The five questions you need to ask yourself.
Amazon Handmade can be an amazing opportunity for makers. Amazon Handmade UK had a mind-blowing 579.5 million visits a month in 2020 and almost 90% of UK online shoppers used Amazon last year.
Of course not all those shoppers are looking for handmade goods but even if just a fraction are then you have a huge amount of potential traffic there for handmade sellers!
Amazon has previously had a reputation as a place to get cheap plastic goods, but there is a huge move in Amazon at the moment towards selling high quality handmade goods. Amazon even incentivises handmade sellers to come onto their platform by offering no monthly selling fee.
There’s clearly opportunity there, but the question is whether selling on Amazon Handmade is right for you and your products. To answer this, you need to ask yourself 5 questions to see whether Amazon Handmade is the right opportunity for you.
If you want to skip ahead and start registering for Amazon Handmade, why not check out my complete step by step guide for starting an Amazon Handmade store.
Q1. What category do you sell in?
Before you consider selling handmade on Amazon, first check that there is a category for your product within Amazon Handmade. Currently Amazon Handmade includes the following categories:
- Accessories
- Artwork
- Baby
- Beauty & Personal Care
- Clothing, Shoes & Handbags
- Home, Outdoor & Home Care
- Jewelry & Watches
- Kitchen & Dining
- Pet Supplies
- Sporting Goods
- Stationery & Party Supplies
- Toys & Games
Amazon Handmade doesn’t currently accept Digital or Downloadable Products, Food & Grocery items, or Electronics.
So if your products don’t fit into those categories then you won’t be able to sell them in Amazon Handmade. But don’t panic if your products don’t fit into the Handmade categories, you can still sell your products in the general Amazon marketplace.
Q2. What kind of products do you sell?
Amazon Handmade has its own definition of “handmade” and it won’t accept products which don’t meet this definition. They have 3 different types of handmade products which they’ll accept:
- Handcrafted: Made entirely by hand;
- Hand-altered: Existing products altered or adapted into a new design, for example, a denim jacket you paint or draw your designs on;
- Handmade customized: For example, if you make jewellery and hand stamp initials on them per the customer’s request.
What about if you sell vintage or antique items? Unfortunately Amazon Handmade doesn’t currently accept vintage, second hand or antique products. That may change in the future but if you sell those kinds of products you are probably better off sticking to Etsy.
What about customised products? If you sell custom handmade products then you’re in the right place! When you sell on Amazon Handmade there are 3 types of customisations you can offer:
- List of options: Colour and size;
- Text entry: Allow customers to add text they would like to have written/engraved on the product;
- Number entry: Allow customers to add custom measurements.
You can offer up to 20 options for each of these types of customisations so you can sell a really wide range of customised products within 1 product listing.
Q3. What kind of handmade seller are you?
Amazon Handmade also has rules about the kind of handmade sellers that can sell in the marketplace. In order to be accepted to sell on Amazon you will need to be an independent maker, working alone or preferably, with fewer than 20 friends, family members, or employees to create products. Amazon also accepts collaborative groups and co-operatives.
Basically Amazon is trying to make sure that all the handmade sellers are actually making the products and not just designing them.
When you apply to sell on Amazon Handmade you have to complete an application process stating which category you fall into and you’ll have to confirm that you do not outsource production to 3rd parties.
Q4. What is your price point?
Whether it’s worth selling on Amazon Handmade will have a lot to do with your pricing. You need to be left with a decent profit once you take away Amazon Handmade’s fees from your sale price to make it worth your time.
Amazon doesn’t charge a monthly selling fee or listing fees, in other words, it doesn’t charge you a fee when you list a product on the marketplace. Instead, it charges a referral fee on each product you sell. This is like Amazon’s commission, which it takes from each sale you make, in return for running the marketplace and bringing potential customers to your products. The current referral fee for Amazon Handmade products is 15%.
You need to have a look on Amazon Handmade and see what your kind of products are selling for there. You may be surprised to find that Amazon is no longer just a destination for cheap products – in fact more and more customers are going to Amazon for premium products which is why you see brands like Elemis or Elizabeth Arden selling on Amazon at premium prices.
Look at your competitors to see the kind of ball park the products are going for – obviously you can go for the upper limit but if you’re way more expensive then you may make less sales.
Once you have a rough figure in mind, take off your cost of goods, fulfilment expenses and Amazon’s fees and what are you left with? Is it worth your time and effort?
Q5. Is there demand?
This is an important one. You’re not going to make lots of sales unless there are lots of people looking for your product.
There are a couple of ways of working this out. Firstly look at whether there are similar products already selling on Amazon. Amazon isn’t always the place to launch an entirely new kind of product – kick starter might be a better place for this! You can create a new variation or style of a product that is already selling but you don’t need to come up with an entirely new invention.
Shoppers on Amazon don’t tend to browse the way they would when they go into a shop. When they go to Amazon, they’re looking for a particular product to purchase – this is actually great as it means shoppers actually WANT to spend their money – but it does mean that in order to sell your products, there needs to be people looking for similar products in the first place.
So before you start, go on Amazon and check that there are products like yours already selling on Amazon. There doesn’t need to be loads of people selling your product but you need to see some competitors as it suggests there is likely to be some demand.
There are also tools that you can use to give you a better idea to give you hard figures for this. JungleScout has a free tool where you can input a competitor’s Best Sellers Rank number and it will give you the estimated sales for that product. Sonar also offers a free tool where you can input a keyword and get the estimated search volume for that work and related keywords.
If you are looking for more data then you should try Helium10 which offers a range of tools to help you assess search volume for keywords and estimated sales for competitor products. You have to pay for it but you can always cancel it after the first month once you’ve done the research you need to do.
Summary
Now you’ve worked through these 5 questions you should have a pretty good idea about whether Amazon Handmade is going to be suitable for you and your business. If your products meet Amazon’s requirements, there’s a good level of demand and you can make a profit, then you’ve got a good chance of making sales on Amazon Handmade.
If you’re answering no to some of the questions, it’s not the end of the world so don’t rule out selling on Amazon just yet. Amazon Handmade is just one category within Amazon.
For example, if your handmade handbags don’t meet Amazon’s requirements for handmade because you outsource a certain amount of the production, you could still look at selling in the general clothes and accessories category on Amazon. Just look at the profitability and demand again to work out whether it would be a good opportunity for you.
For more info about getting set up on Amazon Handmade, check out my video:
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