What to Expect When You Sell on Amazon
- – Choose a Product
- – Find a Supplier
- – Calculate Your Profit
- – Obtain Supplies
- – Set Up Your Bank Account
- – Choose a Seller Category
- – Create Your Amazon Seller Account
- – Set Up Your Profile
- – Set Up Your Seller Settings
- – Be Aware of Category Restrictions
- – Listing for Products Already on Amazon
- – Adding Products Not Yet on Amazon
- – List in Bulk or Individually
- – Winning the Buy Box (and How You Can Lose)
- – Advertising on Amazon
- – Optimizing Your Listing
- – Fulfillment by Amazon (FBA)
- – Seller Fulfilled
- – Third Party Fulfillment
- – Check for New Orders Daily
- – Send Shipping Confirmation
- – Check Your Inventory Regularly
- – Keep Pricing Information up to Date
- – Respond to Customers Promptly
- – Aim to Keep Returns Below 8%
- – FBA Export (Pros and Cons)
- – Amazon Global Selling (Pros and Cons)
Get Started Selling on Amazon
Amazon is the online marketplace used by millions of people globally. From clothing to electronics to toiletries, you can buy or sell almost anything on Amazon.
It’s easy to start selling on Amazon. All you need is a small investment to get started. This guide will give you the knowledge you need to create a successful listing. Amazon Seller Central can answer any additional questions you may run into.
Anyone can sell on Amazon if they can choose a product, set up a profile, and find a fulfillment provider. The benefits of selling on Amazon include access to millions of customers, being part of one of the biggest online marketplaces in the world, and the ease of using the platform.
In this guide, we’ll walk you through each step of the selling process, from setting up your account to expanding globally.
What to Expect When You Sell on Amazon
To start selling on Amazon, there is a four-step process.
- List your product
- Make a sale
- Ship the order to the customer
- Get paid
Of course, each of these steps includes many sub-steps. However, at its core, it’s really quite simple to start selling on Amazon. Though there is a learning curve, once you understand the process, selling on one of the biggest online marketplaces in the world can be easy and fun.
Choose a Product
Finding a profitable product is essential to your successful Amazon business. If you own a small retail business, you most likely already have a product or several products in mind.
If you are starting from scratch you will need to pick something to sell. Here are some tips for choosing a product:
You can look at the ads on Amazon to get an idea of what’s selling well. Type in a category you’re interested in and see what items other sellers are promoting through ads. These sellers are likely promoting the products that sell well. Can you offer better quality or a lower price in these product categories? Or perhaps your niche is something that isn’t offered for sale in the marketplace yet. You could be the first Amazon seller in a new product category.
Another way to find popular products is to use a tool like MerchantWord’s keyword researcher. This will help you find items that are frequently searched for online.
It’s a best practice to sell items in the same product vertical, at least when you’re starting out. Try to pick a product that has complimentary items. That way, when you start to bulk up your store, your items will be related in some way. For example, if you sell pillows, other products that will naturally fit into your Amazon store are pillowcases, sheets, and other bedroom products. If a customer likes your pillows, they will trust you to sell good pillowcases and vice versa. However, a seller whose listings are totally unrelated is less likely to win loyal customers. Selling pillows, blenders, and lamps is probably not a winning product mix.
Find a Supplier
Small businesses who already have a product line don’t need to worry about this step, but for those just starting out this step is crucial. Finding a good supplier is a key pillar of a successful Amazon business.
Here’s how to find good suppliers as you create an Amazon store, both in the US and internationally.
Non-U.S. Based Suppliers
Alibaba is a great resource for finding an overseas wholesaler. While it may seem intimidating, there are best practices you can follow to ensure a safe transaction on Alibaba. Buying from an international wholesaler could give you a price advantage to pass on to your customers. And that can help you win sales.
Always buy from suppliers that have “Trade Assurance,” are a “Gold Supplier” and are an “Assessed Supplier.” You can check these boxes when you search on Alibaba to filter suppliers in the results.
Alibaba is a huge marketplace, but it isn’t the only place to find wholesalers. Use Google to do a search for wholesale suppliers of the products you want to sell and you’ll find listings of domestic and international suppliers.
Always check the purchase price of the item you want to sell in the Amazon Revenue Calculator before you invest in inventory. That will show you how much profit you can make after Amazon assesses their fees.
You may need to negotiate with a supplier to get the costs down. Ecomcrew has a great guide for contracting and negotiating with Alibaba suppliers.
What is Minimum Order Quantity?
Some suppliers have a Minimum Order Quantity (MOQ) and will not accept orders below a certain number. Determine if you can meet your supplier’s MOQ or try to negotiate them down. Some suppliers may let you place a smaller first order as you test the waters with your new Amazon product line.
Calculate Your Profit
After you’ve chosen your product you will want to calculate the return on investment (ROI). This will help you determine costs and keep track of how much you expect to earn from selling your products on Amazon.
Download the Amazon Seller App
With theAmazon Seller App (for Apple or Android), you can calculate the profit you will make on an item whether you’ve set up your account yet or not. If you are already set up to sell on Amazon, the app lets you see the selling price and fees associated with any product on their website.
The app allows you to use the camera on your cell phone to scan a product’s barcode. It will show you the pricing and fee information for the scanned product. This is a popular app for people who participate in retail arbitrage. Retail arbitrage is buying low-priced items at retail and then reselling them on Amazon.
Use the Fulfillment by Amazon (FBA) Revenue Calculator
If you have not set up a seller account yet, you can use the FBA Revenue Calculator to get the fee details on any item.
Simply search for the item that you are considering selling on Amazon and enter the price, how much it will cost you to ship to Amazon, and how much the product costs you. At the bottom, the calculator will display the amount you can expect to receive as profit after all the expenses are taken out, including the $39.99 a month selling fees (for Professional plan sellers).
Compare Shipping Costs
It can also be a smart choice to use a fulfillment company to ship your product, and the costs might even be lower than Amazon FBA.
You can get in touch with your fulfillment company and discuss their eCommerce fulfillment rates. You’ll need to include fulfillment costs in your pricing to ensure your profit margin is healthy.
Getting products to sell doesn’t end with finding wholesale suppliers. There are several preliminary steps you’ll need to take to ensure a smooth process down the road.
Ordering a small sample of 10–20 items before making a bulk purchase will allow you to not only test the product quality but test the bulk seller’s reliability. You can also sell this small amount on Amazon as a test run. That will give you a feel for the demand and interest in your product. This will also give you a sense of whether your product listings have the price points that Amazon shoppers want. For example, if a sample product sells out within a day or two, it’s in high demand and you’ve found a winner.
If you already have a business that sells the products you plan to sell on Amazon, you can skip this step.
Order UPC Codes
Amazon requires you to have a UPC code, to list a product on their platform. Some products come from the manufacturer with a UPC code. In other cases, you’ll need to obtain a UPC for your product. You can buy barcodes from third-party sellers like BarCodes Talk. Amazon won’t sell products that don’t have a UPC code.
UPC codes help the fulfillment company keep track of orders and prevent mistakes. You will only need one UPC code for each product you plan to sell.
You may also want to set SKU numbers for your products, to help you keep better track of them.
Product photography doesn’t have to be complicated. With a few tips and best practices, you can create professional-looking photos on a low budget. All you need is a backdrop, good lighting, and a decent camera. A high-end cell phone may even produce a good product photo if used correctly.
You will want your photos to stand out to compete with other sellers of the same or similar products. Therefore, you need your photos to be high-resolution (1000×1000 pixels) and well-lit. Choose images that accurately represent your products. Take multiple photos to display all its uses and features.
If your manufacturer already has high-quality photos of your product, ask to use those images. You can also pay a professional to take your product pictures for you. However, if you have multiple listings and update them frequently, this can be costly and time-consuming.
Create a Logo and Branding for Amazon
Having a professional-looking brand image for your product on Amazon is key. Branding will help you stand out in a sea of Amazon sellers.
Hire a freelance graphic designer from a website like Upwork, Fiverr, or Freeup and explain the look and feel of your brand. You may be able to get a logo within a couple of days without breaking the bank.
Developing a relationship with a freelance graphic designer is a good idea. Moving forward, you will have someone on call who gets your brand. They can design any product inserts, packaging design, or promotional materials you need in the future.
Set up Your Bank Account
Amazon will pay you bi-weekly. The Statement View in your Payments Report shows you when and how much you will get paid. Transfers to your bank can take up to three to five business days to complete.
You can find payment information in your Amazon Seller dashboard (more on this later). The information is updated automatically so that it always shows up on the payment report.
If you do your own fulfillment vs. using Amazon FBA, Amazon will hold your money in case of returns. Keeping your account in good standing and up to date is the best way to avoid delays in payment.
Getting Set Up
Now that you’ve taken the preliminary steps to set up your business you will want to set up your Amazon Seller account.
Choose a Seller Category
Choose an Amazon seller category based on the size of your business. You can change your Amazon seller category later if your business grows (or shrinks).
Sell as an Individual
Selling as an individual is a smart option if you are a first-time seller or plan to ship fewer than 40 items per month. Amazon charges $0.99 a month selling on the individual plan, but there’s no monthly fee. This can reduce your selling fees when you ship a small number of products.
Sell as a Professional
The Amazon seller Professional plan will cost you $39.99 a month. There’s no per-item fee on this plan. If you’re planning on selling more than 40 items, this is the most cost-effective choice.
Amazon takes a cut of each sale no matter which selling plan you sign up for. Factor Amazon’s percentage when you calculate the cost to sell on the platform.
Create Your Amazon Seller Account
There are three ways to set up an Amazon seller account.
- Visit sell.amazon.com and click on either the “Selling on Amazon” link or the “Sell on Amazon” box
- Visit sellercentral.amazon.com and click on “Selling on Amazon” in the bottom left-hand corner
- Click on the “Sell” button at the top of the amazon.com homepage
Set Up Your Profile
The registration process can be completed in under an hour. It is relatively self-explanatory but there is information you will want to have handy before starting.
- Legal business name, address, and contact information
- The email address for your Amazon business (should be set up before starting the process)
- Internationally chargeable credit card with a valid billing address
- A phone number where you can be reached during the registration process
- Tax information such as your Social Security number or your company’s Federal Tax ID number
Set Up Your Seller Settings
Once you register, you need to start out with the right settings enabled. In the top right corner of the Seller Central home page, click on “Settings.” This will generate a drop-down list. Your login settings are here, as well as several other settings you will want to configure.
Verify that all of your contact information is correct. Here you can also enter a display name if you choose not to use your legal name. You can also double check your return information. This is where you tell Amazon how you would like to handle returns.
Choose which emails you’d like to receive and which you would rather not. These will include reports, recommendations, and news or changes to your listing.
Make sure the “Listing Notifications” and the “Report Notifications” are turned on. These communications from Amazon contain critical information.
As a Professional Seller, you will be able to choose your own shipping rates if you are fulfilling yourself. If you’re working with a third-party eCommerce fulfillment company, their pricing structure and shipping times will dictate your shipping settings.
Keep in mind that the faster and cheaper your orders can be delivered, the more likely customers are to choose your item.
You will need to provide your state tax ID information in this setting. Sales tax requirements vary by state. Talk to your tax professional about when your business needs to collect sales tax and when it doesn’t. TaxJar is a great tool for helping you determine this.
Amazon is required to collect and remit sales taxes for its third-party sellers in several states, due to recent changes in tax laws. You can find a full list of states here.
You can fill out your “About Seller” information here. This gives customers a sense of what your Amazon business is all about. Provide an overview of what your company sells. Let your brand personality shine through, but keep it short.
You can look at other people’s “About Seller” sections for inspiration. You can also upload your company logo here.
Listing Your Product
After you finish setting up your profile, Amazon will begin prompting you to begin setting up your product detail pages. Amazon stores let you create and manage your product pages.
When you’re ready to set up your first product detail page, visit the inventory tab of Seller Central. Click “Add an Item.” Then create a new detail page or search Amazon’s catalog for already-entered information about the item.
Be Aware of Category Restrictions
Before you begin to sell on Amazon, you should ensure that you’re not selling an item that is in one of the restricted categories. Several categories of merchandise require special approval. Other types of items are prohibited altogether. You can view a list of restricted categories on Amazon’s website. It’s best to avoid these when you’re just getting started.
Listing for Products Not Yet on Amazon
For unique items that aren’t in the system yet, you will need to use the “Create a New Product” tool. This page requires more information than if the item were already in Amazon’s catalog. The extra steps ensure a complete product listing for buyers.
You will need to fill in the manufacturer, item name, and UPC code. The system will also generate an FNSKU and you need to enter that. The FNSKU number is Amazon’s internal UPC code. The FNSKU ensures that you get paid for your sales. If you have your own SKU number, you can also enter that. Amazon will also automatically assign each Amazon product an ASIN (except for books – those use the ISBN instead).
Add Products in Bulk or Individually
Listing products individually is recommended when you are first starting out. This will give your buyers a better sense of the information behind each item
If you have many similar products to sell, you will need to follow the Amazon template for that type of merchandise. You can get a detailed example of how to do this here.
Selling Your Product
Once your listings are live on Amazon you can begin to optimize your product listings and experiment with the features.
Winning the Buy Box (and How You Can Lose)
The buy box is the white box on the right side of the Amazon product detail page where customers can add items for purchase into their cart.
Since there is no limit to the number of sellers who can sell the same item, there is a lot of competition to get products in front of shoppers. Not all sellers are eligible for this coveted spot in Amazon search results.
Only businesses with excellent seller metrics have a chance at scoring this valuable real estate. Understanding Amazon’s algorithms will increase your chances of winning the buy box.
To be eligible for this prized page placement, you will need to have a Professional seller account. People on the Individual seller plan don’t qualify. You will also need to sell new items rather than used and have inventory available for sale.
Amazon will choose which seller’s item goes in the prime position by weighing low prices and seller metrics. The marketplace algorithm tries to give customers the best deal. If you have great performance metrics, you can afford to price your product higher. If you have mid-range metrics, you will need to offer a more competitive price. Of course, brand owners are always at a disadvantage when competing against a branded Amazon product.
After eligibility, the algorithm looks at four main characteristics:
- Using AmazonFBA: Amazon favors its own fulfillment options.
- Seller-Fulfilled Prime: The Amazon Seller Prime fulfillment program offers top-performing merchants the opportunity to enjoy the benefits of Amazon Prime while using their own chosen fulfillment company. You must have very strong metrics to apply.
- Landed Price: The landed price is the total cost to buy the product, including shipping. The more competitive the price the more likely it is to end up in the buy box.
- Shipping Time: The time it will take for the seller to receive the product is important. Amazon favors short delivery times.
Your product can also land on the “Other Sellers” section below the buy box. These listings must meet all the buy box criteria. While this page position is not quite as prominent, it will still increase your visibility to the consumer.
Advertising on Amazon
You can pay to advertise your listings if you want to gain more visibility and grow your business. Amazon allows sellers to pay for specific keywords so their product listing will appear when a shopper searches for those keywords.
Amazon ads can appear at the top of the search results. They can also appear on the product page itself under the buy box or at the bottom of the page
The average Amazon ad costs (ACOS) around $0.81 per click. This makes it more cost-effective than using Google AdWords. Amazon ads can be a profitable investment in your business.
You can choose between self-serve ads or premium ads. They both have their advantages and drawbacks. Wordstream.com has a comprehensive guide detailing the differences in ads and how to set them up.
Amazon Associates allows you to advertise your products by allowing affiliates to create links to the products in exchange for a small commission. It’s free to join and easy to use. This allows you to access audiences you might not reach otherwise.
Optimizing Your Listing
Optimizing your Amazon listing is a big topic and the internet is full of advice and tips. Here are some of the most important things you need to know to optimize your product listing.
You get 500 characters to title your product on Amazon. The longer and more detailed your product title the better. Focus more on keywords and less on having a compelling, attention-grabbing title. Titles that are long and keyword rich perform best.
You will often see bullet points describing an item under the title on Amazon. Utilize the bullet point section because detailed information about features and benefits will increase conversion rates as well as search matches for target keywords.
You can add a description further down on the page, but the area that customers first see should contain bullet-pointed, specific details and selling points about the item you are listing to sell on Amazon.
Make sure you use the character count allotment completely. Avoid duplicate content.
Be sure to choose the most accurate and narrowly defined category possible. Customers searching for products get directed to certain categories and if yours is inaccurate it is less likely to be noticed. You will also be more likely to have a higher “best sellers rank” for your given category.
Customer reviews are one of the most important ways to optimize your listing. Encourage your buyers to leave produce reviews. Address any negative feedback immediately. Well-worded and timely feedback requests can massively improve the amount and quality of your feedback.
Professional Quality Product Photos
Make sure your images are crisp, clear, and as professional-looking as possible. Pictures should be 1000×1000 pixels and listings should include five or six images. Highlight the item’s look and features. Include photos that show the item from different angles. Good images will improve the shopping experience for your customers and increase your sales.
Shipping Your Product
Depending on how hands-on you want to be and the budget you have available, you have several options for shipping.
Fulfillment by Amazon (FBA)
Amazon FBA is a popular choice among Amazon sellers. There are pros and cons to using it.
Amazon FBA items are eligible for Amazon Prime shipping. Amazon handles your returns. Since Amazon has dozens of warehouses all over the country and world, your products are delivered quickly to your customers. Also, free shipping is very attractive to the millions of Prime customers, so FBA can increase your sales.
Amazon FBA sellers commonly report mishandled inventory which ends up costing the seller money in the long run. Sellers have reported a lag time for their inventory to be logged into the Amazon FBA system before it’s ready to ship and even reported products getting lost in the supply chain. Also, Amazon has complete control of your fulfillment operations. The company has limited warehouse space during the holidays, causing headaches for sellers.
Additionally, in an effort to reclaim lost sales tax revenue the states have expanded their definition of sales tax nexus. Using Amazon Prime can require you to pay sales tax in every state where Amazon warehouses your products. It can be hard to tell where that is, since the company moves inventory around frequently.
When you handle your own order fulfillment, you are responsible for maintaining inventory and packing, labeling, and shipping your items to your customers. Shipping costs are determined by the product category and shipping service chosen the buyer chooses.
Amazon collects the delivery fee. The Amazon payment service then reimburses you for the cost. If your actual shipping cost turns out to be more than the rate in your product listing, you will have to pay the difference.
You can use a third-party warehouse to outsource your fulfillment. It’s important to choose a fulfillment partner that meets the needs of your business for shipping options. A 3PL company might even save you enough money on fulfillment that you can offer free shipping.
Consider these factors when you choose a fulfillment center:
- Pricing Structure: Think about what kind of items you have and what it will take to ship them. Fees are usually adjusted by size and weight.
- International Options: If you want to ship internationally, you will want to make sure your fulfillment company offers that option.
- Fees: See what the costs are for storing your inventory, picking and packing your items.
- Warehouse Locations: Consider the location of the warehouses in relation to where your customers are located.
- Returns: A good fulfillment company should be able to easily manage returns for you.
- Customer Service: Some fulfillment companies provide built-in customer service, some don’t. If this is important to you you will want to make sure they include it.
- Customer Support: Ensure you have a contact who is ready to help you if there is an issue.
- Integration: It’s best if the fulfillment company’s software integrates with the systems you use. This includes your eCommerce sales platform, marketplaces like Amazon, and your ERP or accounting program.
Tips for a Successful Selling Experience
Keeping your customers happy is an important part of running a successful e-commerce business. There are several small things you can do to ensure quick shipping and avoid any issues that might lead to negative reviews.
Check for New Orders Daily
Promptly fill all new orders by checking for them daily. You will receive an order notification when a sale is made, but it’s best to check manually just in case. Orders and customer communications can be viewed in the Seller Central portal.
Send Shipping Confirmations
Always communicate with your customer once an order has shipped. Amazon will not charge them until their order has shipped, so this step will help you get paid. You are responsible for confirming shipment. To do this go to the “Orders” tab and select the “Confirm Shipment” button for the associated order.
Check Your Inventory Regularly
Check your inventory levels regularly and replenish your stock early to avoid running out. Track your inventory to determine optimal stock levels. Factor seasonal differences into your selling plan.
Keep Pricing Information Up to Date
Since customers are most likely to choose the lowest priced merchandise, it’s important to keep your pricing up to date and competitive. If you’re having a sale or can lower your prices a bit be sure to update your listing to reflect the new pricing.
There are tools available to dynamically price your items and maintain a competitive edge. Many sellers use repricers for this. Dynamic repricing will increase search visibility.
Respond to Customers Promptly
Good customer service is imperative to running a successful business and promoting your brand. Whether you’re doing this yourself, through Amazon, or through a third-party fulfillment service, ensure that customer inquiries are being answered and their problems are being solved in a timely manner. Amazon heavily weighs prompt response time when considering the status of a seller’s account.
Build a Five-Star Feedback Rating
Cultivating a strong seller feedback process is one of the best ways to grow your customer base. A five-star rating will foster more trust in your brand. It will also get you better placement in Amazon search results.
Be sure you describe items accurately, ship them promptly, and provide great customer service. If you do all these things well, don’t be afraid to ask for reviews. This can be done in the form of an email after shipping or a paper request included in the package itself.
Aim to Keep Returns Below 8%
Minimize returns by ensuring your merchandise is accurately described on the detail pages, arrives in excellent condition, and is sized correctly.
For example, if you’re shipping clothes, make sure the size chart is accurate to avoid excessive returns. If your returns rise above 8%, Amazon will shut down the listing.
Using Amazon to Expand Your Business Globally
If your business is successful you will want to expand around the world. It’s important to make sure that you are set up to ship internationally and that you understand all of the taxes and fees associated with selling across borders.
There are two options to choose from when shipping internationally: FBA Export and the Amazon Global Setting.
FBA Export (Pros and Cons)
This is an Amazon program that allows you to sell your products internationally, either on your own website or through Amazon. To use FBA Export, ship your products to Amazon fulfillment centers and Amazon will take care of the packing, international shipping, returns, and all customer service issues.
When you use this service, your products are listed as “export eligible.” There are pros and cons associated with this method.
You can easily reach international customers with FBA Export, since your listings will be shown in 70+ countries. Amazon handles the shipping and takes care of the duty, tax, and export fees.
Delivery times to customers can be longer when using FBA Export. Also, some items are not eligible for FBA export. Oversized products or entertainment banned in certain countries may not be eligible.
Amazon also adds extra fees, including a unit fee and handling, pick and pack, and weight fees. This can make FBA Export less economical than other options.
Amazon Global Selling (Pros and Cons)
With this option, you can choose which countries you’d like to sell in, then ship your merchandise to an Amazon fulfillment center in those countries. Once a customer places an order, it is directly from the nearest international warehouse. This option is available in over 180 countries, making it a great choice if you want your products to reach international customers more quickly.
In addition to faster delivery, you also get more control over your fulfillment and more customer service options. Fast delivery is an important part of the experience for customers, so Amazon Global Selling is a big plus if you want to sell in other countries.
Shipping product directly overseas may mean longer lead times. You’ll have less time and flexibility in responding to changes from your demand forecast. This service also comes with a slower setup and activation process since you have to register to sell in each market individually. The overall process takes more time but is more economical in the long run.
Selling on Amazon can be an incredibly lucrative enterprise. It is not complicated once you get the hang of it. If you choose the right product, embrace seller best practices, choosing the right fulfillment option, the Amazon Marketplace can be a great place to start and run an eCommerce business.
Follow these steps and best practices and you will be making your first sale on Amazon in no time!