How You Can Make Money Selling on Amazon20 Feb 15
Become a seller on Amazon and start making thousands of dollars a month selling products quickly and easily.
Are you aware that YOU as an individual can start a business selling products on Amazon? It’s understandable if you had no idea this was possible. Despite Amazon being arguably the largest online retailer in history, most of us have assumed that only manufacturers and established businesses are responsible for all sales.
But in reality, Amazon’s inventory is supplied by all sorts of suppliers, and you can be one of them. Thousands of individuals have been able to start a successful business selling products on Amazon. Keep reading to learn how you can get in the game and start earning money.
Selling on Amazon 101
If you only recently became aware that you could sell products on Amazon, you might be feeling a little overwhelmed. Getting started can seem pretty complicated, and it will definitely take you some time to get the hang of. But the reality of it is fairly simple. Once you’ve walked through the steps and listed your first product, it will be much less intimidating, we promise!
We will describe each of the steps for Selling on Amazon in detail in this article. Before we do that, take a look at the list below. We recommend you spend time learning, researching, and practicing each of the steps of selling so that you are comfortable with it all. The process of selling on Amazon can be broken down into 7 simple steps:
- Pick your product
- Pick your seller plan
- Register as a seller
- Pick your distribution
- Pick your sourcing
- List your products
- Sell & Earn
These steps might take you a lot of time at first, but once you understand and practice the process, you’ll be selling in no time. Now let’s get into the nitty-gritty of how to carry out each of these 7 steps so you can get started selling on Amazon.
As an Amazon business seller, you can make money from the comfort of your couch.
1. Pick Your Product: How to Decide What to Sell on Amazon
Choosing what to sell is probably the most important consideration when selling on Amazon. The site is filled with inventory and it can be easy to make a wrong choice that will end up costing you. The product that will net you the most money may not be an item you particularly want to sell or find very interesting. It is vitally important that you do some basic research to find a product that is in high demand by consumers, easy to ship, easy to acquire, and easy to profit from.
So how do you conduct this research? It can be hard to tell what is selling well or how much profit is being made by different sellers. Fortunately, there are a number of software programs and apps that have been designed to help with this. These programs will analyze basic sales numbers and costs to help you determine the right balance for your needs.
Part of choosing what to sell is figuring out what is easy to source. We will get more into product sourcing later. But generally speaking, if you want to sell a few products in large numbers, you probably need to find a bulk supplier. If you are comfortable selling low numbers of a wide variety, you can source them more locally (like from a local box store). If you are just getting started you can consider selling items from around your house to get a feel for the process without a major investment up-front.
As a side-note, make sure you stick to the categories that Amazon allows. They have a set of product categories that are restricted until you meet some specific requirements. As you get started, just avoid those categories altogether. It’s not worth your time to spend unlocking them.
2. Pick Your Seller Plan: Individual or Professional?
Once you’ve figured out what you can sell, you can start setting up your seller account. The first decision you need to make is what plan you will use. If you use the Individual plan, you pay a flat fee of about $1 per product you sell. If you choose a Professional plan, you pay a $40 per month fee but eliminates the $1 per product fee. So if you think you will sell more than 40 items per month, the Professional plan will pay off. If you are just selling a few items, the Individual plan will be more cost-effective. You can change your plan later if you begin selling more.
The Professional plan has other added benefits to consider. That plan gives you access to 10 additional product selling categories, from the 20 that come with the Individual plan. It also allows you to list products in bulk and potentially earn your way to Buy Box (making you the default seller for an item with many sellers). Most shoppers buy directly from whoever is listed in the Buy Box without checking the other sellers. Amazon also gives Professional sellers tools to manage inventory and orders better with customized reports. Finally, Professional sellers can pay to have their products promoted as Sponsored products, appearing at the top of lists.
As we said though, it is usually best to start slow with the Individual account and switch later if you increase your sales and decide to stick with the business.
3. Register As a Seller: How to Complete Your Amazon Seller Central Account
Now that you’ve chosen your seller plan, you can finish registering your seller account. This is done through Amazon’s Seller Central. As with the rest of Amazon, it’s pretty user-friendly and easy to understand. This is where you will provide your business information, add your inventory, manage your payments and fees, and so on.
To start, access Amazon.com and find the link for “Selling” at the bottom of the page. You then choose “Start Selling” and are given the option of taking a quiz to assess your readiness to sell on Amazon. Then you create your account with your name, email, business address, business display name, website, and phone number. You will need to complete a “tax interview” as well to provide Amazon with some additional information for tax purposes.
After you have given Amazon the personal registration information, the site will begin asking you about your products. This is why it is important to have done all of your product research and made all of your product decisions prior to registering. You will need to provide UPCs if available and tell Amazon what kind of product and in what quantity you plan to sell.
Pick Your Distribution: Using Fulfillment by Amazon or Fulfillment by Merchant
There are two options for fulfilling orders and distributing your products: Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). Each option has benefits and drawbacks, and one of them may suit your needs much better than the other. Both FBA and FBM are available to all sellers regardless of seller plan type (Individual or Professional).
Fulfillment by Amazon
When your orders are fulfilled by Amazon, that means you are storing your products in their warehouses and having them ship out with other Amazon warehouse products. This method is by far the most convenient for sellers because Amazon handles all aspects of the transaction, including customer service. When a customer places an order on the site, Amazon receives it, processes it in their warehouse, ships it out, collects payment, and distributes your earnings into your account. It’s as easy as that.
Of course, this comes with its own price. For FBA, Amazon charges some fees, such as fulfillment fees, storage fees, and order fees. However, these costs are fairly low and can definitely be worth it to avoid the inconvenience if you have a high volume of orders to manage.
If you choose to use FBA, you will still be responsible for a few tasks: Picking the products you sell, keeping your products in stock, and controlling the listings and advertising.
Amazon can get your products to customers quickly and easily.
Fulfillment by Merchant
For small-scale sellers, FBM might make more sense. This one has no associated fees (except the required referral fee) and costs you whatever you can source for shipping. You handle your own customer service as well. Some sellers prefer this personal approach and have the time to dedicate to it, while others do not. Some sellers with custom-made products also do not want to take the additional time to ship their products through the Amazon warehouse before getting them to the customer.
Fees Charged by Amazon
The fee structure can be hard to keep track of. Rest assured that they are all fairly low and shouldn’t be considered a large barrier to getting started. Basically, Amazon charges a 15% referral fee for each sale, regardless of the fulfillment method. With FBA, Amazon will also charge you fees for the shipping costs and the product storage costs. Their shipping costs are usually lower than what you would pay as an individual though. Individual seller plans are about $1 per sale additionally, while Professional seller plans are $40 a month and no individual sale costs.
Pick Your Sourcing: Where are Your Products Coming from?
As we mentioned earlier, part of researching your product is knowing how you can access it. Maybe you see that a specific game is selling really well and will net you a great profit, but you can’t figure out how to get your hands on it. Well, then that is likely not going to work for you. You have to have a product in order to sell a product. While there are a number of ways you can source products for sale, here are some of the main methods used by sellers:
- Private Label - Source a generic product (like soap) and create your own unique brand and label for it. Typically with a private label you will just source one product in large quantities. After the initial setup, this is probably the method that requires the least amount of effort on your part.
- Arbitrage - With arbitrage, you scout for products on clearance at other retail stores or sites and then sell them individually for a markup. This is a great way to get started and see how the process works before making a big investment. Especially if you know you have regular access to discounted products.
- Wholesale resell - Similar to arbitrage, selling wholesale involves buying discounted products in bulk quantities and reselling them for a higher price.
While you can include used products in the above methods, we would advise against it. Most customers prefer to buy items new unless they are offered at a greatly discounted price. When shipping is factored in, you are less likely to make much of a profit from a used item. An exception might be selling books on Amazon if you have a large selection of books you can acquire for free or very cheaply.
Private label is the method most likely to generate profit. However, it does require a certain amount of experience and capital to get started. If you are still hesitant about selling on Amazon, you will want to start with retail arbitrage and see how you feel about the process.
List Your Products: How to Make a Great Product Listing
So at this point you’ve chosen your product, set up your account, decided how to find and distribute your products, and you’re ready to get selling! The first step is to get your products listed on Amazon. If you’ve ever purchased something on Amazon, you know how important the product listings are. Especially if you are selling a product with a lot of competition or similar products, you need your listing to stand out and convince the customer to buy.
To make the best listing you can, you want to consider the following elements: Title, Images, Descriptions, Reviews, and Rating.
You need the title to be accurate and simple. It needs to have the product name and enough to describe what it is. Make sure any keywords you use are separated from each other and relevant enough for SEO purposes. Keep the title under 200 characters.
Images are a huge selling feature on Amazon. Some customers will choose to buy their product from a seller based primarily on the images included. You can choose to hire a professional to take these photos, or you can do it yourself with a good phone camera and a bright white background (such as a sheet or your cleaned bathtub). Keep all formats in jpeg.
Your product description should be as detailed, accurate, and professional as possible. Try to answer any and all questions a shopper might have about a product in order to convince them that they are informed enough to make a purchase. Use keywords in your description and echo these into the bulleted Features section. A poorly written description will make consumers suspicious of the quality of your product and wary of making a purchase.
Sell & Earn: A Successful Business
If you have done all of the previous steps correctly, you should start making sales. Once a product sells, Amazon will put your earnings into your seller account and confirm customer payment with emails. If you use FBA, Amazon will take care of the next steps and you just have to wait for your money to deposit to your account! If you use FBM, you will need to ship the product directly to the customer yourself.
How to Sell Books on Amazon
You can sell new or used books on Amazon. Book-selling is probably going to make you less profit than other products, but it can be a great option if you have a pile of books collecting dust in your house or if you have access to very low-cost books through local book sales.
To list a book on Amazon, the good news is that you don’t have to do a complete listing from scratch. Each book is sold under a master listing and shows all the different sellers that are offering the book and at what prices. If you list your book for the lowest of all sellers, you will be the most likely to make the sale.
Used bookstores might be a great place to get books for cheap. ( Source )
One thing you want to consider is how likely the book is to sell at all. Amazon will rank its book sales and provide that information for free. If your book is well-ranked, that means it is selling really well and you should go ahead and list yours. If it is not selling much, it’s probably not worth your time to list. At that point, you can donate it or put it back on your shelf if you want.
You can make use of FBA with books as well. If you have a lot to sell, this might be a good idea. Mainly because FBA is how your customers can access Prime shipping. And let’s be honest, that’s what most Amazon customers expect these days. We want our products in 2 days and often filter out sellers that don’t offer it. You will convert a lot more shoppers to buyers if you can ship your books with Prime.
Selling with Amazon Handmade
Selling products through Amazon Handmade is slightly different from general Amazon selling. To sell your handmade products (such as jewelry, pottery, paper crafts, etc), you need to apply as an Artisan so that Amazon knows your products are legitimately handmade.
Once approved, you will register as a seller with a Professional plan. The $40 monthly fee is waived for Artisans, but Amazon will charge the standard 15% referral fee. The Professional plan has features and tools specifically to help Handmade sellers.
If you are already set up as a seller with Amazon, you can just add Handmade to the account; you do not need an entirely new account. You do still need to apply to be accepted as an Artisan though.
Differences Between Amazon and eBay
What’s the difference between selling your products on Amazon versus eBay? The answer to this question depends on what you are selling and how much you want to be involved. If you are selling a low-volume of goods via arbitrage or from products you already own, selling on Amazon and eBay will be similar.
However, if you want to sell a large-scale, it will be a very different experience. You are able to operate as an Amazon seller and do very little work if you choose. Amazon can be hired to do the bulk amount of the work, such as shipping and customer service. eBay does not have that option. You are responsible for all aspects of sales. For bulk products, that could be pretty tiresome.
We hope this post illuminated some of the main requirements for becoming an Amazon seller. If it seems like a lot of work, you aren’t wrong. Learning the ins and outs of this process can take a lot of time and mental energy at first. The more researched and prepared you are before you begin, the more success you will have. Rest assured though, after slogging through the beginning, becoming a seller will be a very simple and passive process that can potentially make you quite a lot of money.
We recommend that you start with retail arbitrage. Walk through the entire registration and setup process this way and see if things start to seem more doable. Set your starting expectations low and consider it a learning process, like taking a class. With retail arbitrage, you won’t have to make a costly investment and can see whether or not you enjoy it.
While many people end up loving it, others do not. At that point, you can stop entirely having only lost some time, but most sellers do not. Eventually, you may be able to invest more and start your own private label business and see the real money come in. Then you’ll wonder why you ever doubted it to begin with.