According to Statista, Amazon.com is the number two provider of food and beverage items in the eCommerce field. The eCommerce giant makes nearly two billion dollars in this segment alone. However, some sellers may tell you that the hurdles to get over this issue are insurmountable. Given that nothing is impossible with the right mindset, we plan on answering the following problem: how to sell food on Amazon.
1. How to Sell Food Items on Amazon: Getting Approval
As you might expect, your first step is to register as a seller on Amazon. If you don't have an account, go ahead and take care of that before moving on.
Once you've done that, follow these steps to garner approval:
a) Have a Stock of Products Ready
Before you can sell anything, you need to be able to have some inventory. In this case, you can do this with one of two options:
- Creating a new listing by uploading the images and providing details on the product
- You can add a new offer of a pre-existing product by scanning the barcode or using another identifying factor.
For option number one, there are many requirements you will need to follow before you can sell your product. Those details will need addressing before you can move on.
Option number two is more accessible, but they have a list of requirements you will need to follow.
In general, you need to have the following:
- A minimum order defect rate of less than one percent
- A pre-fulfillment cancel rate of less than 2.5 percent
- A late shipment rate of less than four percent.
There are additional requirements for packaging, shelf life, listing, shipping, and labeling we will get into later.
b) Choose How You Want to Deliver
When choosing how to ship, you have three options:
- Fulfillment by Amazon (FBA): This involves choosing to ship your items to a nearby fulfillment center for handling. This option may not be available depending on your local fulfillment center.
- Fulfillment by Merchant (FBM): Otherwise known as Self-Ship (SS), this involves you handling the entirety of the shipping process. This option leaves all of the requirements of your product listing up to you.
- Easy Ship (ES): You store the products while Amazon ships them.
Individual sellers are typically left to option number two or three. FBA sellers have the option to include Prime shipping, which might open up some additional food options.
c) Perform Additional Activities to Handle Your Business
Step three is more for after-care, but it's still important to stay active with other activities to grow your presence on Amazon. Those activities include the following:
- Manage your brand presence on Amazon by associating your food operation with a recognizable logo and name.
- Utilize sales tools (Like DataHawk Finance) to understand and produce actionable data on where you need to focus.
- Manage your inventory to be sure you have an ample stock of available items.
- Follow all associated food safety regulations with your sold items.
2. Requirements: How to Sell Groceries on Amazon
The three-step process above makes it sound effortless. However, food safety regulations, storage requirements, and other aspects of the food industry can complicate matters.
Grocery and Gourmet Foods are one of the most challenging product categories to maintain a presence. Professional sellers must hold their process to the highest available standard to maintain a presence.
We will be providing details on those requirements in the following sections. You can double-check all of the information we reference on Seller Central.
a) Item Packaging Requirements
You must handle good packaging appropriately to ensure that your groceries do not receive any contamination from the outside world. Generally speaking, this means your packaging needs to be resistant to the following:
With refrigerated food, frozen food, and raw agricultural commodities, packing must also maintain internal temperature throughout the delivery. Other items, such as chocolate or supplements, must also maintain a temperature-controlled environment.
In this case, your process needs to have an acute focus on the "chill chain." That means you need to have a backup plan should there be a power outage. Your packaging also needs to be reinforced for extended delivery times should you need to deal with shipping delays.
One of the most important but easily overlooked tasks under the "how to sell groceries on Amazon" list involves item packaging requirements. Familiarize yourself and ensure you have high-quality packaging preferences.
b) Shelf Life Requirements
When learning how to sell food items on Amazon, you need to know about shelf life. Through Amazon Seller Central, you have access to providing information on the shelf life of your products. The shelf life, or expiration date, indicates how long customers can eat your food.
With shelf life, you have two requirements:
- You must ship food with enough of its shelf life remaining so that the customer might enjoy it.
- If you are selling raw agricultural commodities, they must meet quality requirements and arrive during the time of ripeness.
In this case, think of a reasonable amount of time someone might take to eat something you've sent them. For a bunch of bananas or apples, your shelf life may not last beyond a week. For bulk soup, customers might stretch out the natural expectation to a few months.
Do not modify the expiration date. Amazon will not allow you to do this via your inventory settings, and you are likely to lose your allowance to sell if you try and force the issue. You may also end up causing food poisoning or other complications resulting from tampering with release dates.
c) Listing Requirements
As a broad topic that includes shelf life, listing requirements need to follow the grocery style guide on Amazon. The style guide contains details depending on the type of food that you might ship. You need to have all the unique aspects of your food displayed upfront.
Below are a few excerpts from listing requirements:
- Dietary claims must be upfront (organic, keto, kosher, vegan, gluten-free, dairy-free, etc.)
- Custom variety packs need to have a different listing from the original brand and fully specify the contents.
Most of the other listing requirements under "how to sell food items on Amazon" delve into how to label bulk items. Be sure to look up your product's unique needs to determine the listing requirements of your products.
d) Shipping and Labeling Requirements
When learning how to sell food on Amazon, shipping and labeling are critical. Labeling delves into the exact requirements as a listing. Your labels need to be upfront, evident in their dietary restrictions and have an unchanged expiration date. Shipping is a bit more complicated.
With shipping, you need to be sure that the food has a good seal from the outside world. You need to have a double layer of packaging for plant-based foods to ensure pests aren't attracted to them. The majority of issues that come with shipping delve into shelf life and packaging requirements.
Amazon has unique packaging and shipping requirements for combined items and bulk food. You can still qualify for enhanced shipping as an FBA seller. FBA sellers can cut their shipping costs by putting their goods in the hands of Amazon.
Remember, this may not be an option if your local fulfillment center doesn't support refrigerated goods.
The safest food items to ship includes the following:
- Cooking oil
- Dry snack foods
- non-perishable items
3. What About Meat and Fruit?
After acquiring Whole Foods, Amazon found shipping things like produce and meat became more manageable for them. However, that is assuming that you are close enough to Whole Foods to take advantage of grocery delivery.
You will find that fresh fruit and meat are difficult to come by online. However, it is possible provided you have enough days, proper storage, and only ship within limited zip codes. The meat will also have the same restrictions.
What Happens if I Cannot Follow Through With These Requirements?
If you cannot meet Amazon's performance targets, the most extreme response Amazon has is to deny you from selling products. To come back, Amazon will request a "root cause investigation," where they will ask you to find and report on what is causing the issue.
Amazon will also perform audits on your chill chain to ensure that everything is working, as you discussed in the initial approval. Those who cannot pass the audits may lose their selling privileges.
4. Food Category Fees: How Much Does Amazon Charge for Selling?
If you want to learn how to sell groceries on Amazon, you need to know about the fees for this product category. For grocery and gourmet food items, prices are in two major types:
- There is an eight-percent fee if your thing is $15 (or less).
- There is a 15-percent fee if your item is more than $15.
Individual sellers also need to pay the same .99 cent fee for each item sold. Professional sellers have no per-item fees, but they pay $39.99 per month to maintain their subscription.
So when answering "how much does Amazon charge for selling," know that it does cost more than average items.
5. How to Sell Food Items on Amazon: The Difficulties
As you can see above, wondering how to sell groceries on Amazon is pretty tricky. There are many requirements, and it is incredibly easy for those who lack an eye for detail.
If you insist on learning how to sell food items on Amazon, check out this quick list of difficulties you will need to overcome:
a) Dealing with the Higher Costs
Our earlier section on "how much does Amazon charge for selling" already went into it, but it's fair to mention again. The costs Amazon associates with food selling are much higher than other departments. This price hike isn't limited to the higher referral fee and selling fees associated with a high stock of food items.
Instead, it includes two crucial areas:
- Shipping requirements
- Storage requirements
b) The Higher Cost (Including Shipping and Storage)
Shipping requirements are much higher if you want to sell fresh produce or meat to a clientele. You will need to have refrigerated packaging with an ice block in the bottom. Typically, meats are also packed in styrofoam or similar materials to retain the internal temperature.
When you store those items, you need to be sure that they are in a refrigerated environment. Amazon will demand this off you when auditing your chill chain.
You can also ship frozen meats, but those will require one or two-day shipping requirements based on most retailers. It can cost up to $150, depending on the type of meat you ship.
Even with snack foods, you need to be extra vigilant to ensure pests do not access them. A contaminated storage unit will need to be cleaned out, removed, and replaced.
c) Limited Time Frames
While you don't have to worry about this with perishable items, there is still a limited time frame for sale with food. While you can enhance those time frames via shipment in insulated packaging with dry ice, your inventory may not sell at the speed you want.
When you don't sell food, it gets thrown away. While third-party companies can sometimes use grocery products in other means, that's a loss at any item price, as nobody is going to want to reuse your spoiled food at the cost you want.
d) Higher Product Quality Requirements
As a result of higher demands on all fronts, the "how much does Amazon charge for selling" isn't always a priority. Instead, the Food and Drug Administration (FDA) regulates much of what you're handling.
For Example, the US's FDA demands that the food not be adulterated (made into a lower quality with something added to it) during the shipment process. Even in other countries, the transportation and management of food have high-quality requirements.
6. Best Practices: Selling Food on Amazon
It isn't enough to know how to sell food on Amazon; you also need to do it well. Below are some of the best practices to be aware of:
a) Familiarize Yourself with the TOS
Before you even begin to think about it, please take a look at the requirements behind it. Everything from temperature requirements to individual shipping requirements is available on Seller Central. So if you happen to wonder, "how much does Amazon charge for selling," you can answer that question without struggling.
b) Know Your Country's Food Shipment Requirements
While Amazon gives you the bare minimum to start, they work internationally. As a result, third-party sellers may not have all of the knowledge they need on food shipment. As a result, you will want to go to Google and find your Country's official guidelines.
Here are some of the most prominent governing boards regarding food requirements to be aware of:
- FDA (Food and Drug Administration) works with the United States Department of Agriculture (USDA) to determine meat and vegetable requirements.
- FSSAI (Food Safety and Standards Authority of India) is India's authority for setting food safety standards to ensure healthy food practices.
- EFSA (European Food Safety Authority) is Europe's answer to the FSSAI, and it is not lumped in with the management of medicine.
c) Start Small
When selling food products, you should start small. Unlike textbook rentals, for example, various items are not all handled in the same way. Doing so can cause dangerous situations for you and your customers.
An easy way to get an idea of how it works is by starting by reselling other products. Who says you have to start with growing fruits in your backyard and ship them across the world? By starting small, you understand the little things first (like product packaging and food-based fees).
d) Offer to Open a Wholesale Account for Another Product
There are two significant forms of food products you can offer:
- Private label
Private label products are those you create yourself. As a result, the regulations behind these are much higher. You will need to know local laws.
Wholesale products leave the laws and regulations (mainly) to the original producer. When starting small, you want to start wholesale.
Start by reaching out to smaller companies that offer non-perishable items. You may be able to find an audience for that company in other locations.
e) Do Not Make False Dietary Claims
When learning how to sell groceries on Amazon, the ultimate tip is this: when you make dietary or allergen-free claims, make sure your products back those up. Some people get into the food industry and think that these are "buzzwords" you can use to sell a product magically.
For example, being organic isn't the same as being vegetarian. Instead, there are specific requirements behind them that make them officially organic. If you want to sell something with that label, do your research before putting it on your product description.
From this list, you can probably see that it is a bit easier (and harder) when learning how to sell food on Amazon. The best advice we can give you here is to stay focused and know your stuff. While this guide goes over what you need to know from Amazon, your country likely has a few additives.
If this is overwhelming to you, it's a good idea to start small. Wholesale someone else's food so you can learn more about the process. You can also take jobs at food processing plants (temporarily) if you want a better inside scoop. Just make sure they follow their regulations!
Another vital aspect comes back to market research. But to avoid being overwhelmed with the data, utilize a market research support system like DataHawk to help you out with simplifying the process.
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