Chapter 5 A Handy Amazon Seller Account Setup Checklist
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The moment you sign up for an Amazon seller account, the clock starts. With your first monthly account charge coming through after 30 days, you are expected to meet all Amazon performance metrics from day one.
Before you jump in headfirst and start selling on Amazon, there are several steps we encourage any prospective seller to take before formalizing the seller account registration process.
The Necessary Paperwork — an Amazon Checklist
To get through the full registration process for an Amazon seller account, you will need a bunch of information readily available, including:
- Business Information
- Your legal business name, address, and contact information
- Email Address
- An email address that can be used for this company account. This email account should be set up already, as you will start receiving important emails from Amazon almost immediately.
- Credit Card
- An internationally-chargeable credit card with a valid billing address. If the credit card number isn’t valid, Amazon will cancel your registration.
- Phone Number
- A phone number where you can be reached during this registration process. Also, have your phone nearby during registration.
- Tax ID
- Your tax identity information, including your Social Security number or your company’s Federal Tax ID number. To submit your tax identity information, the registration process will take a brief detour to a “1099-K Tax Document Interview.”
- State Tax ID
- State tax ID information for states in which you have tax nexus. This physical presence is typically impacted by company offices, warehouses/3PLs, and call centers. If you plan to use Amazon’s Fulfillment by Amazon (FBA) program, there may be further tax nexus implications. I encourage you to talk with a tax attorney or tax accountant who specializes in online seller tax nexus issues (e.g., catchingclouds.net, peisnerjohnson.com) or one of the tax remittance companies that can give you the most current Amazon tax nexus information (e.g., taxjar.com, avalara.com, taxify.co, vertexsmb.com).
Questions to Work Through Before Registering Your Seller Account
Some of the logistics of being a successful seller should be worked out before you set up the seller account, as you likely won’t have as much time to address these after you get started.
Download the checklist
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Where do you plan to send order returns?
Are you going to handle the returns yourself, or send them to a company that specializes in testing/grading returns and making the product available for sale again (e.g., tradeport.com, openedboxreturns.com)
Who on your team will handle Amazon customer inquiries? The key is not just having all of the answers, but also respecting Amazon’s requirements to respond to all customer inquiries within 24 hours, any day of the year. Hence, figuring out who is on point (with possible backup) is one critical operational issue that should be addressed before opening your Amazon seller account.
If you plan to use Amazon’s Fulfillment by Amazon program, will you co-mingle your products?
I very much recommend using FBA, given its visibility potential to 50MM+ Amazon Prime customers. If you decide to go that route, you’ll need to decide whether you plan to co-mingle your products with FBA inventory of other sellers of the same products.
Amazon gives FBA sellers this potentially lethal option of sending product into Amazon’s Fulfillment Centers, where they might get co-mingled with other FBA sellers’ product, leading to your products possibly getting mixed up with counterfeit or low-grade versions of what you purport to be selling.
Unfortunately, if a co-mingled unit gets picked to fulfill an order on your account, you are left explaining to Amazon why a customer complained about getting a counterfeit item. You need to work through this issue very early on because if you decide to use FBA but not use the co-mingled (“stickerless”) option, you need to activate your account to become a “stickered” FBA account right at the beginning before you create your first FBA shipment into Amazon.
While it is possible later on to become a stickered account, it quickly becomes very complicated if you have already sent some product into FBA as stickerless product.
Do you plan to use a DBA (doing business as) name to operate your Amazon seller account?
While some companies have legitimate reasons to use a different customer-facing name, Amazon is also a place where many sellers purposefully conceal their identity. Reasons for doing this include not wanting brands to know that they are selling online, or the brand is actually the reseller and doesn’t want its other retail partners to know it’s selling product online direct to consumer.
Have you checked to see if the products you plan to list are in categories that Amazon has gated?
Amazon has restrictions on who can sell in certain categories, and while the ungating process is usually surmountable, it’s important to recognize that if your desired categories are gated, you will have to apply very quickly to get ungated. Check out Amazon’s approval category page before you decide to register on Amazon, and you can learn more about the ungating process if it applies to your product categories.
Skills You Should Know Now – Or Understand How to Build Quickly
The Amazon marketplace has its own setup rules and regulations, but also its own combination of skills that every seller should master fairly quickly to succeed profitably and long-term.
Stellar marketing content to build product listings
If the products you are selling are already sold by others on Amazon, this is less important because you will most likely end up adding your offer to the product listing that’s already in place (requiring you to provide only basic pricing, quantity available and SKU name information). But, if your products are new to the Amazon catalog (easy to check by simply searching for your brand or UPC in the Amazon.com search bar), you will need to come up with content for such field as product titles, bullet points, product description, and generic keywords (for optimizing SEO on your listings).
You will also need product images for your listings – check out Amazon’s adding images support page for reference, but we encourage sellers to have multiple images, including a lifestyle image, if possible, to show the product in use. This lifestyle image complements the main image that has strict requirements, including a white background, no branding and at least a 500×500 pixel count.
Clear understanding of your product sourcing avenues
If your products sell well on Amazon, do you know how to replenish quickly enough to avoid extensive stockout periods? If you specialize in close-outs and one-time buys, you may not be able to replenish the same SKUs easily, but should have strong channels for adding new inventory, as your Amazon cash position improves.
A decision on if you plan to sell the same items over and over
If yes, you will want to take advantage of Amazon’s replenishment alert tools inside Seller Central, as well as other external forecasting tools, such as standalone tools from www.forecastly.com or those integrated into many of the multichannel inventory/order management tools.
A developed process for identifying and addressing stale inventory
While everyone wants their products to sell, the reality is there will always be some that don’t sell well and need to be liquidated or sold on other channels to help convert the inventory back into some level of working capital. Amazon has tools to help FBA sellers identify stale inventory, while the non-FBA Amazon seller will need to monitor its inventory by SKU to figure out what might need to be promoted for faster sale.
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Understanding of basic cost structure, including overhead costs
Far too many sellers on Amazon understand only the basics of SKU-level profitability, resulting in a blended view of the seller’s overall profitability, rather than a pinpoint perspective on which SKUs drive what percentage of profits, while understanding which products are actually costing money to sell on Amazon.
Too many Amazon sellers don’t know their profitability until the end of the year when their accountant announces the final numbers, hopefully to the relief of the seller. It’s critical for sellers to understand and compile all of their overhead costs, and recognize that these expenses need to be integrated in some manner into the running total of costs that a seller incurs selling on Amazon.
Know who is already selling the same SKUs as you on Amazon
Shockingly often, new sellers join Amazon, list their products, and only then discover that the level or type of competition on their listings will make it next to impossible for the new seller to make any sales or any margin. Before setting up an Amazon seller account, I strongly encourage every seller to spot check its intended catalog on Amazon to see if Amazon Retail is already selling these items. If so, it’s best to walk away from those items right now. Also, I encourage sellers to gauge what price points are competitive on Amazon, which can often lead to another recognition that the seller can’t possibly make any money if it’s competing with such low-priced competitors.
Know how much time is needed to get listings in place right after registered as an Amazon seller
Amazon doesn’t charge a new seller until the end of the first month on Amazon, during which time, the seller should have created its product offers, and activated at least some with sellable inventory. If you open your account and don’t list your products, you’ll still get charged for having your professional seller account open, so why not plan to invest a bunch of time in the first 30 days to get moving on your account?
Finally, knowing that sales feedback is important to Amazon in gauging the performance of all new sellers, I encourage every new seller to sign up for one of the many inexpensive feedback solicitation tools that send each customer a request for seller feedback. These include:
All of these can all help a seller to get feedback, and show Amazon that the seller is performing well against Amazon’s performance criteria while keeping customers happy.