Finding high-demand, low-competition products to sell on Amazon is easy if you're the only one looking. But you're competing with over 9 million sellers, and after over 20 years of Amazon's reign in the e-commerce space, there are barely any new and unique products left to sample.
So what do you do? — Explore a less-known but fast-growing product category that has the potential to rival more popular ones, like Beauty & Personal Care, Home & Kitchen, and Clothing, Shoes & Jewelry.
One such category is Grocery & Gourmet Food.
I know what you're thinking—most people prefer shopping for groceries at the store rather than ordering online and waiting two to three days for delivery.
However, this isn't entirely accurate. Recent statistics show that Grocery & Gourmet Food is in Amazon's top twenty best-selling product categories. This means people are buying these products.
Also, just because a specific product category isn't popular doesn't mean it yields little profit. A good example is the Handmade category. Only 6% of Amazon sellers offer handmade products, yet many make over 20% net profit margin, more than sellers in other product categories make.
In this article, we'll discuss why food is the next best thing on Amazon, how to start selling food products in your store, and how to make your products pop.
Why are food products an excellent addition to your Amazon store?
Still not convinced investing in food products can blow up your Amazon business? Here are some more interesting facts:
- Online grocery shopping accounts for over 5% of global grocery sales.
- Over 56% of Prime usersbuy their groceries on Amazon.
- Amazon is the most shopped online grocery platform.
- Amazon offers different fulfillment options, which attract buyers.
- Grocery & Gourmet Food is one of the least saturated product categories.
- You have a better chance of retaining customers with food products.
This isn’t to say profit is guaranteed in this category. Of course, you still need to optimize your listings, cross-sell on other platforms, try different marketing methods, etc., to make your products stand out.
3 Ways to Sell Food Products on Amazon
Despite Amazon's unique policies for listing, packaging, and shipping food products, you can sell them just like other items. Here are three standard sales models used by sellers in the Grocery & Gourmet Food category:
- Wholesale: This sales model means buying large quantities directly from the manufacturer at a lower price per item and reselling them for profit. Many brands ask wholesalers to create an account on their website. You can reach them via their website or Amazon to ask for instructions.
- Arbitrage: Like wholesale, you buy products cheap and sell them for more. The difference? You're not buying directly from the brand, and there's no need to buy in bulk. Instead, you find undervalued products on platforms like eBay or Alibaba and sell them on Amazon for a profit.
- Private Label: This is when you create and sell your own products on Amazon. However, your product and process must follow all local and federal rules for food production.
How to Sell Food Products on Amazon
Let's get started!
Grocery and Gourmet Food is a gated category. This means stricter rules apply, and new account verification is required. Below are the minimum requirements to be allowed to apply for selling rights in this category:
- You must have an Amazon professional seller account.
- If you've been an Amazon seller for a while, your order defect rate must be less than 1%.
- Your pre-fulfillment cancel rate must be below 2.5%.
- Your late shipment rate must be below 4%.
New accounts can still apply and get approval, though the chances are lower. Additionally, you can obtain the required documents even if you're new to Amazon. The documents have nothing to do with your tenure on the platform.
If you have an existing Amazon store that doesn't have great metrics, focus on boosting your rating before seeking approval to sell in the Grocery and Gourmet Food category. This can improve your chances of being approved.
Step 1: Request approval.
On your Amazon Seller account, click "Start Selling." This will lead you to Amazon's product categories. Choose "Grocery," then click "Start Selling."
This is where you will request to be ungated in the Grocery and Gourmet Food category. Amazon will ask you what type of retailer you are and request two things.
- They’ll ask for at least one purchase invoice from a legitimate manufacturer or distributor dated within 180 days of application. The invoice must display your name, address, and the manufacturer's details. It should also confirm that you've bought at least ten units of the items you plan to sell.
- They’ll also ask for photos of the product or packaging you've purchased to show Amazon that you've genuinely received the product you ordered.
To sell your own food products, you'll need to get the required certifications and licenses from your local and federal government. This process can be long and complex. You are allowed to sell homemade food products under cottage food laws, but state restrictions could limit your reach, as you won't be able to ship them everywhere.
Put simply, to make the most of your permission to sell in Amazon's Grocery & Gourmet Food, get your products from a wholesale distributor. You may have to register for an account with them to become a wholesaler. It's a straightforward process, but they might ask you for some financial and tax information.
Here's a tip: Before stocking up on inventory, be sure that your account is approved to sell in the Grocery & Gourmet Food category. Take Amazon's vetting process seriously, as many applications fail. However, if you do fail, you can reapply until you meet all requirements.
Step 2: Read and comply with Amazon's requirements.
This is supposed to be Step 1. After all, you will send photos of the products you intend to sell during your application. Yet, Amazon's rules extend beyond safety and legitimacy. They include preparation, packaging, sealing, and labeling. Review Amazon's guidelines on selling food products as you grow your online grocery business.
It’s best to develop a workflow that follows Amazon's shipment inspection procedures, especially for perishable items. You should also adhere to Amazon's strict refrigeration guidelines to ensure product safety during storage and shipping. Also, make sure to display the expiration date on your product's label or packaging.
Step 3: Start selling.
Amazon has a separate set of rules for listing and packaging food products, which vary depending on the type. For instance, some plant- and seed-based items aren't permitted in the US. If your products fall into this category, research the regulations in your shipping destinations before accepting orders. If you're selling on Amazon USA, read this first. This, too. You'll find these guidelines here, although Amazon will also provide them to you as you prepare your shipment plan.
Since you're shipping food, it's only logical to use packaging distinct from non-food items. Adhering to Amazon's packaging guidelines not only maintains your product quality but also shields you from liability if leaks occur and damage other items. In addition, customizing your packaging offers a chance to enhance your branding.
Start Selling Food Products on Amazon Now!
Though the application process may seem complex, once approved and you start to see positive results, you'll know you made the right choice. Like other product categories, Grocery & Gourmet Food will likely become saturated. Are you going to wait for that to happen before you take action? Seize the opportunity as it comes, and start your online grocery business today!