More and more consumers are looking online for household purchases, rather than battling the stores. Research firm Statista estimates that sales of food and beverage items on Amazon will go from $8.69bn in 2016, to $23.26bn in 2021.
This presents an opportunity for food and beverage brands. Instead of having to negotiate distribution agreements with specialty or chain retailers to get nationwide distribution, now you can easily access entire countries by making your brand available online. And Amazon is going to be the best place to get traction and visibility – almost half of all US households have an annual membership to Prime – a program that has proven to increase size and frequency of transactions.
To be clear, there are extra hurdles that food and beverage brands face when selling on Amazon. These primarily relate to Category approval or “ungating” But once a brand overcomes the initial hurdles, it can realize significant exposure and sales through the Amazon channel.
The Grocery & Gourmet Food category is considered a “gated” category within the Amazon marketplace. This means that sellers must qualify to sell in this category and be “ungated” by meeting Amazon’s pre-determined standards.
THESE STANDARDS INCLUDE:
- Signing up for the Professional Selling Plan.
- Providing Amazon with acceptable documentation (e.g., product invoices) and other information requested about the products you intend to sell.
SELLERS NEED TO MEET THE FOLLOWING SELLER PERFORMANCE TARGETS:
- Order defect rate: < 1%
- Pre-fulfillment cancel rate: < 2.5%
- Late shipment rate: < 4%
Navigating the process of “ungating” can be tricky for new sellers and can take 2 weeks or more to complete. Once you apply to sell in the Grocery & Gourmet Food category, Amazon will contact you for more information.