06 Apr How Long Does It Take To Become An Amazon Seller
Why should you become an Amazon Seller? The answer is simple, Amazon is one of the biggest online marketplaces there is. In face, AMZ market share just hit an all time high, at 56%. Consumers know the brand by name alone and usually use the platform as their first port of call for their purchase needs.
You might think that becoming a successful Amazon Seller is as easy as it is to become a consumer on the platform. This is understandable, as it typically only takes around 24 hours to set up an account and be verified by Amazon.
However, becoming an Amazon seller is more than just setting up an account. You will need a lot of knowledge, determination, and patience to make your Amazon store work. It takes time to gain traction and grow brand affinity with customers.
There are some things you need to consider before embarking on your Amazon Selling venture. These range from basic administrative documentation, to a firm understanding of the market that you’re targeting.
What you have to consider before becoming a seller on Amazon
The Amazon Marketplace is a great platform for many different types of products. Thus, understanding the market for your particular product is important.
Check out your competitors – is the product popular? Is there something that your business offers that theirs doesn’t? Is your product niche enough that it won’t be overshadowed by the big companies? These are all important questions to ask yourself while looking to open up your business to Amazon.
You also need to determine what your business model is. Are you selling unique and unrivaled products, or reselling products that are already on the market? This question is vital as it determines the path you go down in terms of marketing and pricing.
By selling a unique product, you will have to work harder to market your product to consumers. On the plus side, it can warrant a higher price point, especially if your products are hand-made, for example.
On the other hand, with reselling – people are already looking for your specific product, but are looking for the best deal. You have to be open to lower price points to stay competitive all while being mindful of your profit margin.
Additionally, you need to think about your sales model. How are you going to acquire your goods to sell? There are a few choices you can go with:
You find items at low cost in retail stores (usually on sale or in clearance), that are available online at full price. You can then create a lower price point to generate a sale. This method is at low risk of putting your business in the red. However, it requires a lot of time invested for a low-profit margin.
To keep the price per product low, buying wholesale would be your best choice. This option would give you enough stock for a large number of sales. However, it demands a large budget to initially acquire the goods.
You can go directly to manufacturers to create your product with your branding. This is a good method to create something unique that has the potential to reach a large audience. It does however require a large investment and can be a huge risk, alongside the potential for high margins.
Once you have a plan in place, you need to make sure your business is legal for Amazon to consider you. The documents Amazon requires are:
- A business email address or existing Amazon customer account
- A credit card that can be charged internationally
- A valid State ID (to protect both sellers and customers)
- Tax information for your business to prove its validity
- Phone number
- A bank account for Amazon to send proceeds from your sales
The process to get started selling on Amazon begins by signing up and inputting your business information. This includes all the basic information such as the location of your business, name of your business, whether you’re a company or independent, contact information, and more.
To verify this, Amazon sometimes sends a postcard to that address with a verification code for you to enter. They might also operate a similar process using your phone number or email address.
Amazon also needs to verify your identity. The seller identity verification process requires specific types of documents. These vary by state or country but might include a driving license, passport, birth certificate, and more. In the US, you will need to submit your social security number and Tax ID. You can submit these online and, as long as you meet the document requirements, this process is fairly simple.
You might also need to provide business documents, to prove the veracity of your business. This can include business bank statements or a business license. Again, this will vary by location.
The verification process can take from 24 hours to 10 days. For complex applications, the process may take slightly longer.
This process might seem fairly straightforward, but many business owners still make mistakes. Here are some of the most common problems with the Amazon verification process:
Format or resolution of supporting documents:
Take the time to confirm what format or resolution Amazon expects documents to be in. Often, sellers that send in poor quality documents, or documents that cannot be read, are rejected immediately.
Missing documents or parts of documents:
Again, this might seem like an obvious one, but many sellers miss out critical information in the documents they submit. Ensure that all of your documentation is in its full and original form. When in doubt, assume that Amazon wants to see the FULL document, including small print.
Identification doesn’t match:
This is a more challenging problem, as it may mean making changes to official documentation if it doesn’t match the details that you provided during your application. For instance, billing and residential information need to match, as well as business addresses and billing addresses. Ensure that all of your details are correct and up to date across all identification.
Application Approval is Not The End of The Challenges
Although there is a possibility the application process may take longer depending on the complexity of your business, whether or not your documentation is adequate, or even as simple as the volume of applications that the marketplace could be receiving at that time.
Once your application has been approved, it’s easy to think that that is the hard part over. However, it is just the beginning of your journey.
Building business and brand affinity with your customers is the first big hurdle that you face. If you’re a reseller on Amazon, your brand affinity will come from the big-name products you’re selling. In this case, you would rely more on your low prices and buy box status to push yourself above any competitors.
If you’re selling your products, a lot more goes into building your brand and gaining traction. You need good product imagery and informative listings to draw in customers. Advertising is also a necessary way to get your products out into the wider market. In addition to Amazon PPC advertising, you may explore advertising across social media platforms. Since the popularity of TikTok has blown up, more companies are starting to advertise their products on the platform – whether that be using paid advertisements, or with influencer marketing.
The other main challenge that most Amazon sellers will face in their time on the platform is the long payout periods. It can take weeks for Amazon to pay sellers their revenue from previous sales. This freezes up your cash flow and makes it difficult to grow your business as you then use any savings or ‘back-up cash’ to pay suppliers and purchase more inventory at scale to realize cost savings.
How to grow quicker
As mentioned above, Amazon is the most popular online marketplace, averaging around 500 million visitors per month. However, don’t rely on Amazon’s pre-existing brand affinity with consumers to help your business. Amazon recently announced that their ad revenue topped $32 billion in 2021. Amazon’s ad platform is critical for seller success.
Here are just a few ways that you can expand your market on Amazon, and improve sales:
Amazon continues to increase its Ad revenue, as its PPC platform grows. Amazon PPC ads push your products front and center. Utilize Amazon sponsored product ads, sponsored brand ads, audio ads and more to push your business in front of your buyer. Know your audience, and what they are searching, and utilize appropriate keywords to display your ads in their search results or other Amazon service.
This seems like a no-brainer, but can easily slip through the cracks. Conduct competitor research regularly, to understand how your pricing compares. What do you have to offer that your competitors don’t? Ultimately, consumers expect good prices on Amazon, and will often pick the seller with the most reasonable price.
Monitoring profit margin:
Utilize market research to understand your profitability. For instance, always shop around for suppliers. It’s important to maximize your profit margin by finding inventory at as low a price as possible. Not only that, look at your competitors, and evaluate whether you can attract customers, while increasing your pricing.
Utilize Amazon FBA:
Fulfillment by Amazon is made to help sellers warehouse and ship their products. For a fee, Amazon stores your items and ships them for you, handling the logistics on your behalf. This frees up your valuable time. Amazon FBA can improve customer relations, as Amazon handle returns and problems, and customers often receive faster shipping.
Offer product bundles:
Product bundles are a great way to move more inventory, while keeping your customers happy. They get a better deal than buying the products alone, and you keep your inventory moving and improve your cash conversion cycle. Consider what products your customers are likely to buy together, and how they can save.
Improve your IPI score:
Amazon rates your business based on how you manage your FBA inventory. Improve your IPI score, and this will open up storage opportunities in the Amazon warehouse. More storage means more inventory, allowing you to expand.
Growth capital funding:
Sometimes, you need an extra injection of cash to drive real growth. For a lot of business, sales revenue is just enough to keep the business operating, but they cannot invest into their business. Growth capital funding streams can provide you with a cash injection, to invest in marketing, new product lines, storage facilities, new logistics approaches and more.
How Yardline Can Help
Here at Yardline, we know how to be a successful e-commerce seller, both independently and on platforms such as Amazon. We have a variety of tools to help you succeed in both running your business, as well as growing it to new heights.
We offer a growth capital advance to ease the strain put on your business with the long wait times to get paid from Amazon. You can use this to pay all of the necessary bills and purchase extra inventory so you can keep selling.
A capital advance is not a loan. We give you the cash from your pre-existing sales now, to help you buffer before Amazon pays out. You then pay that back over a repayment period.
We also offer support and guidance on the best ways to grow your business and strengthen your role as an Amazon seller. Our Seller Success Team has all of the necessary knowledge to adapt your business to run as efficiently as possible.
Contact us today to find out how we can help you to become a successful Amazon seller.