Do you want to make money online where you have the freedom to set your own hours? Then you’ve probably heard about selling on Amazon. With a total net sales of approximately $125.6 billion in the United States alone, no wonder many sellers are flocking to Amazon.
Aside from the potential sales, the straightforward way of doing business is also one of the factors that attract sellers to the platform. Secondly, Amazon makes it easy to reach millions of potential customers. Plus, sellers can start selling before they can even set up their website or physical store.
Want to become an Amazon seller but don’t know where to start? This guide will give you easy-to-follow steps plus tips on how to sell on Amazon.
What is Amazon University?
The Amazon University is a free online repository of training videos geared towards helping sellers get started on the Amazon marketplace. The goal is to help sellers optimize their selling process on the platform.
Here are a few things you can learn from Amazon University:
- Create Amazon product listings faster
- Master key tools and applications
- Learn about the product rules and restrictions
- Take advantage of Amazon FBA, advertising, promotions, and more.
To watch Seller University videos on YouTube, you must first create an Amazon seller account.
With the rising demands of sellers, Amazon created the FBA program. And since then, this service has become one of the most popular ways to sell on Amazon.
But what is Amazon FBA?
FBA stands for “Fulfillment by Amazon”. This means Amazon will store your products, fulfill your orders, and offer customer service. That said, enrolling in the Amazon FBA program allows you to take advantage of the platform’s powerful distribution network.
With Amazon FBA, you can:
- Automate order fulfillment
- Take advantage of Amazon’s advanced shipping and fulfillment services
- Earn additional sales from Amazon’s Prime customers
As a seller, you don’t have to pack and ship orders. All you have to do is send your products to Amazon and make sure to keep your inventory full.
When a customer orders one of your products, Amazon will take care of the rest. Plus, Amazon will also handle returns and refunds.
The Amazon FBA program also offers special services like:
- You’ll be qualified for free shipping on orders above $25 on books and $49 on other items.
- Two-day shipping for Prime members
- Powerful inventory management tools
- Access to hundreds of millions of shoppers worldwide
Ready to start selling on Amazon?
How To Set-Up an Amazon Seller Account
1. Choose Your Category
There are a few things you need to consider before setting up an Amazon seller account. First, think about the cost to sell on Amazon. This factor depends on variables such as selling plan, category, and fulfillment strategy.
Thankfully, Amazon offers flexible options so you can find the best one for your needs. That said, you can choose between an Individual and Professional Seller Plan.
Individual Seller Plan
With this plan, you will pay a small fee of $0.99 for every item sold. This option is perfect if you’re selling only a few items. That said, consider this option if you’re getting started and selling handmade products.
This plan is for you if:
- You’ll sell fewer than 40 units per month
- You’re just getting started and still deciding what to sell
- You don’t plan on advertising or using advanced seller tools
Professional Seller Plan
With this plan, you’ll be paying a monthly subscription fee of $39.99 plus additional selling fees. But the more you sell, the less this fee matters. So this seller plan is perfect for large-scale sellers, retailers, and established brands.
This plan is for you if:
- You’ll be selling more than 40 units per month
- You’re planning to advertise your products in the long run
- You want a chance to be displayed on the top placement on product detail pages
- You want to take advantage of the advanced selling tools
- You want to sell products in restricted categories
In both Individual and Professional plans, you can list products in more than 20 categories. But with a Professional seller plan, you can list products in additional 10 categories.
Note: To qualify for the extra 10 categories, you’ll need to apply for permission and meet requirements.
For a full list of features, you can check out Amazon’s Selling Plans here.
2. Find Products To Sell
You’re ready to start selling and earning money online. That’s great! But do you know what products to sell on Amazon?
Here is a simple guide to help you choose which product to sell:
Pick A Niche
A profitable product must fall between your interests and profit margin.
This means picking a profitable product that aligns with your passion and interests. So conduct product research to:
- Be familiar with product trends
- Understand their practical value, visibility, and recognition
But with a plethora of options, choosing a good product to sell can be overwhelming. To help you, consider these criteria when choosing a product:
- Selling between $21 and $200
- Small, light, and easy to ship
- Sells at least 10 units per day
- Offers a minimum profit margin of 50%-67%
- Sells twice or three times its cost
- Under 150 reviews
Here’s an additional tip: Take a look at the list of products under sponsored ads. Since sellers are investing in advertising, then it’s a good indication that the product is selling well.
Avoid Amazon’s Restricted Categories
Since you’re just getting started, it’s best to choose products that will help you make sales quickly. So avoid products that fall in restricted categories.
Why? Because in order to sell these products, you’ll need to apply and meet Amazon requirements. You can take a look at Amazon’s list of restricted categories here.
Choose the Right Tools for Amazon Product Research
There’s no product research tool that will help you auto-select profitable products. You’ll have to do your due diligence to gather the necessary data. Then, you can use these tools to help you make the best decision.
These tools will help you sort your data, set competitive and profitable prices, and track products offered by other sellers.
Here are the top 3 product research tools:
- Jungle Scout: This tool allows you to filter the entire Amazon product database. You can use it to uncover great opportunities in niche markets. Plus, it helps you keep track of what your competitors are doing. This means you can quickly update prices in case of changes.
- AMZ Tracker: Amazon works like Google. People input keywords in the search bar to find products. So for potential buyers to find your products, you’ll need to be ranking for the right keywords.AMZ Tracker offers keyword tracking reports. With this tool, you can see which search terms your products are ranking for. Additionally, it also offers negative review alerts and competitor analysis.
- Unicorn Smasher: This is a free online Chrome extension that offers accurate sales estimates from thousands of live Amazon products. This data will help you determine the profitability of any niche. Plus, with this tool, you can analyze which products offer a good opportunity to dominate the marketplace.
3. Find a Reliable Supplier
Are you going to produce your products yourself? If not, then you’ll need to find a reliable supplier.
Check out different supplier directories, but take time to research any you find. You can start on Alibaba and other B2B platforms, like AliExpress. Another option is to search on Google or if there are trade shows near your area, get contacts from potential suppliers.
Of course, you can also reach out to sellers on Amazon and ask for recommendations.
Once you find a potential supplier, reach out to them. Send emails, make phone calls, or visit the supplier if they’re within your area.
Here are a few things you should do:
- Inspect the sample products. Are they made well? Do they meet your quality standards?
- How much does the product cost per unit?
- Is there a minimum order quantity?
- Does the supplier have an order limit?
- How much is the shipping fee?
Additionally, you must also ask about their payment options and the payment terms. Ask around, compare different sellers, and find the best one.
4. Open an Amazon Account
If you already have an Amazon customer account, you can use it to Sign In.
Another option is to create a new Amazon seller account using your business email.
But first, here’s what you need to get started.
- Business email address or an Amazon customer account
- Credit Card
- Government ID – this is used for identity verification to protect sellers and customers
- Tax information
- Phone number
- Bank account where you want Amazon to send you the proceeds from your sales
Step 1: To sign up, you can choose either of the following options:
- Go to https://sell.amazon.com/, then click on any of the “Sign Up” links.
- Go to https://sellercentral.amazon.com/, then click on the Sign-Up button.
- Or scroll through the bottom of Amazon.com and tap on the “Sell on Amazon” link.
Any of these options will start your registration process.
Step 2: You can immediately click on the Sign Up button to get started. But if you want to check the Selling Plan options and comparisons, scroll down to the “Make Money” heading. Tap the “See Pricing” link.
Note: If you immediately click the “Sign-Up” orange button, you’ll be taken to the Professional Seller registration page. So if you want to check your options, tap the “See Pricing” link first.
Step 3: Choose between Individual and Professional Seller plans.
In the previous section, we’ve discussed the difference between each plan. But to review, an Individual Seller Plan is a good option if you’re just starting out and selling not more than 40 products per month.
Step 4: Click the “Create a New Account”.
Step 5: Enter your information on the required fields.
Step 6: On the next page, you’ll be asked to input a one-time password (OTP) generated by Amazon. This OTP will be sent to the email address you provided and will also serve as email verification. Once done, tap the “Create your Amazon Account” button.
Step 7: Choose your “Business location” and “Business type”. Then input your first, middle, and last names and click “Agree and Continue”.
As for the business type, you can choose between the following:
- State-owned business
- Publicly-owned business
- None – I am an individual
Step 8: On the next page, you’ll need to provide your personal information. This is for verification purposes. That said, you’ll be asked to provide your passport number, or driver’s license, and phone number.
Step 9: Choose your marketplace then click Next.
Step 10: Enter your billing information. On this page, you’ll be asked to provide your credit card information. Amazon also uses this data to verify your identity so make sure your credit card information is valid.
Step 11: Provide information for your product(s) and Amazon store, then tap Next.
Amazon will ask a few questions about:
- The name of your Amazon store
- If you have UPC codes for your product(s)
- Whether or not you are the manufacturer and/or brand owner of the product(s) you’re selling
- If you registered a trademark for your product(s)
Step 12: Lastly, you’ll be asked to confirm your business address. If the address is correct, then click the “Confirm” button.
The next page will let you know that you’ll receive a postcard at that address with a verification code. Once you received that card, you’ll need to enter the code into the “Enter code below” field and click Next.
As soon as you’re verified, you’re in!
But before you can start selling, you must first select a fulfillment option.
- Do-It-Yourself: This means maintaining your own inventory. You’ll have to handle the packaging and shipment of your products to customers.
- Sign up for FBA (Fulfillment by Amazon): Amazon will take responsibility for the packaging, labeling, and shipping of products.
How to Sign Up for FBA
- Log in to Seller Central to “Set up FBA”.
- Create your product listing. When adding your products to the Amazon catalog, specify FBA inventory.
- Prepare your products. Make sure you follow the Amazon packaging guidelines and shipping and routing requirements.
- Ship your products to Amazon.
To know more about Fulfillment by Amazon (FBA), you can download the Getting Started Guide here.
5. Calculate Amazon Revenue
First, estimate your monthly sales volume – based on the product’s Sales Rank and current price. Then add your Shipping Cost and Cost Price to get the figure of your total revenue and potential profit.
Doing so will help you determine whether or not the product is worth pursuing.
You can also use Amazon’s Revenue Calculator. It’s a tool that allows sellers to compare revenue estimates based on the fulfillment channel used. Another option is to use the FBA Revenue Calculator to estimate your sales margin.
Note: The Revenue Calculator only provides an estimate. It doesn’t include taxes, selling plan fees, FBA fees, and other costs you might incur.
You’ve probably come across poor product listings on Amazon.
The most common mistakes include product titles that are stuffed with keywords and low-quality descriptions. Don’t make the same mistakes.
Here are a few tips to optimize your product listing:
- Product Title: Keep it clear. It must contain important information, such as brand, model, size, color, etc.
- Features and descriptions: Provide concise information and use relevant keywords. Consider providing the benefits of the products, followed by their features. It’s also a good idea to list frequently asked questions.
- Categories: List all relevant categories and sub-categories.
- Product Images: Use high quality, professional-looking images. Consider using photos with a 1000px x 500px size.
- Reviews: Encourage your customers to leave feedback about your products. You can use a tool, like Feedback Express, to eliminate the hassle of requesting product reviews.
- Ratings: Maintain a good rating on your products. If you observe a low rating, then improve your product or remove it from your listing.
- SKUs: This is a unique alpha-numeric code assigned to each of your products. That said, all products sold on Amazon need to have SKUs. You can generate on your own or have Amazon generate for you.
Additional things to keep in mind:
- Highlight the top 5 benefits or features that your customers would love to know.
- Use bullet points. Keep each point short and concise.
- Don’t use all caps and symbols.
- Be specific with product features.
- Don’t include price and quantity.
- Avoid adding shipping and company information. Amazon prohibits this.
- No promotional messages like discounts or sales.
- Lastly, use a consistent tone.
7. Create a shipping plan
Providing high-quality products is one of your responsibilities as a seller. For one, it helps you gain 4 or 5-star reviews on Amazon. So make sure that each unit is in good condition before shipping them to Amazon. Additionally, follow Amazon’s FBA guidelines.
With regards to shipping costs, it should be based on factors like item weight and delivery time. So, the heavier the item being express-shipped, the higher the costs.
8. Observe and refine
Now it’s time to start selling!
Once your Amazon store is fully functioning, keep an eye on products that are selling well. You should also keep track of items that are not doing well or have low ratings and negative reviews. Based on these observations, refine your product listing.
How to sell on Amazon? Here are 4 Important Things You Need to Practice to Stay on Track
1. Show Up In Search Results
Amazon sells more than 12 million products. And before buyers decide to make a purchase, they’ll have to search, find, and compare items. The challenge then is to show up in search results.
So, optimize your product listing. Use keywords in your product information and provide concise product details as much as you can.
Why is this important?
- Your product will show up higher in search results
- More keywords will be associated with your product
- As your volume increases, you’ll be able to enjoy better pricing.
2. Observe the Traffic
Another important practice is to monitor your store’s performance. Here are a few things to watch out for:
- Sales: Is it increasing or decreasing?
- Return rate: Do you receive a number of return requests per month? What’s the reason behind it?
- Seller rating: What is your average rating?
- Traffic: Where is your traffic coming from? Which Amazon product receives the best traffic?
If you’re serious about improving traffic on your store, consider investing in Sponsored Ads. You can also utilize external traffic by promoting your products through blog posts and social media.
3. Pay Attention to the Conversion
Don’t limit your focus on sales, refunds, and traffic. You also need to observe conversion rates
But how do you check your conversion rate?
In Amazon, your conversion rate is also known as Unit Session Percentage. You can find it by going to Reports > Business Reports > Detail page sales and traffic.
This metric is calculated by the number of units sold divided by the number of sessions.
Note: Sessions are the number of visits to your page within a 24-hour period. Multiple views within the 24-hour period count as one session. That means a consumer visiting your page 5x in a day before buying is still counted as one session.
The higher the conversion rate, the better.
4. Get Feedbacks and Listen to Them
Lastly, pay attention to what your customers have to say. Regularly check feedback and monitor your performance.
Here are some tips to get good feedback:
- Accurately describe each of your product
- Quickly ship out items to your buyers
- Be prompt in responding to customer inquiries
- Provide excellent customer service in terms of refund or return requests
- Build rapport and add a human element to your business
To encourage your customers to leave product reviews, you may solicit feedback on your packing slips. Or as previously mentioned, you can use online tools to automate the process.
How Much Does It Cost To Sell On Amazon?
The cost to sell on Amazon depends on several factors including:
- Selling Plan
- Amazon Product Category
- Fulfillment Plan
- and other costs
Here are some of the costs to keep in mind:
Selling Plan: The individual seller account costs $0.99 per unit sold while the Professional seller account has a subscription fee of $39.99 regardless of the number of units sold.
Referral Fee: Amazon also charges a referral fee for each item sold. The cost ranges between 8% and 15% and it depends on the product categories.
Fulfillment Fee: This cost depends on whether you fulfill your own orders or you sign up for Fulfillment by Amazon (FBA)
Other Costs: Some sellers may also incur additional fees like inventory fees, high-volume listing fees, refund administration fees, etc.
Thankfully, Amazon offers flexible options so you can choose the best combination that works for you.
For Amazon FBA beginners, it can be intimidating to open your shop and start selling. But the tips listed above are meant to motivate you. Each tip will guide you step-by-step on how to sell on Amazon.
But first, you’ll need to figure out what product to sell and which supplier to get them from. It’s also a good idea to look into Amazon University. Doing so will help you dip your toes into the Amazon marketplace. Lastly, consider signing up for Amazon FDA as it eliminates the hassle of shipping your products to customers.
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