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How to Sell on Amazon: The Ultimate Guide

GET UP TO $500K IN BUSINESS FUNDING

If you’ve been curious about using the Amazon marketplace to grow your small business—or to start your own ecommerce business—read our comprehensive, step-by-step guide on how to sell on Amazon.

We’ll also discuss how much it costs to sell on Amazon, as well as offer tips on how to source products and find suppliers.

How to Decide What to Sell on Amazon

First and foremost, before you can actually get into the details of setting up your account and creating your listings, you’ll need to decide what you’re going to be selling on Amazon. The products that you decide to sell, after all, have a large impact on the way you set up your store and the way you conduct your business.

So, how do you decide what to sell? When it comes down to it, there are nearly endless options for products you can sell on Amazon. To have the greatest success, however, here are a few tips to keep in mind:

  • Market: If possible, finding and operating in a niche market can give you an advantage when selling on Amazon. With a niche market, you find a particular space with a customer base that is highly engaged and interested in purchasing your product. Instead of operating in a highly competitive market against big-time sellers and companies, you’ll have a better chance to stand out and meet the demand of your customers.
  • Demand: Although operating in a niche market is great, you still need to ensure that there is a demand for the type of product you want to sell. Again, you’ll want to avoid products that everyone is selling—especially big companies—where the competition will be too difficult. This being said, to evaluate market demand, you can perform a Google search for your potential products, look at listings on Amazon and other sites, as well as use a search volume tool, like SEMrush, to see how many people are searching for your potential product in any given month.
  • Competition: Directly related to both market and demand is competition. Ultimately, you’ll want to try and find the right space that has demand but isn’t too competitive. Again, you’ll want to avoid product areas that are already thoroughly covered by big brand names, as well as other Amazon sellers.
  • Pricing: In terms of pricing, you’ll also want to try and find a balance. You’ll want to aim for a product that isn’t too expensive to purchase but can be sold for a fair amount. Although it may seem advantageous to buy more expensive products that you can then sell at a higher price, it can be much more difficult to find success on Amazon this way.
  • Size: One of your biggest costs as a new Amazon seller will be shipping. Therefore, as you’re trying to decide what product to sell, you’ll want to think about shipping costs. Ultimately, you’ll want to look for products that are on the smaller side and will easily fit into packaging—after all, the smaller and lighter the product, the more affordable your shipping costs will be.

With all of these points, it’s important to do the right product research. You can browse Amazon to see what other sellers are doing, as well as look at similar shopping channels, such as Google Shopping. You can also read our guide on how to find products to sell on Amazon to learn more.

How to Find Suppliers

Next, once you’ve decided what you’re going to sell on Amazon, you’re going to need to find suppliers—unless, of course, you’ve opted to make and manufacture your own products. From sites like Alibaba to AliExpress, there are a variety of ways you can go about finding the right suppliers for your products.

With this in mind, on a basic level, one of the first things you can do is to perform a Google search for suppliers of your product. Once you’ve found a couple of options, you can contact them for more information.

how to sell on amazon

Alibaba is a popular site to find suppliers when selling on Amazon. Image source: Alibaba

As you go through this process, however, you’ll want to make sure the supplier is reputable and that they’re offering you a good price. Here are a few product sourcing strategies to keep in mind:

  • Get samples: Before you choose a supplier, you’ll want to ask for samples and actually get a feel for their products. This will not only help you choose a good supplier, but it will also help you start thinking about how you’re going to list and advertise your products. Plus, getting physical samples of the product will give you the opportunity to evaluate them and decide if they’re worth selling.
  • Read reviews: If possible, it’s always helpful to read reviews of suppliers and see how other business owners feel about working with them. As you might expect, a supplier with a handful of negative reviews probably isn’t going to be someone you want to work with.
  • Understand their pricing and terms: All suppliers will have different pricing methods—some may have a minimum order quantity, different shipping costs, and individual capacities. Therefore, you’ll want to think about all of these factors as you compare suppliers. What size orders are you looking to make? Can this supplier accommodate the order size you need, as well as the frequency? How long does it take to receive orders after you’ve made them? Answering all of these questions as you choose a supplier will be helpful in selling on Amazon successfully, even before you’ve set up your account.
  • Don’t be afraid to negotiate: Although it may seem intimidating as a new business owner, you shouldn’t be afraid to negotiate with a supplier if you think you can get a better deal or if their terms seem unreasonable. And, if it any time through the process, you don’t feel right about the interactions, don’t be afraid to move on to another option.
  • Compare multiple suppliers: Just as you’d compare bank accounts or ecommerce platforms, you should compare multiple suppliers before making a decision. Comparing a range of suppliers will give you a good sense of what pricing looks like, as well as help you ensure that you’re getting the best deal for your business.

How Much Does It Cost to Sell on Amazon?

Like any online marketplace, there are a variety of fees associated with learning how to sell on Amazon—especially as a beginner. Therefore, it’s important to understand the types of fees you’ll face before you get started with your account.

Amazon deducts all applicable fees from your sales proceeds every two weeks. They’ll deposit the remaining balance into your bank account and send you an email notification every time you’ve received a new payment.

This being said, because of the variable nature of many of these fees, it can be unpredictable to determine the actual cost of selling on Amazon upfront. Overall, however, if you’re trying to decide whether investing your time and effort into selling on Amazon is worth it based on the cost, you’ll want to look into the following:

  • Seller Fees: First, you’re always going to have to pay a seller fee in some way. If you’re a professional seller, you’ll pay the monthly subscription fee ($39.99) and if you’re an individual seller, you’ll pay the $0.99 per item fee.[1]
  • Referral Fees: You’ll also always have to pay a referral fee. As you can see in the chart below, certain product categories have higher referral fees, so you’ll want to consider the type of product you’re selling and what the respective referral fee will look like. Generally, however, you won’t have to pay more than 15% of your product’s sale price as a referral fee.
  • Returns Processing Fees: Amazon charges sellers a returns processing fee in certain product categories.
  • Shipping Costs: Whether you use FBA or ship your products yourself, you’ll want to consider how much any shipping services will cost. You may want to do some research on the cost of packing materials and shipping providers to compare the prospective cost to the cost of using FBA.
  • Inventory Costs: Finally, you’ll want to think about how much it will cost you to find and purchase the products you’re going to sell, or, if you have your own manufactured product, how much it costs to make that item. You want to be sure that you can sell your products for more than you paid for them, especially considering the fees that Amazon will charge that will be taken out of the money you make.
    • Stock Removal Fees: This is a fee that Amazon charges FBA sellers who want Amazon to send back or dispose of their unsold stock.
    • Inventory Placement Fees: This is another fee levied on FBA sellers who want more control over which Amazon fulfillment centers their inventory ships from.
    • FBA Export Fees: Sometimes, Amazon charges export fees for shipping products internationally.
    • Pick and Pack Fees: Amazon charges fees for FBA sellers, based on the weight and size of your products, to pick, pack, and ship your products, and handle customer service inquiries. This fee can be as low as $2.41 per product for smaller items but can increase significantly for larger or oversize items.
    • Monthly Storage Inventory Fees: Once again, if you use Amazon’s warehouses to store your inventory, you’ll be charged a monthly fee based on the amount of storage space you’re using.
selling on amazon

These are some of the referral fees Amazon charges based on category. Image source: Amazon.com

Ultimately, these are some of the costs associated with learning how to sell on Amazon. Plus, when you first start out as a seller, you’ll likely find that you need to invest a little more in getting set up and figuring out your process.

How to Sell on Amazon in 5 Steps

Although there have been entire books written about how to sell on Amazon, selling your products using this online marketplace can be a pretty fast, easy process—especially if you’re already chosen your products, found a supplier, and evaluated potential costs before setting up your account.

This being said, regardless of their size, every new Amazon seller gets started with the same five steps. Here are the details of what you need to do to start selling on Amazon.

Step 1: Sign up for an Amazon seller account.

In order to set up your Amazon seller account and get started selling on Amazon, you’ll need to choose a seller plan, provide some information about your business, and understand Amazon’s seller policies.

Choose a Seller Plan

When you sign up to sell on Amazon, you’ll choose one of three different selling plans, depending on the scale of your business:

  • Amazon Individual Seller: If you own a very small business and plan to sell fewer than 40 items per month, you can sign up as an Amazon individual seller. This will cost you just $0.99 per sale, plus a few other transaction fees.
  • Amazon Professional Seller: If you plan to sell more than 40 individual items per month, you’ll need to sign up for a professional account. Amazon will charge a subscription fee of $39.99 per month, plus some transaction fees on each sale.
  • Amazon Vendor: If you manufacture products yourself, you can sell these goods as a wholesale business to Amazon. They will handle product listings, fulfillment, and shipping, and when they run out of stock, they will order more from you.

Be aware that certain products require approval to sell—and, if approved, only sellers with professional accounts are eligible to sell those products. Some products that require approval include specific software, laser pointers, and hoverboards.

Before you choose which type of account to sign up for, check out Amazon’s comprehensive list of products requiring special approval to see whether you’ll need to get the go-ahead before becoming a seller.

Additionally, Amazon also prohibits certain items, like prescription drugs, from being sold on their platform—so be sure to consult those restrictions as well. Finally, it’s worth mentioning that if you choose to sign up as a professional seller (and meet certain requirements) you can apply to list your products in an additional 10 categories that are not available to individual sellers.

selling on amazon

Amazon recommends that you use the professional seller plan. Image source: Amazon.com

Create Your Amazon Seller Account

After you’ve chosen which plan you’ll sell under, you’re ready to set up your Amazon Seller Account. To complete your account setup, Amazon will request:

  • Your Business Name: This is the name that will be visible to customers in the Amazon Marketplace.
  • Your Legal Name and Address: This information is stored in your account for Amazon’s reference. If you’re a registered business entity, or have a fictitious business name or DBA, use the exact name and address under which you’re registered.
  • Contact Information: Amazon will use your contact information to send you order notifications, guarantee claim notifications, and service and technical updates. Customers will use your customer contact information to reach out with questions about your orders. Contacts for Amazon and customers can be the same or separate.
  • Where Products “Ship From”: Although your “ship from” location doesn’t change the shipping time or cost for buyers, some customers will use this information to make a buying decision between similar listings.
  • Bank Account Information: Amazon delivers payments for products sold every 14 days directly to your business bank account.
  • Shipping Options: Select which worldwide regions you’re willing to ship to, and indicate whether you’ll offer expedited shipping.
selling on amazon

Image source: Amazon.com

Set up Your Seller Profile

Once your account is active, the next step to learning how to sell on Amazon is to complete your public seller profile. Think of the Amazon seller profile as your Amazon-based social network profile for your business: This is where Amazon customers will get to know your company, view your shipping and return policies, review customer feedback, and more.

Here are the main sections you’ll want to complete in your seller profile right away:

  • “About Seller” Section: This is where you’ll introduce buyers to your small business. Let them know who you are, tell the story of how you started your business, share your company philosophy, and add any other information that may help the buyer establish an emotional connection to you as a seller.
  • Your Seller Logo: Customers will see your logo on your At a Glance page, on your storefront, and on the Offer Listing Page. Your logo must be 120 x 30 pixels in size, and the image can’t contain a URL or any reference to your own website.
  • Return and Refund Policies: Provide instructions for how customers should return items, including the address where the merchandise should be returned to, and inform customers about the estimated time to process a refund. Keep in mind, though, that Amazon policy requires sellers to allow returns for a minimum of 30 days.

Once you provide all this information, you’ll be able to access your Seller Central Dashboard, you can start listing products, and start selling on Amazon.

selling on amazon

Image source: Amazon.com

Step 2: List your products.

There is a learning curve to determining how to sell on Amazon successfully, but once you get the hang of it, selling on Amazon can be simple and intuitive. Once you set up your seller account, you get the ball rolling by listing your products for sale in the Amazon marketplace.

If you’re an individual seller, you’ll list your products on the Amazon Marketplace one at a time. If you’re a professional seller, on the other hand, you can list your products in large batches. Certain types of products, like clothing, support variations of size or color under a single listing.[2]

The products you’re selling on Amazon will fall into one of two categories: Products already listed in the Amazon Marketplace, and new products of which you will be the first or only seller.

Listing Products Already on Amazon

If the product you’re listing is already on Amazon, you can use the stock images and descriptions available on the site. You just have to indicate how many of the products you have to sell, describe the condition of the products, and select your available shipping options.

When other sellers offering the same product run out of stock, Amazon will show your listing at the top. Remember also to try to differentiate yourself from other sellers who have listed the same product. You can offer free shipping, faster shipping, or lower prices to stand out from other sellers.

You can find “List a New Product” in your seller dashboard. Search through the product catalog to see if Amazon already stocks the product. You’ll be asked to provide price, quantity, and shipping information.

You can add one product at a time. But if you’re listing more than 50 products that are already in the Amazon catalog, you’ll use the Excel-formatted Listings Loader to fill in and upload the UPC/EAN codes for your listed products.

Listing a product on Amazon. Image source: Sellercentral.amazon.com

Listing Products Not Yet on Amazon

Do you design or manufacture a brand-new product that isn’t yet sold on Amazon? The great news is that you’ll definitely face less competition. The not-so-great news? Listing new products requires an Amazon professional seller account and involves a few extra steps.

In order to list a new product on Amazon, you’ll need to provide:

  • The UPC/EAN Number: A unique 12- or 13-digit bar code used to track products. Multiple listings from various sellers of the same product will have a single UPC/EAN number, and only one product detail listing will be created to match that unique number.
  • The SKU: A SKU number is a unique number that you create to track each of your listings.
  • The Product Title: This should describe the product as concisely as possible.
  • Product Description and Bullet Points: Use the bullet points as quick descriptive text to catch the buyer’s interest. You can provide a more thorough overview of your product in the product description.
  • Product Images: High-quality images are essential to selling on Amazon successfully. Amazon requires that images are at least 500 x 500 pixels on a pure white background without text or watermarks, and the product should take up at least 80% of the image area. For best results, use well-lit images of at least 1,000 x 1,000 pixels in size.
  • Search Terms: For each new product that you list, Amazon gives you five fields of 50 characters each in which to list search terms.

Your product description and images will be key to attracting customers. Make sure the description is optimized for ecommerce SEO and that you include high-quality product images. Once you’ve gathered your product information, you have two options for uploading new product listings:

  1. If you’re selling 50 or fewer products, you can use the Seller Central Add a Product tool.
  2. To add multiple products not yet listed in the Amazon catalog, you’ll:
    • Go to Seller Central
    • Download the Inventory File Excel template that corresponds to your primary product category
    • Fill in and upload details for all of your products from one central spreadsheet.

You can also link some ecommerce apps, such as Shopify and BigCommerce, with your Amazon Seller account to automatically pick up product listings.

Listings may be available to customers immediately after your upload is complete—but Amazon may take up to 24 hours to process your upload. If you don’t immediately see your new listing on the offer listing page, be patient and check back the next day for updates.

If it still seems to be missing, contact Amazon through the Seller Portal, or use the FAQ to troubleshoot any upload errors.

Step 3: Manage your inventory.

As soon as you upload your listings and set them live on the Amazon marketplace, you can use the Seller Central website to manage all aspects of your selling account. You can check for new orders, update your inventory, monitor your performance metrics, and much more.

Properly managing your inventory is one of the biggest keys to successfully selling on Amazon. As a buyer, you know how it feels when you click on a product you really want or need, only to find that it’s out of stock—and that’s a huge missed opportunity for the seller.

To prevent that situation from happening, there are a couple of different tools you can use. The simplest for small sellers is the Seller Central dashboard. From there, you can manually adjust inventory levels for all of your products.

If you’re a Professional seller, you can also adjust inventory levels with a bulk Excel upload. If you use an inventory management app that integrates with Amazon, such as Vendio or SellerEngine, you can use that to update your Amazon inventory.

Sometimes, sellers choose to sponsor their merchandise with ads if a particular product is not moving fast enough, or simply to increase demand. Sponsored ads are keyword-targeted ads that will move your listings above other search results—marked as sponsored—when a customer types in a specific search term.[3] The cost is per click, and you can set your own budget and track performance.

Step 4: Fulfill and ship your products.

Listing products for sale in the Amazon marketplace and managing your inventory are the hardest parts of learning how to sell on Amazon. This being said, once a customer places an order, the next step is to get that product into their hands.

Amazon offers two options for product fulfillment and shipment:

  1. Fulfillment by Merchant (FBM): You, as the Amazon Seller, are responsible for maintaining inventory, packaging, labeling, and shipping products to individual customers.
  2. Fulfillment by Amazon (FBA): Amazon stores your products in their fulfillment centers, and they’ll handle packaging and shipping products to customers.

Fulfillment by Merchant (FBM)

Self-shipping is typically a good option for small sellers and those with smaller margins. You can opt to charge for shipping or offer free shipping. The biggest advantage of FBM is that you can keep everything in-house and not lose more of your profits to Amazon fees.

The disadvantages are that it’s harder to qualify as an Amazon Prime shipper when you do FBM, so you could lose out on customers with Prime accounts. The other downside is that it’s more difficult to win the buy box (more on that below) when you choose FBM.

Fulfillment by Amazon (FBA)

If the nitty-gritty of processing and shipping orders yourself feels overwhelming, go for the Fulfillment by Amazon (FBA) shipping method. Through FBA, you can use Amazon’s world-class fulfillment centers, customer support, and other operational tools to scale your business faster than you ever could on your own.

If you work with FBA, you’ll store your inventory in Amazon’s fulfillment centers around the world. When a customer places an order, Amazon handles packaging and shipping the product to the customer.

Here are some other advantages to using FBA:

  • Automatic Prime Eligibility: When you manage your products through Amazon FBA, your entire inventory automatically becomes Prime-eligible—a benefit that regularly leads to customers choosing your listing first. With FBM, you must have high volume and outstanding sales metrics to qualify as a Prime seller.
  • Free Super Saver Eligibility: All products that FBA manages are eligible for Free Super Saver Shipping on orders over $25. These listings benefit from better placement on the Amazon site than seller-fulfilled listings.
  • A Single Inventory Pool: You can use Amazon FBA to fulfill orders not just from the Amazon Marketplace, but from your own ecommerce platform or other third-party sites, as well. As a result, you’ll have a seamless sales and shipping experience, regardless of where you’re selling online.
  • Win More Buy Box Listings: When you choose FBA, you significantly increase your chances of winning the buy box for a particular product.
  • Higher Product Rankings: Amazon gives preference to FBA sellers when ranking products.

Beyond these advantages, the best part of using FBA is that it’s incredibly easy. Instead of handling the logistics of monitoring and fulfilling orders, tracking shipments, and handling customer service issues yourself, all you have to do is send your inventory to Amazon and let them handle the rest.

selling on amazon

Image source: Amazon.com

How FBA Works

If you decide that using Fulfillment by Amazon to manage your Amazon Seller account is the best choice for your business, follow these steps to get started.

  1. Upload Your Product List: To get started with FBA, upload your product list onto Seller Central following the same steps you would use for a seller-shipped product. Then, arrange to ship your full or partial inventory directly to Amazon, benefiting from Amazon’s reduced shipping rates.
  2. Store and Manage Your Inventory Through Amazon: Amazon stores and manages your inventory within one or several of their 75+ fulfillment centers around the world. You still own the products, of course. You’ll also pay a storage fee for your items until they’re sold.
  3. Pay-as-You-Go: FBA has no minimum unit count, so you only pay for the number and weight of units you actually store and ship to customers. The only monthly fee is the monthly inventory storage fee for the convenience of using Amazon’s fulfillment centers to store your products.
  4. Picked, Packed, and Shipped by Amazon: As soon as you receive an order, Amazon will package and ship your product directly to the customer.
  5. Seamless Management of Payments: Once Amazon ships the order, Amazon collects payment from the customer, deducts their fulfillment fee as a percentage of the total sale based on the weight and number of items, and deposits payments directly into your bank account every 14 days.
  6. Customer Service by Amazon: If you use FBA, Amazon serves as the direct customer service contact.

FBA Pricing

When using FBA, you’ll be responsible for two different types of FBA fees:[3]

  • Amazon Fulfillment Fees: Amazon charges fees, based on the weight and size of your products, to pick, pack, and ship your products, and handle customer service inquiries. This fee can be as low as $2.41 per product for smaller items but can increase significantly (even over $100) for larger or oversize items.
  • Monthly Storage Inventory Fees: If you use Amazon’s warehouses to store your inventory, you’ll be charged a monthly fee based on the amount of storage space you’re using. This fee can be as low as $0.69 per cubic foot, and reach as much as $2.40 per cubic foot.

There are additional, smaller FBA fees as noted above. Don’t forget that you’ll also have to pay separate fees that all Amazon Sellers are charged, whether or not they use FBA.

5. Optimize your processes.

At this point, you’ve taken care of all of the essential steps required to get your account set up and your Amazon store launched. However, if you’re learning how to sell on Amazon—especially as a beginner—there are certain actions you can take to increase your chances of success.

One of the most important actions? Optimization. From your listings to your pricing strategy, optimizing your Amazon selling processes can make a huge difference as you get started selling on this platform. Therefore, here are some tips to keep in mind:

  • Listings: Although this may seem like common sense, optimizing your listings and building an Amazon-specific SEO strategy can be essential to your success, especially when you’re just starting out. Therefore, in addition to ensuring that you have top quality images, thorough descriptions, you’ll also want to make sure you optimize your product titles and key product features. Plus, as we’ll discuss below, you’ll want to try and get product reviews and ratings, as these will help boost your listings in terms of search. Learn more about writing the best ecommerce product descriptions in our guide.
  • Pricing: Similar to optimizing your listings, you’ll also want to pay close attention to your pricing and evaluate your strategy as you go along. If you’ve been up and running for a significant amount of time and aren’t receiving many orders, your price point may be too high, or even too low. It may take some trial and error to find your pricing sweet spot, but it’s just as important to think about how to price your products as it is to optimize the way you list them. Use our guide for more information on how to price products.
  • Winning the Buy Box: If you do any research on how to sell on Amazon for beginners, you’ll likely come across information regarding the buy box. If you’re not familiar, the buy box is the little box that shows up when customers are browsing products and allows them to immediately add that product to their shopping cart. In short, all Amazon sellers compete for this buy box, as getting it increases your chances of getting a sale. Therefore, to put your store in the best possible place to win the buy box, you’ll want to have competitive pricing, detailed listings, a full inventory, a range of shipping methods (the faster, the better), and excellent customer service.
  • Building your Profile and Reputation: Speaking of customer service, the best way to show that you have great customer service is to build your seller profile and reputation. The better reviews you have, the more likely customers are to purchase from you, and the more likely you are to improve in rankings, as well as earn the buy box. Therefore, you’ll want to encourage customers to leave reviews, and you’ll want to address any complaints as quickly and thoroughly as possible. You can use the Seller Central to evaluate your metrics, as well as monitor customer feedback.

Check out our article for tips for selling on Amazon to learn more about optimizing your processes to set yourself up for success.

The Bottom Line

Whether you’re selling products or services, Amazon’s brand recognition and logistical advantages are incredible tools for expanding your business far beyond what you’d likely have the capacity to achieve on your own. However, setting up your small business on Amazon will take some time and attention. 

And, although the costs associated with selling on Amazon do take a notch out of your profit margins (as is the case with most marketplaces) you can make up for these costs by developing a strategy— deciding how to optimize listings, promote your store, and work best within the Seller guidelines—in order to find success selling on Amazon.

Article Sources:

  1. Amazon.com. “How Much Does it Cost to Sell on Amazon
  2. Amazon.com. “Seller Help
  3. Amazon.com. “Amazon Advertising

The post How to Sell on Amazon: The Ultimate Guide appeared first on Fundera Ledger.

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