Selling on Amazon: Keys to Unlocking Success as a Multichannel Amazon Seller

Get more orders by selling on Amazon—that's the plan! Adding Amazon to your multichannel ecommerce mix helps you get more eyes on your products through Amazon’s massive marketplace.  

As a new Amazon seller, you need to understand the best way to work with Amazon and meet your business objectives. This includes how to get listed (and avoid getting de-listed), stay compliant, and turn Amazon into a successful sales channel for your products. First, let’s look at the problems new Amazon sellers typically face so you know what to avoid. 

Any time you start selling on a new channel, unexpected problems can arise. That’s why it’s important to look at common problems with selling on Amazon ahead of time so you can be as prepared as possible. Let’s talk about what often gets in the way of success for new Amazon sellers. 

When you start selling on Amazon, sometimes order volume grows so rapidly that it outpaces your ecommerce logistics setup and results in costly overtime, mis-ships, and late orders. The tools and processes that worked when your business was smaller may not be scalable if you experience rapid growth or spikes in order volume.  

For example, imagine you normally ship 20 orders per day, print shipping labels out of your front office inkjet printer, and visually scan the shelves for products to fill the paper pick list in your hand. How would you keep up with 3x, 5x, or 10x order volume as your business grows? It’s important to have the foundation for scalable operations laid ahead of time so you can handle rapid growth when it occurs. 

Becoming enrolled in Seller-Fulfilled Prime (SFP) carries the potential for rapid growth in order volume. STAYING an enrolled SFP seller requires an efficient way to keep up with throughput and satisfy Amazon’s requirements, even when your sales skyrocket.  

According to Amazon, to keep from getting de-listed, enrolled Amazon Prime sellers must consistently meet the following criteria to maintain their status:  

1. Provide free 1-day and 2-day delivery for Prime customers  

2. Give all customers free nationwide standard shipping  

3. Meet minimum 1-day and 2-day delivery speeds according to Prime customer detail page views  

4. Achieve an on-time delivery rate of at least 93.5%  

5. Show a valid tracking rate of at least 99%  

6. Keep a seller-initiated cancellation rate of less than 0.5%  

7. Ship and deliver Prime orders on weekends (Saturday, Sunday, or both)  

8. Offer free returns on items weighing less than fifty pounds  

9. Allow Amazon to manage all post-order customer service inquiries  

Failure to meet the requirements would result in being de-listed as a Prime seller and no longer allowed to use Prime branding¹. 

To succeed as an Amazon seller and avoid getting de-listed, you have to keep Amazon updated with accurate tracking information and available inventory. If your other software, such as a shipping solution or your ecommerce platform, doesn’t automatically sync with Amazon, you will get stuck updating Amazon manually. This is not sustainable as order volume grows because it’s a slow and error-prone process. 

You need software that connects to Amazon via an API so it can sync, write back tracking information, and update your Amazon marketplace as multichannel fulfillment occurs.  

Multichannel sales bring a high level of complexity to inventory management. If you don’t have a way to update available inventory on all platforms at the same time, you risk overselling. Manually updating inventory in real-time for multiple sales channels is nearly impossible, and many ecommerce businesses keep overselling their inventory until they have an inventory management system in place.   

Managing your catalog and listings for one sales channel is hard enough. Add Amazon to the mix, and suddenly you have double the number of listings to maintain. Depending on how many SKUs you list and how often you update them, it could be a full-time job to keep everything current! You have a million other things to do, and you need an easier way to update your catalogs and listings one time, then have it automatically sync to all sales channels. 

The best way to handle this is catalog and channel management software. It works like a central hub for all your channels and listings so you can keep your Amazon listings (and everything else) current without spending so much time. 

There are two main ways to start selling on Amazon: Amazon Seller Central and Amazon Vendor Central. Which is the right one for you? Let's look at the difference between these options. 

Amazon Seller Central is a way to enter the Amazon marketplace and become a reputable third-party seller, selling your products and building your brand. In contrast, with Amazon Vendor Central you are a supplier for Amazon and sell to them in bulk. Then, Amazon sells the products under the Amazon brand.  

Amazon Seller Central is best for D2C brands already selling to end consumers. It’s the easiest and simplest way to start selling on Amazon, and if you are successful, Amazon may want to bring you on as a vendor later. The real question is, do you want to be a supplier FOR Amazon or a seller ON Amazon with your own brand?  

To keep things from getting too confusing, we will just focus on Amazon Seller Central for the remainder of this article. If you want to sell on Amazon with your own brand, keep reading. 

The good news is, it’s pretty easy to start selling on Amazon by signing up on Amazon Seller Central. Of course, Amazon can change the process at its discretion, so please check the Amazon website for the most up-to-date information. As of the date of this publication, you basically just need to sign up, list a product, promote your product, and fulfill the orders. 

It’s important to note that HOW you do these four things will determine whether you succeed as an Amazon seller. There’s nothing wrong with dipping your toe in the water before you fully jump in. However, even when testing a new sales channel, you need a good plan if you want to succeed. 

Before you dive into the Amazon marketplace and start listing products, you need to have a warehouse and shipping strategy in place and a plan for how you will fulfill your orders on time. Otherwise, you’ll be struggling, trying to keep your head above water when you become successful. How can you build that momentum on the new sales channel without drowning in order volume? 

Here are the five most important steps to becoming a successful Amazon seller: 

1. Warehouse strategy – Decide whether to fulfill your orders from your own warehouse, a 3PL, or a mix of both. 

2. Shipping strategy – Choose appropriate shipping software and carriers to control costs and meet Amazon’s valid tracking rate requirements. 

3. List your products – Start a free Amazon Seller Central account, list your products on Amazon, and consider registering for Seller Fulfilled Prime. 

4. Fulfill your orders – Use your warehouse and shipping strategy to fulfill your orders accurately and on time to avoid getting de-listed. 

5. Monitor and adjust – Regularly monitor customer reviews, operational costs, warehouse KPIs, and other data to make strategic adjustments. 

Amazon sellers have five main options when deciding how to fulfill Amazon orders: 

1. Amazon Warehousing and Distribution (AWD) – Amazon warehouses and distributes your products to the Amazon store and other distribution channels 

2. Fulfillment by Amazon (FBA) – Amazon warehouses your inventory and fulfill your Amazon orders, functioning as a 3PL 

3. Amazon Fulfilled by Merchant (FBM) – Use Amazon software with your own warehouse and workers to fulfill your Amazon orders 

4. Non-Amazon 3PL – A 3PL other than Amazon warehouses your inventory and fulfills your multichannel orders 

5. Multichannel software with Amazon Partner API – Integrates with all your sales channels to fulfill multichannel orders with your own warehouse and workers  

Amazon Warehousing and Distribution (AWD) is a low-cost inventory storage and distribution solution, offered by Amazon, that warehouses your products and distributes them to the Amazon store and your other distribution channels. It’s essentially a third-party logistics (3PL) program providing long-term, upstream bulk inventory storage in Prime-ready fulfillment centers ². 

Pros 

• The pricing also covers FBA inbound placement with no separate charge 

• AWD's auto-replenishment feature keeps your FBA inventory in stock 

• Bypass Fulfillment by Amazon (FBA) storage limits to warehouse more goods 

• Multichannel distribution is available, so you can use one inventory for all channels 

• Time to market: inventory is received/visible 2-4 days after its arrival to AWD, and it’s received by FBA 10-14 days after you request replenishment. 

Cons  

• Less inventory control and flexibility for businesses that also do B2C/D2C 

• Subject to Amazon Warehousing and Distribution (AWD) product eligibility 

• May be a slower replenishment method for FBA compared to distributing goods yourself or through a different 3PL 

Best for sellers who: 

• Want to lower the cost of doing FBA  

• Are willing to replenish FBA inventory a bit slower 

Fulfillment by Amazon (FBA) is the easiest way to sell on Amazon without having to fulfill your own orders. Amazon warehouses your inventory, provides free, 2-day Prime shipping to your customers, handles returns and customer service, and picks, packs, and ships all your orders. Think of it as an all-Amazon 3PL that handles everything for you³. 

Pros 

• New Seller incentives 

• Don’t have to manage fulfillment, returns, or customer service 

• No worries about getting de-listed as a Prime seller 

• More time to focus on other aspects of your business 

Cons  

• May be more expensive than handling these activities yourself 

• Not recommended for heavy, bulky, or temperature-sensitive products 

• Additional fees for aged inventory, returns, removal, disposal, and liquidation 

• Less inventory control and flexibility for multichannel sellers 

Best for sellers who: 

• Want to sell on Amazon but don’t want to warehouse goods or be responsible for fulfilling orders 

• Are willing to make less profit if it means avoiding complexity and risk 

• Want to expand into other markets quickly without needing to open their own warehouse and develop their own localized storefront 

Amazon Fulfilled by Merchant (FBM) is a suite of Amazon software solutions to help you fulfill orders from your own warehouse instead of having Amazon warehouses hold your inventory and fulfill your orders.  

Amazon FBM includes tools for inventory management, shipping, and returns management, and you can use it alongside Fulfillment by Amazon (FBA) according to your business strategy⁴. 

Pros 

• Can fulfill heavy, bulky, or temperature-sensitive products that FBA can't do 

• May be more cost-effective than FBA or other 3PLs 

• Manage your inventory more effectively for multichannel fulfillment 

Cons 

• Does not include warehouse management system capabilities 

• No direct API integration to NetSuite (requires a connector) 

• Gives Amazon access to your order info and data for all sales channels 

Best for sellers who: 

• Sell on multiple channels and warehouse their own inventory 

• Operate a small warehouse and don’t experience seasonal peaks or high growth 

• Don’t require warehouse management system features/capabilities 

While it may seem counterintuitive to use a non-Amazon 3PL to fulfill Amazon orders, there are certain situations where it makes sense for multichannel sellers:  

1. You want to house all your inventory in one place for greater agility, but you don’t want to operate your own warehouse. 

2. Your products are heavy, bulky, temperature-sensitive, or otherwise not eligible for Fulfillment by Amazon, and you don’t want to use your own warehouse. 

3. The non-Amazon 3PL meets Prime Seller requirements and is more cost-effective for your business than FBA. 

4. You want to avoid certain rules and restrictions related to FBA. 

5. You sell on Amazon but are not a Prime Seller and don’t need to meet Prime Seller requirements. 

Many multichannel sellers prefer a purpose-built solution when it comes to ecommerce logistics software. Unlike the one-size-fits-all Amazon FBA or FBM options, and unlike a non-Amazon 3PL that handles fulfillment for you, multichannel software with an Amazon Selling Partner API provides a highly customizable set of capabilities to solve your unique problems AND the common problems most Amazon sellers face. 

Multichannel ecommerce logistics software includes best-in-class:  

• Shipping software 

• Inventory management system (IMS) 

• Order management system (OMS) 

• Warehouse management system (WMS) 

• Catalog management system 

• Multichannel listing management software 

• Purchasing and purchase order management software 

• Returns management software 

• Enterprise resource planning (ERP) software 

For multichannel sellers, Amazon is only one piece of the puzzle, and logistics for all the other sales channels require a great deal of connectivity to keep everything running smoothly. In this case, it makes sense to use a purpose-built set of integrated software solutions that sync with Amazon via API. 

By reducing the complexity of multichannel order fulfillment, this type of solution helps ecommerce businesses manage hyper-growth while continuing to expand their catalogs, listings, and sales channels for a strong, diverse business model. 

Now that you understand the multichannel order fulfillment options, let’s talk about shipping. There are five general ways to ship Amazon orders to customers: 

1. Fulfillment by Amazon (FBA) - Amazon fulfills and ships your orders 

2. Amazon Buy Shipping – Amazon's multi-carrier program to print discounted labels 

3. Amazon Shipping – Amazon's carrier service to deliver parcels with Amazon’s fleet 

4. Veeqo by Amazon – Amazon's multichannel shipping software platform 

5. Third-party shipping software with Amazon Partner API – Integrated with Amazon 

We already discussed Fulfillment by Amazon earlier, so we will not revisit it here. Before we dive into the pros and cons of the other methods, we should take a quick look at Seller Fulfilled Prime shipping since it has changed in recent years.