The Beginner’s Guide to Selling on Amazon
Amazon is an increasingly popular platform for selling and buying all kinds of goods. It is quickly becoming the go-to site for people when they want a specific item delivered quickly.
That’s because they have a huge selection of items and an option for delivery.
This ease of shopping on Amazon makes it one of the largest groups of consumers online. When you plan to sell online, having a large customer base is integral to your success because you don’t have to build a new audience from scratch.
Since Amazon is also a large website with a lot of traffic, it is also a great place to establish or showcase your brand.
One downside of Amazon being such a successful selling platform is that there is a lot of competition. Almost everything can be purchased there, in a variety of styles and materials.
Standing out in this saturated market is not easy, but it is possible.
In this guide, we’ll outline exactly how to start selling on Amazon. We cover your needs, the options available to you, and how to make your sales business a success.
Why choose Amazon over other selling platforms?
Amazon is one of the most trafficked sites on the internet, amassing 2.4 billion visits in September 2022 alone.
Having a large number of potential customers makes selling on Amazon relatively easy compared to other lesser-known sites.
You also get the benefits of being a well-known seller on Amazon. If you have a good product and profit margins, you can engage with other Amazon partners to further build your brand, they offer Amazon partnerships.
When you sell through Amazon, you generally still have a responsibility to your customers, which can help you with the experience as your brand grows bigger and improves your product overall.
While there are many positives to selling on Amazon, there are also some disadvantages to consider.
The first is that Amazon charges a lot of different fees for various reasons, and if you don’t understand all of them, you may be charged unexpectedly. We’ll cover most of these fees later in this article.
Another downside of selling on Amazon is that you need to follow strict rules about what you can sell and how. Other sites may not have these strict rules, so you have more freedom to choose what you can sell.
What to expect when registering with Amazon
The first thing you need to do is set up an Amazon seller account, this is where you will manage your listings. An Amazon seller account is very simple, you just need a few details to get started, which we cover later in this article.
Depending on where you live, you may also need to have a business license since you are essentially creating a small online selling business.
When building your business, it’s important to separate it from your personal life. This includes having a separate email for it, and possibly a separate phone if you can afford it.
When setting up your Amazon seller account, they will ask which category you intend to sell into, some categories require approval which can lengthen the registration process.
Bank account number and bank routing number
Since selling on Amazon is another way to make money, it makes sense that you have to provide your bank details so you can get billed and have the money earned deposited into your account.
charge credit card
Since Amazon pays the fees, linking a chargeable credit card to your account means Amazon will always be able to cover those fees.
Government-issued national ID card
You will need to provide a copy of your ID so Amazon can verify your credentials and determine that you can be trusted as a seller.
tax information
You need to provide details of your business to Amazon so it can be taxed. The types of businesses you can own include an LLC, partnership, corporation, or sole proprietorship.
Tax information also includes your social security number.
telephone number
This is required so that Amazon and even customers will be able to contact you at any time.
This contact can be for different notifications or service updates.
Choose an Amazon Seller Program
After setting up your Amazon seller account, you need to choose which plan you want to use. There are 2 different plan options on Amazon, Personal and Professional, you can choose according to your needs and you can change it anytime.
Be sure to check their policies, code of conduct and any requirements before choosing a plan. This can greatly affect the plan you choose, so you need to be well informed.
personal
This is a good option plan to start out with. It’s a free option, and you only pay when you sell something. At $0.99 per item sold, it’s a great price if you’re not sure what to sell and are testing out different items.
The Personal plan doesn’t give you access to advanced selling tools, and the goal should be to sell enough products to be worth getting the Professional plan.
professional
This makes it an ideal plan if you’re selling more than 40 items per month, as it’s ultimately cheaper and you can use different selling tools.
The Professional plan is a subscription-based plan that costs $39.99 per month, not per piece.
You’ll likely end up making more money in the long run with a professional plan, so you want to take your business to a level where it’s worth buying.
What to do before you start selling on Amazon
Now that you know how to start selling on Amazon, it’s time to start thinking about the products you want to sell.
Ideally, you want to have a general idea of what you will be selling before setting up your Amazon seller account, as certain categories require approval.
Take the time to do your research, the more information you have, the better equipped you will be to deal with anything unexpected.
You also need to consider what you hope to gain from selling online, and what your end goal is. Are you looking to build your brand by selling online, or are you just looking for a way to earn some extra income?
Also use this opportunity to set realistic expectations for your selling business. Only 63% of sellers are profitable within 1 year of selling on Amazon, and while this is the majority, you still need to prepare for the worst.
It may take a few years before you see the benefits of your hard work.
find your product niche
With anything you sell you want to make a profit, and the best way to do that is to find a niche that is popular, but there are opportunities that haven’t been covered yet.
You want to find a niche that sells consistently so your product has longevity.
It’s not easy to find, so you’ll need to do a lot of research. The best place to look is the Amazon bestseller list, because that’s where you’ll find items that people have been buying.
You can also identify potential competitors and read their reviews, so you can learn what people like or don’t like about certain products.
When looking for something to sell, try to avoid competing with Amazon’s own brands like Amazon Basics, as they will be heavily in-stock and may appear preferentially on search pages.
You should also avoid seasonal items as they have a short lifespan and fragile items as the chances of a refund are much higher.
develop a business plan
Next, you develop a business plan. You should create it with the end of the business in mind, but still allow for flexibility.
Your business plan should include your overall mission, market analysis, the products and services you will offer, any marketing you will be doing and what you want your sales to be.
Overall, you want your business plan to be about how you can beat your competition. This should also include any potential future competition as your business grows. This is how you create a sustainable business model.
A common business scheme is retail arbitrage. Here, items are bought from brick-and-mortar stores at discounted prices and resold online.
As a business plan, this is a bit more time-consuming, but it’s a great way to get started without dealing with suppliers.
set a budget
Your budget needs to be based on your business plan, which means it needs to cover everything listed in it. This includes supplies, marketing and any additional costs.
Ideally, you want more than you think you need, and that’s because it gives you the flexibility to cover any unexpected expenses.
This number can vary widely depending on what you plan to sell and how much you want to pay.
do some market research
For market research, you’re not just looking for what’s popular, you’re looking for what people want. Knowing what people want or might want is a great way to break into a market that few people have set foot in.
Not only can you conduct market research on your product, but you can also conduct research on what your competitors are selling. You can see the average price of items so you know what to sell.
A great way to conduct market research is to conduct surveys, which you can do in person or online. They can provide a lot of valuable information and can be targeted to a specific audience.
Research on shipping costs and fulfillment options
We’ll discuss some implementation options later in this article, but it’s still important to consider them early on.
By thoroughly researching shipping and fulfillment, you can choose the option that works best for you.
These costs will need to factor into the cost of the item, the supplier, Amazon fees, and whether it is shipping internationally or locally.
Identify product suppliers
There are many shipping options available to you. Most choose to supply from another B2B platform, such as Alibaba or AliExpress. You can also attend trade shows and meet other suppliers.
When discussing with suppliers, you need to know their minimum order quantities and get a sample of their product so you know it’s high quality.
There are mainly 3 types of product suppliers, white label, private label and drop shipping.
White labeling is when the manufacturer sells you a generic product and you put your own brand on it to sell it. This is commonly used in cosmetics, smartphone accessories, water bottles and essential oils.
Private label is where you have your own brand. You need to find your own supplier for this.
The last is shipping. Dropshipping refers to sending products directly from a third party. Amazon has a lot of limitations…
