How to Sell on Amazon for Beginners - Complete Guide
If you ever thought about selling online, Amazon is the first place that crosses your mind. At the first glance, it looks quite straightforward. You find a product and start selling. But when you to go into details, it seems not so easy anymore.
Amazon for beginners is a perfect school of sales. It offers great opportunities because of the huge customer base and potentially high profits. For the same reason, it does have barriers to entry. Amazon is a crowded place with brutal competition at times.
If you are not sure where to start, go for the Amazon selling guide for beginners. The best way to act when you are not sure how exactly to approach a problem is to understand how things work.
Therefore, when you look into how to start selling on Amazon for beginners, it’s a good idea to come up with a roadmap. For that, you should know how the sales processes are organized on the platform.
Doing it right from the start helps minimize the risk of failure. This is because if you don’t do your product research properly and won’t calculate its profitability from the start, you may end up losing time and money.
Though all of us expect good things to happen, it’s much better to facilitate your success on Amazon based on informed decisions.
In our Amazon for beginners guide, you’ll find everything you need to know about how to sell on Amazon for beginners.
How to Be a Seller on Amazon for Beginners?
To start selling on Amazon, you should register as a seller on the marketplace and find a product that customers will be interested to buy.
Easier said than done.
The first one means that you should set up an Amazon Seller Central account. Also, you’ll have to figure out the sales model you’ll use - in other words, the way you will sell. In addition, you’ll need to select a fulfillment method.
Once done, you’ll need to choose a product to sell, source it from a supplier, and list it on Amazon.
Selecting a business model and fulfillment method from the start will help you better understand how exactly you’ll sell and deliver the product to your potential customers. Also, this will help you calculate the product’s profitability.
Selling on Amazon for Beginners: Guide in 7 Steps
Launching a product on Amazon involves a number of major steps. After selecting a business model and fulfillment method (typically, Fulfillment by Amazon or Fulfillment by Merchant), you have to research a product, source it, and list it on Amazon.
7 steps to selling on Amazon
Step 1. Choose a sales model.
Step 2. Decide on a fulfillment method.
Step 3. Select a product to sell.
Step 4. Set up an Amazon seller account.
Step 5. Source a product from a supplier.
Step 6. List an ASIN on Amazon.
Step 7. Start your sales.
Now, let’s see how the steps of selling on Amazon for beginners look in detail.
Step 1 to Amazon selling. Choosing a sales model on Amazon
The sales model defines what type of product you’ll sell and the way how you are going to sell it to your buyers.
You can sell one of the two types of products on Amazon – a new or existing one. If your intention is to sell a new product, which implies less competition, you can go for a private label or handmade model.
However, you should keep in mind, that selling a new product means creating a new listing. Besides, in many cases, new products require a higher initial investment and a longer time to launch. In addition, you’ll need to promote it and attract customer reviews from scratch.
If you’ve made up your mind to resell an item that already exists on Amazon, you can choose retail arbitrage, online arbitrage, wholesaling, or dropshipping. In such a case, you can sell it under an existing listing.
A private label is a model of finding a popular unbranded product and creating your own brand out of it. Some sellers may introduce improvements to the initial product based on customer reviews.
Pros: Brand is an asset. Low to no competition. Higher profit margin.
Cons: Longer launch time. More upfront cost.
Wholesaling is reselling items in bulk. Due to big lots of products wholesalers buy from the suppliers they get discounted wholesale prices. The profit in this model comes from the difference between wholesale and retail prices.
Pros: Better chance to sell established brands. Good profit margins.
Cons: Big upfront investment. Substantial store goods.
Retail / Online Arbitrage
Retail arbitrage is reselling discounted products from brick-and-mortar stores on Amazon for profit. Online arbitrage is the same but the sellers find their products on the internet.
Pros: Easy and fast product launch. Low initial cost.
Cons: Thin profit margin. Time-consuming research a product. For retail arbitrage – it is necessary to physically drive around the stores.
Dropshipping is a model when a seller lists a product on Amazon and concludes an agreement with a supplier that they deliver orders to the customer. When a shopper places an order, it goes directly from the supplier to the shopper.
Pros: Almost no cost to start. Easy and fast product launch. No need for inventory management.
Cons: No control fulfillment process. Low-profit margin.
Handmade is selling handcrafted products that sellers create by their own hands.
Pros: High-profit margin. No competition.
Cons: You need to have skills to produce such items.
Related: You can find out how to select a business model that matches your business in our blog Amazon Business Models Guide: How to Choose the Right One.
Step 2 to Amazon selling. Deciding on FBA or FBM fulfillment method
The fulfillment method is the way how a seller delivers a product to a buyer. The most popular methods are FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant).
Many sellers on Amazon use either FBA, FBM, or a combination of both.
Fulfillment by Amazon
FBA is a service that Amazon provides to sellers. It helps them fulfill their orders. For the merchants enrolled in the FBA program, Amazon takes care of order picking, packing, labeling, delivery to the buyer, customer services, and returns management.
This service allows sellers to save time on inventory management and invest more effort into scaling their business. Especially, this service is useful on Amazon for beginners. In fact, over 70% of Amazon sellers use the FBA fulfillment method.
However, the service comes with a cost. There are many different fees Amazon charges FBA sellers. Therefore, it’s necessary to take into account all of them to define if your product is profitable or not.
Note. To carefully account for all Amazon fees, sellers use the FBA&FBM calculator. Seller Assistant Apps’ FBA & FBM Calculator helps you compute ROI and Profit Margin right on the Amazon product page when you do product research.
Pros: Amazon stores, ships your inventory and manages returns on your behalf. It also takes care of customer services.
Cons: FBA involves a lot of different fees. Amazon changes them, typically on a yearly basis.
Fulfillment by Merchant
With FBM, sellers take care of the order picking, packing, labeling, shipping to the buyer, customer support services, and returns, on their own. This method is good when a merchant finds a third-party service provider that offers better fulfillment prices than Amazon.
Pros: The merchant controls every stage of the delivery process and costs.
Cons: Inventory management and shipping takes time and effort. Since Amazon optimizes its FBA prices, its solution may be more cost-efficient compared to 3PL services.
Step 3 to Amazon selling. Finding a product to sell
The product you offer buyers on Amazon is key to your sales. When looking for a product to sell on Amazon, you should keep in mind that Amazon ships approximately 1.6 mln units daily.
Therefore, if you are not planning to create a private label brand, chances are, that your product already exists in the marketplace. This means that you’ll need to compete with other sellers in your category and niche.
In order to make sure that your product will be profitable, you’ll have to do product research. There are two ways to do it - either automatically or manually. Or, you can use both.
Automatic product research
Automatic product research means that you find a product using one of Amazon product research tools available on the market. Just don’t forget that your competitors use product research tools as well.
Manual product research
You can find your product manually as well. For online arbitrage sellers, for instance, this may mean going through hundreds of products daily. However, this reduces the risk that competitors will intercept your “gold mine”.
Note: Some of the sellers' tools are specifically created to make product research easier. For instance, the Seller Assistant app is a tool that combines product research features, an FBM&FBA profit calculator to check product profitability, Advanced IP Alerts to see if the product is hazmat, oversized, or has any other associated risks, and other features. It also allows making notes right on the Amazon Search Pages or Amazon Product pages.
How to do manual product research step by step
Step 1. Come up with a product idea.
Step 2. Identify a subcategory in your product’s category.
Step 3. Pinpoint the best sellers in your niche.
Step 4. Check the popularity of your product on Google trends.
Step 5. Select products in the highest demand.
Step 6. Study what your competitors do.
Step 7. Validate research results.
How to validate the researched product
A product you researched should:
- have a high demand;
- be an “evergreen” product;
- have a good profit margin;
- don’t have too much competition;
- have a price of $10 to $50 (a maximum of $100);
- its market niche should be popular.
A product you researched shouldn’t:
- belong to a licensed or restricted category;
- be a highly seasonal item;
- have too much competition;
- be an oversized, too heavy, or fragile;
- be an item you can’t market on social networks.
Where you can find product ideas?
Amazon’s best-seller list;
- Google trends;
- eBay’s trending list;
- SaleHoo Market Research Lab;
- Shopify stores;
- AliExpress’s best-sellers list.
What are the top product categories to sell?
- Arts Crafts & Sewing;
- Beauty & Personal Care;
- Cell Phone & Accessories;
- Clothing, Shoes & Jewelry;
- Computer Accessories;
- Handmade Products;
- Health & Household.
Step 4 to Amazon selling. Setting up an Amazon seller account
In order to sell on Amazon, you need to have a Seller Central account. First of all, you’ll need to select a selling plan and register on Amazon.
Choosing a selling plan
When you register your selling account, Amazon will ask you to choose from two subscription plans: individual and professional.
Individual selling plan
Under the individual plan, there is no monthly payment. On the other hand, you will be charged $0.99 for every unit you sell. This plan is viable for you if you’re going to sell less than 40 products per month.
Professional selling plan
With a professional account, you’ll pay $39.99 per month. If you’re planning to sell more than 40 products monthly, a professional account will save you money.
In addition to seller account fees, Amazon charges merchants a referral fee per sale.
Registering Amazon seller account
When you register an Amazon Seller Central account, make sure you have ready:
- business email address or Amazon customer account;
- valid credit card;
- government ID;
- tax information;
- phone number;
- a bank account where Amazon can transfer the money you earned from sales.
Registering Amazon seller account step by step
Step 1. Open the «How to start selling on Amazon» sign-in page.
Step 2. Enter your name, e-mail address, and password. Click “Next.”
Step 3. Amazon will send the verification code to your e-mail. Enter it where necessary and click “Verify.”
Step 4. Add your business details, and click “Agree and Continue.”
Step 5. Specify your citizenship, date of birth, proof of identity, business address or home address, and phone number. Click “Next.”
Step 6. Enter your payment method. Click “Next.”
Step 7. Submit your Amazon store’s name. Add product details and Universal Product Codes (UPCs). If you are a manufacturer or brand owner with registered trademarks, tell that to Amazon. Click “Next”.
Step 8. Verify your identity. Upload a picture or a scan of your ID. You may be also asked to upload a bank account or a credit card statement. Click on “Submit” and send the application to Amazon.
Step 9. Wait until Amazon approves your account (it takes up to 24 hours).
Step 5 to Amazon selling. Source a product from a supplier
Finding the right product supplier is important for your Amazon business. Not only should you make sure that they deliver products on time, and you can reorder a product in the quantity you need.
There are certain risks associated with product sourcing, especially if you research an item online. You need to make sure that the product is high quality. Also keep in mind, that some items may not look like those in the picture. There is also a certain risk of unreliable suppliers and payment transaction fraud, depending on where you source a product.
Therefore, it’s a good idea to order a small number of items from the start to test them and check the quality.
Criteria to choose a product supplier:
- reputation and references;
- product cost;
- quality certificates;
- options to scale supply;
- logistics and shipping terms;
- return policy;
- insurance policy.
Step 6 to Amazon selling. List an ASIN on Amazon
The product page is the first thing that your buyer sees when they get to your product. Therefore, it’s important that the listing information is clear and correct, and contains bullets, and high-quality images. Also, make sure that the title and content are optimized for highly-ranked keywords since they are indexed by Amazon’s search algorithm and help make your item visible to customers.
If you’ve selected one of the reselling models (wholesaling, retail / online arbitrage, or dropshipping), chances are that a product already exists on Amazon. In such a case, you don’t have to create a new product detail page. You can add your ASIN to an existing product listing.
However, if you are going to sell a private label or handmade product, you’ll need to create a new listing.
Optimized listing components
- clear title and description;
- informational bullets;
- high-quality images and video / A+ content;
- highly-ranked keywords;
- backend keywords;
- at least 20 reviews with 4-star ratings and up.
More details you can find in Amazon’s listing guidelines.
Step 7 to Amazon selling. Start your sales on Amazon
Now you are ready to sell. Before you publish your listing, make sure that you’ve set a competitive price. Manage your inventory effectively and market your item. Add new products and scale your business.
If you are not sure where to start selling on Amazon, our guide of 7 steps for beginners will help you launch your first product successfully. You’ll need to choose a sales model and fulfillment method, and find a product to sell. After that, set up an Amazon seller account. Once done, source a product from a supplier, list an ASIN on Amazon, and hit the road.
Of all these steps, product research is the most important one since your item is key to success. In a lot of cases, it takes sellers many hours a day to browse the internet in search of product ideas. To get it right, you need to find a profitable product and verify it you can sell it on Amazon or not so that it’s not restricted. You need to check that the item isn’t bulk or oversize to avoid extra shipping fees. You need to consider a lot of other parameters in process of search.
Knowing this, we created an app that makes your life easier. Seller Assistant app is a powerful tool that combines product research features, an FBM&FBA profit calculator, and a lot of other useful options. With it, you’ll get access to Advanced IP Alerts, Quick View, Stock Checker, and Restrictions Checker in one tool.
Try the Seller Assistant Аpp now. Register for our 14-day trial. Grow your Amazon business with confidence.