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Popular with both sellers and customers alike, it’s no wonder Amazon is a multibillion-dollar company. The site gives sellers an easy way to get their products in front of a global audience. Getting started on the platform might seem intimidating, but it’s easier than you might think. In this guide, Forbes Advisor will walk you through how to sell on Amazon in five simple steps. Here’s everything you need to know to get started.
For existing Prime members who shop at Amazon and Whole Foods, the 5% rewards rate is exceptional. To sweeten the deal even further, the Prime Visa card offers a 2% rewards category as well as Visa Signature benefits.
There are two other tactics for selling on Amazon, but they are exclusive. You can use both functions simultaneously. You can ship your bulky or heavy, slow-moving pieces yourself while relying on Amazon to ship your lighter, fast-moving products.
Fulfilled through Amazon means that you send your products to Amazon’s warehouse and when you sell a product, Amazon ships it for you. There’s a caveat to this: In addition to the monthly service fee, you also have to pay a monthly stock garage fee.
With FBA, Amazon also takes care of all visitor support. If you don’t have a position to buy its stock and are okay with handing the reins over to Amazon, you might want to use FBA. The most productive products suitable for the FBA program are small and lightweight, with fast turnover.
Also known as Fulfilled through Merchant (FBM), this means that you purchase and ship your own products. You are also in charge of all visitor service, so it is vital to have a formula ready to respond to queries and any problems that may arise with your products.
Sellers with giant or heavy products that are temporarily out of stock tend to use FBM. This way, they don’t pay to buy a product from an Amazon warehouse. The logic is that the longer a product sits on the shelves of an Amazon warehouse, the more expensive it is, thanks to long-term garage fees.
Below we explain how to sell on Amazon in five steps:
Before you start promoting on Amazon, you want to check out the limited list of products. Some categories, such as jewelry or DVDs, require approval before being listed, while some products are completely limited. Restricted products are regulated by the federal government.
To narrow down a potential product, personal labeling is a successful product. This means that the manufacturer adds its corporate label to an existing product. Look at which products are popular and trendy.
After you settle on a product or product niche, check out lists of what you need to sell. Is there a lot of competition? If all your competition offers Prime shipping, uses FBA, and gets a lot of 4. 5 and 5 star reviews, it can be hard to compete.
You want a product that is in demand but has a lower barrier of entry. Once you find a product, you need to get a supplier. Negotiate and ask for samples—the last thing you want is a product that breaks easily or doesn’t look like the pictures.
After finding a supplier, you must calculate your cost per unit. Are your margins high enough to make your product viable? If not, you may need to consider a different product. Ideally, you have enough of a margin to offer discounts or coupons. You may need to do a viability test on several options before you settle on your first product.
To set up a seller account, you must have the following details on hand:
After collecting those details, move on to Seller Central and a promotion plan. The individual selling plan is ideal for those who sell less than 40 games per month. Think of it as a pay-as-you-go plan, as it costs 99 cents consistent with the sale.
The Professional promotion plan is ideal for merchants who sell more than 40 games per month and need access to complex reports and APIs. To sell on Launchpad or Handmade, you will need to have a Professional account. Professional pricing $39. 99 per month, regardless of how much you’re promoting.
There are two ways to add products: use an existing listing of an identical product or create a new listing. If you’re the only seller for a particular product, you must use a new listing.
A list of the following details:
Your product descriptions deserve to be optimized for search engines (called SEO). Keyword studies for your classified ads are a vital component of SEO. The concept is to upload keywords to your directory that other people search for, and uploading irrelevant keywords can hurt your visibility. If writing is rarely your strong suit, hire a copywriter to write optimized product descriptions for you. You can locate writers on platforms like Fiverr and Upwork.
Likewise, photographs are as important as the product description. Photographs must have a white background and a minimum length of 500 x 500 pixels. For high-quality lists, increase the file length to 1,000 x 1,000 pixels. Many dealers use a light box to take product photos; Otherwise, some companies may take photos of you if you send them your product.
With the enormous amount of Amazon listings, yours must stand out. The best practices to attract customers involve pricing, shipping and advertising.
There are strict rules for what is and isn’t allowed when asking for reviews from your customers. If caught providing incentives for your customers to leave a review, your account can face a permanent ban, withholding of funds and even legal action.
What you can do is:
Just because you see an Amazon distributor doing it doesn’t mean everything is fine. It’s not worth getting stuck and wasting your reseller account.
While the steps to sell on Amazon are relatively simple, success takes selecting the right products and carefully optimizing your listings. Even after seeing success, keeping ahead requires constant maintenance.
Generally speaking, no, you don’t want a business license to sell on Amazon. However, your state or jurisdiction may have special rules.
Amazon is required by law to report its source of income to the IRS if it sells more than $20,000 in gross payment volume and makes more than two hundred transactions consistent with the year. They will factor a 1099-K so you can file your taxes.
When you sell products via the FBA method, you are doing so using dropshipping. Dropshipping occurs when you sell products that you do not physically have at your location. In the case of FBA, they are kept in one of Amazon’s warehouses. When you sell a product, you send the information to your supplier (FBA in this case) and they ship it out to the buyer for you. Any costs that you incur for shipping and handling are built into the dropshipping agreement you have with the supplier.
Doing this research on Google Trends and other social media sites will help you determine what’s the most productive thing to sell.
Katherine Haan is a small business owner with nearly two decades of experience helping other business owners increase their incomes.
Cassie is a former deputy editor who collaborated with teams around the world while living in the beautiful hills of Kentucky. Focusing on bringing growth to small businesses, she is passionate about economic development and has held positions on the boards of directors of two non-profit organizations seeking to revitalize her former railroad town. Prior to joining the team at Forbes Advisor, Cassie was a content operations manager and copywriting manager.