What is the Amazon Marketplace? All You Should Know

Amazon seller app menu on smartphone screen close up view

If you’re someone who frequents Amazon or other e-commerce websites, then it’s very likely that you’ve heard of people becoming online sellers.

But, you’re not quite sure what the Amazon Marketplace and its equivalents are, nor are you familiar with the process of selling online.

In this article, we’ll give you the rundown of what the Amazon Marketplace is and how you can get started as a seller!

What is the Amazon Marketplace? 

Before we tell you more about how you can start your own Amazon business, we should cover information about the Marketplace itself. If you’ve done any sort of shopping from Amazon, you know that they sell just about everything.

Browsing amazon webpage on an ipad.
Launched in November 2000, Amazon Marketplace makes it easy for third parties to sell a variety of goods.

Books, ping pong equipment, and pretty much anything else you could want can be found on their website. What you might not know is this: along with buying directly from Amazon itself, you’re actually buying from third-party sellers. These sellers utilize the Amazon Marketplace, which is integrated straight into the main website itself. This allows the third-party sellers to easily get their merchandise out on the market, whether it’s new or used. 

So, to answer the question, the Marketplace is a third-party online retail market. It allows independent online sellers to put their merchandise on the website directly. These products can both be new or used and are integrated alongside the main website. However, products that use Amazon’s namesake will always be new and entirely owned by them. 

Now that you know all of this, you’re probably wondering to yourself “What’s the big difference between Amazon and its Marketplace?” At a glance, it probably doesn’t seem like much. However, there are some defining characteristics between the two platforms. 

Differences Between Amazon and the Marketplace

We’ll first look at Amazon itself. Like we mentioned before, if you are buying directly from Amazon, you will always receive a new product, unlike if you buy from a third-party seller. The other key difference is that Amazon will keep the profits from the items they sell. 

Marketplace sellers have the ability to sell both new and used products to their customers. Another thing you have to remember is that Amazon gives permission to certain people to become Marketplace sellers. We’ll get into the stipulations behind this soon. Additionally, Amazon will keep a percentage of the profits from these third-party sales. 

How To Become An Amazon Seller

Now that you’ve learned a little bit about the Marketplace itself, you’re probably thinking that it sounds like a pretty good way to bring in some extra income. After all, partnering with the biggest online retailer in the world would certainly mean you’re reaching a whole lot of different customers!

So, we’ll give you a little guide on how to actually get your seller’s profile set up. There are two important things you need to do before you set up your seller’s account. First and foremost, you’ll need to pick a selling plan. A selling plan dictates how big your selling business will be.

Depending on the one you pick, you’ll be allowed to do things like advertising your products or even selling in bulk. We’ll go over the specifics so you can get an idea of what you’re getting yourself into with each plan. 

Individual Selling Plan

Individual selling plans are perfect for people who are just getting into the world of online selling, have a smaller business, or are unsure what it is they’d like to sell online.

You will not have to pay a monthly fee and instead only have to pay a small fee of $.99 every time an item is sold. With this type of plan, you are allowed to add new products to the Amazon Catalog as well as grow your business with Fulfillment. 

But what is Fulfillment? Simply put, it’s a program by Amazon that allows shipping, storing, packing, as well as returns and exchanges to be handled by Amazon. It’s a big benefit for those who do not have the time or money to do all of these things themselves. It’s perfect for sellers who are just getting started and don’t have a clue about the packaging and shipping process. 

There are, however, some negatives when it comes to the individual selling plan. Because it’s meant for individual or smaller sellers, it doesn’t have any of the benefits of a Professional Selling Plan. You can’t even sell more than 40 products a month with an individual plan. 

Professional Selling Plan

If the Individual Selling Plan seems too small-scale for you, or if you’ve already got an idea of what you’re selling, then the Professional Selling Plan is perfect for you. It already includes the few benefits of the Individual Plan, such as the being able to add new products and the use of Fulfillment by Amazon, but also adds a lot more and removes some restrictions. 

While we won’t list every advantage of using a Professional Plan, we will show you what we think are the most notable ones. API integration, bulk listings, advertising, restricted category access, and other advanced selling tools are by far some of the more appealing aspects of using this selling plan.

If you’re planning on running a larger e-commerce business, this plan is essential to you. There is a snag with this plan though. Amazon won’t let you sell your products on their platform for free. Unlike the Individual account where you’re just charged $.99 for each item that’s sold, you’ll have to pay a monthly fee of $39.99 for the Selling Plan. This can be a turn-off for some people as they might not bring in enough profits to warrant the monthly payment. 

Additional Selling Fees

Upon looking at teach of the different Selling Plans you might think to yourself that this is a pretty good deal. But, before you get too excited, you should know that your products are charged different fees when they’re sold off.

Office paper sheet with text FEES CHARGED and keyboard
There are many kinds of fees involved in selling on the Amazon Marketplace.

These types of fees include per-item fees, referral fees, closing fees, and high-volume listing fees, to name a few. We’ll look at some of these so you can better understand the cost of selling your items on the platform. 

Per-item Fees

This is the type of fee that’s charged each time you sell an individual item, regardless of what other fees and charges are tacked onto it. Thankfully, for professional sellers, you will never be charged a per-item fee. This is the tradeoff for the monthly subscription. Meanwhile, individual sellers are charged $.99 per item sold. 

Referral Fees

This fee type is the big one. As in, you’ll see the biggest fees in this category. Referral fees are applied to items that fall under certain categories and Amazon will deduct the applicable fee percentage on the sales price. This means that this fee is applied to the base price of the item. 

There is a huge range of referral fees that cover a wide variety of different item categories. It would admittedly take a long time to cover all of the different categories and their associated fees. Therefore, we’ll link the table that Amazon provides for applying these fees.

It’s definitely worth a look as you may want to change up what you plan on selling depending on these fees. Some of these fees take up to as much as 45% of the price! 

Closing Fees

This type of fee is thankfully more straightforward. It’s simply a flat $1.80 fee on any item that falls into the categories of books, DVDs, music, video games, game consoles, and video game accessories. You will find that these items also have referral fees on top of them, so be wary. 

High-Volume Listing Fees

This fee only applies to sellers who are selling items with unit counts over 1.5 million. Essentially, Amazon tracks the amount of SKUs (Barcodes) of all of your items. If the number that you are stocking exceeds 1.5 million you will be charged $0.001 per each of those SKUs. While this number seems minuscule, it can add up quickly. 

Refund Administration Fees

That’s right, even when you’re performing a refund, your item will have a fee attached to it. When you perform a refund, Amazon will return the referral fee you paid but with a catch. You’ll be charged either $5.00 or 20% of the referral fee, whichever is the smaller amount. 

Fulfillment Fees

While these are not directly tied to selling fees, you should be made aware of the fact that Amazon charges fees for using their Fulfillment services. Pretty much every service that is provided by Fulfillment incurs some sort of fee.

These range from storage fees, removal and disposal fees, return processing fees, and even unplanned service fees if they receive any inventory that lacks proper documentation. 

Seller Central, the Next Step 

The number of fees can certainly be daunting. However, don’t let this dissuade you from partnering with Amazon. You are still able to make plenty of money by using Amazon Marketplace! Once you’re ready, continue with all of the account creation steps and you’ll find that you have access to your Seller Central account. 

What is Seller Central? Well, it’s your hub for selling your items on Amazon. It will allow you to manage your account and the items that you sell. Through this hub, you’ll be able to add product information, update inventories, manage your payments, and you’ll list all your products here too.

Additionally, Amazon provides plenty of helpful content within Seller Central to better navigate the wild world of Amazon business. This is not all that Seller Central can help you with. One of the most important parts of this feature is the ability to look at reports for your items.

You can track inventories, keep track of sales, generate business reports, and even use custom tools to monitor customer metrics. This will allow you to take a closer look at trends as you sell your items. If you’re someone who’s on the go a lot, you should definitely get the mobile app. It allows you to do everything on Seller Central as well as extra features like quickly capturing product photos. 

Time To List Products! 

Now that you’ve got your Seller Central account all set up and ready to go, it’s finally time to start listing your products! But how do you do that exactly? Well, keep reading and we’ll tell you all you need to know. Something that you should know before you start listing your items is what seller plan you’re using.

If you’re using a professional plan, you will actually be able to list your items in bulk. Individual plan owners must list their products one at a time. Beyond that, you’ll need to either match an existing listing or create a new one yourself. Matching an existing is used if someone else is already selling the same product as you.

Doing this won’t take away any sales from you, it’s just an easy way to keep the Marketplace from being full of duplicate listings. Otherwise, you just have to make a new one for your item. In order to create this listing, you’ll need to have access to your product’s Global Trade Item Number.

This is something like a UPC, ISBN, EAN, or SKU. Additionally, you should also be prepared to provide things like product titles, descriptions, images, and keywords for when people search for your product. 

Shipping Your Products

You’ve made a sale and now it’s time to have your product delivered! You can do this by either doing the shipping yourself or by using Fulfillment. It’s generally easier to use Fulfillment because Amazon will handle all of the shipping and delivery for you.

But how does this system work? It’s really quite simple. You simply ship your inventory to Amazon where it will be made ready for sales and when a customer orders something, they’ll ship it to the customer for you. 

Final Thoughts

Well, there you have it. This is essentially all you need to know about the Amazon Marketplace and how you can get started as either an individual or professional seller! As you can see, the process is fairly simple and it’s not hard to do.

It is very easy to get an account set up and start selling your products. That being said, all of the different fees and costs can seem daunting and scary at first.

Therefore, if you’re ready to take your selling experience to the next level, or want some extra help, check out our website! 

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