10 Step Guide to Selling Alcohol on Amazon in 2021
So, you have decided to launch your alcohol brand on Amazon. Wise choice, Coronavirus has changed consumer buying habits and accelerated the adoption of buying alcohol online and Amazon is one of the primary beneficiaries. This guide to selling alcohol on Amazon covers the ten most important steps so that you can capitalize on this shift.
1: Decide how you will sell your alcohol on Amazon.
Amazon will only work on a trade relationship with the brand owner or an entity with exclusive distribution rights.
If you are the brand owner, then the best approach is to sell via Amazon’s Vendor Central platform. If you are a distributor and do not own exclusive rights to a brand in your market, you will sell through the Seller Central platform.
2: Set up an Amazon account to sell alcohol.
If you are a distributor you will sell through the Seller Central platform. The initial set up is straightforward. Go to sellercentral.amazon.com and create an account in two simple steps.
- Choose a selling plan – either a $39.99/£30 monthly subscription or a small fee per unit sold. 99.99% of you will go with the first option.
- Create your account – you will need to enter your business and bank information.
If you are the brand owner then the best approach is to sell via Amazon’s Vendor Central platform. The first and most important thing to know is that Vendor Central is invite-only. There are two ways to get an invite
- Amazon has a business development team that is regularly reaching out to brands. You may already have an email from them asking whether you are interested in selling on Amazon. The downside, however, is that unless you’ve received this email there’s nothing you can do to start this process.
- Speak with an Amazon marketing agency like us. The good ones will have numerous contacts at Amazon and will be able to open the conversation with the appropriate buying team at Amazon.
3: Get approval to sell alcohol on Amazon.
As you might expect, there are specific administrative tasks that you must complete before Amazon will allow you to sell alcohol. Vendor and Seller Central sellers must meet all the following requirements.
- Provide a return delivery address in the local country or offer free delivery.
- Provide local language support for Customer Service in the marketplace in which the sale will take place.
- You must not sell alcohol to buyers under the minimum drinking age governed by the applicable laws.
- Supply acceptable documentation and any other information we request about the products you intend to sell, including information to demonstrate payment of excise duties in the local country.
- Adhering to all local, state, and national laws.
4: Decide how you will fulfil your orders.
You have a choice between 3 options.
- Fulfilment by Amazon (FBA) – Inventory is sent to Amazon’s warehouses and Amazon manages the entire fulfilment process. Amazon charges a fee based on product size and weight. Sellers may also incur additional storage fees.
- Seller Fulfilled Prime (SFP) – Inventory is kept in the Seller’s warehouse and delivery is managed through an Amazon preferred carrier. The warehouse must match FBA service levels to qualify. Entry to SFP is only granted after a successful trial period.
- Fulfilled by Merchant (FBM) – As the name suggests, the Seller fulfils from their warehouse. However, they are under obligation to match FBA delivery times and as such, FBM Sellers don’t enjoy the benefits of being a Prime Seller.
Our ‘Which Amazon Fulfilment Method is Best for your Business Guide‘ will help.
5: Create your listing.
Now that you have an account, it has been approved, and you have chosen your fulfilment method, you can start to create your listings.
It is vital to understand that if the product is already sold on Amazon, then you do not create a new listing; instead, you add your offer to the existing listing.
If the product is already on sale, then you will be prompted to create an offer on that listing.
Those of you who have already received approval to sell alcohol (step 3) then you can create your offer. If not, you will be prompted to ‘apply to sell’. Enter your sales prices and confirm your order handling and delivery times.
Your products are ready to be sold.
6: Sit back and watch the orders fly in.
Setting up your listing or making your first sale is a huge milestone, but it’s just the beginning of your growth opportunities selling on Amazon. Once your store is up and running, there are a few important things to keep in mind.
6: Aim for the buy box.
How you ‘win’ the sale or in Amazon’s jargon, how you ‘win the buy box’ comes down to a few things…
- Fulfilment method e.g. fulfilment by Amazon.
- Seller rating.
The algorithm that decides which Seller wins the sale is heavily weighted towards rewarding the lowest price and, secondly, how quickly they can deliver. Then the seller rating. If a seller performs poorly on any of these measurements, they will struggle to win the buy box.
The biggest challenge with online distribution is awareness. Amazon provides the opportunity to access millions of customers, but it does the same for thousands of other brands including your competitors.
It is essential to understand some core principles of Amazon marketing;
- Amazon is ‘pay to play’ – do not expect to accelerate sales if you don’t invest in paid advertising.
- Amazon is a ‘purchase engine’ – it rewards products with high sell-through rates with more organic visibility.
- Use paid advertising to drive more traffic and increase sell-through, creating more non-paid traffic and sales.
8: Invest in marketing.
Now that we understand the underlying principles let’s walk through the marketing tools at your disposal.
SEO stands for Search Engine Optimization. It is the practice of understanding how people search for your type of product and optimising your listing to reflect that customer behaviour.
From a practical point of view, it means…
- Researching how customers search on Amazon.
- Using those keywords in your listing, primarily in the title and bullet points.
- Adding additional keywords into the ‘back-end’ – there’s a section in the listing editor which allows you to add supplementary keywords that haven’t yet been used on the listing.
When people search on Amazon, the top of the search results is usually taken up by ads. Amazon calls these ‘sponsored products’ or ‘sponsored brand’ ads. Any Amazon seller can use ads. Amazon advertising should be an integral part of every Seller’s toolkit. To say there is a lot of search traffic on Amazon would be an understatement.
Ads are based on keyword targeting. You can decide which keywords you want to target, or you can let Amazon’s algorithm decide for you.
At the start of a campaign, it is better to let Amazon decide. This is because the algorithm will pick up any relevant keywords. If you pre-empt what those keywords are, you may miss out on keywords you are not aware of and lose out on lots of traffic.
9: Take advantage of promotions.
Increasing sales on Amazon does not have to be a linear process – sales rise in proportion with the amount you spend on advertising. Promotions will drive short term sales which in turn improves sales rank. Do this consistently over a period of months, and you will build up a sustainable Amazon store.
Spikes of promotional activity, particularly preceding and during seasonal events, will enable you to accelerate sales. We often recommend that clients treat some events as loss-leaders. A short-term loss is worth it for the long-term benefit of increased exposure.
10: In Conclusion.
- Customer behaviour is changing rapidly, therefore the forced acceleration to buying online means that brands have to react quickly or be left behind.
- It’s essential to understand the nuances of each platform. Amazon comes with a vast ‘ready-to-buy audience, but that also means serious competition.
- Choose the correct selling method (Vendor or Seller) and invest in Amazon advertising in order to kickstart and sustain sales.
- It’s a pretty simple combination, but the difference between the bestsellers and the long tail of also-rans is monumental.
- Brands succeed by having a team of people who understand the system, leverage the marketing options, and do all of this in the most profitable manner.
- Don’t expect overnight success, Amazon can be a lucrative new channel for alcohol brands by committing to these principles.
- If you already sell alcohol on amazon, and you’re looking for a more comprehensive guide our How to Sell Alcohol on Amazon (2021 Edition) is perfect for you.
Lastly, assuming that you’ve discovered this article as an alcohol brand looking to begin selling on Amazon, we hope that this guide has helped. If you have any unanswered questions or would like assistance with any aspect of your strategy, do get in touch, we would be more than happy to help – firstname.lastname@example.org.