipping times. However, you should be aware that using Amazon fulfillment carries additional costs. However, it may encourage customers to choose your store – for example, Amazon Prime customers can count on free delivery for products from services using the American company's fulfillment services.
When it comes to product storage, there's a third option: opting for fulfillment through an external logistics company. While this can have many advantages, you'll need to choose your partner carefully to avoid disappointment with the results and the risk of your account being blocked.
It is worth knowing that Amazon can also handle the labeling and packaging of products and the entire logistics process, which makes the task much easier – especially when serving a new market.
Using Fulfillment by Amazon also gives sellers additional advantages, including higher product rankings, the opportunity to win a BuyBox, and the option to offer free shipping to Amazon Prime subscribers.
How much does it cost to work with Amazon?
The primary expense associated with selling on Amazon is the aforementioned Pro account subscription, which is approximately 25 British pounds. But that's not all. Amazon fees also include:
- using the fulfillment service – these are calculated individually, depending on, among other things, the warehouse space used and the number of orders,
- order fulfillment by Amazon and its shipment,
- sales commission – it ranges from 8-16% and depends on, among other things, the product category, as well as the sales volume and the value of the customer's shopping cart.
The expenses are therefore considerable, but all this at the cost of reaching a very wide audience.
Advertising on Amazon – opportunities and conversion
Amazon, like other marketplaces, offers opportunities to promote your offerings, and advertising on Amazon is a tool worth testing. How can you do this? There are several tools sellers can use. These include "sponsored products" banners, which feature sponsored products displayed at the top of search results (well-known from Allegro, for example), "Amazon Headline Search" banners, which display three promoted products from the store on a banner, as well as typical display ads. You can also promote product bundles and create video advertising materials.
While selling through Amazon may seem challenging at first, it's worth the effort. Perhaps this will be your online store's path to the international market?
Partnering with Amazon, while it may seem challenging, can be a very good business move – especially if the products you want to sell have significant potential in foreign markets. If you prepare your Amazon offer properly, conversions can be quite high. So, take a look at current trends and assess whether Amazon is the right marketplace for you. Who knows? Maybe you'll start making a real profit there soon? After all, distributing products in Western Europe often means higher product prices than in Poland – even after deducting all Amazon commissions.
Want to get started on the Amazon platform and need help? Or perhaps you'd like to increase your Amazon conversions? Contact our advisor and we'll provide you with comprehensive support in this area as well.
Summary
The above article covers the following topics:
- How does the Amazon platform work?
- How to sell on Amazon?
- How to use advertising on Amazon to increase sales?
