If you’ve ever thought about how to make money online, you’ve probably considered selling on Amazon.
You can sell products on Amazon whether or not you have an established business. While many people earn a good living selling on Amazon, many others struggle to do well. Selling on Amazon isn’t easy or quick, but the steps to start selling on Amazon are pretty simple. See how you can get started.
Why Should You Sell on Amazon?
Why sell on Amazon versus another site like eBay or Etsy? Or why not only sell through your own website?
Here are the top reasons to consider Amazon as a selling platform:
- Enormous traffic: Millions of people go to Amazon first when they’re looking to buy something. You can sell products without any real marketing in many cases.
- Brand recognition: People trust Amazon, but many are wary of buying from other sites that they’ve never used before.
- No need for a website: While you can also keep a website in addition to selling on Amazon, you can start a business selling only through Amazon with no website of your own.
- Scalability Amazon can easily handle spikes in traffic and changes in inventory levels. They can even handle fulfillment if you use Fulfillment By Amazon (FBA).
- Fraud protection: Amazon takes care of accepting payments and has great fraud protection. It’s one less headache for you to worry about.
Even though there are a few drawbacks, like having less control, there are many big benefits of selling through Amazon.
If you’re wary of solely relying on Amazon, you can always sell through it on the side.
What Are The Best Ways to Sell on Amazon?
You can sell on Amazon whether or not you already have a business. We can further divide that into 5 different types of selling on Amazon.
See which option interests you the most:
Dropshipping through Amazon is the latest craze in online business. You can start dropshipping for relatively little, saving you from having to be involved with manufacturing.
The idea behind dropshipping is to offer products for sale that someone else manufactures. When someone makes a purchase, your manufacturer ships it to the amazon customer, and you get a profit cut.
Amazon provides the customers, your vendor fulfills the orders, and you collect a cut.
Sounds perfect, right?
Many people are successful with dropshipping, but there are some big challenges:
- Small profit margins.
- No control over product quality or shipment times.
- There are often others dropshipping the same products you are.
There have been entire books written on dropshipping. Here’s a good intro guide to dropshipping written by Shopify if you’d like to learn a bit more.
Since the beginning of the internet, arbitrage has been around.
Arbitrage is the concept of buying something and reselling it for more. Or, as many people would call it, flipping.
On a small scale, you can do this by sourcing products from garage sales, flea markets, and thrift stores. But it’s hard to find multiples of products, so you usually sell these sorts of goods through eBay, Craigslist, and other similar sites.
But those who practice arbitrage through Amazon try to scale up a bit more by buying from retail stores. If you can find local clearance sales, it’s often possible to sell online for a higher price through Amazon.
It’s hard to scale with arbitrage, but it can be a great way to start without an existing business.
There are even apps to help you do this by reading your scan of an item’s barcode and looking up how much it sells for on Amazon. The three main ones are:
- Amazon Seller App (Free) — Includes more features.
- Profit Bandit (Paid).
- Scoutify (Paid).
Here’s a more in-depth guide to retail arbitrage on Amazon for further reading.
Reselling wholesale goods
This method is similar to arbitrage but lets you sell at a much bigger scale.
Instead of buying from a retail store, which has already bought products from a manufacturer, you go straight to the manufacturer and buy from them in bulk.
You get a cheaper rate and more profit when you sell.
It’s possible to start with retail arbitrage and then move into reselling wholesale goods once you’re comfortable and know which products you’d like to focus on.
The challenge is finding a good manufacturer to buy from and being able to afford bulk purchases (at least at the start). You also have to carry more stock, which can be risky if it doesn’t all sell.
Finally, others can wholesale the same product.
Private label selling
Selling a private label product is almost identical to reselling wholesale goods.
The difference is that you are allowed to put your own branding on the product. This lets you build brand recognition that can increase sales long-term.
While others may be selling the same product, you will have your unique label, allowing you to stand out from the competition.
But there are the same upfront costs and even more. Also, not all manufacturers will let you put your label on their products.
Finally, you can take care of the manufacturing yourself. This usually means more control over product quality and higher profit margins but more work and startup costs.
You can do this on a small scale with handmade goods, then sell through Amazon or other platforms like eBay and Etsy.
But you can also manufacture a product on a bigger scale if there’s enough demand and sell mainly through Amazon. You’ll have to do this if you want to sell a product that doesn’t exist yet.
Read this thorough guide to learn more about the actual details behind finding a manufacturer and producing products.
How Do You Sell on Amazon?
Selling on Amazon is an easy way to expand your business, reach millions of customers, and increase your bottom line. Follow the following steps to start selling on Amazon:
Find a product to sell
If you already sell a product, you are done with this step.
When picking something to sell on Amazon, there are many things to look for:
- Price: The ideal selling price range is between $10 to $50 for most. That’s low enough that you will get impulse buys and just high enough that there’s enough profit margin to make it worth it.
- Weight: The lighter a product is, the cheaper the shipping is. Shipping costs are a major factor behind profitability on Amazon.
- Demand: Find similar products already being sold on Amazon. Enter their best-seller rank into this Amazon sales estimator. Will you sell enough to make it worthwhile?
- Competition: If there are more than 10 similar products with hundreds of glowing reviews, it will be tough to break in. Find products with only a few serious competitors.
- Durability: Amazon has a great return policy for customers. So if your product tends to break easily, it will come back to bite you.
You can try to explore Amazon and brainstorm good product ideas, or you can put data to work with a tool to find products that meet the criteria above.
Here are the three most popular tools:
- JungleScout: An all-in-one tool for selling on Amazon. While it is a paid tool, they have a few other useful free tools like the sales estimator and product listing grader.
- Bqool: Focuses specifically on Amazon product research. They use historical data to predict future hot sellers and how hard it will be to sell particular products. There’s a 14-day free trial but no free plan or tools.
- Viral Launch: Comes complete with an Amazon keyword research tool like the first two here, as well as tools to help you find new profitable products to sell.
Set up an individual or professional Amazon seller account
To sell on Amazon, you’ll first need to set up your basic free account if you haven’t already.
After that, head to the Amazon Seller Plans page.
You’ll need to sign up for an Individual or Professional selling plan.
The Individual plan, where you pay a small fee for each sale, is designed for people selling a few items here and there, less than 40 products per month. It’s okay to get started and selling handmade products.
Otherwise, you’ll want to go with a Professional plan, where you pay a monthly fee. The more you sell, the less this fee matters.
The sign-up process is fairly short, but you’ll need a few things handy:
- Your business name.
- Your address and contact information.
- A credit card for billing.
- A phone number you have access to (you’ll need to confirm the number during the sign-up process).
- Your basic tax identity information.
It should take no more than 10 minutes if you have all this information ready.
After that, you’ll have access to your Amazon Seller Central account.
Create product listings that convert
There are two situations when listing products.
If you’re selling the same product as other people, which happens if you’re doing retail arbitrage, you can simply add your stock to the listing page. You fill out a simple one-page form with price, quantity, quality, and shipping information, and that’s it.
The more common situation is where you have to make your listing.
To do this, log in to your Seller Central account and go to “Inventory > Add a Product”:
This process can take some time. There are six tabs (or pages) of forms that you’ll need to fill out.
This includes details like:
- Product name
- Brand name
- UPC or EAN
- SKU number
Doing this for several products can be quite time-consuming, but it is a necessary step. Even though some details are optional (like description), these are important for getting more sales, so don’t skip them.
Here’s a more detailed guide to writing effective descriptions for Amazon products, complete with a template.
Bulk product upload tool
If you’re planning on selling several products, either immediately or in the future, you’ll want to get familiar with the Listing Loader tool.
- Lets you import data of multiple products from a spreadsheet.
- Can use a barcode scanner.
- Detects errors and conflicts before you submit.
- Can upload directly to Amazon from Excel.
You can download the lister loader spreadsheet template from the description page.
Manage your inventory
It’s important to stay on top of your inventory so that you’re not selling products that you don’t have, leading to missing delivery times.
In your selling account, there’s an entire section for inventory management with various tools.
You can quickly change it if you get new stock.
But what if you also sell products online through your e-commerce website? Fortunately, you can use the Amazon API to keep your inventory on both sites in sync when you make sales.
If you don’t have a website yet, consider using one of the following content management systems (CMSs) that automatically integrate with Amazon:
You’ll be able to log your inventory in one of those, and your Amazon seller account will automatically update.
Fulfill your orders
There are three main shipping options to fulfill orders. I’ll go over each at a high level.
Option #1: Fulfill on your own
If you only sell a small amount, it may be worth packing products yourself and shipping them.
It’s time-consuming, but you avoid fulfillment fees. Remember to purchase packaging supplies (boxes, tape, and a scale) upfront.
Options 2 and 3 involve having your orders fulfilled by fulfillment services.
Option #2: Fulfillment By Amazon (FBA)
Your manufacturer ships products directly to Amazon, and they take care of the shipping on time.
Amazon fulfillment center is called Fulfillment By Amazon (FBA). There are several benefits of choosing this route if you primarily sell through Amazon:
- It can offer Prime shipping (higher conversion rates).
- You get higher search result ranking.s
- FBA sellers get preference if two products are tied for prices.
- It’s highly reliable and scalable.
But there’s a cost, of course. On top of your typical seller fees, you’ll also pay FBA fees.
Option #3: Use a third-party fulfillment center
There are other third-party fulfillment centers that you can use if you sell on multiple sites other than Amazon.
These third-party services will often be more expensive and provide fewer benefits than FBA other than fulfilling orders from any source.
Market to get more sales and reviews
Amazon has millions of visitors per month, but if all you do is put up products, you won’t make many sales. Even if you do make a few, it’ll take time to reach the volume that you’re looking for.
The key to success is to get to the top of categories and search results so that you get passive sales. A few key parts of Amazon search engine optimization (SEO):
- Product title and description (step #3).
- Click-through rate from search results (mainly from images and title).
- Existing sales and reviews (both quantity and quality).
This third aspect is huge because launching new products typically leads to a struggle in getting initial customer reviews.
But doing a little marketing to get those first reviews and getting the ball rolling will lead to passive reviews and sales in the future.
Six Common Pitfalls of Selling on Amazon
Selling on Amazon successfully isn’t easy. Here are the six most common areas where sellers go wrong:
- Not collecting taxes properly: You are responsible for collecting the appropriate sales tax for your state. If you don’t set it up correctly, those taxes come from your revenue.
- Focusing on sales, not profit: While volume is important, it’s hard to make a lot on Amazon with a razor-thin profit margin.
- Not labeling products correctly (if you are using FBA): There are very strict guidelines for your manufacturer to follow. If they don’t, your products won’t be accepted, and you’ll be behind schedule.
- Overselling: If you sell products that you can’t deliver, you can be penalized by Amazon.
- Competing against Amazon: Amazon sells certain products directly, and it’s near impossible to beat them. Find a type of product where you only compete against other sellers.
- Skipping marketing: Amazon reduces most of the marketing you’ll need to do, but not all. You should at least do some initially.
Frequently Asked Questions
Here are some commonly asked questions you might have on your mind now.
What happens if a customer is unhappy?
Amazon has an A-to-Z guarantee program for handling disputes if a customer claims they did not receive their order or it wasn’t what they expected based on the listing.
This process lets a customer file a claim, and if Amazon says you’re in the wrong, you will have to reimburse the customer.
Sometimes this may be unfair, but if you want to continue selling on Amazon, you have no choice.
How will I find out if I make a sale?
Can I sell on Amazon if I live in another country?
If you use FBA, you ship your products straight to Amazon’s fulfillment center in any country you wish to sell in that you have access to.
What if I can’t find a good product to sell because everything is too competitive?
If you’re having a hard time finding a good product, try to think of up-and-coming products in which you can establish your brand before anyone else does. Tools like JungleScout can help you do this.
Is there any downside to selling on Amazon?
Related Software and Services
- Amazon Feedback Tools: xSellco Feedback vs. FeedbackFive
- Automation Software for Amazon PPC for Your Small Business
- AMZScout vs. Jungle Scout: How To Choose the Better One for Your Business
- Comprehensive Management Tools for Amazon Sellers
- How To Start Your Online Business as an Amazon Affiliate
- The Best Amazon Tools for Keyword Research
- Top 3 Websites to Help Amazon Sellers With Product Research
- Why Are Keyword Tools Important for Amazon Sellers?