KPMG Spark Blog

Picture of a succulent plant

Helpful Tips for Selling Online

Interesting in getting into ecommerce? This primer provides tips and advice for selling online, primarily focused on sales via Amazon.com.

Picture of a succulent plant

In 2018, Amazon's share of the US ecommerce market hit 49% according to BigCommerce.com. That's 5% of all retail spent across the entire country. To put things in perspective, according to BigCommerce.com this market share is more than the next three biggest online sellers combined, with eBay coming in at 6.6%, Apple at 3.9% and Walmart at 3.7%. Because of its online market share and, although these tips also apply to other online sellers and retailers, our blog will primarily provide tips for selling on Amazon.

There are more than 2.5 million active sellers on Amazon. Looking to make a quick few bucks, join the 200,000 Amazon sellers making more than $100,000 in sales, or even the 25,000 making more than $1 million in sales? Well, you’ve come to a good place to learn how to get started. 

A few additional facts from BigCommerce.com to get you hyped about selling on Amazon:

  • There are 101 million Amazon Prime members in the US
  • The average money spent by an Amazon Prime member is $1,400 every year 
  • 90% of consumers price check a product on Amazon
  • More than 50% of all Amazon sales come from third-party sellers

You pumped yet? Let’s go. There are two stages to consider for online selling: before you register and after you register

Before You Register

Decide what you want to sell

It might seem unnecessary to include this step, but it’s probably the whole reason you came to read this blog in the first place: you have something to sell! However, while there are more than 20 product categories open to all sellers, there are at least 10 categories that are only available to professional sellers. To sell from these additional 10 product categories, you need a Professional Selling plan and specific permissions from Amazon. Why is this the case? It’s so Amazon can ensure quality product selling in those categories. Right now there are 11 product categories that need approval (and a Professional Selling plan), which include:

  1. Automotive and Powersports
  2. Business Products (B2B)
  3. Collectible Coins
  4. Fine Jewelry 
  5. Fine Art
  6. Grocery & Gourmet Food
  7. Industrial and Scientific 
  8. Professional Services
  9. Sports Collectibles 
  10. Video, DVD, & Blu-Ray
  11. Watches

(This list was updated March 2, 2020) 

Within the open 20 categories, products can be listed without special permission or a Professional Selling plan but each category has additional guidelines that sellers need to follow. For example, if you would like to sell Home and Garden products there are no requirements to sell new, used or collectible items. For certified refurbished products, however, there are a few requirements that must be met. Each product category is different, so take your time to learn about your product category here

Choose a selling plan

Choosing a selling plan strictly depends on how many products you want to sell. According to Amazon, the magic number is 40. If you plan on selling fewer than 40 items, then the individual selling plan is the way to go. This plan charges you $0.99 per item plus referral fees and variable closing fees. If you plan on selling more than 40 items, then the Professional plan is probably better suited for you. This plan has a monthly subscription fee of $39.99 plus referral fees and variable closing fees. 

Reading about all these “fees” may sound overwhelming. Don’t worry—referral fees are there since Amazon plays a role in facilitating the sale between the buyer and the seller. The referral fee is again based on which product category you are selling. Let’s go back to our Home and Garden example. The referral fee for Home and Garden products is 15% or with a $0.30 minimum. So if you sell a Bonzai tree for $50, Amazon’s referral fee would be $7.50 ($50 x 0.15 = $7.50). If you sold a succulent for $1.50, the referral fee would be $0.30. (Even though 15% of $1.50 is $0.23, $0.30 is the minimum referral fee).

The variable closing fees refer to media categories only. This includes books, DVDs, music, software and computer/video games, videos, video game consoles, and video game accessories. All products sold within these categories must pay a closing fee of $1.80 per product. 

The only other fee included is a shipping fee. The shipping fee depends on whether or not you plan for Amazon to fulfill your orders for you. If you do so, you will be charged fees for order fulfillment, storage and optional services. See this page for further details on fulfillment fees. 

Have you figured out your selling plan yet? If not, see Amazon’s own website for further info. If you have figured out your plan, let’s move on to stage two of online selling: after you register

After You Register

Create your account

In order to start listing, you must create an account on “Seller Central,” which is the interface where you will manage your selling account. 

List

How exciting is this? You’re ready to list your items to sell. To list, you must know whether your products are already on Amazon.com or not. If they are, then you simply indicate how many products you have to sell, describe the condition of the product(s) and provide shipping options. If your products are not yet on Amazon.com, you need to identify a Universal Product Code (UPC) or a European Article Number (EAN), and a Stock Keeping Unit (SKU) number. You also need to list product attributes like a title and a description. 

Sell

The best part of selling--actually selling the product! The payment for your product, minus Amazon and shipping fees, will be directly deposited into your designated bank account. Boom, that’s it. 

Ship

Once your product sells, you will be notified. If you decided to use Amazon’s fulfillment service, then Amazon has you covered and you are done here. If not, you need to handle the shipping yourself. 

Conclusion

All in all, it’s pretty simple. The biggest thing is understanding Amazon’s process and doing what’s necessary to get your products on their platform. 

If you are ready to sell using an online retailer like Amazon, but don’t know how to start bookkeeping or need help with bookkeeping for your business, that’s what we’re here for. Learn more about how KPMG Spark can help here

 

 

This blog article is not intended to address or provide advice concerning the specific circumstances of any particular individual or entity and does not constitute an endorsement of any entity or its products or services.

Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.

Ben AsplundJune 4, 2020Posted In: Business Tips

Subscribe

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

KPMG Spark is an online accounting service that saves you time so you can focus on what’s most important for your business.

How Outsourced Bookkeeping Can Amplify Your In-House Accounting Team

Outsourced bookkeeping services, such as KPMG Spark’s, offer a cost-effective solution for outsourcing traditional data entry and reporting, freeing up critical bandwidth so that your in-house bookkeeper can do more with your financial data. Join us as we discuss how outsourced bookkeeping can amplify your in-house accounting team.

KPMG SparkMay 11, 2021Posted In: Business Tips

Introduction to the KPMG Spark Bookkeeping Team

At KPMG Spark we provide an online bookkeeping service using automation technology all while providing you with a bookkeeper that works with you to make sure your books are in order. Join us as we take a look at what we do, how we do it, and how we can help you have more time for your business.

Ben AsplundMay 4, 2021Posted In: Business Tips

How 40 Dreams Catering Made an Offer on a Million-Dollar Building With Confidence

Owner and founder Adrienne Fudge used KPMG Spark to get clarity on her finances, save money, and eventually– make a huge business decision with ease.

KPMG SparkApril 27, 2021Posted In: Client Stories

If You Have a Business, You Need Artificial Intelligence

Artificial intelligence can help virtually any business step up its game to improve productivity and efficiency. Let's take a closer look at what artificial intelligence is and how it can help your business.

Ben AsplundApril 22, 2021Posted In: Business Tips

Outsourced Bookkeeping vs. In-House Bookkeeping: Everything You Need to Know

While most companies aspire to outsource their bookkeeping, many instead opt for a DIY option. Managed accounting is a viable alternative that offers more support and features than DIY software, but is just a fraction of the cost of a full-time bookkeeper. Join us as we take a look at the pros and cons of online bookkeeping software vs. outsourced bookkeeping with managed accounting.

KPMG SparkApril 20, 2021Posted In: Business Tips

4 Critical Metrics For Making Better Business Decisions

As a business owner, you probably don’t have a lot of time to spend analyzing your financial data. By taking a few minutes each month to track just four important metrics, you can understand where your business is performing well and quickly spot areas of concern. Let’s look more closely at these four financial indicators that are critical for most companies.

KPMG SparkApril 15, 2021Posted In: Business Tips

The Hidden Costs of Doing Your Own Bookkeeping

 You may view doing your company’s bookkeeping as a point of pride, or simply as a way to save money. But there are many costs associated with “do-it-yourself” bookkeeping that business owners often overlook. Join us to see how outsourcing your bookkeeping can help you and your business.

KPMG SparkApril 13, 2021Posted In: Accounting Info

4 Benefits of Choosing KPMG Spark for Your Bookkeeping

Entrepreneurs often start out trying to do their own bookkeeping but quickly realize they need a bookkeeping solution that not only makes it easy, but also one that addresses their evolving business needs — such as managing cash flow as their business grows. Let's take a closer look at how KPMG Spark can help your business.

Jonathon WalkerApril 6, 2021Posted In: Business Tips

Managing Cash Flow in 2021

The insight provided by an updated, thorough examination of upcoming cash flows can help business owners make more informed decisions and best leverage the cash they’re generating. Let’s look more closely at some leading practices for generating a cash-flow projection and how it can help your business.

KPMG SparkApril 2, 2021Posted In: Business Tips