Did you know? Amazon is the largest e-commerce platform, holding a 37.6% share of the U.S. e-commerce market, according to recent Amazon statistics. With millions browsing products on Amazon daily, selling on Amazon can significantly expand your business’s reach and revenue potential. In this guide, we’ll walk you through essential steps and strategies for how to sell on Amazon successfully, helping you unlock the full potential of this dynamic e-commerce ecosystem.
Let’s get started!
Table of Contents
Benefits Of Selling On Amazon
As a beginner prepping to sell on the platform, you must wonder, ‘Is it worth selling on Amazon?’ If you’re asking yourself how to sell on Amazon for beginners, here’s why you should start your selling journey on the platform:
Massive Customer Base
Amazon has millions of customers worldwide, providing sellers with instant access to a large audience. This extensive reach is beneficial for new and established brands looking to expand their visibility.
Trust and Credibility
Amazon is a trusted platform among consumers. Knowing how to sell through Amazon can lend credibility to your brand, as customers often feel more comfortable buying products from a well-known marketplace. Selling on the Amazon marketplace not only enhances your visibility but also boosts customer confidence.
Fulfillment by Amazon (FBA) Feature
Amazon’s FBA service allows sellers to store their products in Amazon’s fulfillment centers. Amazon takes care of storage, packing, shipping, customer service, and returns. This can significantly reduce the logistic burden on sellers and improve customer service.
Prime Eligibility
Products handled through FBA automatically become eligible for Amazon Prime. This gives sellers who want to sell on Amazon Prime access to a vast pool of loyal Prime members. These members prefer purchasing Prime-eligible products due to benefits like free two-day shipping.
Multi-Channel Fulfillment
Sellers can use Amazon’s fulfillment network to ship products sold on other platforms, not just items sold on Amazon. This versatility helps streamline operations and maintain consistency in fulfillment services.
Easy International Expansion
Amazon operates in numerous countries, making it easier for sellers to expand their operations globally without the need to establish a physical presence in each country.
What Do You Need To Sell On Amazon?
Before you learn how to sell on Amazon, make sure you have these preliminary requirements set up:
Choose A Selling Plan
Amazon allows flexibility, enabling sellers to switch or terminate their chosen selling plan at any time. However, you can’t sell on Amazon for free. It offers two selling plans to cater to different needs and budgets. The Individual selling plan, priced at $0.99 per sale, is suitable for those selling fewer items or just starting out. On the other hand, the Professional selling plan costs $39.99 per month, regardless of the number of items sold, making it ideal for sellers with a higher volume.
Additionally, the platform imposes a referral fee on each item sold, along with potential additional selling fees under certain circumstances. Some optional tools and programs may also involve supplementary costs, providing sellers with a variety of resources to optimize their sales strategies.
Create An Amazon Seller Central Account
Once you’ve selected your selling plan, register with Amazon and set up a Seller Central account.
You can create your account using either the email address linked to your Amazon customer account or a separate business email address.
You need to fill in the following information:
- Bank account and routing number
- Internationally chargeable credit card
- Government-issued ID
- Tax information
- Phone number
Configure Your Amazon Seller Central Account
After signing up as a seller, you’ll get access to your Seller Central account. Seller Central is where you manage everything for selling on Amazon. You can list products, set prices, keep track of your stock, and fulfill orders from customers.
It also has tools for creating promotions, managing coupons, tracking payments and expenses, etc. You can also add other users to your account. Before you start selling, make sure to set up your Seller Central account according to your business needs.
Ensure you have reviewed and checked the following:
- Public seller profile
- Payment and business information
- Shipping and returns settings
- Tax information and settings
- Notification preferences
- Login settings
- User permissions
Add Your Brand To Amazon Brand Registry
Before listing your products on Amazon, it is important to enroll your brand on Amazon Brand Registry. It is a free platform that offers various selling benefits and protection tools to sellers. In order to enroll, you must have the rights and ownership of the brand.
The Brand Registry provides better control over product detail pages and information. It also automatically protects your brand and lets you access additional reporting options.
You even gain access to no-cost tools such as:
- A+ Content: Earlier known as the Enhanced Brand Content (EBC), A+ Content helps enhance product detail pages with pictures, videos, etc. You can access it on Seller Central.
- Brand Analytics: Brand Analytics helps businesses understand their customers and how their brand is doing by gathering and summarizing search and purchase data. It includes different dashboards that brands can use to make smart choices for improving their products and Amazon PPC ads.
- Stores: Stores is a free, self-managed page on Amazon where advertisers can create content to inspire and educate customers and help them find the brand’s products.
| Learn how to create an Amazon store from our detailed blog. |
4. Manage Your Experiments: Manage Your Experiments is a tool that lets you test different versions of your product’s images, titles, and descriptions to see what attracts customers and increases sales on Amazon.
Add Product Listing
When adding a product listing, decide what you want to sell on Amazon.
After you’ve added your brand to the Brand Registry, it’s time to add your products on Amazon.
Adding products helps display them on the product detail page, where customers view your products, their details, ratings, specifications, etc. Here’s how it looks:
Your product detail page must contain the following:
- Images – 500 x 500 or 1,000 x 1,000 pixels to increase listing quality.
- Variations – colors, size, shape, etc.
- Featured offer (Buy Box) – It’s a button that adds items to a cart or buys.
- Bullet points – These must contain descriptive information about the product.
- Other offers – Multiple sellers selling the same product at different prices, etc.
- Description – Add keywords for better discoverability.
- Product Identifiers: Add product identifiers like GTIN & ASIN to your products. The most common one used on Amazon is UPC, but you can also use EAN, ISBN, or JAN.
Ensure your products follow Amazon’s policies and comply with their rules and regulations. Your business must also follow all laws. Review what you can sell and what products are restricted. Also, understand product safety.
Strategies To Start Selling On Amazon
Let’s see how you can start your selling journey on Amazon:
Decide What To Sell On Amazon
When selling on Amazon, it’s important to know what to sell and what is prohibited on the platform. This requires thorough product research, understanding customers and the market, and your inventory budget. Here’s how you can decide what to sell on the platform:
- Look for products that are trending and have demand but low competition. This can be done by finding high-demand products with fewer reviews. This means there is less competition but a good amount of demand.
- Next, read product reviews to understand what your potential customers like and how you can improve their experience. Based on these reviews, strategize and find ways to be better than your competitors. Merchants can create a brief ICP (Ideal Customer Persona) for added benefits like ad targeting, etc.
- Lastly, be as creative as possible. Check out the latest trends, find unique ways to market your goods, and learn how you can improve shopping and product quality.
- Ensure that your products meet customer demand and are affordable for your target audience. You must also consider their shelf life, packaging material & effort, ease of use, and branding potential.
Once you’ve decided, you can easily create a product feed and upload your products on the marketplace.
Leverage Fulfilled by Amazon (FBA) & Prime Badge
Use Fulfillment by Amazon (FBA), which makes it easy to sell your products to Amazon’s customers. As an Amazon seller using FBA, you simply send your products to Amazon Fulfillment Centers, which store these products and also ship them.
When a customer places an order, Amazon packs, ships, and delivers it to their door. With FBA, your products get the Prime Badge and can offer fast delivery. Amazon also manages returns and customer support for you.
Using FBA offers a lot of benefits when selling on Amazon:
- Amazon customers prefer the Prime Badge for fast shipping and great service.
- With Fulfillment by Amazon, your products stand out, reaching millions of loyal Prime customers. This exposure can be beneficial during a phase where you are launching new products, as it increases the likelihood of achieving high sales volumes quickly.
- You’ll also have a better chance to feature in the Add to Cart Offer Display. You can participate in Prime Day, an exclusive annual shopping event.
- Amazon looks after your inventory and shipping.
- FBA offers a flexible rate structure where you are charged only for the services you utilize, without any additional subscription fees, minimum unit requirements, or initial fees.
- Customer support is taken care of by Amazon.
Utilize Amazon FBM (Fulfilled By Merchant)
Fulfilled by Merchant (FBM) is an Amazon order fulfillment program that allows you to store, ship, and process orders received on Amazon and other sales channels, such as Shopify, eBay, and others. You can also choose reliable shipping options to ensure fast and secure delivery.
Fulfilled by Merchant provides high-quality shipping options to ensure fast and reliable delivery, protecting your seller account from delivery issues. You can use it for all your products (or catalog) or integrate it with Fulfillment by Amazon (FBA) to improve your business strategy.
With FBM, you can do the following:
- Automate inventory management and purchase shipping labels across Amazon and other e-commerce platforms.
- Get pre-negotiated rates up to 31% lower than retail for UPS, FedEx, and USPS; receive refunds for undelivered packages.
- Store, pack, and ship items yourself, including heavy, bulky, slow-moving, or temperature-sensitive inventory.
- After meeting requirements to provide customers with preferred one—and two-day shipping speeds, you will qualify for Premium Shipping or Seller Fulfilled Prime.
- Set shipping rates, capacity limits, and handling/transit times, or use Shipping Settings Automation for shorter, more accurate delivery dates.
- Customer support is taken care of by Amazon.
| Pro Tip đź’ˇ: When choosing FBM, the FBM way of selling items becomes helpful to sellers when the products are unique to their shop. This benefits the merchants and builds trust in both the products and the store. FBM is also useful for small businesses where shipping is manageable and meets Amazon’s and customers’ standards. When choosing FBA, it might be a good option if you sell small and light items, don’t have time or resources to pack and ship orders, want your products to be eligible for Prime shipping, prefer Amazon to handle customer service and returns, can’t afford your own warehouse or staff or are selling popular items in a competitive market. |
Understand Amazon’s A9 Algorithm
Amazon developed the A9 algorithm for ranking products. It shows what to put at the top of a search result page, given a customer’s search query. This algorithm is programmed to give higher priority to the product listing with good sales and conversion history.
What does the Amazon A9 algorithm look at to determine product ranking?
Here’s what you need to know:
- Keyword Intent: The product shall only be ranked by Amazon if the listing contains keywords that match customers’ search terms. Ensure there is no keyword stuffing happening when you create a listing.
- Focus On Conversion Rate: If a certain product of yours recieves less conversion rate, Amazon will see it as irreleveant and drop its ranking position.
- CTR or Click-through Rate: If the CTR is low, Amazon will deem the product as irrelevant and not display it to potential leads. Instead, use better quality images that follows Amazon’s guidelines.
- Customer Reviews & Ratings: Amazon also counts how well your products are doing on the platform. So, if you have a good rating, say above 4.5 stars and a good number of reviews, the algorithm will place the product at a higher and better position.
- Better Pricing Plan: You need to have good pricing set on your listings. If the products are too costly, no one will purchase them. If they are too low, some potential customers might question the quality and this may lead you to making less money. So, researching the market and setting the right price will go a long way.
Keep tabs on the latest updates and changes to such algortihms. One such is the A10 algorithm, which is slightly different from the A9 algorithm.
Add “Buy Box” Feature
The Amazon Buy Box is where customers click Add to Cart or Buy Now on a product listing. It is the white box on the right side of a product page where customers can add items to their cart.
Winning the Buy Box can propel your product into Amazon’s top sellers list, significantly increasing your sales. Aiming for the Buy Box is crucial because about 80% of Amazon sales occur through it, making your product more visible to customers.
Also, most Amazon sales happen through the Buy Box, especially on mobile. So, using this feature can prove to be a game changer when it comes to conversions.
Utilize Different Business Models
When selling on Amazon, a business model highlights what makes an online business unique and helps attract customers by showing its core value. A well-defined business model is also essential for attracting investors, as it demonstrates how the business intends to make money and grow over time.
Here are the business models that you need to consider:
Private Label Seller
A private label involves a product made by one company but sold under a different company’s brand name. An example of a private label seller on Amazon is AmazonBasics.
AmazonBasics products are manufactured by third-party companies but are sold under Amazon’s own brand name. This allows Amazon to offer a wide range of products, such as electronics, office supplies, and home goods, often at lower prices compared to competing brands.
Using private labels on Amazon has perks. You can offer appealing deals and promotions to customers while gaining increased visibility for your brand. As a sponsored brand on Amazon, you’ll effectively reach your target audience with ease.
Reseller
The reseller business model (also known as Amazon retail arbitrage business model) on Amazon involves purchasing products from various sources, such as wholesale suppliers, clearance sales, or retail stores, and then selling them on Amazon for a profit.
Amazon resellers often use retail arbitrage. This involves purchasing discounted or low-cost items from physical stores and reselling them on Amazon at a higher price, with the reseller keeping the profit from the price difference.
Dropshipping
Amazon dropshipping is a business model where a seller doesn’t hold any inventory. Instead, they forward customer orders directly to the manufacturer or supplier, who then handles fulfillment.
White Label Selling
Selling white label items on Amazon is more straightforward than on other platforms due to the wide variety of options. It involves taking off-the-shelf products, branding them with your logo, and selling them as if they were custom-made by you. This approach helps you avoid the complexities of production and design.
Provide The Best Customer Service
With high competition among sellers on Amazon, it’s important to stand out. Good customer service emphasizes simpler, more efficient error or issue resolution, which grants more space for customers to be loyal and can consequently retain customers.
Here’s how you can offer good customer service:
Use Customer Service By Amazon
Customer Service by Amazon is a paid service where Amazon handles customer support for your self-fulfilled orders. Instead of managing inquiries yourself, they will be directed to Amazon’s team, who offer 24/7 support via phone, chat, or email.
You’ll get a monthly email with a summary of the previous month’s performance. This service is available in the United States, Germany, and Japan.
New sellers get a 90-day free trial. After that, you can continue using the service for free or at a lower cost based on your performance, and you can opt-out whenever you like.
Enhance Customer Service On Your Amazon Product Page
Selling on Amazon has a lot of perks. You can offer customer service on your product page by:
- Providing quick and helpful responses to customers.
- Addressing negative reviews and offering prompt assistance.
- Responding to questions in the Q&A section.
- Managing seller feedback proactively.
Respond To Your Customers Promptly
To provide the best customer service, respond to customer inquiries and concerns within 24 hours, and strive to resolve issues in a single interaction whenever possible. It’s essential to maintain a polite and professional tone in all communications to ensure a positive and respectful interaction with your customers.
Also, show empathy to your customers. Start by actively listening to the customer’s concerns without interruption, reflecting back to ensure you understand their perspective. Acknowledge their feelings by validating their emotions with phrases like “I understand how you feel” or “I can see why you’re upset.” Personalize your response by using their name and referring to specific details of their issue, demonstrating genuine concern.
Effectively Respond To Customer Concerns
Addressing customer concerns swiftly helps reduce negative returns. Quick answers to product questions can prevent returns and show your commitment to customer satisfaction.
Customers frequently have questions about a product, and addressing these quickly can reduce the likelihood of returns. Effectively solving issues shows your dedication to customer satisfaction and helps prevent problems from escalating, protecting your reputation as a seller.
Monitor Performance Based On Metrics
These metrics matter the most when it comes to selling on Amazon –
Amazon Fees
Understand and track Amazon fees, including referral and FBA fees, to ensure profitability and avoid overcharges. Familiarize yourself with the fee structure to manage costs effectively.
Keyword Ranking
Track where your products rank in search results for key terms. Higher rankings mean better visibility and more potential sales. Aim for first-page results and use tools like Jungle Scout’s Rank Tracker to track and improve rankings.
Account Health Rating
Monitor your Amazon Seller account health to avoid suspensions. Key factors include customer service, order defect rate, policy compliance, and shipping performance.
Inventory Performance Index (IPI) For FBA Sellers
For FBA sellers, your IPI score shows inventory management efficiency. A high score indicates good sales and inventory control, while a low score means overstocking or slow sales. Key factors include excess inventory and sell-through rate.
Conversion Rate
Track your conversion rate to see the percentage of visitors who buy your product. On Amazon, a low rate might mean issues like high prices or poor listing quality. To find the conversion rate on your Seller Central, go to Reports > Business Reports > Detail Page Sales and Traffic By Child Item. In that, look for the Unit session percentage.
ROAS (Return on Advertising Spend)
Amazon ROAS shows revenue earned per dollar spent on ads. A higher ROAS indicates more profitable ad campaigns. This is tracked in Amazon’s Campaign Manager.Â
TACOS (Total Advertising Cost Of Sale)
TACOS measures your ad spend compared to total sales, including organic and ad sales. A lower TACOS suggests effective ads that boost overall sales.
ACOS (Advertising Cost Of Sale)
ACOS measures ad spend relative to sales generated. Lower ACOS is better, but ideal rates vary by product and goals.
| Read how much different types of Amazon ads cost through this detailed blog on Amazon advertising costs. |
Common Mistakes To Avoid While Selling On Amazon
To evade any issues that may arise when working on Amazon is to avoid making these common mistakes:
Too Many Inventory Orders
Ordering too much stock can lead to high storage fees at Amazon’s warehouses (mostly when you’re using FBA), especially if items sit for over a year. Moving unsold inventory back to your own storage can be expensive, and liquidation often results in not getting full investment back.
How To Fix It: To avoid these problems, use your past sales data to determine how much inventory to send to FBA.
| Pro Tip: Using an Amazon inventory management tool can help. These software are capable of predicting inventory demands based on historical sales data, trends, etc. |
Skipping Product Listing Optimization
Failing to optimize your Amazon listing can lead to lower visibility and fewer sales, as your product may not appear in relevant search results or effectively attract potential buyers.
How To Fix It: Ensure your listing includes relevant keywords, high-quality images, a compelling title, and detailed descriptions. Additionally, gather positive reviews and utilize competitive pricing strategies to improve your product’s attractiveness and search ranking on Amazon.
Improper Accounting Management
Poor account management can silently drive your business to bankruptcy or leave you short on inventory without the funds to restock.
How To Fix It: It’s crucial to monitor your cash flow closely. Always track your incoming and outgoing funds and identify areas where you can adjust operations to cut overhead costs.
Not Complying With Amazon’s Policies
Amazon is known for its strict policies and will suspend any sellers suspected of not adhering to marketplace rules. Since these rules frequently change, sellers must continuously stay informed to avoid suspensions.
For instance, Amazon has strict policies when it comes to selling supplements on their platform and these keep changing from time to time—thus staying updated with the policies will protect your account from suspensions.
How to Fix It: Stay updated with the latest rules and policies. Learn what products you can sell and what you are prohibited from selling. Also, keep tabs on any latest changes as Amazon frequently changes its policies and regulations.
Conclusion
In conclusion, learning how to sell through Amazon can be a highly rewarding venture for e-commerce merchants when approached with the right strategies. By understanding how to sell on Amazon step by step and leveraging key aspects such as optimizing your product listings, managing inventory efficiently, and staying updated with Amazon’s ever-evolving rules, you can maximize your success on the platform.
With careful planning and ongoing effort, you can navigate the complexities of Amazon’s marketplace and achieve significant growth and profitability.
FAQS
What are the basic requirements to start selling on Amazon?
To start selling on Amazon, you need to create an Amazon Seller account, provide necessary business information, and choose a selling plan (Individual or Professional). Additionally, you need a valid credit card, tax information, and a phone number.
How do I create an Amazon Seller account?
To create an Amazon Seller account, visit the Amazon Seller Central website, click on “Sign Up,” and follow the prompts to enter your business details, tax information, and payment method.
What are the differences between an Individual and a Professional selling plan on Amazon?
The Individual plan charges $0.99 per item sold, suitable for sellers with fewer sales. The Professional plan costs $39.99 per month and offers additional features like bulk listing, access to Amazon Marketplace Web Service (MWS), and eligibility for top placement on product detail pages.
How do I list my products on Amazon?
To list your products, log into your Seller Central account, go to the “Inventory” tab, and select “Add a Product.” By providing product details, images, and pricing information, you can either match an existing listing or create a new one.
What are Amazon’s fees for sellers?
Amazon charges various fees, including a referral fee (a percentage of the total sales price), a variable closing fee (for media products), and fulfillment fees if you use Fulfillment by Amazon (FBA). Fees vary based on the product category and selling plan.
What is Fulfillment by Amazon (FBA), and how does it work?
FBA allows sellers to store their products in Amazon’s fulfillment centers. Amazon handles storage, packaging, and shipping, as well as customer service and returns. Sellers pay storage and fulfillment fees for this service.
How can I optimize my product listings for better visibility on Amazon?
Optimize product listings by using relevant keywords in titles and descriptions, providing high-quality images, writing clear and informative bullet points, and encouraging customer reviews. Competitive pricing and ensuring products are in stock also help improve visibility.
How do I manage inventory and fulfill orders on Amazon?
Use the Seller Central dashboard to track inventory levels and sales. For self-fulfillment, ensure timely shipping and order updates. If using FBA, send your inventory to Amazon fulfillment centers and let Amazon handle the rest.
How do I handle customer service and returns on Amazon?
For self-fulfilled orders, you are responsible for customer service and returns, adhering to Amazon’s policies. If using FBA, Amazon handles customer service and returns on your behalf. You can use third-party fulfillment services that cost less than FBA.
What are some strategies for driving traffic to my Amazon listings?
Strategies include using Amazon Advertising (Sponsored Products, Sponsored Brands, etc.), leveraging social media marketing, optimizing listings for SEO, offering promotions and discounts, and utilizing Amazon’s Early Reviewer Program to build reviews.
