A step by step how to sell on Amazon guide is what beginners need if they wish to start an online business on Amazon.
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Amazon allows anyone to sign up with them and start listing their products for sale right away.
Despite the fact that the sign-up and product listing process takes only a few minutes, selling on Amazon and doing it efficiently is not that simple, and you need to dive deeper to understand it fully.
Step 1: Sourcing the Products to Sell on Amazon
If you are stepping into the world of Amazon for the first time, you should first understand the possible paths that you can take. Before you can sign up with Amazon as a seller, you have to figure out where you are going to source your products from and how you are going to source them. There are three possibilities that you can choose from:
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Wholesale is the most common way through which Amazon sellers get their products. Buying products in bulk is more cost-effective than buying them individually. Buying products at discounted rates and reselling them on Amazon is one of the most common practices.
Before you buy any product in bulk, there are certain important considerations that one has to make. You have to be extremely cautious when you are buying products of a particular brand in wholesale because some of the biggest names only allow authorized businesses to resell their products. Moreover, you also have to be sure that your research is thorough and that there is a demand for the products you are planning to list for sale on Amazon. You certainly don’t want thousands of your products to rot in a warehouse.
2. Retail Arbitrage
Retail arbitrage is one of the most popular and affordable ways of sourcing the products you wish to sell on Amazon. In this method, you visit physical and online stores while they are offering sales and discount offers and buy these products at their discounted prices. Although browsing through stores, looking for the products you want to sell on Amazon, and keeping track of sales is time-consuming, buying products this way is going to cost you the least amount of money.
If you are not sure whether the product you wish to sell will generate sufficient profits, you can sign up for the Amazon seller app. It will scan the barcode on the product you want to sell on Amazon and display the pricing and fee that you will be charged.
Amazon also offers interested sellers an option known as the Fulfillment by Amazon (FBA) Revenue Calculator. This calculator will help you calculate the selling price and the profit that your product will generate. All you have to do is input the cost of the product and the shipping costs, and the calculator will do the rest for you.
3. Private Label
Private label selling means that you buy products from one brand and resell them with your own label. There are many companies and stores that work in private label selling like Great Value by Walmart.
Private label selling can be time-consuming as it takes time to look for products that will be a hot item on Amazon and then search for companies that manufacture those products and allow you to re-label them with your brand’s name.
Alibaba is the biggest Chinese wholesale retailer. Most of the sellers on Amazon source their products from Alibaba. It is a great source of products, both for wholesale and for private label selling. You just have to be cautious about the consistency in the quality of the products being sourced from Alibaba.
5. Selling Your Own Products
If you make your own products, be it a finished cosmetic product or crafted items, you can always sell your self-made products on Amazon. It takes a lot of time and may cost you a fair bit in the beginning, but as you make your name, you can always look for better, less costly options.
Step 2: Calculating the Startup Cost and Budgeting
Once you have decided what products you will source and from where, you can now move on to calculating how much it will cost you to start selling on Amazon. Since cost is a major factor, you cannot leap into becoming a seller on Amazon without working through this step.
The total cost that you will have to bear initially includes:
- The cost of the products (this varies, depending on the product and the quantity)
- Shipping cost (air or sea).
- The cost of product research tools to help you estimate the sales, profit, and revenue on your products.
- The cost of an Amazon Seller Account. You can choose between an Individual Seller’s Account and a Professional Account. An Individual Seller’s Account charges $1 on every product sold, and Professional Account charges $40 per month, regardless of the number of products sold.
- The cost of a logo and branding; it is up to you if you wish you spend money on this at all.
- The cost of a UPC Barcode. You need a UPC barcode for every product that you sell on Amazon. However, the barcode is assigned per listing and not per product.
Adding up all the initial costs, it will cost you around $1500 to start selling your products on Amazon. Additional costs may include:
- The cost of product photography
- Inspection service costs if your products are fragile or electronic
Step 3: Making a Seller Account on Amazon
Now that you have done your homework, it is time to move onto the actual work. Setting up a seller’s account on Amazon is quick and easy.
- Go to the website www.amazon.com.
- Scroll down and click on ‘Sell on Amazon.’ It’s the first link under the “Make Money with Us” title.
- Click on the ‘Start Selling’ link that appears on the webpage.
- You will be redirected to Amazon Seller Central.
- Select your option from the two; Sell as an Individual or Sell as a Professional.
- Fill out all the required fields, and you are ready to start selling your products on Amazon.
Step 4: Product Listing on Amazon
After you have created your seller account, you can start listing the products that you wish to sell on Amazon.
- After you sign in to your seller account, you will be directed to a dashboard. Hover over the ‘Inventory’ tab and click ‘Add Product.’
- Since you are listing new products, you have to select the option ‘Create a new Product Listing.’
- You will be taken to the next page, where you will have to select a category for your products. When you type in the name of the product, Amazon will list down the most relevant categories in which your product may fall.
- The next page will ask for details related to the listed product, including the manufacturer, brand name, product name, and the product ID (UPC, SKU, ASIN). The UPC code is needed for every listing on Amazon, and it can be purchased at affordable rates.
- If you wish to add variations of a product, you will need a new UPC code for each product that you enter.
- Other information that you are required to enter includes the condition of the product (new/used), the price, the fulfillment channel (Amazon or your own), product images, product features, product description, and search keywords.
- Additional information includes material, thickness, volume, etc.
- Click ‘Save and Finish’ to return to your inventory
Each product will be listed in the same manner to eventually form a Product Listing.
Step 5: Managing Inventory
Listing products and managing your inventory are the hardest parts of becoming a successful seller on Amazon. Let’s say a potential customer clicks on a product to buy it only to find out that it is out of stock. This is a major miss for the seller. This is why managing inventory is an extremely important step.
As soon as your products are live on Amazon, you can use Amazon Seller Central to manage your orders, inventory, performance, and all other aspects of your selling account.
There are many tools that you can use to manage your inventory. Seller Central Dashboard is an ideal option for small sellers. However, professional sellers may need a bulk Excel upload or an inventory app that can be integrated with Amazon.
Step 6: Launching Your Product on Amazon
You can’t just make a product listing and wait for the magic to happen. The marketing of your products is very important, and it is the thing that will get you customers.
Numerous tools are available that will help you use the right keywords and product descriptions that will pull in more potential customers. These tools include Jungle Scout, Feedback Genius, etc. The steps that you need to take when launching your product are:
- Get reviews from your customers. Reviews come in slowly, and you may even have to conduct giveaways, and discount offers so that more and more people turn towards your products.
- Try to respond to every review that you receive. Using the relevant keywords in all your responses will help your listing start indexing on Google.
- Decrease the price of your products slightly as compared to your competitors so that more customers purchase from you.
- Run Amazon PPC. This will help you collect valuable information regarding what people are searching for. You can then plan and make alterations accordingly.
- Run FB ads. When you run FB ads through Super URL, it makes Amazon think that visitors searched for the keywords you have used. Your products will be ranked higher on Amazon’s search engine, and as a result, you will get more sales.
You will observe greater sales when you run these campaigns. At this point, when your sales are high, you can increase the price of your products. However, there will come a time when your sales will start to decrease. This is an indication that you need to reduce prices again to retrieve your sales volume. It is very important to have a strategy even before you start selling on Amazon. You cannot be a successful seller without a plan and a solid strategy.
Step 7: Shipping the Products to Your Customers
There are two options that Amazon offers to its sellers when it comes to product fulfillment and shipment:
- FBM – Fulfillment by Merchant
- FBA – Fulfillment by Amazon
Fulfillment by Merchant
In Fulfillment by Merchant, you are responsible for inventory maintenance, packaging, labeling, and the shipment of the products to the customers. It is a good option for small sellers. You can either ship orders for free or charge for it. The major benefit of using Fulfillment by Merchant is that you don’t have to spend any part of your earnings on Amazon fees and can keep everything in-house.
However, with FBM, it is difficult for you to make it as an Amazon prime shipper, which can result in you losing out on customers that have Prime accounts. It also reduces your chances of winning the buy box.
Fulfillment by Amazon
In Fulfillment by Amazon, your products are stored in Amazon fulfillment centers, and Amazon will be responsible for handling the packaging and shipping of the products to customers. With the help of fulfillment centers, Amazon customer support, and other operational tools, you can scale up your business faster than you can on your own.
Choosing FBA comes with a number of benefits. These include:
- When you sign up for FBA, your inventory becomes eligible for Amazon Prime. This makes customers choose your listing first. However, it is difficult to qualify as a Prime seller with FBA.
- All products that are listed with FBA are eligible for Free Super Saver Shipping on all orders that are above $25.
- Listings with FBA get the benefit of better placement on the Amazon website.
- FBA allows you to make your selling and shipping process seamless regardless of where you are selling your product (on Amazon or your own website).
- Your chances of winning the buy box for your products increases.
- FBA sellers get a higher ranking from Amazon.
Step 8: Receiving Your Payments
Amazon is one of the best platforms to start your e-commerce business, but it comes with a cost. Amazon will deduct a fee from every payment that you receive. The payment cycle is 2 weeks long. Payments will be deposited in your bank account after deductions every two weeks. You will be notified via email when payments have been deposited into your bank account.
The list of charges that Amazon will deduct from every payment that you receive includes:
- The Monthly Seller Fee is the fee that the sellers pay for having the privilege to sell their products on the Amazon marketplace. Individual sellers pay $0.99 per sale, and Professional sellers pay $40 per month.
- The referral fee varies with the category and size of the product, but it is never more than 15% of the sale price.
- The Returns Processing Fee is charged by Amazon for returns processing in some categories.
- The Stock Removal Fee is charged when FBA sellers want Amazon to dispose of or send back the unsold stock.
- The Inventory Placement Fee is charged from FBA sellers who want control over which fulfillment center their inventory is shipped from.
- The FBA Export Fee is charged on international orders sometimes.
- The Pick and Pack Fee is charged based on the size and weight of the products (as low as $2.41 for smaller items).
- The Monthly Storage Inventory Fees are charged for using the Amazon warehouses.
Amazon is an online store that is known all around the globe. It is one of the best platforms for you to become a seller on. This step by step how to sell on Amazon guide is a detailed guide that is sure to help beginners make a mark on this massive platform!
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