One very common and viable way of selling coffee online is doing so through Amazon.
Amazon, which is currently the world's largest online marketplace, quite effectively facilitates the buying and selling of all kinds of products, including coffee. According to a study by Wunderman Thompson Commerce, over 60% of all online consumers start their product search on Amazon.
Because Coffee is part of the food category, selling on Amazon does require a sometimes challenging approval process.
Additionally, selling on Amazon effectively also requires some forethought and a really solid understanding of how Amazon penalizes and rewards sellers in their marketplace.
This guide will explains and ins and outs of what is required to sell coffee on the Amazon marketplace as well as how to do is effectively.
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How to Sell Coffee On Amazon
1. Determine if You Can Sell Coffee On Amazon & Register
Selling coffee on Amazon does require you go through an approval process.
From Amazon's perspective coffee falls under the category of "Grocery & Gourmet Foods" which means it needs to adhere to the Amazon rules for those types of products.
Amazon publishes those guidelines and makes them easy to find, but note they will potentially vary depending on the country you are selling from.
One example of Amazon's guidelines for coffee can be found here. Note that example is for the United States specifically.
Essentially, the rules reflect the country specific regulations for selling food.
They can be summarized as follows:
1. Ensure you are properly packaging the coffee and that it's protected and safe for shipping.
2. Ensure you have the appropriate licenses and certificates you need to sell coffee in the country of origin.
3. Amazon explicitly requires that you "sell all Grocery & Gourmet Food products as "new"." In other words you don't want to accidentally sell your product as "used coffee".
4. Ensure you're applying appropriate labelling, nutritional information, and expiration dates.
5. It's also important to keep in mind that even if you are "white / private labelling" someone else's coffee the regulations and certifications typically still apply. For instance if Amazon requires FDA approval you'll need to seek that out to get your own (re)packaging processes and facilities certified.
It's also easier to get approval to sell from Amazon if you already have a well established distribution through other sales channels. For that reason it might be worth considering starting with your own coffee website first before beginning to sell on Amazon.
What You Need to Register With Amazon
You're also going to need to make sure you have your ducks in a row, so to speak, when it comes time to register an Amazon Seller account.
Amazon will require you to provide a bank account number, a chargeable credit card, a government issued ID, and tax information specific to your business.
2. Learn to Manage Your Amazon Business through Amazon Seller Central
After completing the initial registration, you'll be granted access to an Amazon Seller Central dashboard.
This is the interface you'll use to add your coffee products, keep track of inventory, and manage payments etc..
Amazon Seller Central will also provide you with a fairly in depth sales dashboard, to help track sales, revenue, and conversion rates across different products.
Seller Central is meant to function as the ultimate "hub" for your Amazon business, bringing together reporting and management of your coffee sales through Amazon.
Your sales dashboard, for instance, will look something like this:
You might be wondering how you actually use Amazon Seller Central to sell coffee. We'll explain exactly how to go about doing that, along with some "best practices" in this section of the guide.
First, build out your listings.
The listings are where you include you product title, description, and images. It's also where you'll need to include "product details" like product condition, manufacturer, size and color. All these elements are important either to optimize for sales or to ensure Amazon properly indexes your coffee against all the potential searches and attributes.
Listings can be further "optimized" by following these best practices:
1. You have 200 characters for the product title. A title that is too short risks not being descriptive enough to be found or clicked on. A title that is too long will not fit into Amazon's requirements.
2. Generally you'll want a minimum of five photos per product. You'll also want to ensure they appear properly across both desktop and mobile devices. One thing to keep in mind is Amazon has specific requirements you'll need to adhere to, like including only a pure white background and using only images of the product itself in the listings.
3. You'll have the opportunity to call out "key product features" for each type of coffee you sell. Those will show up as bullet points. It's important to take care to get the most out of this space by keeping these "skimmable" and calling out benefits vs features. For instance if you're advertising a decaf coffee, rather than simply saying it's decaffeinated you'll want to say something like "Decaf means you can enjoy a great tasting coffee after supper".
4. Ensure your coffee description is written in a way that mirrors how people might search for it. You'll want to include "keywords" that your target customer might use to find the specific coffee you're listing.
Next, make the most of the reporting Amazon provides.
Amazon Seller Central provides reporting and dashboards that track a number of metrics that probably won't surprise you.
For instance you'll be able to use the dashboard to monitor sales by individual products as well as review metrics, views, product returns and conversion rates.
The metrics aren't only useful to benchmark success, but also can be very actionable.
The reality is some products sell very well on Amazon and others don't - for a variety of reasons. So the sales dashboard can be very useful in finding out if one type of coffee, presented in a specific fashion, sells better than other types.
Insights might make it clear to you that certain types of coffee should be sold through the Amazon channels while others can be solder through a regular website.
Other insights could include seeing the correlation between sales and reviews. Or sales and certain days of the week.
Above and beyond the actual performance of your Amazon sales strategy, there are also useful consumer behavior insights you can use to inform your product listings, descriptions, and advertising.
Manage your product inventory.
Seller Central is also the tool you'll essentially use to manage your product inventory on Amazon. Simply put, if your inventory is at zero, Amazon will not show your listing in search results.
The "Manage Inventory" section within Seller Central provides an interface you can use to search, view, and update inventory.
Note, this is also where you'll be able to manage pricing.
Manage your customers.
Amazon also provides tools within Seller Central to manage your customer service.
Those tools and options in including making use of their "Buyer-Seller Messaging Service" to communicate directly with your customers.
Amazon also enables and encourages you to respond to customers questions and populate the listing's official "Q&A" section.
Be advised, customer service is one of the most essential and, in some respects, challenging parts of selling on Amazon. Amazon has strict rules in place and will penalize sellers who respond late to customer queries, for instance. The customer service and response tools found within the Amazon Seller Central interface are among the most important ones to familiarize with.
3. Decide if You'll Use Fulfillment by Amazon (Amazon FBA)
Amazon provides a service they call "Fulfillment by Amazon" (FBA) which many sellers find appealing if they don’t have the space to manage their inventory.
Essentially, the service allows you to store your coffee in Amazon's fulfillment centers, and they handle the packaging and shipping from there. An added benefit of FBA is Amazon also provides additional customer service in the form of return management and access to Amazon's 24/7 customer support contacts.
Another benefit of using FBA is your products are also eligible for things like "free delivery" to Amazon prime customers.
Of course this comes at a cost, and Amazon does charge fees for this as an enhanced service.
Perhaps most interestingly, Amazon also makes this service available to people who are looking to outsource their fulfillment for orders from their own website or channel outside of Amazon. Amazon call's this their multi-channel fulfillment offering and you can learn more about it here.
If you choose to avail yourself of the service you'll basically need to setup a process whereby you send your coffee products to Amazon at regular intervals. From there, Amazon will scan and store your coffee and ultimately make it available on their website for purchase. As mentioned they'll handle the packaging and shipping and, finally, will deal with questions returns and refunds.
If you're curious about costs and fees, Amazon breaks them down across different parts of the service. So for instance there are fees for Inventory Storage, Fulfillment, Long-Term Storage, and Returns Processing.
The fee structure can be a bit complicated because the value of the service is dependant on your sales volume and your own fulfillment costs if you hadn't used FBA.
Fortunately Amazon provides a calculator that let's you compare your profitability using their service vs your own.
The FBA service could be a god send if you are looking to launch a test or a "pilot" offering, and want to minimize risk by taking on all the overhead costs associated with inventory management and fulfillment.
Ultimately you'll really need to crunch the numbers to decide if this is a better option, but if you want to test the waters as far as selling coffee on Amazon than this service makes that idea a lot easier to consider.
4. Consider the Approval Process if You Sell Private Label Coffee
Selling private or white label coffee on Amazon isn't necessarily that much different than selling coffee from your own roastery, but there are a few more things to keep in mind.
The biggest challenge for a lot of vendors looking to sell coffee on Amazon is the approval process.
This would make sense since selling through anything within the food category is going to open the door to legal concerns extending to certificates, licenses, and other regulations.
Choosing to source your coffee from a roaster rather than make your own will either make the process a lot easier or a lot more difficult.
If you can source your coffee from a roaster who has the paperwork, the certifications etc.. required and can demonstrate that conclusively than you'll have an easier time going through Amazon's approval process.
On the other hand, some roasters might not have a ton of clients who sell on Amazon and providing the level of detail required to go through the approvals process might be more difficult.
So all that to say that if you are considering selling private label coffee you purchase from a roaster AND also considering selling that coffee through Amazon, than make sure you disclose that fact up front to the roaster and inquire specifically as far was what their experience has been going through Amazon's approval process either on their own behalf or on behlaf of their clients.
For more information on sourcing coffee and setting up private label agreements see our guide to building a coffee brand.
5. Learn About Amazon's A9 Algorithm
Amazon uses their "A9" search algorithm to decide what products to show for what searches that take place in their platform.
Amazon searchers are going to be an essential part of selling your coffee through that channel, so it's helpful to have at least a basic understanding of criteria is considered before they decide to show your coffee in a search result. Consider also that 70% of Amazon consumers don't scroll past the first page of results, so shwoing up in results isn't enough - you are simply not going to make sales if you don't show up prominently for at least *some* searches.
The most important factors the A9 algorithm looks at are as follows:
Most obviously, they will consider the "relevance" of the query.
In other words, does it make sense to show a coffee product for someone searching for stuffed animals or someone searching for "coffee"?
Another important factor that determines when and if your listing will appear is inventory levels. Amazon obiously doesn't want to show coffee sellers in prominent positions if they have no more coffee to sell.
Pricing is interesting. Amazon does explicitly say they will factor in your pricing when deciding when to show your product. Realistically this is more of a factor if there is something very different about the way you have priced your coffee vs other in the same category.
Images and Videos
This one is debatable. Amazon does not explicitly use images and videos to determine what products appear in their searches directly. However, images and videos can influence conversion rates, which absolutely are a direct factor.
Your conversion rate, or "sales velocity", are a big factor. If Amazon can see that when people come to your product listing they purchase they will give you a significant advantage over a similar product offering or competitor who doesn't sell at the same rate as you do.
This factor has a number of marketing implications. Because Amazon weighs actual sales and conversion rates so heavily in its algorithm ensuring success on Amazon requires doing everything you can to increase the likelihood of people actually making a purchase when they come across your listing.
Number and quality of reviews are also a significant factor and, as you can image, also influence conversion rates significantly. More than that, Amazon also rewards sellers who respond to their reviews and penalizes those that don't.
Amazon also rewards sellers who are able to respond quickly to customers, including complaints and questions.
Amazon also considers late shipments, cancellations, and fulfillment shortcomings and complaints in determining when and where to show your coffee in search.
Of course, if this is a challenge for you and your business, leveraging Amazon's FBA service, at least temporarily, can be an effective remedy.
6. Consider Advertising on Amazon
Amazon also affords you to option of paying to get high placements in their search results.
Simply put, you can pay Amazon through a "Pay Per Click (PPC)" campaign where your coffee product will be shown above the ‘organic’ results and when someone clicks on your product / ad you pay Amazon a fee.
Anytime you see results with "sponsored" at the top right, you are seeing the end result of someone's Amazon paid search campaign:
The opportunity, on the face of things, is to drive additional traffic and sales through this kind of campaign. However, it's worth noting that this approach will also indirectly improve your likelihood of showing up in the "organic" Amazon results as well.
Amazon will not directly reward your "unpaid" listings with higher positions if you choose to pay for this kind of campaign, but your organic listings will almost certainly be indirectly rewarded.
The way to look at it is as follows: The more traffic you drive, the higher your sales and the higher your sales the higher your reviews. Both sales and reviews are, as already mentioned, direct factors in the A9 algorithm determining how prominently to show your unpaid listings.
So if you have more sales and reviews than a similarly priced competitor, you will be rewarded ahead of them.
Including this tactic as part of you broader Amazon launch strategy, at least initially, can be hugely beneficial and the gains you make will extend beyond the life of the actual paid search campaign itself.
Another approach you might consider, for similar reasons, is to drive traffic to your Amazon listing page from external paid marketing campaigns.
You could, for example, employ Facebook Ads, Google Ads, or even email marketing that encourages your customers to make a purchase through Amazon (and leave a review).
Sales don't need to be driven exclusively from the Amazon platform to count towards the A9 Algorithm's reward / penalty system. If the traffic you drove from other sources results in sales and positive reviews that will work in your favour when it comes to Amazon showing your listings in their own internal platform searches.
7. Harness the Amazon Flywheel
A combination of Amazon's internal paid search and externel digital advertising can kick off an effective Amazon "flywheel", where each sale you make improves your listing prominence which in turn improves your sales and so on.
This is an important concept and phenomenon to keep in mind, as it cuts to the heart of how you can make Amazon work for your coffee business.
Amazon's algorithms and model places so much weight on reviews and sales, the best chance you have at making this sales channel work for you is to attack it from every angle.
That is to say, anything you can do to drive sales and reviews specifically from the Amazon product page will typically be well worth the effort.
There are companies whose entire business model is built around facilitating this fly wheel. So they will help target happy customers to solicit reviews, for instance. Or they build and sell software that helps make use of hyper targeted discount codes, to help you encourage people to buy your coffee through Amazon specifically, even when they find your business through a facebook ad.
Full credit to Seller Labs, once such company that's built to help effectively leverage the fly wheel effect, for the image above.
Consider, finally, that the more sales you can make through Amazon, the lower your cost per sale (usually). This means eventually with enough sales you could lower your price which, in turn, will once again increase your chances of showing up more often in Amazon.
With Amazon, the story is always the more sales you make.. the more sales you make.
Do you want to learn how to build your own coffee website?
For a variety of reasons, it's usually best to have your own website as a sales channel before getting started with Amazon. It helps with the initial approval process AND it helps you build an audience and customer base you can use to kick off your sales on Amazon later on.
We've built a complete guide on how to go from zero to one hundred pretty quickly using Shopify, so if you're interested you can start by checking out the guide on building a coffee website.