If you are looking to earn some money online, selling on Amazon is a fantastic way to do it. Amazon FBA, which means Fulfilment by Amazon, is a lucrative way of earning money, with some people earning hundreds of thousands a year from selling in the right place at the right time. In fact, there’s no better time to start selling on Amazon than right now – 62% of Amazon Seller profits rose in 2020 alone!
Of course, it’s not as simple as just getting a product and listing it on Amazon. To succeed in Amazon FBA, you need some background information first to ensure that you are doing the right things to help you to maximize your profits. After all, a lot of other people are doing Amazon FBA too, so you need to know how to beat the competition. With that in mind, we’ve created this nifty beginners guide to selling on Amazon. Without further ado, here’s everything that you need to know.
Why Should You Choose Amazon Over The Competition?
This solid fact shouldn’t come as a surprise, but Amazon is one of the leading online marketplaces in the world.
It completely dominates the US eCommerce with an approximate 49% market share. Moreover, in 2020 Amazon was the world’s third-leading B2C market after Tmall.
With such a firm and intense grasp on the market, it is as clear as day that every seller should try to take advantage of Amazon and its big consumer pool. Amazon lets you dip into its millions of loyal user base who are always in the market for the next big thing.
Furthermore, with such a great market and nearly no overhead costs, you can efficiently and successfully run your business.
We are confident that these reasons should surely compel you to start listing on Amazon today!
Now that you are determined to become a successful Amazon seller, let’s jump into our ten necessary steps for becoming a professional Amazon seller.
What You Will Need Before Starting To Sell On Amazon
The very first thing that you need to do is to do a little bit of research. Here are some of the things that you will need before you begin to sell on Amazon.
Finding Your Niche And Starting Market Research
Finding your niche is incredibly important. In fact, it’s one of the key things that will determine how successful you are in your efforts. Make sure that you do plenty of market research before you start selling any random thing on Amazon. Look for products that are going to be competitive that will give you a good profit margin.
One thing that you can do is analyze the Amazon sellers that have had success and look at their niche and what products will sell the best. Look for niche products that will perform well in sales throughout the year too – seasonal products are only going to be useful for one small part of the year. Niche products should also be giving you a profit margin above 15% in order for it to be worthwhile. Things like FBA calculators can help you to figure out how much profit you will get on a given product.
If you are struggling to find a niche, it can be helpful to join FBA communities where you can ask for advice.
Set A Budget
In order to set up an Amazon FBA business, you are first going to need to have money. You can’t source products to sell if you don’t have money to begin with. For this reason, you need to set a budget. You can set this budget based on your startup costs. But how much money? These costs will largely depend on things like the niche and the size of the products, but if you’re smart you can usually start up your FBA business with a budget between $5,000 – $10,000. This includes the costs of buying the inventory to begin with, buying UPC code, opening your Amazon seller account, logos and branding and product photography if needed. Again, these costs may vary and some gurus will be trying to tell you that it can be done for a few hundred dollars. Sadly it cannot and does take some capital. We’ll dive into some of the costs in more detail later in this article.
Do Some Market Research
Now you have found your niche and set a budget – congratulations! The next thing that you need to do is a little bit of market research. Before you buy the products to sell, You should have a look at competitor analytics spanning a couple of months or so. This will help you to truly gauge whether the niche is going to be a profitable choice for you.
You can also do other things like conducting surveys or speaking to customers to see what people truly desire.
When you have done this research and you feel confident that your products and niche can help you to have success in the market, you can then move onto the next step based on your needs.
Note: Avoid trying to compete with an Amazon brand such as Amazon basics as they will be ordering huge volumes and new sellers like yourself wont be able to compete.
Finding The Right Suppliers
Your next obvious step is to find suitable suppliers. Take it from us; this is more difficult than you think.
If you plan to sell out-of-the-box handmade goods, you do not have to worry about this step. Instead, you can plan on searching suppliers for raw materials.
Many Amazon sellers prefer to import their supplies from e-com giants like AliExpress or Alibaba. Once you contact the sellers, make sure that you get samples. You do not want to place a large order only to find out the quality is poor.
To save your money and time, consider asking for samples of each unit. You should also not forget to read reviews. Try to stay away from suppliers who have many negative reviews.
Try to negotiate for a better price; even a slight discount can help you save a lot when considering buying in bulk. Understand the supplier’s terms and pricing structure completely.
Place Orders For Those Products
Now you’ve found your supplier, it’s time to place an order. As mentioned previously, it’s a good idea to order some to sample before sending them off to the Amazon warehouse. After all, you don’t want to be getting lots of negative reviews because you have chosen an unreliable supplier that doesn’t make very good products.
Research on the Shipping Costs
Another thing that you need to think about when it comes to purchasing products from a supplier is how much it costs for shipping products to Amazon warehouses. It’s important that your product is a low price to begin with – there’s no doubt about that. Of course, that low cost isn’t going to make a huge difference if most of your profit is going to be eaten up by the shipping costs.
Look into the different shipping options costs and how long it will take for your product to get to you from overseas. The reason that this is important is because you will be able to make a better decision about what price you should put on the product listings when you are ready to start selling. Likewise, knowing the shipping time is vital as it can tell you how much time you are going to need in order to restock your Amazon store, especially during busy periods. It helps you to prepare, which is rule number one of having an Amazon FBA business!
Test The Product
This warrants its own separate sub heading in our guide! Always, ALWAYS make sure that you are testing products before placing a huge order. Your products need to be high quality, otherwise you will be giving a lot of people refunds and will be stuck with a bunch of low quality stock cluttering up your garage. We can assure you that stumbling over poor quality yoga mats for who knows how long can get old real fast.
When you feel confident that you have a high quality product, you can then move onto the next steps.
Lastly, take your time and compare multiple suppliers to get the best deal.
Name Your Brand
The next thing that you need to do is name your brand. This can be a challenge so you may need to do some brainstorming! Make sure that you choose a name that is going to accurately cover your personal product name. If you are struggling then you can search certain names on Google, as this will tell you what names are already taken. It’s a good idea to opt for a name that doesn’t have a domain associated with it, as you can then create your website without worrying about competing with other brands. Ensure that your brand is consistent, and not so obscure that it can’t be associated with a specific product lineup.
Create Your Brand Logo
When you have your name, you will then need a logo and some branding for you private label product. If you aren’t particularly well-versed in Adobe Photoshop, then it may be worth speaking with a graphic designer to help you to create your logo and color schemes. You don’t want something that’s too complicated to make, since complicated logos are going to cost a lot more money to make. The other problem with complicated logos is that they can be hard to recognize for many customers, and they usually aren’t very clear either. You can find lots of freelance graphic designers online on websites such as Fiverr or Upwork. You can also put an ad up on Craigslist, or speak to someone that you know in real life.
The logo isn’t the only thing that you need to think about for your own brand either. You should also take some time to consider the brand themes and the taglines. They help to make your brand and products stand out, meaning people will be more likely to purchase your products.
Register Your Business
For the sake of consistency, it may be worthwhile to register your business early on. With that being said, it’s not strictly necessary to register your own business immediately on Amazon. You can use a generic name to sell under if you wish until you get to the point where you are making consistent product sales. You don’t technically need to register your business in order to sell online at first, though you will need to register it later on when you are earning more money. You can register your business as a sole trader, limited company and a wide variety of other options, so you need to choose what you think will best suit you.
What you will need to do at the beginning though is to register your seller’s account on Amazon. Read on to find out more!
How to Start Selling on Amazon
Sign Up On Amazon
Now that you have a clear picture or idea of your product and its total price, it would be best if you started fiddling through Amazon to set up your Amazon seller account.
Consider selecting a suitable plan before you begin your registration process. Amazon offers its sellers two programs- Individual and a Professional selling plan.
The individual plan usually costs $0.99 per sale, while the professional plan costs $39.99 per month. You can choose either plan according to your needs.
We highly recommend starting from the Individual plan and then bumping to Professional once your sales drastically increase. Amazon gives you the freedom to choose and change the program anytime.
|Individual Plan||Professional Plan|
|This plan lets you sell fewer items than 40. You cannot go beyond 40 products a month, so beginners find this plan feasible.||The professional selling plan lets you have the freedom to sell more than 40 items a month. This plan comes extremely handy when you have a long catalog of items.|
|The individual plan doesn’t let you use any advanced programs, software, or tools.||This plan lets you access APIs, selling reports, and much more. You can easily manage your inventory via spreadsheets and feeds.|
|Isn’t eligible for listing placement in the Buy Box.||Eligible for listing placement in the Buy Box.|
|An excellent choice if you are still testing the waters.||Highly recommended when you are 100% sure about your private label product.|
Information and Documents You Will Need To Provide
It would help if you had these below-mentioned documents to start your registering process:
- Chargeable credit card
- Government-issued national ID
- Valid phone number
- Tax information
- Bank account number
- Bank routing number
Amazon would likely ask you to produce scanned copies of other documents like bank account statements, passports, national ID, credit card statements, etc.
Ensure the address and information on each document matches with each other. Amazon usually looks for information consistency to prevent scammers from joining the program
Your Home Address
You will need to ensure that your home address is provided for your Amazon seller account, along with your legal name. If you have registered the business name then you should provide the name listed on the business registration and use the address associated with the business.
Your Phone Number
It is important that Amazon has your contact information, including your phone number and email address. This is because Amazon is going to provide you with notifications, service updates and guarantee claim notifications by getting in touch via phone or email. Not only that, but your contact information allows customers to get in touch with you if they have any questions. You can use separate contacts for customers and for Amazon if you wish, however.
How you’ve registered your business
Have you registered your business? If so then you need to provide information on how the business has been registered, for instance if you have registered as a limited company, a sole trader or anything else.
Current Appointments Report (CAR) dated from the past 90 day
If you are registered as a Private limited Liability Company then you are going to need to provide a Current Appointments Report that has been generated within the last 90 days.
Utility Bill, Bank Statement or Credit Card Statement in the name of the Business and dated from the past 90 days
To prove that you are the business in question, Amazon will also require that you provide evidence. This can be in the form of a Credit Card Statement, a Utility Bill or a Bank Statement. These should be in the name of the business and should be dated in the last 90 days or so.
Articles of Association
Make sure that you have some Articles of Association as these will be needed for your Amazon Seller Account.
Memorandum of Association or Statement of Capital
Finally, you are going to need a Memorandum of Association or a Statement of Capital. This will tell Amazon about any shareholders in the business and anyone that will have a division of the shares.
It’s also worth noting that the information needed will differ if your business is registered as a Sole proprietor or a United States Incorporated company. You can find more information here.
Understanding the Fees Structure
Before starting, you should have a clear idea about all the fees you are expected to pay. These fees would change according to the plan you decide to go for.
- Subscription fees – Subscription fees are the amount you need to pay for the type of plan you choose. As mentioned earlier, the professional plan charges you $39.99 per month and the Individual selling plan charges a $0.99 fee for each item sold.
- Selling fees – Selling fees are always charged per item sold. These fees also include the referral fees and variable closing fees. The final amount continuously varies according to the product’s category, media catalog, and percentage of the selling price.
- Shipping fees – When a seller completes their orders by themselves, then Amazon shipping rates get applied to send the product from the Amazon fulfillment center. Amazon charges the rates based on the product category, shipping distance, and shipping service opted by the buyer.
- FBA fees – These fees are only applicable to sellers who join the Fulfillment By Amazon structure. These fees are charged for the order fulfillment, storage, and other types of optional services that a seller wishes to use.
- You can find out more about the FBA fees on Amazon Seller Central.
Registering On Amazon Seller Center
As soon as you register as an Amazon seller, you will have personal access to your Seller Central account.
This Seller Central acts as the main hub for your Amazon business and all the other managing requirements. Whenever you have to make any change in the existing listing, this portal can help you.
Amazon Seller Central can help you check inventory, add or remove product information, close or delete a list, manage the payments, resolve FAQs, and much more.
You can also use the Seller Central Amazon account to:
- Constantly update your inventory.
- Download helpful custom reports and bookmark all the templates that you regularly use.
- Monitor your seller performance via the customer metrics tool.
- Contact support and help clear any tickets using the Case Log.
- Keep a detailed track of how many sales you make each day.
- Manage Inventory
- Monitor account health
- Create Sponsored brands PPC campaigns
Listing is one of the essential things in your Amazon business. You need to ensure that you create a perfect and, most importantly – accurate product listing.
Create Product Listing
Create listings page for your product is one of the most important aspects of the entire process. If your product listing isn’t very good then you will likely have a hard time trying to get people to buy your product.
We all wish that selling on Amazon could be as simple as listing your product and then waiting for a sale, but you need to be strategic. Make sure that you are adding keywords and being creative with your listings. Ensure you choose the correct product category so your target customers can easily find your listing. That way, people will be more likely to find your products when they are searching on Amazon and also on their chosen search engine/ Make sure that your listing is one that draws in the customer while still giving them all of the information that they need. Even when you have got a few sales, you still need to keep on refining your product listings so that you can stay ahead of the algorithm and beat the competition.
Each individual aspect of the listing should be optimized, so let’s dive into them individually.
Your customer is going to see two main things when they first look for products that are similar to yours. First is the title, and then the image. If either of these fail to appeal to the prospective buyer, they’re just going to move on to a product listed by one of your competitors. Your product title needs to be one that is going to be alluring to a potential customer if they search for a product like yours. You can make the title more appealing by adding things like identifying information into the title. Make sure that this information is clear and unique so your customer will have no problems figuring out what the product is supposed to be. It’s also vital that you put one keyword into the product title too.
The next thing that you need to do is put a product description on your listing. It’s vital that this listing is simple to read and should be concise. Any information that you missed from the title can be placed in the product description, including the key features, colors, sizes, weight, product dimensions, installation guide and the warranty information.
Professional Product Photos
When you scroll through Amazon, do you buy products that have bad looking photos? No! That’s because they don’t look like they’re high quality, so you don’t want to waste your money on them. By putting poor quality images on your product listings you are missing out on some great customers. Instead, make sure that you have some professional product photos for the job. They should accurately reflect the product that your customer will be getting. If you aren’t sure how to take professional photos, you can get a photographer to help you out.
Price your products
A lot of buyers will make their final decision based on one main thing – the selling price. If two products look fantastic but one is slightly cheaper, the buyer will usually go for the cheaper option to save some money. This is one of the reasons why you need to make sure that you are doing your research. Take a look on Amazon to see what the pricing is like for other similar products. You can then make your own pricing accordingly, based on profit margins and your likelihood of success.
You have the freedom to match an existing one or to build one from scratch (in case you are the only Amazon seller selling it). The professional plan lets you upload your product in bulk using various third-party systems.
If you have opted for the Individual plan, you need to list the items one at a time. Once your product listing goes live, you can successfully receive orders and make sales for your won products.
Bonus tip: You can setup enhanced brand content for you listing to really show off your own products features and benefits.
Avoid these listing mistakes that can affect your sales:
- Be careful about variation listing. Only add the variation if your product differs by color, size, flavor, or scent. Avoid the mistake of putting non-similar products under one parent ASIN.
- Ensure your pictures have a minimum quality of 500 x 500 pixels. You can increase it to 1,000 x 1,000 for a better and high-quality image. Do not add colorful backgrounds, and remember that your item should fill 80% of the total image area.
- Keep consistent UPCs and GTINs. Consistency in these number codes promotes confidence which in turn helps you rank better.
Delivery is the last step that you should neatly pay attention to before launching your listings.
Amazon always lets you decide if you want to participate in their FBA program or do it yourself (Merchant fulfillment).
Let’s look at both options to understand which system is more suitable for you in terms of profit and efficiency.
- Merchant Fulfilment – Merchant Fulfilment means the seller has to store and ship the items directly to the customers. They might have to decide on the store inventory and need to deal with the shipment procedure all by themselves. Amazon’s Buy Shipping Tools is an excellent toolkit to find trusted shipping parents across the globe.
- Fulfillment By Amazon – Amazon has 175 fulfillment centers with massive storage space. With the FBA program, a seller gets to use the area and store the inventory in their warehouses. Apart from that, the seller receives Amazon’s customer service, hassle-free return service, and Prime eligibility. These extra add-ons help your products become more credible and ultimately become best sellers.
A list of common mistakes newbies make:
Ignoring the reviews
All types of customer product reviews are an integral part of Amazon’s shopping experience. Reviews can genuinely make or mar your listing, so it’s always advised not to take this section lightly.
Ensure you are following all the steps to earn client reviews. You can request your customers to review the product to increase the credibility of the listing.
Potential customers usually run towards the product reviews to see for themselves, and a pool of bad reviews would surely make them bounce off your listing.
According to a survey, around 82% of potential customers read the reviews before making a purchase. Therefore, pay attention to your reviews.
Writing wrong titles, keywords, and fake images
Keeping the listing proper will be an ongoing challenge since Amazon comes up with new policies, limits, and restrictions every few months.
Ensure to stick within the limited-character keywords. Avoid the following things on your listing, as your Amazon seller account could get suspended if you fail to comply.
- Keeping the full title and description box in all caps.
- Your title, description, and images should be devoid of URLs and HTML codes.
- Symbols like &, etc., @ should be avoided.
- Hyper promotional wordings like ‘lowest price,’ ‘best,’ ‘free,’ ‘Sale’ should never be used.
Selecting an over-saturated niche
New Amazon sellers should avoid picking up an oversaturated niche. It would be helpful to stay away from standard niches as many well-established competitors have been ruling the listing.
With such expenses, it is impossible to offer discounts or situate your listing near theirs. Instead, pick a niche that has low competition but will ensure a high sales yield.
Lacking efforts while listing
Your Amazon listing is your product catalog, and you should always strive to make it as interesting, informative, and trustworthy as you can.
Consumers will skip your listing if they notice many spelling mistakes, shoddy descriptions, lack of information, or low-quality pixelated images.
These tell-tale signs point towards a lack of effort from the seller’s side. If you wish to increase your sales, pay extra attention to the listing and focus on how the product shall benefit the consumer.
Launching the product and optimizing the listing
Many sellers launch the product and wait for the magic to happen. You have slim chances of getting customers via this route. Those who continue to optimize product listings will stand the best chance of success on the Amazon marketplace.
A new seller should establish their product with a boom and proactively try to increase the listing views as time passes.
A seller should start an Amazon Sponsored campaign, promote the items on their social media, optimize the keywords to their fullest, keep discounts and giveaways. These efforts would help you launch your product to bag your first few clients.
It would be best if you never run out of stock as it can badly influence the ranking of your listing. Apart from that, you will also lose many potential clients till your inventory gets stocked up. On the flip side having too much inventory can mean your storage fees add up if you dont have enough sell through.
To avoid this, always keep track of your list and refill it as and when needed. You should immediately opt for ‘closing the listing’ if you encounter such a situation in the future. There are some good inventory management tools like Helium 10 and Forecastly to do the hard work for you.
Doing so would keep your ratings intact while causing no harm to your SEO. Re-live the listing as soon you are completely stocked up with the products.
Use a Keyword Research Tool
One of the hardest parts of creating an Amazon FBA business is keyword research. It can seem like a bit of a minefield for people just starting out, since there are so many different things that you need to know. As we have already established though, there is a lot of competition that sell on Amazon, so getting your keyword research correct is vital if you want to be successful.
Keyword research tools can help to take a lot of the guesswork out of the process. They are designed specifically for Amazon sellers, so they will help you to find relevant keywords that are going to work well for your product listings. For instance, Jungle Scout is one of the most popular keyword research tools for selling on Amazon can make finding high volume keywords a breeze. This particular tool will help with pretty much everything related to selling on Amazon from product research to optimizing your product listing. It has other tools that you can use too, most notably Promotions and Supplier Database. Supplier Database can help you to find a manufacturer for the product that will work best for you. Their Opportunity Finder tool is basically the perfect tool for helping you to find the best products to sell.
Other tools include Viral Launch, AMZScout and Helium 10 which even provides PPC tools that you can use, and competitor analysis.
Of course, this isn’t an exhaustive list. You can look online for a bunch of great tools that you can use based on your own FBA business needs. It is definitely worthwhile to try a keyword research tool though as it will save you a lot of time and confusion.
Selling on Amazon can be super simple when you know where to start. It may take a little bit of trial and error and you may not get the results that you want straight away, but with some time you will get the hang of it and be earning some serious money! By following the beginner’s guide listed above, you are sure to have a successful Amazon FBA business in no time.