How To Sell Grocery On Amazon In India (Step by Step Guide)
Learn from the masters and cracks the code to festive season sales success with Fynd Platform's Festive Readiness Guide
One of the significant effects the pandemic in India had, is it increased the demand for online groceries. Consumers started migrating to online grocery from the traditional channels which were used for decades. This shift had a significant effect on the industry as new players flooded the market. Amazon has always been a winning player in the grocery market.
According to Grand View Research, the Indian grocery market is valued at USD 2.9 billion in 2020 and is expected to grow at a rate of 37% at a rate of 37% from 2020 to 2028. Instead of walking down to neighbourhood vendors, people are finding it convenient to use online grocery stores.
COVID-19 outbreak has made the online grocery store to be the most preferred among people. Consumers are turning towards online stores as they find them to be more convenient and a safer option. Sellers may have a question in their mind, Why should they sell groceries on amazon in India? The simplest answer is because amazon has been the most visited shopping destination where more than 6 lakh businesses are presently selling their products.
Amazon has taken a lead over the retail stores as the CVR for amazon grocery has increased 81% from February 2020 to reach 38% in August 2021. Since then grocery sales have increased by more than 120% across other categories.
Benefits Of Selling Groceries On Amazon
Following are the benefits of selling groceries on amazon:
- Funds will directly get deposited into your bank account
- Yow will be able to get control of the amazon product page that features your brand
- Reach a wide range of customers on one platform
- Amazon will take care of delivering the products and managing the return if needed.
- You can use targeted ads and pay only if the customers click
- You can find seller support where you can easily resolve an issue
- Manage your business from anywhere by downloading the seller app, resolving customers' issues and responding to them.
How To Get Approval To Sell Groceries On Amazon
Even if you are an experienced Amazon seller, the grocery category will still be restricted for you. You will need to get approved to sell groceries on amazon. If you have been selling on Amazon for years you may be able to sell groceries on amazon without any permission otherwise you will be required to provide some documents to Amazon to sell groceries.
You can check for pre-approval by copying an ASIN from the grocery store, adding the product in seller central and thereafter clicking on ‘apply to sell’. An option will be there to ‘request approval’ click on it and Amazon will auto approve your request. If your request will not be approved, you will be required to submit some documents to start selling groceries on Amazon.
Getting Ungated In Grocery On Amazon
If you are stopped by a category selling application, this is normal on Amazon for any restricted items as it wants to check if the products you are selling are safe and authentic or not.
In the grocery category application, you will come across the first question which will ask you, if you are a reseller, distributor or manufacturer?
- A reseller refers to a person who bought something to sell and earn money. You will have to provide an invoice from a wholesaler or a retailer as Amazon will not accept retail grocery store receipt
- A manufacturer is a company or a person who produces goods to sell, If you are choosing a manufacturer as an option, you will have to get an invoice from your manufacturer
Here is a tip for you! Choose a reseller or a distributor which will make the process easy and you can use the legitimate distributor to get an acceptable invoice from Amazon. Now the application will ask you to submit the documents where you will need to submit one purchase invoice from a manufacturer or distributor.
The documents must meet the following requirement:
- It should be dated within 180 days of application
- It should include your name and address which should match the name and address provided in your selling account
- It should include the name and addresses of the manufacturers.
- Combined purchase of at least 20 units should be there
- Do not give pricing information
- Amazon will verify your documentation by contacting the product vendor provided in the application
The product you will list on Amazon should have the following:
- The photos should be real and should not be computer-generated photos
- It should display all sides of the products or their packaging
- It should include model number, product name or both
- It should include the name or the physical location of the business or manufacturer
- All the important information should be in your local language
Search For The Wholesale Grocery Distributor
You can search for the wholesale grocery distributor and find the one whose invoice is accepted by Amazon. Buy the required quantity from the distributor and once delivered click their photos and upload according to the above-mentioned criteria. If by any chance your application is denied, relax! Resubmit your application and your application will be accepted by it.
It is very important to note that if you are in the untagged grocery category, you will be approved for all the products. It might be possible that you have to go for additional approval for some of the products.
Policies For Product Quality, Product Branding And Consumer Safety
Amazon has a large marketplace and offers tools which will help sellers to expand their businesses in the upcoming future. According to BigCommerce, Amazon has over 12 million products on their websites. From this data, you imagine the quality and standard that amazon needs to maintain to retain the trust of its customers. To sell the grocery on Amazon, sellers are required to achieve the following performance targets:
- Order defect rate should be less than 1%
- The cancel rate of pre-fulfilment should be less than 2.5%
- The shipment should not be late by 4%
Sellers should make sure that all the products ordered should be delivered within time.
- The food must be properly packed, labelled, sealed and preserved to maintain the freshness
- You will be required to get a license from the government agency for the food you want to sell
- You must ensure that the products you want to sell and the operation of your business comply with federal and state law. These include all the laws whether included in the amazon service or not.
- You have to list all the new grocery products as the used or old products cannot be listed. You may see the guideline in the condition guidelines of Amazon.
- Every unit of food displayed for sale or shipped should have an expiry date on it until it is exempted from doing so as food items are considered to be data sensitive.
- Keep the fulfilment centre shelf life details up to date for the products you will be selling. The shelf life is the till the product can be used with safety
- Label all the products correctly keeping in mind all the federal, state and local laws.
- Pack the food in a way to keep it away from contamination, spoiling, melting and spilling. The package should be designed to completely protect the items.
- Ship the product white it is having enough shelf life. Altering or removing the expiry date will not be acceptable.
- When you sell the multi-pack, you should keep the date of the multi-pack near the expiration date of the product inside the pack.
- You will be required to use the manufacturer's UPC Code to list the grocery products. If your product doesn't have GTIN (Global Trade Item Number), you can simply go for a GTIN exemption.
Requirement for refrigerated, frozen, temperature-controlled food and raw agricultural commodities
- You must ensure that the packaging is suitable for shipping refrigerated, frozen and temperature-controlled products. The packaging should be designed in a way to keep the temperature safe throughout the delivery.
- Some food needs to be temperature controlled to maintain its efficiency like chocolate if not provided at a suitable temperature can melt or vitamins if exposed to sunlight can lose their efficiency.
- Raw agricultural products do not have a mentioned shelf life therefore they must meet the quality standard for ripeness, staling or contamination.
Based on the product, you must ensure that the items you are shipping are getting the right temperature in transit. You also use a thermal barrier to protect your item if it is shipped at a lower temperature. To sell the chilled and frozen food items, they must be fulfilled by the merchant and should meet all the other prescribed requirements. You will be required to provide Amazon with a food permit along with other documents.
Listing Of Grocery And Gourmet Foods
Amazon has implemented additional compliance for the sellers to ensure that the grocery products are safely listed and the customers have enough confidence to buy them. Product branding, quality and customers' safety are kept in mind while listing the products on Amazon. Customers' concerns are given priority.
Following are the requirements for the sellers if they wish to list their grocery products:
- Referring to FSSAI license requirements
- The license should be in your or your company's name
- At the time of requesting approval, it should be valid for at least more than two months
- The scope of license should cover all the elements of the items you have requested to list and regarding the ‘proprietary items’, it should properly specify that it belongs to the category of the proprietary item
- Displaying the FSSAI license number on the Amazon marketplace
- As per the FSSAI requirements, the sellers must display their license numbers at e-commerce sites.
- You can update your FSSAI license number n the Amazon storefront by clicking here
- List of products that you wish to sell with all the necessary descriptions like storage temperature, and shelf life, and mention if the product is organic or imported.
- Food declaration as per the template provided. You are required to provide the declaration in the same format.
- Images should also be provided according to the guidelines for the food ASINs.
Additional requirements: Following are the additional requirements for certain food product
Temperature-Sensitive Food Products
The sale or listing of the temperature-sensitive food product is done on an invitation basis on Amazon. The sellers are allowed to list their products only after the physical verification of the documents under the guidance provided in schedule 4 of the Food Safety and Standards (Licensing and Registration of Food Business) Regulations, 2011.
After providing all the required documents, click on request for approval. By clicking on a request for approval, you are confirming that you reviewed the documents and are applying to sell the grocery.
If you require any help with certification, testing or license, you can consult a third-party service provider for help. Once you have submitted the required documents it will be assumed that you are complying that the products you want to sell are true, authentic and accurate.
Amazon has the authority to remove the product if they do not meet the above-mentioned requirements.
Selling Grocery Products
Once you are done with all the formalities, you can research the grocery items you want to sell. Following are three methods for the grocery category:
- Retail arbitrage
- Private label
When a seller buys from a retail outlet at a discount and sells these discounted products at a profit it is known as retail arbitrage. In this case, you buy directly from a store or a market which cuts the middlemen's cost, this can result in a cut profit margin but is often easier to find and source without any supplier. You can start this with a little investment and it is a great way to make money quickly.
You can check with the wholesale account who are the authorized distributors or brands to resell the grocery products of Amazon. You can easily spot a wholesale or an arbitrage product by looking at the number of sellers the product has. If a product listing has three or four sellers, it means they are the resellers who have purchased from a brand or the store.
Private label goes best with the grocery product but you will be required to ensure that the product you are selling complies with all the federal and state laws. If the seller's name matches the grocery product, you can spot it as a private label product.
What to include in the product description
- Focus on the question a customer can ask and you can add them to the description because, on an online store, the customer cannot touch or see the product. They will only buy the product by trusting your brand.
- Include the details of the product like size, material, dimension etc. The details should be correct and the image of the product should not be misleading
- Tell a perfect story for your product so the customer can relate to it and get attracted to your product
- Make text easy to read which will help the customers to understand the product and its details
- Fill the important backend information for search filters so that the customers can search the product by filling their dietary needs or they may filter by speciality (if products are vegan-free or GMO-free)
- You will be required to show any dietary or allergy-free claims on the label of the products and have to receive legitimate approval from the authorized authority
- Make sure to list all the ingredients of your product.
Fulfilment Options Provided By Amazon
Storing, packaging and delivering the products are known as fulfilment. You can choose all the fulfilment options for one product or only one option for a different option. Most of the sellers use a mix of the thefulfilmentt process according to their product items.
Fulfilment by Amazon
When you opt for fulfilment by Amazon, You will be required to send the product to the Amazon centre and they will take care of all the process. You can sit and relax Once the order is received by Amazon, they will pack and ship your orders to customers and will handle all their queries.
Advantages of fulfilment by Amazon
- Every seller who will opt for Fulfillment by Amazon will receive a prime badge
- You will be getting to be more visible on the display page of Amazon
- Once the sellers will receive the prime badge, their product will become more competitive and will gain access to a crore of prime members of the Amazon
- The visibility of the product will be increased when the customer will search for it
- Prime items get three times to increase in sales in comparison to non-prime items
- Once the order is placed, you will not be required to do anything, Amazon will take care of all delivering the order
- Amazon provides fast and free service to all the prime customers at all the serviceable pin codes
- Amazon will also provide you with the return and customer support service
If you are selling on a large scale, you can opt for the Fulfillment by Amazon option as it will save your time and will help you to increase your sales. You will also be given prime day to sell your items at discount to the customers where your sale can be increased by two times.
Amazon easy ship is a delivery service for Amazon sellers. In this case, the Amazon logistic service will pick up the packed product from the seller's location and will deliver the products to the customers.
Following are the advantages of easy shipping:
- Amazon delivers to 99% of India’s pin codes
- It will help to enable pay-on delivery for customers
- Customers will be provided with order tracking and an assured delivery date
- The option will be provided to handle customer return
In Easy ship, the sellers will be required to store their products, they will have to pack their products using their packaging material or Amazon’s packaging material and schedule a pick-up so the Amazon agent will deliver the picked-up products to the customers.
The easy ship will be ideal if the sellers have their warehouse and want to sell their products on a tighter profit margin but will leave the delivery work to Amazon.
You can also choose to store, pack and deliver your products using any third-party delivery agent at your convenience.
Following are the advantages of self-shipping:
- Use your flexibility to deliver the products
- You can enable a prime badge for nearby Pincode by signing up for a local shop
- You have the option to put your shipping price
In this case, the sellers will have to store, pack their products using their own or Amazon package material and ship them to the customers. It is ideal for large-scale businesses that have their warehouse and delivery networks to deliver the products to their nearby pin codes.
How will I receive payment by selling on Amazon?
Many sellers worry about their online payment or if their payment will be stuck but Amazon will take care of all the payment-related issues and ensure a smooth payment process.
After your seller account is registered with Amazon, it will first settle your account balance within the first 14 days. Amazon will initiate the payment on the settlement date and this will be repeated after every 7 days.
To be eligible to get the payment from Amazon, you must have the following:
A Positive seller account balance: This means the money you have earned from sales is greater than the fees and refunds that have been incurred during the sale.
Provide valid bank account information: Amazon prefers to pay through the bank transfer to the bank account of the sellers. So, the sellers will be required to provide valid bank account information in the seller's account to ensure the smooth flow of payment.
After your account is settled, Amazon will post a settlement report in the report section of the seller's central. It will also initiate the payment to the seller's account through an electronic bank transfer which will usually take 2 to 3 days to reach the bank account after Amazon has initiated the payment.
Amazon directly transfers the fund to the seller's bank account specified in the seller's central account. The sellers can visit the account info page in seller central to check the information regarding their payment. Even in the case of Cash On Delivery, Payments are directly made to the seller's account.
The statement view in the seller's payment dashboard will show when and how much they should be paid. The information will be directly updated in the payment dashboard.
How Can I Get Paid Faster?
To get paid faster, the seller will be required to keep their account up to date. and in good standing to prevent any delay. They should be quick in shipping their products. The sellers will have to maintain high-performance standards.
How To Solve Queries Regarding Payments
Amazon gives the sellers access to seller support where they can contact them and understand their payments as well as solve their queries.
The sellers will have to make sure that their account information provided on seller central is correct.
Sellers will receive the payment every 7 days of their sale but for their first payment, they will be paid after 14 days. If the account of the sellers is under review for validation, it might take some time to receive the payment.
Sell groceries on the FYND Platform
https://platform.fynd.com/ is one of the best Platforms which gives you a tool to take retail businesses online. You can use this business Platform to sell groceries online because of its huge advantages.
Following are the advantages of the Fynd Platform:
- Your profile can be quickly set up to sell groceries
- It will help you to save your large upfront cost like electricity, rent, wages etc
- You can use the flexibility of the Fynd Platform to diversify into a broad category of products
- You can run the business from anywhere anytime
With the use of Fynd Platform, you can choose your template, design your website and choose among the payment options. This will help you to customize the website according to your convenience.
If you want to sell groceries on Amazon, you will have to get through the above-mentioned process. As Amazon is the most visited e-commerce platform, you can trust its process and follow the registration process to register as a seller on Amazon. You will be required to mention and list all the items you are planning to sell on Amazon.
Learn from the masters and cracks the code to festive season sales success with Fynd Platform's Festive Readiness Guide
How can I sell my groceries online?
You can sell groceries on Amazon as it is one of the most visited and popular e-commerce platforms in India.
How can I start an online supermarket?
To start the online supermarket, you will have to decide on the following:
- Determine the delivery region carefully because managing inventory is not a child’s play
- Choose an e-commerce platform that has a wide range of customers or you can partner up with the expert e-commerce service provider
- Set the inventory and categorize them accordingly
- Find a delivery system to deliver your items to the customers
- You will require solid marketing if you want your store to be successful
- Build your grocery store on a mobile-friendly platform as the customers orders mostly from their mobile phones
- The platform should have multiple payment options
Is selling grocery items on Amazon profitable?
The online grocery market is expected to reach $100 billion by 2025 and Amazon is leading among all the other e-commerce platforms.
Despite the low margin of grocery items, it will be profitable to sell them as Amazon has a wide range of customers and the customers are required to purchase them every week as it is necessary for survival. For every book or toy to be sold, we can expect two to four grocery items to be sold so, the grocery items lead in sales velocity more than any other items.
How does shipping work on Amazon?
Amazon will set the shipping charges based on the type of product the customer has chosen. The type of shipping channel will also be considered while calculating the shipping charges. The amount charged from buyers will be credited to the seller's account. Sellers should ensure to ship the product even if the shipping credit is less than the total shipping cost to ensure the smooth flow of sales.
How does Amazon make payments to its sellers?
When Amazon will settle your seller's account and it has a positive balance, it will send money to the registered bank account using electronic transfer payment or an Automated Clearing House. Once the payment is initiated by Amazon, it will take at least five days to be reflected in your account.
Do sellers need a bank account to sell on Amazon?
Amazon uses an electronic system to transfer funds to the seller’s account which will be specified in the seller’s central account. Amazon will need valid account information to transfer funds, it cannot transfer payments into a credit card or any payment wallet like Paytm or PayPal.