I am an individual seller on Amazon but would like to become a Professional Seller. I do not have a brick and mortar store nor do I have an online store. Based on experiences, would this greatly limit the number of buyers, especially in terms of trust.
Also, I’ve looked at the template for uploading a large number of products at one time and it is really confusing. Is there something out there that will make this process a little easier.
Going professional makes sense if you intend on selling more than 40 items a month AND if you think you will benefit from the various seller tools that are made available (and which, if used properly and on a regular basis, will help boost your sales).
Being designated a “professional seller” in and of itself will not necessarily make a difference in the number of items you sell, however. Price of course is key.
As for the template… well, there is lots here that is confusing at first glance. But if you are loathe to invest the time required to understand how things works here on Amazon, you will not be successful as a seller here. There simply are no shortcuts.
Before you look at how to upload “tons of items” make sure you understand how Amazon works and what is and is not allowed. It is quick and simple to get suspended. Drop shipping as newbie (for example) is a quick road to the abyss.
Many categories and individual brands across the board are restricted. Products can only be listed new if they do not yet exist on Amazon, otherwise you need to add your offer to the existing listing. Your products will need UPC codes…and so so much more.
That being said, everyone started here at some point. Having another store will not make selling here easier or get you customers here faster. Your build it up and sales largely depend on your prices and policies, more than feedback.
Thank you so much for each of your answers which were very insightful and also bring other questions to mind.
First, what do you mean by “Drop shipping as a newbie is a quick road to the abyss?
Second, what do you mean by “Having another store will not make selling here easier”? I do not have any type of store, i.e. online store, or brick and mortar store. In other words, there will not be a link that will send the customer to my store outside of Amazon.
Third, my hope is to sell more than 40 items a month, that’s my reason for becoming a professional seller but there are no guarantees. Wouldn’t the number of items I have for sell be a direct correlation to the number of items I sell?
Fourth, I’m sure it is going to be very difficult for me to compete in the price war against so many established sellers. With that being said, do you see this as a very low chance of me being able to compete?
Fifth, I have no problem taking the time and doing what I need to do to understand how things work on Amazon. That is the reason why I came to the forum/the experts/the people who have gone before me to first learn what I need to do and how to do it right.
Lastly, what is my next step, or where should I start.
The dollar value of the $40 pro merchant fee is why you will always hear “If you plan on selling more than 40 items per month” advise. If you lose $1 per item to Amazon as a non-Pro Merchant, then selling 40 per month means you lose $40 per month.
If you sell 45 items per month and are not a Pro Merchant, you’re paying $45 in those fees, when you could be paying $40 as a Pro Merchant and save the $5.
If you sell 100 items per month and are not a Pro Merchant, that’s $100 in fees when you could be paying $40 as a Pro Merchant and save that cash.
Thank each of you for responding so quickly. I do understand there will be challenges and I’m ready to meet those and I’m thankful for any help I can get. What scares me though is the comment from SELLC that states, “if I am going to be using a drop shipper, it will eventually lead to disaster”. Does this happen often with sellers. Why is this a cause for disaster. I don’t want to set myself up to fail and if I need to revisit this move I’d rather do that before or instead of failing.
Is there anyone else who does or have used drop shippers who can lend some additional information. I am not too proud to beg/ask.
You have no B&M Store or on-line store and you want a professional account. Right? and you will have tons of stuff to list. Sounds like you are going to be using a drop shipper. If so, it will eventually lead to disaster.
They buy from the same suppliers you can buy from and they want to make profit in doing do. That profit comes from you. They do not care if you make money - only that they make money. The price they charge you is the bottom line. They will charge you for shipping and handling on top of that price.
Dropshippers always have many clients that sell the same thing. If there is a catalog of 500,000 items, every client will use the entire catalog since they have no stake in the products.
That means that if several customers together purchase from many of these sellers more than the dropshipper has in stock, the first order the dropshipper processes gets the product and those that follow get an out of stock notification. Unfortunately, that has occurred after you have listed for the customer. After you cancel a few of those orders, you will get suspended.
The dropshipper may not have as good performance in shipping to the customer as quickly as Amazon expects. That will also hurt your metrics and lead to suspension.
When a customer decides they don’t want the product (for any reason), the customer will want to return the item to you and then you will need to return it to the dropshipper, after you receive their RMA number to include on the package. You will need to pay for the ship back. The dropshipper will deduct their profit (assume 20%) as a restocking fee. They make money both ways - when you sell and when you return.
With all of the competitors buying from the same dropshipper, they will adjust their pricing downward to try to get the competitive sales. You will also. That will mean that you will try to sell for the lowest price.
That is your topline.
Amazon will charge you a referral fee on your topline (usually 15%).
That means that you will need to hope that your selling price (set by your competitors) less Amazon’s fees and less the shipping and handling and the product cost from the dropshipper leaves something for you, or at least allows you to break even.
When you do the math, you will often find that you will lose money on most competitively priced sales.
The only winners in the dropship game are the customers who see the best price for the item and the dropshipper who makes money on the product you get from them, the shipping and handling they charge, and when you return the item to them when the customer decides they don’t want it.
Between poor inventory management (out of stock), late shipping, poor delivery performance, and minimal profit or even negative profit, the dropshipping game is not for anyone with good sense. It can be managed, but for those who are new to it, it is a recipe for disaster.
Thank you so much rssbooks for further verifying what SELLC meant, that’s what I thought but just wanted to be sure. I am very familiar with drop shippers. I have about 3 that I work with who support selling on Amazon and are very good at meeting those deadlines. I also have instant access to their stock and can always adjust as needed. It is just a matter of me doing my job.
Now, I need to be sure we are comparing apples to apples. My drop shippers are actually distributors who I had to apply to giving my tax id #, my business banking account information and so on and so on. They will also provide drop shipping for me to my customers. Some allow Amazon selling and some don’t so naturally I will only be using the ones who do. As stated above, the ones who allow Amazon selling stated they would meet Amazons shipping requirements. Once again, I have instant access to their inventory and I have found the best practice is when the inventory is down to less than 10 (I will probably need to play with that #), I will change my Amazon inventory to zero until their stock has been replenished.
I am aware of the fees that Amazon charges because there are fees as an individual seller also. What I don’t know is how different those fees are, in other words, are the fees as a professional seller more and higher.
One very true fear I do have is the ability to be competitive. That is why I’m trying to find out as much as possible before moving forward.
Please continue to provide any and all information it will be greatly appreciated. Your true and outright honesty is appreciated just as much. Even if you say “Listen idiot, leave drop shipping alone”, after my true LOL, I would seriously consider your suggestion and I would not be offended.
+I am aware of the fees that Amazon charges because there are fees as an+
+individual seller also. What I don’t know is how different those fees+
+are, in other words, are the fees as a professional seller more and+
The feesare NOT “more and higher” They are the same except for the 39.99 a month Pro seller fee vs. the 1.00 per item individual seller fee when an item is sold. All other commissions, variable closing, etc. apply to both types equally…
The 39.99 a month subscription for Pro allows access to all of Seller Central’s features, including buy box eligibility, a somewhat-storefront that has your products clickable by brand, reports, feed templates and a few more. So it is way more features and gives Pros a distinct advantage on catalog pages, since individual sellers (except for some FBA cases) do not appear at the top of the listing, but are another click away, behind “also available from these sellers.”
Pro sellers to NOT pay the 99 cent per item fee, which, as explained earlier in this thread, is the cheaper way to go until you hit the 40 sales a month threshold, in which case Pro is cheaper.
The individual account is entry level, allowing you to get your sales up to speed and not pay 40 bucks a month until sales are around the 40 units a month volume or more.
Thank you so much to each of you. I guess I can say my prayers and just get started. One more question before I graciously bow out, the bulk upload template, I think that’s what it’s called, is a little bit intimidating. I read there are 3rd party programs that can do that for you, would any of you recommend those?
If you look under Inventory > Add a Product via Upload, you will find the templates to upload. That can be intimidating if you are not comfortable with spreadsheets or do not understand the data.
Every year I get new product catalogs and spreadsheets from my suppliers, I upload thousands of items. It is not hard for me, but can be overwhelming for some others.
Yes, there are tools, but when you think about it, it is not easier. Think about where the data comes from with your products. You need to get that data into the tool. It is about the same as setting up the same for Amazon.
The advantage is when you are trying to get the same data to multiple marketplaces or websites.
Thank you Boardgames4Us, you are right, it would be as much work if not more for me to use one of those tools. Since I am very familiar with spreadsheets, I’ll just have to jump in and get my feet wet. With Amazon having such strict rules, I’m just afraid of getting kick out before I can even get started.
I’m late to this thread, but I’ll just re-affirm that all the advice you’ve received on drop-shipping is correct. If I were you, Amazon is not where I would first try drop-shipping as a rookie. One mistake and you may never sell here again, forever. I guarantee you’ll make a mistake within a week if you upload tens of thousands of inventory at once.
Having said that, you can become a multi-million seller if you employ technology to drop-ship your inventory. You will need expensive API integration to link your supplier’s inventory IN REAL TIME to your e-commerce platform. That means even when you’re asleep your Amazon inventory will auto sync with your supplier’s warehouse quantity. You can also automatically route all Amazon’s sales directly to your supplier for fulfillment. Monitor all of this push and pull and shipping activity from a central console. With a few clicks you can re-price all of your products.
But this integration will cost you tens of thousands of dollars to do it right. There are several vendors out there who will charge you around $1,000/mo plus setup fees (yes, one grand/mo). Their platform is cloud-based, so they can cut you off if payments are not received. Believe it or not, even this price is cheap and will likely NOT work. They will ask you to watch videos on how to configure their own complicated software, and then do it yourself, because they want to avoid liabilities as their tool may not sync correctly. If sync fails, they blame you for not getting it right, not their tool. Eventually you stop paying/wasting $1,000/mo, and they chase you to collect on remaining contract months.
So it will cost you tens of thousands of dollars to implement and maintain an effective API integration with real time inventory sync with drop-shipper, including updates, order fulfillment, shipment tracking, accounting reports, and performance metrics. Most importantly, you’ll be lucky to find the right vendor or programmer to do it.
Almost all I’ve written here I’ve personally experienced. If you cannot afford expensive integration technology with your drop-shipper, consider specialization with a few hundred profitable SKUs that you can control, instead of thousands in a catalog of which you have no control. However, avoid drop-shipping at Amazon, especially as a rookie.