Amazon, a globally renowned company, offers an extensive range of products and services through its website. Furthermore, it provides a platform for individuals looking to sell their own products. The Middle East has experienced remarkable growth in the adoption of online services, and Amazon recognized the potential within this region. As a strategic move, Amazon acquired souq.com, marking its entry into the Middle Eastern market under the name amazon.ae.
The United Arab Emirates, in particular, has embraced the online market surge, with online sales generating over $10 billion in revenue in 2018. This substantial figure can be attributed to the average spending capacity of online shoppers and their confidence in the online shopping mode. More than 63% of internet users in the UAE actively engage in online purchases. Furthermore, the recent pandemic has only accelerated the trend of online sales. Given the immense potential this market offers, many entrepreneurs are turning to platforms like Amazon to set up their online stores. In this article, we’ll delve into the steps for establishing your own successful online store and selling products on Amazon.
Things to consider before selling on Amazon
Before you start selling on Amazon you need to set up your amazon seller account. The registration process to set up your Amazon seller account is simple; all you really need to do is enter your business’s details and select a seller plan. There are two types of seller plans, which are as follows:
a. Individual Plan: This is for those who do not require additional selling tools or other add-on programs.
b. Professional Plan: This is for those who plan to sell in large quantities and require the selling tools Amazon has in order to conduct business.
The Professional Plan comes with a significant advantage – there’s no upfront payment required to access this service. Instead, you pay a small percentage from your sales once you’ve made them through the program. This pay-as-you-go model alleviates the financial burden on entrepreneurs, thanks to its conditional installment-based payment structure.
To complete your registration, you must meet the following requirements:
- Trade License (for businesses) if you are the owner and a Power of Attorney only if you are a legal representative “or an account manager”.
- For Individuals: a recent bank account statement (less than 3 months old), credit card statement, or utility bill.
- National ID.
- A bank account for the proceeds of your sales.
- Business email address or Amazon customer account.
- Phone number.
Before venturing into the realm of online selling, it’s crucial to choose a business line that holds profitability in the digital landscape. Among the top product categories that online users frequently purchase are:
a. Apparel and textiles b. Handmade products c. Electronics
Furthermore, it’s worth noting that the UAE’s shopping preferences reveal a strong preference for cash on delivery, with almost half of all purchases settled using this payment method. Enabling cash on delivery can be a strategic move to enhance your business’s sales significantly.
Is Amazon the right platform for your business?
While the benefits of selling on Amazon are appealing, it’s essential to recognize that it might not be the right choice for every business. To make an informed decision, consider the following factors:
1. Product Eligibility: Your products must meet specific criteria to be eligible for selling on Amazon. Some items are restricted and cannot be sold without certain permissions. Additionally, certain products may have restrictions on international shipping.
2. Customization: If your products need to be customized to cater to the diverse preferences of customers, it’s crucial to verify whether Amazon provides this feature for your specific product category. Not all listings enjoy this customization benefit.
3. Storage and Shipping Challenges: If your products are large, fragile, or have a short shelf-life, you may encounter difficulties in terms of storage and shipping. Amazon’s fulfillment services can be an option to address these challenges.
4. Market Competitiveness: Amazon is a highly competitive platform with a vast number of sellers. If your product lacks a unique selling proposition to set it apart from similar products, securing a prominent position can be challenging. However, Amazon offers various marketing solutions to enhance your product’s visibility.
Amazon can be a valuable tool for success, the decision to sell on the platform should be based on a thorough evaluation of your product’s suitability, your ability to meet Amazon’s requirements, and your strategy to stand out in a competitive marketplace.
Benefits of selling on Amazon UAE
Selling on Amazon UAE offers a multitude of benefits that can significantly boost your business. As one of the world’s leading global retailers, the platform boasts unparalleled traffic, and the demand for online shopping is skyrocketing. About 65% of UAE residents prefer Amazon as their go-to retail outlet. Here are some more advantages:
1. Easy Entry and Low Upfront Investment: Amazon provides an accessible entry point for entrepreneurs with limited capital. Listing fees are relatively low, and you only incur charges when your products sell. Additionally, there’s a thriving market for second-hand and refurbished items.
2. Immediate Access to a Vast Customer Base: Amazon is often the first choice for online shoppers, granting you access to millions of potential customers and increased sales.
3. Leverage Amazon’s Reputation: Building a new business’s reputation can be challenging, but Amazon is a globally trusted brand. You can tap into this trust and enhance your business’s credibility.
4. Brand Visibility: Amazon’s global reach can enhance your brand’s visibility, exposing your products to millions of potential customers without the need for substantial marketing investments.
5. Scalability: With Amazon, your business can grow without incurring substantial infrastructure costs.
6. First-rate Shipping: Utilizing Fulfilment By Amazon (FBA), Amazon handles the picking, packing, and shipping of your products from their warehouse. This saves you the hassle of managing shipping logistics and allows you to offer Prime shipping to high-spending customers.
7. Increased Sales: Amazon’s website attracts millions of users each month, including a substantial percentage from the UAE due to the growing global preference for online shopping. Selling on Amazon can enhance your brand’s credibility, benefiting from Amazon’s trusted reputation.
8. Low Investment Costs: Amazon is an excellent choice for new sellers with budget constraints. Listing fees are budget-friendly, and you only pay when your products start selling.
9. Practical Shipping Solutions: Amazon provides multiple shipping and delivery options. You can handle storage and shipping yourself, store your products and leave shipping to Amazon, or rely entirely on Amazon for storage, packing, and delivery.
10. Multiple Payment Options: Amazon offers a variety of payment methods, including credit cards, bank transfers, e-wallets, and direct debit. Plus, Amazon provides fraud protection, ensuring secure transactions.
Legal requirements for selling on Amazon UAE
Opening an Amazon UAE seller account is a process that involves gathering and completing various documents required by both Amazon and the UAE free zone. These necessary documents include:
1. Business Name: The first step in setting up an Amazon UAE account is choosing an appropriate business name. It’s essential to note that the UAE has stringent naming criteria, with restrictions on names that are blasphemous, offensive, or contain obscene language.
2. Contact Information: Amazon mandates that all sellers provide their contact information, including their legal names. While this information won’t be publicly displayed, it will be used by customers and Amazon for direct communication with you.
3. E-commerce License: To operate an e-commerce business in the UAE, you must obtain an e-commerce license. This legal requirement is a crucial step in the process.
4. Valid Visa: Foreign residents living in the UAE must possess a valid visa to sell on Amazon. This visa serves as a prerequisite for conducting business.
5. Corporate Bank Account: Amazon will use your corporate bank account in the UAE to transfer the proceeds from your sales, typically every 14 days. You can open a corporate bank account in the UAE once you have a valid e-commerce license and visa.
6. Billing Address: Amazon requires a valid billing address as a means of verifying your identity. This address is necessary to set up your account on the platform.
7. Phone Number: A valid phone number is a mandatory piece of information requested by Amazon to verify your identity. You can sign up for a phone contract once you possess a national ID issued in the UAE.
8. National ID: To complete your seller account setup, you must provide legal proof of identity in the form of a national ID issued by your government.