How To Sell Grocery on Amazon
Most sellers utilizing the Amazon platform can attest to the unending demand for various goods, including food, home appliances, and clothes.
Though, the increased sales and profit margins do not come easily. Like any other global marketplace, Amazon has a set of rules that limit sellers from selling anything they want.
That means new sellers are likely to face challenges when determining which niches to choose and the best suppliers to trust.
For instance, Amazon restricts its resellers from selling anything they want unless they are approved. An example of these restrictions is Grocery and Gourmet Food gating, which has strict rules that every Amazon grocery seller has to meet before being allowed to sell.
Therefore, if you intend to become an Amazon grocery seller, here is everything you need to know about the category and how to ungate it.
Understanding Amazon Grocery Seller Gating on Amazon
First things first, anyone planning to harness Amazon’s market power should understand the two primary categories; gated and ungated categories.
Gated, closed, or restricted categories are those that have strict rules that limit anyone from selling them.
These categories require Amazon’s approval, meaning only a few sellers can go the extra step to unlock them.
They also have less competition and a higher profit margin, primarily because they have fewer sellers and more buyers.
Gated categories include Grocery and Gourmet Foods, Fine Arts, Collectible Coins, and Jewelry.
Ungated or open categories, on the contrary, are those without strict selling requirements. Anyone can sell these categories or subcategories, meaning they have stiff competition and a lower profit margin.
The only downside of open categories is that buyers can easily get counterfeit products due to a lack of quality assessment procedures.
Why Is the Grocery Category Gated on Amazon?
Amazon has a long list of gated categories that range from cheap to expensive and rare items. While the restrictions aimed at protecting both sellers and buyers from unauthorized activities, Amazon defends its decision by putting buyers first. That way the three main reasons for restrictions are all about the customers, including:
To Enhance Shoppers’ Experience
The primary reason Amazon limits resellers from selling certain categories is to enhance the brand’s as well as its reputation. It does so by ensuring products or categories in circulation are of high quality and meet the set safety standards. In the case of grocery and gourmet food, Amazon requires all food products to have FDA-approved certificates, which ensures buyers get only healthy products. This allows buyers to make their intended purchase without going through all descriptions to determine safe foods.
To Prevent Customer Exploitation
Since Amazon requires all sellers to meet certain requirements before enlisting their products on the platform, it becomes hard for suppliers to exploit buyers. These requirements include excellent customer service, timely deliveries, detailed product descriptions, and high-quality products. Any Amazon grocery seller who does not meet these standards is likely to lose their seller account, which prevents customer exploitation.
To Combat Counterfeit Food Products
Failure to impose selling restrictions means anyone can sell anything on this global marketplace. That means buyers are likely to land on counterfeit and harmful food products. However, due to Amazon’s strict rules, only a few sellers can fulfill the quality standards needed to supply food products. This reduces counterfeit cases experienced in unrestricted categories.
How To Ungate Grocery on Amazon
As a new Amazon grocery seller, the goal is to reach as many buyers as possible and make more sales. However, you cannot enjoy this expanded customer base if you are restricted. Therefore, before unlocking the grocery category, you need to learn the basic ungating strategies, as discussed in the steps below:
1. Obtain A Professional Seller Account and An Online Store
Amazon only allows sellers with professional accounts to sell groceries to its users. That means you need to create and verify your Professional Seller Account information before sending your approval request. Remember, unlike other categories, selling groceries on Amazon means you are dealing with edibles, which come with strict standards. Therefore, to authenticate your account information, ensure the address you use when opening an account on Amazon matches what you have on the receipts. You should also fulfill the following seller requirements before proceeding.
- Have an order error rate of below 1%.
- Have a cancellation rate before order fulfillment of below 2.5%.
- Have a late shipping rate of below 4%.
2. Check If the Product Is Gated
One thing to note about Amazon category restrictions is that some products may still be open, even if they are under a gated category. Therefore, before requesting approval, you can start by checking if the product you intend to sell is gated or not. You should also check specific product ungating procedures since they differ among products. For instance, to qualify for grocery ungating, your food products must meet some requirements, including:
- The product must be properly prepared, packaged, sealed, and labeled.
- The product must be approved by the relevant government regulatory agency.
- The business and products must comply with both federal and state laws.
- All products must be new.
- You have to mark the expiration date of the product on every unit, including shipped units and those on display.
- Include the Fulfilment Center (FC) shelf-life details for every product.
3. Create Your Wholesale Account
Besides creating a professional seller account and an online store, Amazon will also demand you to have a wholesale account before selling groceries. This step is optional if you already have an open account with your suppliers. But if you don’t, then should ensure that the address you use matches the one on your Amazon seller account. Proceed to place three separate orders since Amazon will ask you to provide more than one legit invoice. Also, ensure you order at least 10 pieces of the same gated product.
4. Have Your Documents Ready
With your accounts and all products’ requirements at the highest state, you can now proceed to prepare your documents ready for submission. Ensure you write the ASINs and UPCs next to the product names. You should also scan all invoices individually, but ensure all information is easy to read.
5. Submit Your Approval Request for Amazon Grocery Seller
The last step in ungating the grocery category on Amazon is submitting your approval request. To do this, you need to follow these simple steps:
- 1. Go to the Inventory section and click on Add Product.
- 2. Search for the food product you want to sell.
- 3. From the new search results, click the Apply to Sale button to begin the application process.
After submitting the request, it can take days, weeks, or a few months to get approved to sell groceries on Amazon. The verification speed depends on various factors such as the authenticity of your documents and the units you intend to sell.
Final Note on Learning Amazon Grocery Seller Tips
Ungating the grocery category on Amazon allows the seller to enjoy more opportunities, including an expanded market and more profits.
However, before reaching this point, any Amazon grocery seller needs to learn all the ungating strategies discussed above.
They should also have legit documents needed to ungate specific categories to prevent application rejection.