Overview of Alcohol, Wine and Spirits Landscape on Amazon

Let’s strip it all the way back to basics – why should you be selling your alcohol, wine or spirit products on Amazon in the first place?

Well, Amazon is one of the world’s largest online marketplaces – giving an incredible opportunity for alcohol, wine and spirit brands and distributors to expand their reach and tap into a vast customer base.

The gin segment generates £50M in annual revenue while the vodka segment £26M in the UK market alone (source: Cobalt). The screenshots below showcase some main stats for these two segments. If you want to get insights into your specific type of alcohol or spirit, please send us a message here.

 

 

Amazon also has a range of fulfilment options – 5 different options – that offer many solutions to store and distribute your products easily and quickly across the globe.

You also gain credibility when you sell on Amazon as it is a trusted online marketplace with a strong reputation for customer service and reliability across the globe.

Whether you are a brand owner or distributor, Amazon should be part of your distribution strategies.

 

Brand Owner vs. Distributor

When you sell Alcohol on Amazon, you will either be the actual brand owner who manufactures and distributes the products, or you will be a verified distributor of alcohol brands.

Whether you are a brand owner or a distributor, you have two routes to selling alcohol on Amazon either through Amazon Seller Central or Amazon Vendor Central. More on the difference below.

 

Amazon Vendor Seller and Amazon Seller Central

To start right from the beginning, you will need to sign up to the Amazon platform as a seller through Amazon Seller Central. There is another platform called Amazon Vendor Central, but you need to be invited to that via Amazon, more on that in a moment.

 

Amazon Seller Central

Under this model, your brand is considered a third-party seller (or 3P). This is a direct-to-consumer relationship; you sell your products directly to customers and pay Amazon a referral fee for the privilege of selling on their platform.

Through Seller Central, you’re able to control what products you stock and sell on the platform, your inventory levels, pricing and communication with customers as well as reviewing your account health. It’s basically your one-stop-shop for selling on Amazon and is the necessary first part of your Amazon selling journey!

So as a 3rd party seller, you either have your own account and listing or you can piggyback off the listing that already exists on Amazon by creating your own offer. Here is an example from Hendrick’s Flora Adora Gin listing.

 

 

Amazon Buy Box from Hendrick’s Flora Adora Gin.

 

Amazon Vendor Central

Brands that operate under this model are considered first-party sellers (or 1P). This is much like a wholesale relationship whereby Amazon purchases your product at a discount via Purchase Order, and then sells the product to the consumer on your behalf.

Products sold through this model are “Sold and Fulfilled by Amazon”. It’s important to note that this is invite-only. More on this below.

 

Amazon Buy Box for House of Boe Gin.

 

Want to know how to be invited to Amazon Vendor Central? Check our guide on Amazon Vendor vs Amazon Seller model.

Ok, so you know that you need to start with an Amazon Seller Central account, so what’s next? Don’t fret! Follow the below steps.

 

Winning the Amazon Buy Box

How does Amazon decide what distributor to show first and which one second and so on? Well, it all comes to:

• Fulfilment method – Fulfilment is probably the most important variable considered by Amazon. FBA and SFP sellers have a high score for multiple variables including shipping method and on-time delivery. It’s very unlikely for FBM sellers to beat other resellers with similar prices and win the buy box.
• Selling price – The final price of your listing, including shipping and VAT, is also one of the most important criterias to win the buy box.
• Shipping time – Shipping time has a high impact on winning the Buy Box, particularly for products such as birthday cards and perishable items.
• In stock status – Usually, if your item is OOS, you can’t win the Buy Box and it will rotate to another seller. This is why it is crucial to keep good stock levels of your products.

 

While the above are the most important elements, other factors that can affect winning the buy box are:

• Seller performance – Your account health also impacts the buy box, which is a combination of the Order Defect Rate, Late Dispatch Rate, Valid Tracking Rate and Delivered On-time Rate.
• Feedback rating – Feedback rating aggregates all feedback scores the seller has received over the last 30, 90 and 365 days. The most recent feedback has the greatest impact.
• Customer response time – Amazon checks responses for the last 7, 30 and 90 days and compares them with competing sellers. Being able to respond customer within 12 hours increases your chances of winning the Buy Box.
• Feedback count – Buy Box takes into account the number of buyers who have given seller feedback. A higher feedback count can lead towards winning the Buy Box.

 

 

 

Unfortunately, the order of these factors that help you win the Buy Box isn’t predefined. Amazon algorith determines who is the best to win the Buy Box each time.
If you consider that Vendor Central is the best option for you, then you will need to follow the steps in the next section.

However, if you think Seller Central is the right platform for you, click here to skip ahead to our Seller Central guide.

 

How to Set Up Your Vendor Account for Alcohol, Wine & Spirits.

As mentioned before, Vendor Central is a platform that you need to get invited to, to have access to it.

There are two ways to get invited to the platform:

1. Wait until Amazon’s dedicated business development team reaches out to you or,
2. Collaborate with a reputable Amazon marketing agency like ours, which has dedicated contacts and can facilitate the discussion of getting you set up with a Vendor Central much quicker.

It’s important to remember that setting up a Vendor account requires more than just finding someone to talk to. There are factors such as pricing that need to be negotiated first.

 

What to Consider When Negotiating Prices with Amazon

Co-op Activities Fee

Amazon charges a fee, which varies between 4% and 10% of the sales price per unit sold. This fee serves two main purposes: firstly, it funds advertising efforts, and secondly, it contributes to the continuous enhancement of the Amazon platform.

While this fee does eat into a significant portion of your profit margin, it’s a cost associated with engaging in business with Amazon. Accessing such a vast and diverse customer base may necessitate some sacrifice in terms of profit margin.

 

Transparency

From our experience, we recommend being transparent about your cost of goods and other relevant factors is the most effective way to arrive at a mutually beneficial agreement with Amazon. Every Amazon buyer operates within certain limits. Demonstrating the rationale behind your pricing strategy not only establishes trustworthiness but also makes the buyer more amenable to adjusting their purchase prices.

 

Buy Pricing

After you’ve shared your trade prices with Amazon, they typically counter with a lower buy price. Don’t be intimidated by their purchasing clout. There’s always room for negotiation. Explain why their initial offer may not be feasible and propose a more agreeable middle ground. Buyers often have flexibility in their negotiations. Plus, they potentially do expect some level of negotiation.

 

Utilise Marketing as a Bargaining Tool

It’s essential to recognise that even though Amazon is acquiring your products, they may not cover advertising and promotional expenses. You can leverage this to your advantage. Convey your commitment to investing in Amazon advertising campaigns, but clarify that you require a more favourable margin to do so. When the buyer understands that these funds will be reinvested to drive sales growth on Amazon, they may be more inclined to agree to a higher purchase price.

 

Flexible Margins

Buyers may be willing to accept varying margins for different products, even within the same product category. Consider accepting lower margins on your more popular items and use this flexibility as leverage to protect your margins in other areas.

Once pricing terms have been agreed upon, the Vendor Manager will initiate the onboarding process, which includes:

• Setting up your account.
• Providing trademark information for Amazon’s Brand Registry programme.
• Uploading product details to your Amazon account.
• Coordinating the initial shipments.

 

Setting Up Minimum Order Quantities

When selling alcohol and spirits on Amazon, you need to consider your Minimum Order Quantities (MOQs) and case sizes.

If your pricing is influenced by order quantities, convey this information to the buyer. They will engage in discussions with you to formulate an initial ordering plan that aligns with your specific needs.

Case-packing knowledge is equally important. Ensuring that the buyer comprehends your case-packing requirements is key.

Amazon’s replenishment systems operate on a schedule, generating purchase orders, which can occur up to twice a week depending on your product range and sales volumes. Failing to specify your case pack sizes may result in receiving orders with random quantities that may not be suitable for your warehouse.

To avoid this, be sure to articulate your requirements during the negotiation phase. The buyer will work to configure the system so that order requests are exclusively dispatched in multiples of your specified case sizes, streamlining your inventory management.

 

How are Products Fulfilled to the Customer with Vendor Central?

Well, all good news here!

With Vendor Central, Amazon handles the fulfilment to customers, this process is called Fulfillment by Amazon or FBA. Your sole responsibility is to ship the agreed units on a weekly, bi-weekly or monthly basis to Amazon’s fulfilment centres.

Worth noting that your products on the FBA programme are eligible for fast delivery to Prime subscribers.

 

How to set up your Alcohol, Wine, and Spirits Listing on Amazon Seller Central in 6 steps

1. Set up your Amazon Seller account

The exciting part is always getting started! And on Amazon, in order to register your seller account you must provide all required documentation of the person most responsible for the account.

We recommend the owner of the business provide these details. This is what you need to provide:

• Personal identification (passport/driver’s license etc)
• Proof of address
• Business registration details
• Proof of business address
• ID for any shareholders over 25% + company shareholders agreement

Approval will typically take up to 2 business days if you submit all the necessary documentation.

 

2. Get all relevant licences and details for category approval

Before you even start selling Alcohol on Amazon you need to get category approval, and to sell alcohol on Amazon you need to jump a few hoops. To get category approval you need to obtain some documentation and licenses to process this on Amazon’s side. This is what you need:

 

2.1 Personal License

This varies from country to country, but Amazon requires you to register wherever your business is registered, the following information applies to the UK.

To apply for a personal license in the UK you need these forms:

• Application for Personal License Form
• Personal License: disclosure of convictions and declaration

After this, you need to complete an exam for the BIIAB Level 2 Award which gives you a certificate that you can then use to apply for your personal license to sell Alcohol in the UK.

 

2.2 Premises license

Next, you’ll need to apply for your Premise License from your local authority. The Premise License can be granted to any fixed commercial property where the handling and dispatch of alcohol is taking place which includes warehouses, storage facilities and more.

You must also appoint a Designated Premises Supervisor (DPS) who also owns a Personal License – even if you are selling alcohol online.

Along with the application you also need to submit a floor plan of your premises, highlighting the areas where alcohol will be stored and handled – even if you are planning on using Fulfilment by Amazon (FBA).

In your application, it’s important also to highlight how you will be implementing certain protections for children, for example. And this is where you would be placing an “Over 18’s” tag on your Amazon storefront and A+ content.

You can also make it a requirement for delivery drivers to ask for ID when they deliver, which Amazon already does via FBA.

 

2.3 Obtain your AWRS Number

If you sell wholesale items then you are required to apply for the Alcohol Wholesaler Registration Scheme. If you are B2C and selling directly to the customer then this doesn’t apply to you, you can skip this step!

Who needs to apply for the AWRS:

1. If you sell alcohol in the UK.
2. If your sales are made or after the point where excise duty is due.
3. You sell B2B for onward sale or supply.

 

2.4 VAT Registration

The not-so-fun but pretty simple part – you just need to submit your VAT details to Amazon. If there are any issues with your VAT details you will need to speak with an accountant.

 

2.5 Excise Duty

Excise Duty is an extra tax you need to pay, but this is a rule that is not specific to selling Alcohol on Amazon but is required by law in the UK & EU.

You may already know this if you are selling alcohol out with Amazon, but in case you need a little reminder – Excise Duty requires you to inform the destination country’s responsible authority of delivery and provide a guarantee the excise duties will be or have been paid.

The following types of alcohol are subject to excise duties:

• Wine
• Spirits
• Beer
• Fermented drinks such as cider

There may be certain countries that give reduced rates like the EU gives reduced rates to small businesses, so we recommend doing some research on government’s websites.

 

2.6 How long will it take to get Category Approval

It can take anywhere between a few days to a couple of weeks depending on the information provided. We recommend triple-checking that you have all the right documentation so you can make the process as seamless as possible. If you have any doubts you can reach out to us.

Next step: Brand Registry.

 

3. Register for Amazon Brand Registry

Amazon Brand Registry helps you protect your intellectual property (IP), manage your listings, and grow your business, regardless of whether you sell on Amazon – for free.

The Brand Registry is useful to ensure the correct representation and protection of your brand. Once registered, only the brand is allowed to control the content of products listed underneath the brand as well as eliminate any duplicate product listings that carry the brand name but are sold by other sellers.

Also, the Brand Registry reduces contributions from other sellers who may be altering information relating to a brand and its products because the registered brand’s product data is prioritised above other 3rd party sellers.

The Amazon Brand Registry team uses information that you provide about your brand to implement additional protections in place that attempt to identify and remove potentially counterfeit listings by other sellers.

 

3.2 Protections in Brand Registry

The more information provided to Amazon’s Brand Registry team regarding your brand and its intellectual property, the more you can protect your brand against the following:

• Product listings that aren’t done by your brand and incorrectly use your trademarked terms in their titles.
• Images that contain your logo, but are for products that don’t carry your brand name.
• Sellers shipping products from countries in which you do not manufacture or distribute.
• Product listings created with your brand name when you have already listed your full product catalogue on Amazon.

 

3.3 Brand Registry Eligibility

To be eligible for Amazon Brand Registry, your brand must have an active registered trademark in each country where you wish to enrol or have a pending trademark application filed through Amazon IP Accelerator.

Brand Registry also accepts brands that have a trademark pending registration in a subset of trademark offices. The trademark for your brand must be in the form of a text-based mark (word mark) or an image-based mark with words, letters, or numbers (design mark).

 

3.4 How to enrol in the Brand Registry

To enrol in the brand registry, sign in to Seller Central using the same login details, and then you will need the following information:

• Your brand name that has an active registered or pending trademark. Your brand’s trademark must appear on your products or packaging and you need to provide images that showcase this.
• The trademark registration number which was provided to you by the Intellectual Property office.
  The list of product categories where your brand should be listed.
• After you submit this information, Amazon will verify that you are the Rights Owner of the trademark and reach out to you with a verification code that you need to send back to Amazon to complete the enrollment process.
  Once Amazon has verified the provided information, you will get access to the full suite of Amazon Brand Registry’s benefits and features that help you protect your brand!

 

4. Create products and listings

Just like Google, Amazon has an algorithm that influences who sees your listings and when they see it. The A9 algorithm hides behind Amazon’s Search Results Page and decides which products to recommend. It uses data such as listing keyword placement, conversion rate, consumer purchase behaviour, sponsored-product ads, and others.

 

4.1 Conduct Amazon Keyword-research

Before you list a product, it is essential to do some Amazon keyword research. Without keyword research, you are listing your product blindly. You may know how you would search for your product, but you don’t know how your customers will search for it. And that can make a big difference.

So, say you’re a gin brand looking to create a product listing that really stands out from the crowd, here’s how we would conduct some keyword research;
We use platforms such as Helium10 to search for a specific search term, i.e. “gin”. The platform allows us to see the search volumes of “gin” and its related keywords.

 

4.2 Add Keywords to Your Product Title

Once you have conducted your keyword research, we recommend including the most important, high-search volume keywords in your product listing title.

Think about it from your potential customer’s perspective – they’re going to search for exactly what they are looking for, so these words should be included in the title. You have a character limit of 80-200, depending on your product category, so check what this is with Amazon’s Style Guides. Include the main keywords in the title, keeping it concise and direct. Extra keywords can be transferred to backend search terms, bullet points and descriptions.

Consider these essential tips.

• Length: There is a limit of 200 characters.
  • The desktop view is limited to about 100 characters.
  • The mobile view is limited to about 70 characters, which is where a lot of Amazon customers shop.

 
Keep the most important keywords/message in the first 70 – 100 characters
 

• Unicorn layout “Brand – Product Name (with KWs) – Colour – Size/Quantity”.
• Hyphens should be used to separate topics and commas to separate words.
• There is no need for extra information in the title, it can be expanded in the bullets.

 

Example:

 

 

4.3 Optimise product descriptions

For your product description, you want to elaborate on the bullet points above, and really give the customer a reason to buy your product. You can add HTML to this description to make it more readable and appealing to consumers. Include details about your brand, the benefits of the product and any “extras” you may offer, such as a warranty. We have Amazon product listing optimisation guide which you can use to set up your create discoverable product descriptions.

 

 

Just a note that if you have an A+ Content, then it will replace the product description section.

 

4.4 Back-end keywords

As well as including your keywords in the product listing itself, it is essential to include keywords that you haven’t used in the title, bullets and description in the back end. This is a good place for common spelling errors and keywords that you find hard to incorporate into the front end of the listing.

 

4.5 Images & Videos

Adding visuals is what will make your product listing stand out and a good image and/or video can sell faster than any piece of text can. You can add up to nine images within a product listing, including a main image and one of those places can be occupied by a video.

Well-photographed, professional images will set you miles ahead of your competitors. Ensure that your main image is on a white background, and include a mix of product and lifestyle images that clearly show what your product is.

 

 

Amazon Video is becoming predominantly more important. With the rise of TikTok over the past two years, all social media platforms & advertising platforms have been prioritising this feature as statistically, people prefer to obtain information through short videos than reading text.

Video is the easiest way to develop that emotional connection, to help the customer picture the product in real life and how it will benefit them.

Here are some best practices for videos on Amazon product listings:

• Stay consistent
• If using voice-over, use subtitles
• Include quick introduction
• Ensure it is short yet informative
• Have a key takeaway

 

 

4.6 Utilising A+ Content

A+ content is a powerful tool that you can use to stand out from the competition and boost your sales on Amazon. With A+ content, you can create engaging and informative product pages that highlight the unique features and benefits of your products. You can also use A+ content to tell your brand story, educate potential customers about their products, and answer common questions. To elevate your A+ Content and distinguish yourself from competitors, consider utilizing Premium A+ Content.

 

5. Add Inventory of Listings If Using Fulfilment by Merchant (FBM) or Send Inventory to Amazon for Fulfilment by Amazon (FBA).

We’ve already written an extensive guide on the different Amazon fulfilment options and their benefits, but here is a little breakdown of the two that you can use when selling your alcohol products.

 

5.1 Fulfilment by Amazon

In the Fulfilment by Amazon (FBA) option, Amazon manages the complete customer delivery experience. FBA allows products to be shipped to an Amazon fulfilment centre, where Amazon takes care of the rest – from storage to shipping and delivering to buyers.

Sign up for Amazon FBA here.

 

5.2 Fulfilment by Merchant

The fulfilment by Merchant (FBM) option is where the brand is completely responsible for storing products in its own warehouse or with a 3rd party fulfilment provider (3PL), and is the method sellers of alcohol usually pick. This is because some of the rules on how to package and deliver products to Amazon fulfilment centres can be restrictive for brand owners or merchants. And there is a risk that Amazon’s fulfilment centres are not geared up to handle the delicate items being shipped.

 

6. Launch Ads

So, you’ve got all your documents sorted and in order, your account set up, your fulfilment method organised and your listing optimised – now what? You need to run some ads!

Amazon ad campaigns are one of the most powerful tools for driving discoverability and increasing sales for Amazon sellers. There is no better place to invest your budget than where the consumers are browsing with the intent to purchase. We already have a comprehensive guide on our blog but here we will mention the main points for each type of Amazon ad.

 

What Are the Different Types of Amazon Ads?

Sponsored Product (SP)

There are two types of SP campaigns; manual and automatic, and both have the options to target keywords, products and categories. Sponsored Products are Amazon’s most popular ad type and generate the highest conversion rate.

In recent news, Amazon announced that it will be taking Sponsored Products off Amazon as well to reach wider audiences.

 

Sponsored Brands (SB)

Sponsored Brands are creative cost-per-click (CPC) ads that feature your brand logo, a custom headline and multiple products that appear in relevant Amazon shopping results. You can also enhance your ad by creating a Sponsored Brand Video, that stands out on the desktop and mobile shopping results.

 

Sponsored Display (SD)

Sponsored Displays are self-service display ads that are available to Amazon sellers. The ads appear to audiences on the Amazon homepage, PDPs, shopping result pages and in select marketplaces.

 

Amazon Demand-Side Platform (DSP)

In addition to the above ad types, there is also the Amazon Demand-Side Platform (DSP), which is a platform that programmatically – automated buying and selling of digital ads – allows you to buy ads and can be used by brands that do not sell exclusively on Amazon.

DSP ads do a couple of things; they can either send traffic to a product listing on Amazon or send them to an external website. However, DSP is an advanced strategy, so we recommend that brand advertisers start with SP, SB & SD before moving on to DSP.

Read our comprehensive Amazon advertising guide.

 

Key Strategies and Tactics for Selling Alcohol, Wine, and Spirits on Amazon.

You’ve done all the steps, set up your Amazon account, optimised your listings and you run your ads. Now you need to work on several strategies and tactics for staying competitive within this category on Amazon.

 

1. Prioritise reviews

Reviews are crucial as they build trust in a product, with customers relying on positive reviews to guide their purchasing decisions. These reviews offer valuable insights into a product’s quality, usefulness, and potential issues, empowering potential customers to make informed choices. Additionally, products with a substantial number of positive reviews enjoy greater visibility, ranking higher in search results and attracting more attention.

Given the presence of multiple competitors with thousands of reviews within the different alcohol categories – gin, whiskey, wine etc. – it is essential to establish a strong review strategy.

Here is a tip: Using a third-party software tool such as Feedbackfive can help increase the number of reviews, as they request feedback from customers automatically after an order is placed. The sellers can customise when the emails are sent so that the customers have time to try the product before writing a review

 

2. Enrol in the Subscribe & Save programme on Amazon.

Customers have the option to subscribe to their favourite alcoholic brands, receiving regular deliveries at their desired frequency, through the subscribe and save programme. This offers convenience for consumers who want to ensure a steady supply of their preferred alcohol, wines and spirits and provides brands with a recurring revenue stream and loyal customer base. While some categories may see more benefit of this than others, we recommend brands give it a try.

Here is a tip: To encourage more customers to subscribe, sellers can offer an extra voucher to clients signing up for their first product subscription through Subscribe & Save. To create these vouchers, go to Advertising > Vouchers and select Subscribe & Save Vouchers. Only products that have an active Subscribe & Save offer will be eligible to create one of these vouchers.

 

3. Run promotions

Lightning deals and promotions on Amazon are a good tactic to encourage short-term sales which can improve your sales rank. If you do this consistently over a few months you will build up a sustainable Amazon store.

Running deals and promotions before big holidays like the festive season also helps to accelerate sales during the holidays as well as drive awareness.

 

4. Utilise seasonality

Alcohol and spirits are definitely products that people beside purchasing for themselves, buy as gifts when they go for a visit or on special occasions. Adjusting your Amazon strategy to seasonality such as Christmas holidays, Father’s day will definitely prove to be a win strategy.
 
 

Our Thoughts

Amazon is a fantastic platform for alcohol, wine and spirits brands and distributors to sell products either in the capacity of Amazon Vendor or Seller. If you are a better match to be a Vendor we advise reaching out to an Amazon agency to assist you in accelerating the process of getting you set up on the platform.

At This Is Unicorn we really understand alcohol, wine and spirits brands, the success on the platform lies in the combination of activities and most importantly staying up to date with changes and regulations on the Amazon platform as well as ensuring top-notch customer experience that naturally will help you stand out from the competition.

However, as it is not always possible to be the best from the start having the right strategies in place to grow and stand out can assist in your success.

Need our help?

Need our assistance setting up your Amazon ad strategy, and advertising campaigns or providing an audit for your existing ad strategy? Our Amazon experts are on hand to answer any questions you have, just send us a message or schedule a call.

 

Who are we?

This is Unicorn is an Amazon full-service marketing agency. Brands come to us to help them launch and/or grow their business on Amazon.

This is Unicorn work with some of the most innovative and recognisable brands. We create their strategy, develop their marketplaces, support their growth, work with their vendors and manage their spend.

We have frequently been referred to by those who work with us and know us best as an extension of their own team. And we love it!