How to Sell Grocery on Amazon: Complete Guide 2023

Are you looking to tap into the vast market of online grocery sales? Well, look no further than Amazon, the global e-commerce giant. Selling grocery items on Amazon has become an incredibly profitable venture for many sellers, and now it's your turn to join the ranks. This comprehensive guide will delve into the world of selling groceries on Amazon, equipping you with the knowledge and strategies to maximize your success. From understanding Amazon's requirements and navigating the competitive landscape to optimizing your product listings, get ready to unlock the immense potential of selling groceries on Amazon.

How Selling Groceries Differs?

Selling groceries on Amazon presents a unique set of challenges and opportunities that differentiate it from selling in other categories. Understanding these differences is crucial for success in the online grocery market. 

Firstly, the perishable nature of many grocery items demands efficient inventory management and fulfillment processes to ensure freshness and timely delivery. 

Also, sellers must comply with specific regulations and guidelines Amazon sets, including proper packaging, labeling, and management of expiration dates. 

The competition in the grocery category is fierce, with established brands and Private Label products vying for customer attention. Consequently, optimizing product listings with accurate and enticing descriptions and leveraging customer reviews become vital strategies for success.

It's important to note that selling groceries on Amazon falls under the category of restricted products. This means that as a seller, you'll need to obtain account approval, also known as ungating, to sell grocery items. If you're a new seller, likely, you won't initially receive approval to sell in this category. However, don't be discouraged! Building a solid selling history and demonstrating success in other categories can increase your chances of obtaining approval to sell groceries on Amazon in the future. Patience, persistence, and a solid track record will be key in accessing this lucrative market.

Related: Seller Assistant App Extension Review

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How to Get Approved to Sell Groceries on Amazon?

Getting approved to sell groceries on Amazon requires following specific steps and meeting certain criteria. 

Getting approved to sell groceries step by step

Step 1. Professional seller account: Ensure you have a Professional Seller Account on Amazon, as selling groceries is only available to professional sellers.

Step 2. Eligibility check: Determine if you meet Amazon's eligibility requirements for selling groceries, including having a positive selling history and meeting performance metrics.

Step 3. Category approval: Apply for approval in the "Grocery & Gourmet Food" category. This involves providing detailed information about your business, including sourcing, inventory, and safety procedures. 

• Start by copying a product's ASIN (Amazon Standard Identification Number) of a product within the Grocery category. 
• Navigate to your Seller Central account and access the "Add a product" section. Locate the option to "Apply to sell" and click on it. 
• Click on "Request approval" to proceed with your application. 

Selling application to ungate Groceries&Gourmet category

Step 4. Documentation: Prepare the necessary documentation, such as invoices from authorized suppliers, product labels, and relevant licenses, to demonstrate your compliance with Amazon's requirements.

Requirements for the category approval documents:

• Recent dated: The documents should be dated within 180 days of your application submission.
• Accurate name and address: The documents must display your name and address, matching the information provided in your selling account.
• Manufacturer/distributor information: The documents should clearly indicate the name and address of the manufacturer or distributor associated with the product you intend to sell.
• Minimum purchase quantity: The documents should demonstrate that you have purchased at least 10 product units combined.

Step 5. Application submission: Submit your application through Seller Central, ensuring all information is accurate and complete.

‍Tip. Please remember that gaining approval to sell in the Grocery category does not automatically grant you permission to sell products from every brand within that category. Certain brands may have additional requirements or restrictions, which means you might need a separate approval to sell their products. Seller Assistant App can help verify your eligibility to sell a product. Utilizing the Restriction Checker feature within the app allows you to determine if you have the authorization to sell a particular item on your account. A Green Lock icon signifies that you are permitted to sell the product, while a Red Lock icon indicates that you are ineligible to sell it on your account. This feature allows you to confidently navigate the Amazon marketplace and avoid any potential selling limitations or violations.

Seller Assistant App shows a Green Open Lock if you can sell the product. A Red closed lock means you need approval or are not eligible to sell the product

Related: How To Get Ungated On Amazon In 2023

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What Are the Requirements to Sell Groceries?

To sell groceries on Amazon, you need to meet specific requirements.

Seller requirements

To ensure eligibility for selling groceries on Amazon, it is necessary to achieve the following seller performance targets:

• Order Defect Rate: Maintain an order defect rate of less than 1%. This metric measures the percentage of orders with defects such as negative feedback, A-to-z Guarantee claims, or credit card chargebacks.
• Pre-Fulfillment Cancel Rate: Keep the pre-fulfillment cancel rate below 2.5%. This rate represents the percentage of orders canceled by the seller before they are shipped to customers.
• Late Shipment Rate: Maintain a late shipment rate of less than 4%. This rate calculates the percentage of orders shipped after the expected ship date.

Related: Amazon Account Health – A Guide for FBA Sellers in 2023

Product requirements

To sell food products on Amazon, there are essential requirements you need to follow:

• Proper preparation and packaging: Food must be prepared, packaged, sealed, and labeled correctly.
• Licensing and approval: You must be licensed or approved by the relevant government agency for the products you intend to sell.
• Compliance with laws: Ensure that your products and business operations comply with federal and state laws, even if they are not explicitly mentioned in Amazon's policies.
• Selling new products only: Only list Grocery & Gourmet Food products as new. Used products cannot be listed.
• Expiration dates: All food items must have a permanent expiration date marked on each unit unless exempted. This applies to shipped and displayed units.
• Shelf life management: Keep the Fulfillment Center (FC) shelf life details up to date for grocery products. Use the inventory file template and set the is_expiration_dated_product field to "true."
• English labeling: All products covered by federal, state, and local laws must be labeled in English.
• Secure packaging: Food should be enclosed and sealed in packaging suitable for shipping, ensuring it is protected from contamination, spoiling, melting, or damage.
• Remaining shelf life: When shipping food, make sure there is enough remaining shelf life and do not remove or alter the expiration date.
• Multi-pack expiration dates: For products sold in multi-packs, the expiration date on the packaging must match the earliest expiration date of the products inside.
• UPC code usage: List Grocery & Gourmet Food products using the manufacturer's UPC code. Refer to Amazon's guidelines for more information on Product UPCs and GTINs. For products without UPCs, follow the instructions on how to list them.

Listing requirements

When listing your products on Amazon, it's crucial to adhere to the following requirements:

• Amazon listing standards: Ensure that your product listings meet Amazon's general listing standards and the specific standards set for the Grocery & Gourmet Foods category.
• Dietary and allergen claims: If your product makes dietary or allergen-related claims (e.g., Organic, Kosher, Gluten-Free, Dairy-Free), ensure that these claims are clearly indicated on the product label and have obtained the necessary regulatory approvals.
• Accurate Price Per Unit (PPU): Provide accurate PPU information for all new product listings. This helps customers understand the unit price of your product.
• Single product focus: Display only the product you are selling without any accessory products or additional items. For example, avoid showing tea or spices next to a teapot.

Is Selling Grocery on Amazon Profitable?

Selling grocery items on Amazon can be a profitable venture for many sellers despite the Groceries category not implying high-profit margins. The online grocery market has experienced significant growth in recent years, and Amazon, as a leading e-commerce platform, offers a vast customer base. 

What makes selling groceries on Amazon profitable?

Product demand: Grocery items are essential products that experience consistent demand, making them a stable market to tap into. The demand is recurring because people consume groceries daily.

Broad customer reach: Currently, online grocery sales will increase by 12% yearly and will grow for the next 5 years. Amazon provides access to a large and diverse customer base, increasing the potential for sales and exposure to new customers.

High turnover rate: The constant demand for essential grocery items ensures a continuous flow of sales, helping to maintain a healthy revenue stream. This dynamic environment allows for increased inventory turnover, minimizing the risk of stagnant stock and capital tied up in slower-selling products. By focusing on the fast-moving nature of the grocery market, you can capitalize on the high turnover rate to drive sales and enhance the overall profitability of your Amazon grocery business.

Tips for Selling Grocery 

Consider the following tips for successfully selling groceries on Amazon:

Ensure product quality: Prioritize the quality of the groceries you sell. This involves sourcing fresh and high-quality products, ensuring proper packaging, and complying with relevant food safety regulations. By delivering top-notch products, you build customer trust and encourage repeat business.

Polybag liquids and powders: For groceries such as liquids and powders (e.g., sauces, spices), consider using polybag packaging. This helps prevent leaks and spills during transportation, ensuring the products arrive in excellent condition. Adhering to Amazon's guidelines on polybag usage is crucial.

Focus on replenishable items: Look for grocery items that have consistent demand and can be replenished regularly. Selling products that customers frequently purchase and restock helps maintain a steady flow of sales and establishes a reliable revenue stream for your business.

Mind meltable inventory requirements: If you sell groceries prone to melting, such as chocolates or certain confectionery items, pay close attention to Amazon's meltable inventory requirements. Properly package and protect these items, especially during warmer weather, to prevent damage and maintain product quality during transit.

Related: Amazon Meltable FBA Inventory: All You Need to Know

FAQ

How to sell Grocery items on Amazon?

To sell grocery items on Amazon, follow these significant steps:

• Step 1. Get approval: Check eligibility and apply for approval in the Grocery & Gourmet Foods category.
• Step 2. Product sourcing: Source high-quality grocery products from reliable suppliers.
• Step 3. Prepare products: Ensure proper packaging, labeling, and compliance with food safety regulations.
• Step 4. Create listings: Create accurate and appealing product listings with clear titles, descriptions, and images.
• Step 5. Pricing and competitiveness: Set competitive prices based on market research and consider utilizing promotional strategies.
• Step 5. Fulfillment options: Choose between self-fulfillment or utilizing Amazon's FBA service for efficient order fulfillment.

How to make money selling Groceries on Amazon?

To make money selling groceries on Amazon, follow these steps:

• Step 1. Product selection: Identify in-demand grocery items with good profit margins and low competition using Seller Assistant App product research extension.
• Step 2. Competitive pricing: Set prices strategically to attract customers while maintaining profitability.
• Step 3. Efficient sourcing: Establish reliable supply chains and negotiate favorable terms with suppliers to optimize costs.
• Step 4. Fulfillment by Amazon (FBA): Utilize Amazon's FBA service for streamlined logistics, customer service, and fast delivery.
• Step 5. Continuous optimization: Regularly analyze sales data, customer feedback, and market trends to refine your product selection and strategies.

What are the best Grocery items to sell on Amazon?

The best grocery items to sell on Amazon are those that have high demand, good profit margins, and low competition. Some popular categories include non-perishable pantry staples like coffee, snacks, and cooking ingredients. Health-conscious items such as organic and gluten-free products also have a growing market. Specialty or gourmet foods, including international or regional delicacies, can attract niche customers. Additionally, items with long shelf lives and lightweight packaging are ideal for cost-effective storage and shipping. Conduct thorough market research, analyze customer reviews, and consider emerging trends to identify the best-selling grocery items that align with your business goals and target audience.

Can I sell Groceries on Amazon?

Yes, you can sell groceries on Amazon, but it is important to note that the Grocery category is restricted. As a seller, you must obtain an approval or "ungating" to sell groceries on the platform. Amazon requires sellers to meet specific criteria, such as having a professional selling account, completing performance targets, and submitting relevant documents. These documents typically include proof of product authenticity, supplier invoices, and proper licensing. You can check your eligibility to sell a grocery product with Seller Assistant App product research extension.

Final Thoughts

Selling groceries on Amazon opens up a world of opportunities for entrepreneurs and businesses looking to tap into the growing online grocery market. With a vast customer base, efficient fulfillment options, and the convenience of online shopping, Amazon provides a platform for success. By following the necessary steps, such as obtaining approval, sourcing quality products, and sticking to Amazon’s requirements for selling groceries, you can establish a profitable grocery business on Amazon. Keep a pulse on market trends, adapt to customer preferences, and continually refine your strategies to stay competitive. With dedication and strategic planning, selling groceries on Amazon can be a rewarding and lucrative venture.

Seller Assistant Аpp can effectively and reliably help you with this task. This all-in-one extension incorporates all features vital for product research. Seller Assistant App shows you the product’s profit, margin, and ROI. It also helps you immediately see if a product has any sales restrictions or has previously triggered problems with account health. It combines an FBM&FBA profit calculator, Quick View, Stock Checker, and Restrictions Checker in one tool.