How to sell on Amazon – Forbes Advisor

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With its popularity with sellers and customers, it’s no wonder Amazon is a multi-billion dollar company. This gives sellers an easy way to present their products to a global audience. Lucky for you, learning how to sell on Amazon only takes five simple steps: conduct market research, set up your seller account, add products, attract your customers, and get reviews.

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Two different ways to sell on Amazon

While there are two different ways to sell on Amazon, be aware that you can use both options at the same time. You can personally ship your bulky or heavy items slower while your lighter and faster products are shipped by Amazon.

Usage by Amazon (FBA)

Fulfilled by Amazon means that you ship 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 your monthly service charges, you also have to pay monthly inventory storage charges.

Along with Fulfillment by Amazon, Amazon also takes care of all customer support. If you don’t have a place to store your inventory and are okay with giving the reins to Amazon, you might like to use Fulfillment by Amazon. The best-suited FBA products are small and light with quick turnover.

Ship the products yourself

Also known as Merchant Completed (FBM), this means that you store and ship your own products. You also handle all customer service, so it’s important to have a system in place to respond to inquiries and any issues that may arise with your products.

Vendors with bulky or heavy products that don’t sell quickly tend to use FBM. That way, they don’t pay to store a product in an Amazon warehouse. The logic is that the longer a product sits on an Amazon warehouse shelf, the more it costs, thanks to long-term storage charges.

5 steps to selling on Amazon

1. Conduct market research

Before you start selling on Amazon, you should check the list of restricted products. Some categories, like jewelry or DVDs, require approval before they can be listed, while some products are completely restricted. Products subject to restrictions are generally regulated by the federal government.

To narrow down a potential product, consider considering private labeling of a successful product. It just means that the manufacturer adds your company’s label to an existing product. See which products are popular and trending.

After deciding on a product or product niche, take a look at the best listings for what you want to sell. Is there a lot of competition? While all of the competitors offer Prime shipping, use Fulfillment by Amazon, and have 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 to entry. Once you’ve found a product, you need to find a supplier. Bargain and ask for samples – the last thing you want is a product that breaks easily or doesn’t look like the photos.

After finding a supplier, you need to calculate your unit cost. Are your margins high enough to make your product viable? If not, you may need to consider another product. Ideally, you have enough margin to offer discounts or coupons. You may need to do a viability test on several options before settling on your first product.

2. Set up a seller account

To create a seller account, you must have the following information:

  • Bank account number and routing number
  • Credit card
  • Government-issued national ID (such as a driver’s license)
  • Tax information
  • Phone number

After gathering these details, go to Seller Central and choose a selling plan. The Individual Selling Plan is best for those who sell less than 40 units per month. Think of it as a pay-as-you-go plan, as it only costs $ 0.99 per sale.

The Professional Selling Plan is ideal for sellers who sell over 40 units per month and need access to advanced reports and APIs. To sell on Launchpad or Handmade, you must have a Professional account. Professional costs $ 39.99 per month, regardless of how much you sell.

3. Add products

There are two ways to add products: use an existing list of the same product or create a new list. If you are the only seller for a particular product, you must use a new ad.

A listing includes the following details:

  • Product identifier (GTIN, UPC, ISBN or EAN)
  • SKU (inventory management unit)
  • Price, product condition, quantity available and shipping options
  • Product name, brand, category, description and images
  • Keywords and search terms

Your product descriptions should be optimized for search engines (called SEO). Researching keywords for your ads is an important part of SEO. The idea is to add keywords to your list that people are looking for, and adding irrelevant keywords can hurt your visibility. If writing isn’t your strong suit, consider hiring a copywriter to write optimized product descriptions for you. You can find copywriters on platforms like Fiverr and Upwork.

Likewise, pictures are just as important as the description of the product. Photos must have a white background and have a minimum dimension of 500 x 500 pixels. For high quality lists, increase the file size to 1000 x 1000 pixels. Many sellers use a lightbox to take pictures of products; otherwise, some companies may take pictures for you if you send your product to them.

4. Attract customers

With the huge amount of Amazon listings, yours must stand out. Best practices for attracting customers involve pricing, shipping, and advertising.

  • Set competitive prices. Amazon has built-in sales tools that automatically re-price your ad at an optimized price based on the parameters you set (this way you always make a profit). It also offers wholesale pricing to attract Amazon Business customers.
  • Ship quickly. If you’re not using Amazon Prime shipping, the best thing to do is make sure you ship your products quickly when using FBM.
  • Advertise with sponsored ads. When you turn your ad into a Sponsored Ad, it shows up on product pages and in search results. These ads operate on a cost per click (CPC) basis. This means that every time someone clicks on your ad, you pay whether they make a purchase or not. It can be pennies, or it can cost several dollars per click.

5. Get opinions

There are strict rules about what is allowed and what is not allowed when asking your customers for reviews. If you are caught tricking your customers into leaving a review, your account may be subject to a permanent ban, withholding of funds, and even legal action.

What you can do is:

  • Ask for a review, but don’t offer any compensation, free product, refund or discount for it
  • Sign up for Amazon’s Early Reviewer program, which encourages reviewers to provide genuine reviews

Just because you see another Amazon seller doing it doesn’t mean you’re okay. It’s not worth getting caught and losing your seller account.

Final result

While the steps to selling on Amazon are relatively straightforward, success requires selecting the right products and carefully optimizing your listings. Even after being successful, staying ahead of the game requires constant maintenance.

Find legal answers for your small business

Nolo offers hundreds of user-friendly DIY legal products written in plain English.

Frequently Asked Questions

Do i need a commercial license to sell on Amazon?

Generally speaking, no, you don’t need a commercial license to sell on Amazon. However, your state or jurisdiction may have special rules.

Does Amazon Report Its Income to the IRS?

Amazon is required by law to report your income to the IRS if you sell more than $ 20,000 in gross payment volume and complete more than 200 transactions per year. They will issue a 1099-K so you can file your taxes.



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