So, you have decided it’s time to sell your alcohol brand on Amazon. Off the back of an industry-changing year, we don’t blame you. According to Kantar, “Online grocery market share in the UK has nearly doubled over the last year to 14%”. The recent pandemic has led many alcohol-based brands to refocus their efforts to online platforms, which has proved to be a vital lifeline.
You’ve read through all of the success stories of online businesses, funnelling their sales through Amazon, and not looking back, right? Although that has been the case for many businesses, the alcohol category is a complex vertical, that requires additional attention and process implementation. It is unlikely that you will be granted approval to run your business from home. We’ve broken down the key considerations and processes that you will need to follow.
- Licences to operate
James Bond wasn’t the only one that needed a license to operate. Similar to selling from a physical environment, online stores require licenses to be approved before trading on Amazon. Ultimately there are two types of licenses to pay attention to: the Personal License and the Premises License.
This is your first step to selling on Amazon. There are two parts to getting a Personal License:
- You’ll need to undertake a short exam that requires some preparation beforehand.
- Once you’ve passed the exam, you will get a certificate which can be used to apply for your license through your local authority.
The Premises Licence is granted through your local authority/council. It is granted to any fixed commercial property where the handling and dispatch of alcohol-based goods is taking place. This typically relates to shop floors, warehouses and storage facilities. Note that all businesses selling alcohol need to have Designated Premises Supervisor (DPS), who has been appointed for the relevant location. The chosen individual must have a personal license in place.
Unlike other categories, you will need to pay for the application fees, which will be based on the rateable value of your business premises. These additional costs are worth factoring in.
- Consider applying for AWRs (Alcohol Wholesaler Registration Scheme)
Although it’s not the catchiest acronym out there, it’s a fairly important scheme to look into. Whether you need it or not will depend on your circumstances and how you plan to sell your product. If you are solely focused on the direct-to-consumer route on Amazon, it’s unlikely you’ll need it. It’s worth checking out.
- Getting started on Amazon
The set-up process on Amazon can be broken down into three main areas:
- Account set up
- Page set-up and activation
In most cases you will be setting up an Amazon Seller account (also known as a marketplace seller). The other option that you may be presented with is a Vendor account. This is Amazon’s wholesale model which is by invitation only. Some brands start off as a Seller and then migrate to Vendor, operating what is known as a hybrid model. To keep things simple, we will focus on the Seller option.
To take full advantage of Amazon’s features across its ecosystem, you want to ensure you are Brand Registered. The process can take up to 3 months and you will need to have an approved trademark in place. Once your application has been processed and approved, you’ll get access to features including A+ Content, Brand Stores, and of course extra brand protection against counterfeits. We believe that you should only consider Amazon as a major channel if you have this in place.
Next, consider your fulfilment model. There are several to pick from. Fulfilled by Amazon (FBA) is the most popular, and you should also look to enable Fulfilled by Merchant (FBM) as a back-up. Going down the FBA road will allow your products to be Prime eligible, meaning that all-important next day delivery. It’s worth noting that Prime based products typically rank higher than non-Prime based products. When sending your stock into Amazon, there’s several components to be aware of:
- Units do not need to be individually prepared/conditioned. If units are received prepared, they will be re-packaged and prepared at the fulfilment centre where they do not meet carrier requirements.
- Units should be sent in pallets (fulfilling the general requirements for pallet inbound), or another method that ensures that individual units will not break during transport to the fulfilment centre or during inbound (this is the seller’s responsibility).
- If units are to be sent in cartons, Amazon requires cartons to be closed and not include units with two different FNSKUs.
- Each unit needs to be labelled with the FNSKU linked to the country-specific SKU (e.g., For Germany: FNSKU X000000000/MSKU DE-FBA-SKU1). Labelling needs to be done on the product itself, covering the original product barcode.
- Page Set-up and activation
Arguably, this is the most straightforward and enjoyable part of all the process prior to hitting the ‘Go Live’ button. It’s during this time that you want to bring your brand experience to life through well-optimised titles, bullet points, images and A+ content. Now is also a good time to consider programmes like Amazon Vine, which will help generate customer reviews. Once you have these elements in place, you are now ready to move onto the final step of the process.
- Tell the world
Congratulations, your listing is now active on Amazon and customers are ready to buy your product! Well, that’s what you thought, right? The truth is, if you’re not implementing a marketing strategy to tell Amazon users about your product, the chances of the brand taking off on the platform are slim to none. Therefore, we recommend implementing a 3–6-month launch plan that includes Amazon Advertising, and more specifically Sponsored Advertising, lightning deals, coupons and money-off vouchers. These types of tools will allow your listing to get the exposure needed.
Skye High Media is an ecommerce growth agency, specialising in Marketplace and D2C strategies. If you would like to find out more on launching your brand on Amazon, reach out to the Skye High Media team through our Contact Us page or alternatively email us at firstname.lastname@example.org.