How To Sell on Amazon: An Easy 5 Step Guide

It is hard to argue with selling your product on Amazon, given their global e-commerce leadership. There are other marketplaces to sell your products online, including Etsy, eBay, Shopify, and Facebook Marketplace. Still, Amazon is unquestionably America’s largest and most popular e-commerce marketplace.

Did you know they have 300 million active users, with about half of those, or 153 million, estimated to be Amazon Prime customers by the end of 2022? Amazon’s third-party selling partners are nearly 2 million small- and medium-sized businesses. At the end of 2021, 56% of Amazon’s sales came from these businesses.

It is relatively easy to sell on Amazon once you have a viable product, as the company guides sellers through the five steps we discuss. Their selling guide provides videos and content. Here’s what you need to know before you start.

Benefits of Selling on Amazon

There are many benefits of selling on Amazon:

• Massive reach gives small businesses international exposure
• Attractive sales channel
• Bestows sellers with credibility and trust
• Affordable pricing for built-in infrastructure
• Offers packing and shipping

With all these benefits, sellers may face high competition. To succeed on Amazon, it is up to the merchant to do their own market research to find a sweet spot when choosing your product.

Amazon Restricted Products

Before moving forward, you’ll want to review Amazon’s Restricted Products list to ensure your potential product doesn’t appear on the list. Their restricted products are a mix of potentially unethical or illegal items (e.g., alcohol, drugs, drug paraphernalia) or products that may not comply with federal, state, local laws, or Amazon’s policies.

After their review, Amazon may approve your product, but many products will remain restricted.

Five Steps How To Sell on Amazon

Step 1: Research Your Product’s Viability

If your product is not restricted, you need to determine the viability of your product by doing some research to target customers. You can use several tools, notably Google Trends, to see what products are popular. Another tool is Google Shopping, which will show you the number of competitive items. Niche products in categories like fashion, arts & crafts, and housewares tend to be in demand. You want to sell things that make money.

It would be best if you understand the following factors:

The market’s competitive nature – do you have something unique to sell? You should research your competitor’s products and compare them to your product. Competition is not necessarily a bad thing, and it may highlight that there is strong demand for your product.

Is there strong demand? Through research, you’ll want to highlight what is unique about your offering.

What is the barrier to entry? A low barrier to entry is desirable (but not so low that you will be up against too many competitors). Find a supplier you want to work with you and your products.

High-quality products with a relatively low cost of goods sold result in higher margins and bring a good outlook for your business and flexibility to offer customers incentives. You don’t want to enter the market with low prices causing low margins, as your product won’t last long in such a scenario.

Other Selling Options

Other selling options include dropshipping, retail arbitrage, or private labeling. However, make sure you don’t violate Amazon’s policies.

Dropshipping is an order fulfillment option for Amazon sellers that allows the seller to outsource functions like procurement, storing, and shipping to a third party. You could either go with a separate supplier or use Fulfillment by Amazon (FBA). As the Amazon seller, you must be the seller of record on the invoices, packaging slips, or any other information.

Another option is retail arbitrage, where you find items on clearance with a deep discount (e.g., Bed, Bath and Beyond) that you resell to your customers for a profit. You can also consider looking at the private labeling of a successful product. The manufacturer can add your company label to an existing product.

Amazon can provide you with the means to build a good reputation, trust, and credibility, but you are the master of the product, and it is up to you to find the best products to sell, find potential customers, and drive traffic.

Two Selling Methods: Fulfilled by Merchant and Fulfilled by Amazon

There are two ways to sell on Amazon, and some sellers use both methods.

Fulfilled by Merchant (Fbm)

FBM is a selling method where the seller lists products in Amazon stores but manages all storage, shipping, and customer support independently. This method may benefit those who have dealt with some of the challenging aspects of inventory management.

The seller decides how to store inventory, pack and ship products, and handle returns or refunds, all while providing excellent customer service. They maintain control and can send the merchandise to their buyer.

If the seller has the resources to handle the inventory, they can save on some of Amazon’s service fees for Amazon’s for storing and shipping. It may work for the seller if they have logistics to handle the products to the customer, sell a low volume of products, and can handle the complexity of packing and shipping requirements.

Fulfilled by Amazon (FBA)

Fulfillment is the process of storing, packing, shipping orders, and handling returns and exchanges. FBA provides the infrastructure, including fulfillment centers and warehouses, to manage the seller’s customer orders, send shipments on time, and obtain the latest information on products available in inventory.

Additionally, FBA can give the seller’s business a competitive edge in attracting desirable Amazon Prime customers. Amazon Prime members spend more than non-Prime customers, at $1,400 per year compared to just $600 annually.

If your competitors serve their customers with FBA, you don’t want to risk poor inventory management or product delivery that can disappoint your customers.

Since the pandemic, there have been severe supply constraints, and Amazon, as an e-commerce leader, could be in a better position to overcome these issues than individual sellers. According to JungleScout’s 2022 report on Amazon sellers, three-quarters (76%) of sellers will be profitable in 2022, despite severe disruptions due to supply chain problems.

Step 2: Create an Account

You can use your customer account to start selling or create a new Amazon seller account with your business email. Residents of these countries are eligible.

Before you sign up, make sure you’re ready with the following:

• Business email address or Amazon customer account
• Internationally chargeable credit card
• Government ID (identity verification protects sellers and customers)
• Tax information
• Phone number
• A bank account where Amazon can send you proceeds from your sales

Choose Your Selling Plan

After setting up your seller account, you can pick your plan on Amazon Seller Central. There are two plans: the Individual Plan and the Professional Plan.

With the Individual Plan, you’ll pay $0.99 every time you sell an item, plus additional selling fees*. This plan works for those who sell fewer than 40 units per month, are figuring out what to sell, and don’t want to promote their products with ads or use Amazon’s advanced tools.

The Professional Plan costs $39.99 monthly (before additional selling fees*), no matter how many items you sell, so if you sell more than 40 units per month, this plan is more desirable. This plan is more robust than the Individual Plan. It allows the sellers to leverage Amazon’s advanced selling tools, including dashboards, and product reports, run promotional ads, and qualify for their product’s top placement on Amazon’s website.

*For both plans, Amazon also collects a referral fee on each sale, a percentage of the total transaction, which varies by product category.

Step 3. Add Your Products

What can you sell on Amazon? It depends on the product, the category, and the brand.

Some categories are open to all sellers, some require a Professional seller account, some require approval to sell, and some include products that third-party sellers cannot sell.

To start selling a product on Amazon, you’ll create a product listing in Seller Central (or via API). A product listing includes:

• A product identifier, such as GTIN, UPC, ISBN, or EAN, specifies the exact item you’re selling. You can get a UPC code directly from GS1 or request an exemption.
• An SKU, which is a product ID you create to track your inventory.
• Offer details, including price, product condition, available quantity, and shipping options.
• Product details like name, brand, category, description, and images.
• Keywords and search terms to help buyers find your product.

If another seller already offers the same product, you’ll match an existing listing (which means some details will already be in place, like the product identifier). You’ll create a new listing if you’re the first seller to offer a product.

Once your products go live in Amazon’s stores, there are several things you can do to attract customers.

The Product Detail Page

It is not enough to simply add your product listing. You’ll need to develop an SEO-friendly listing to attract customers and build demand when creating your product detail page.

You will need to use keyword search terms in a relevant title, clear images, product descriptions, and bullet points that customers use to find your products. Your listing should highlight the uniqueness of the product.

An excellent listing will help you get your sales conversion. The more detail you add to the product page, the higher it will rank. Your goal is for your product to appear at the top of page one (where most people land and click through).

Step 4: Attract Customers

Once your products go live in Amazon’s stores, there are several things you can do to attract customers and stand out from the competition.

Sellers should focus on these three areas:

Provide fast shipping

Customers want their product as soon as possible. Delivering promptly can be done through a robust FBA plan (as discussed above). Alternatively, some sellers will opt to deliver the product themselves.

Advertise and promote your offers

You can promote your product with sponsored listings. This offering is available to those who choose the Professional Plan. This strategy will help improve the visibility of individual products and boost brand awareness by advertising in search results and product pages. Consider running a deal or a coupon as another way to promote your products. You choose which products you want to advertise, assign keywords to those products, and enter a cost-per-click bid, keywords, and SEO images.

Set competitive prices

This can be done through Amazon Seller Central’s built-in tools. It offers automated repricing and bulk pricing for Amazon Business customers to help you stay competitive. They suggest you consider shipping incentives as part of your value proposition.

Additionally, Amazon provides many recommendations that may benefit your business, but beware that most of their suggestions will result in higher costs, impacting your margins.

Access to an Amazon Selling Coach

An Amazon Selling Coach offers personalized recommendations to help you increase your success on Amazon.

Prime Fulfillment

When you enable Fulfillment by Amazon (FBA) for your products, you can leverage Amazon’s fulfillment networks and expertise to make your offers eligible for Prime and free shipping. You send your products to Amazon fulfillment centers, which pack and ship them to buyers and provide customer service.

Hub by Amazon

Hub by Amazon is another comprehensive solution that frees you and your staff from daily package management, from high-rise buildings to garden-style apartments. The Hub does not require an Amazon Prime membership and does not charge a fee to your residents.

Promotions

When shopping online, buyers look at various promotional offerings, including dollars or percentages taken off the price or free shipping.

Amazon found that one promotion-free shipping on orders with eligible items that total $35 or more impacts the purchase decisions. Free shipping is what attracts buyers to Amazon. You, too, can make a great impression on buyers by offering promotions.

Step 5: Get Customer Reviews

Customer product reviews benefit customers and sellers. You will need to review Amazon’s policies and what may result in violations when trying to attract legitimate customer reviews. Become familiar with their guide that discusses the right and wrong ways to get more product reviews and avoid policy violations.

Final Thoughts

When you become an Amazon seller, you gain exposure to a massive global market that can help you grow your business online, whether your full-time job or a potentially profitable side gig. Do some homework and leverage Amazon’s reach, infrastructure, and guidance.

This article originally appeared on Wealth of Geeks.