Are You Ready to Be an Amazon.com Vendor? (10 PRO TIPS)

10 Pro Tips

Your company may produce fantastic consumer products and want to get into North America’s largest online retailer, but unless you clearly know what you’re getting yourself into, you should properly prepare yourself for the process. It will be unlike working with any other retailer you have ever worked with, and there is potential risk if you aren’t ready and capable. Here are 10 PRO Tips to get you ready to be an Amazon vendor.

 

  1. Prepare to ship one unit. Like all great journeys, you don’t start at your destination. Your goal for Amazon may be to ship containers, but unless you’re prepared to pick, pack, and ship one unit, you may never get to container level sales. If you’re a well-known brand with huge demand, Amazon may be able to place staged POs but that’s quickly becoming the exception.

  2. Develop and optimize content. Product content is king with Amazon. The more you have, the better. Customers use Amazon to research products more than Google. Content needs to be optimized for the channel so that customers can find your products among Amazon’s millions of offerings. If you have no content or just a few bullet points you won’t even be able to fill out Amazon’s item setup forms. Time and effort devoted to top-notch content will more than pay for itself in the end.

  3. Make your product the brand. Care about what people think about your Brand? Care about what people think about your product? Be prepared to read reviews, respond to negative ones, and take feedback with an open mind. Be ready with content that accurately represents your product. There is a place on Amazon for a basic no-frills product as well as the top-of-the-line killer product. Just don’t convey the no-frills product as the top one and you’ll be OK.

  4. Staff up thoughtfully. If you’re the owner or a VP of the company, you shouldn’t attempt to do everything yourself. Amazon takes up a lot of time and resources. There are two key roles you need to fill. One is for order processing, forecasting, and warehouse coordination. This person needs to know what’s in stock and when it can ship before a PO comes through. The other is for content, merchandising, and metrics. A business analyst with strong spreadsheet skills is typically the best. Amazon is going to provide you with a lot of data you will need to drive your decisions. Note that these roles don’t have to be devoted full time to Amazon.

  5. Know how to be self-sufficient. Unless you’re doing millions of dollars per year on Amazon, you may never speak with a buyer (vendor manager). Most of your problems can be solved through Amazon’s vendor portal (Vendor Central). Have a small team of people ready to read through Help sections and manuals. You’ll be filing many tickets with Amazon in the future and you’ll need to know what to ask for and how to ask for it.

  6. Package for survival. Your product will be sent to the far reaches of the US, and perhaps may go out internationally. It will be dropped, stacked, conveyed, picked up, and dropped again. Your packaging should pass small parcel and UPS drop testing requirements. Amazon tracks every damaged product and return and will increase charges to you accordingly to the cost of handling those returns.

  7. Label everything. Every single product you make should have an individual UPC or EAN code. This code should be a scannable barcode on the outside of the consumer-level packaging. This doesn’t mean the same barcode for each color of a product, it means a barcode unique to each color of product. You can obtain barcodes from GS1, or purchase them from some resellers.

  8. Find peer mentors. Join user groups on Linkedin such as the Amazon Marketing Services and Amazon Vendor Central Users. You’ll get a wealth of information from more experienced folks who are ready and willing to answer your questions.

  9. Set aside enough time. If you are too busy with your current business, you won’t be able to add on Amazon business. Amazon will demand performance from you that is “best in class” and that takes time. Be ready to invest time in your product setup, your images, your marketing plan, your cost analysis, and learning the systems and processes to ship an order to Amazon. Chargebacks can occur for even slight mistakes.

  10. Hire an Amazon specialist to train your team. Amazon boils down to content, data, and operational effectiveness. You don’t need or want a rep group that offers simply “a connection” or a “relationship” with Amazon. Even the slickest rep will struggle to get a buyer to return an email. If your current rep group has a focus on Costco, Fred Meyer, Wal-Mart, etc., consider finding an Amazon-specific consulting group/navigator that can teach you the ropes quickly. Your Costco rep doesn’t fully understand Amazon, because Amazon isn’t anything like big box stores or Costco. They’re completely different animals. Amazon is all pull-based demand, starting with one unit on the shelf. Big box stores are about relationships with the buyers, transferring risk of inventory, and allocation of limited floor space. Amazon’s “infinite aisle” and data-driven, highly scaled-out self-service corporate culture change everything about the skill sets needed to make you successful.

Bonus Tip: Check your product listings on Amazon. If the selling price of your products is significantly lower than your MSRPs there’s a good chance Amazon won’t be profitable on your products. This will cause a lot of churn with the buyer and Amazon will ask for lower costs.