So, you have a business idea and you would like to get your product to the market. Amazon services rank as one of the most effective ways to reach the mass market. It is possible to optimize your SMEs sales by launching on Amazon.
Before you get started, there are important points to bear in mind. For starters, it’s imperative that you know precisely what you want to sell. This is one of the biggest challenges for up-and-coming entrepreneurs, since you need to position yourself effectively to become a success story.
For example, are you going to be competing in a saturated market of similar products, or are you going to be offering a rather unique products with little (if any) competition?
Amazon currently boasts 20 categories of products which all sellers can access. As a professional seller, there are 30 product categories available to you.
The Amazon selling plan requires a well-structured strategy for newcomers. For starters, you will choose between the Professional Plan, or the Individual Plan.
At the time of writing, Amazon was charging its subscribers $39.99 per month for a professional plan which allows you to sell a virtually unlimited number of goods. The unlimited option is a great choice if you are expecting high sales volume.
The other option caters to individuals who simply pay $0.99 for each item that is sold. As always, the devil is in the details. Amazon currently states that it charges $39.99 per month + additional selling fees.
The 4-step Registration Process Is Where It Begins
The 4-step registration process requires traders to list the products they will be selling. Fortunately, the professional subscription allows you to use bulk tools to upload large batches of products. Products can be delineated by SKU, UPC/EAN, or by product attribute.
The next step will allow your customers to see your products at Amazon, have them shipped, and then you get paid. The latter component is the most important for sellers, and one of the most contentious issues.
It’s important to understand precisely what these selling plans entail. The professional package allows you to sell 40+ items every month for a fixed fee of $39.99 per month + other selling fees.
The individual plan allows you to sell less than 40 items per month with a fixed fee of $0.99 for each sale + other selling fees. Amazon also allows you to advertise for additional fees, and there are various offer services and payment solutions involved.
The Amazon Pay Option is touted as an effective way to build customer loyalty, increase brand awareness, and support multiple e-commerce applications and software solutions. Remember that payment is an issue that requires additional consideration.
Domestic and International Money Transfers with Amazon
For the most part, it is relatively easy to send and receive payments domestically, but it’s the international money transfers that become a bugbear.
If you have a great product, you certainly don’t want to lose out with low margins by payment processing options that eat into your profitability. Consider that Amazon’s money exchange services tack on a 4% exchange rate fee when you sell internationally.
The Amazon currency converter allows for payments to be made in local currency with eligible credit cards or debit cards.
Various international money exchange services have revealed the pros and cons of Amazon’s currency converter, and it’s none too impressive for the budding entrepreneur.
For example, if you live in Italy, and you want to buy something from the United Kingdom with your credit card, you have a few options available. You can either pay the price in GBP, or if you’re using MasterCard or Visa you can use the currency converter and see the price in EUR.
This is a convenient option, but you don’t know exactly what the currency exchange rate is until you get your next bank statement.
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The exchange rate actually posts on the date that the shipment goes out. And the exchange rate that you’re being charged is not necessarily the interbank rate (it never is) it’s much higher. It is the rate that the credit card provider is charging and there’s typically also a transaction fee tacked onto that as well.
There are few benefits involved in exchange rates savings opportunities with the Amazon currency converter. The only benefit you get to enjoy is knowing what it’s going to cost you in your local currency at the moment you make the purchase. It’s certainly not an effective way to maximize your Forex rates and get the most bang for your money.
In fact, it mirrors the actions of big banks and currency brokers which typically tack on fees, commissions, and unfavorable exchange rates. Rather than risk lower profits and decreased competitiveness, it’s better to take a look at other Amazon international seller FX solutions.
For example, if your annual turnover is $100,000, you could be looking at $4,000 in currency fees with Amazon currency exchange, but just $500 – $1,000 in currency fees with a specialist provider.
Cost savings like this means that you can plow thousands of dollars back into your business, expand operations, marketing campaigns, and product development and grow your e-commerce operation.
Amazon is leveraging its vice-like grip on e-commerce by offering currency exchange services that benefit the company more than it benefits traders.
It’s imperative that new and existing businesses evaluate the pros and cons of all aspects of the e-commerce operation and not simply accept everything at face value.