How to Sell on Amazon: A Beginner's Guide - Learn about selling online

How to Sell on Amazon: A Beginner’s Guide

Step 1: Research and Plan Your Amazon Business

Identify Profitable Products

Begin by researching product categories with high demand and relatively low competition. Utilize tools like Jungle Scout, Helium 10, or Keepa to analyze BSR (Best Seller Rank) history, sales velocity, and estimated monthly sales for specific products. Look for products with an average BSR below 50,000 in their main category and a consistent sales history. Consider products that are lightweight and small to minimize shipping costs, and those with a retail price point between $15-$50, as this often indicates a good balance between profit margins and customer willingness to purchase.

Additionally, assess the competition. Look at the number of sellers on a listing and their pricing strategies. Identify opportunities for differentiation, either through product bundling, unique features, or superior branding. Read customer reviews of existing products to identify common complaints or desires that your product could address, providing a competitive edge.

Understand Amazon’s Seller Fees and Policies

Before sourcing any product, meticulously calculate Amazon’s various fees. These include referral fees (a percentage of the selling price, varying by category, typically 8-15%), FBA (Fulfillment by Amazon) fees (storage fees, pick & pack fees, weight handling fees), and monthly subscription fees if you opt for a Professional selling plan. Use Amazon’s FBA Revenue Calculator to estimate profitability for specific products, inputting your target selling price, product dimensions, weight, and cost of goods sold. Factor in potential long-term storage fees if inventory sits for extended periods.

Familiarize yourself with Amazon’s strict policies regarding product quality, intellectual property, restricted products, and customer service. Violations can lead to account suspension. Pay close attention to product safety regulations and ensure your suppliers provide necessary certifications (e.g., CE, FCC, CPC for children’s products) if applicable to your chosen product category.

Step 2: Set Up Your Amazon Seller Account

Choose Your Selling Plan (Individual vs. Professional)

Amazon offers two primary selling plans: Individual and Professional. The Individual plan charges a $0.99 fee per item sold, making it suitable for sellers expecting to sell fewer than 40 units per month. It has limited features, such as no access to advanced selling reports, advertising tools, or eligibility for the Buy Box. The Professional plan costs $39.99 per month, regardless of the number of items sold. This plan is recommended for most serious sellers as it unlocks critical features: eligibility for the Buy Box (which drives most sales), bulk listing tools, inventory management reports, and access to Amazon’s advertising platform (Sponsored Products, Brands, Display).

If you are unsure, you can start with an Individual plan and upgrade to Professional at any time. However, if your goal is to build a scalable business, the Professional plan is a necessary investment from the outset.

Gather Required Documentation and Information

To set up your Amazon seller account, you will need several pieces of information and documentation. Ensure everything is up-to-date and matches exactly across all documents to avoid delays. You will typically need:

Business Email Address: A dedicated email for your Amazon business.
Credit Card: A valid, chargeable credit card (not a debit card) for Amazon to charge fees.
Phone Number: A phone number where you can be reached for verification.
Tax Information: Your Social Security Number (SSN) or Employer Identification Number (EIN) for tax purposes. If you are a business, your EIN is preferred.
Bank Account: A bank account where Amazon can deposit your sales proceeds.
Government-Issued ID: A valid passport or driver’s license.
Business License (if applicable): Depending on your business structure and location.
Utility Bill: A recent utility bill (electricity, gas, water, internet) showing your name and address, matching the information provided during registration. Mobile phone bills are typically not accepted.

During registration, Amazon will guide you through a verification process which may include a video call. Have all documents readily accessible and ensure the names and addresses match precisely to expedite approval.

Step 3: List Your Products on Amazon

Create Compelling Product Listings

A strong product listing is crucial for attracting customers and converting sales. Each listing consists of several key elements:

Product Title: Include your main keyword(s), brand name, key features, and quantity/size. Aim for clarity and conciseness, typically within 150-200 characters for optimal display. Example: “BrandName Ergonomic Office Chair with Lumbar Support – Adjustable Headrest & Armrests – Black Mesh – High Back Executive Swivel Chair”
Bullet Points (Key Product Features): Use 5-7 concise, benefit-oriented bullet points to highlight the most important features and how they benefit the customer. Start each point with a capitalized keyword or benefit. Example: “✅ ENHANCED COMFORT: Breathable mesh back and thick padded seat provide all-day support.”
Product Description: Provide a more detailed narrative about your product, its uses, and benefits. Use HTML tags (e.g., <b> for bold, <ul> for lists) to improve readability. Incorporate secondary keywords naturally.
Backend Search Terms: These are hidden keywords that help Amazon understand your product and rank it for relevant searches. Include synonyms, common misspellings, and related terms that aren’t in your visible listing. Maximize the character limit (typically 250 bytes) without repeating keywords already in your title or bullet points.

Research competitor listings and use keyword research tools to identify high-volume, relevant keywords to integrate into your title, bullet points, description, and backend search terms.

Optimize Product Images and Descriptions

High-quality images are paramount for online sales. Follow Amazon’s image requirements precisely:

Main Image: Must have a pure white background (RGB 255, 255, 255), show only the product being sold, and fill at least 85% of the image frame. Products should be in focus, well-lit, and professionally shot. No text or graphics are allowed on the main image.
Additional Images: Include lifestyle shots showing the product in use, images highlighting specific features (e.g., close-ups of materials, dimensions), and infographic images explaining benefits or instructions. Aim for at least 7-9 images.
Video (if applicable): Upload a short, engaging video demonstrating the product’s features and benefits.

For descriptions, as mentioned, use HTML to break up text and make it scannable. Focus on telling a story and addressing potential customer questions or concerns. Highlight the unique selling propositions (USPs) that differentiate your product from competitors. Ensure consistency in branding and messaging across all elements of your listing.

Step 4: Manage Orders and Customer Service

Fulfill Orders (FBA vs. FBM)

You have two primary options for fulfilling customer orders:

Fulfillment by Amazon (FBA): You ship your products to Amazon’s fulfillment centers. When a customer orders, Amazon handles storage, picking, packing, shipping, customer service (for shipping-related issues), and returns. This is highly recommended for most sellers as it grants your products Prime eligibility, significantly boosting sales, and frees up your time for other business activities. While FBA incurs fees, the benefits often outweigh the costs.
Fulfillment by Merchant (FBM): You store your products and handle all aspects of order fulfillment yourself, including packing, shipping, and customer service. This option gives you more control but requires significant time and logistical effort. It’s suitable for large, heavy, or custom items, or if you already have an established fulfillment infrastructure. If choosing FBM, ensure you can meet Amazon’s strict shipping performance metrics (e.g., on-time delivery rate, valid tracking rate) to avoid penalties.

You can use a hybrid approach, using FBA for your core products and FBM for slower-moving or specialty items.

Provide Excellent Customer Support

Customer service is critical for maintaining a healthy seller account and positive reviews. Respond to customer inquiries promptly, ideally within 24 hours (Amazon’s target). Address issues professionally and courteously, even if the customer is difficult. For FBA orders, Amazon handles most shipping and return inquiries, but you are still responsible for product-related questions.

Proactively monitor your seller performance metrics in Seller Central, including Order Defect Rate (ODR), Late Shipment Rate, and Pre-fulfillment Cancel Rate. High rates in these areas can lead to account warnings or suspension. Encourage satisfied customers to leave product reviews, as these are vital for social proof and ranking. However, never solicit positive reviews or offer incentives for reviews, as this violates Amazon’s terms of service.

FAQs

Q1: How much money do I need to start selling on Amazon?

A: The initial investment varies significantly based on your product choice and selling strategy. For a private label product, you might need $2,000 – $5,000+ to cover product sourcing (minimum order quantities), shipping, initial FBA fees, and marketing. If you start with retail arbitrage (buying discounted items from stores to resell), you could begin with a few hundred dollars. The Professional Seller plan costs $39.99/month, and product samples or supplier deposits are additional costs.

Q2: How long does it take to start making sales on Amazon?

A: After setting up your account and listing your first product, it can take anywhere from a few days to several weeks to see consistent sales. Factors influencing this include product demand, listing optimization, competitive landscape, and whether you’re running Amazon advertising campaigns. Products with high demand and strong keyword targeting tend to sell faster.

Q3: Do I need a business license to sell on Amazon?

A: While Amazon does not explicitly require you to have a formal business license to open a seller account (you can register as an individual), it is highly recommended to establish a legal business entity (e.g., LLC, sole proprietorship) and obtain any necessary state or local business licenses. This provides legal protection, simplifies tax reporting, and often makes it easier to open wholesale accounts with suppliers.

Q4: What’s the biggest mistake new Amazon sellers make?

A: One of the biggest mistakes is insufficient product research, leading to sourcing products with low demand, high competition, or poor profit margins. Another common error is underestimating the total costs involved (fees, shipping, advertising) or neglecting to read Amazon’s terms of service thoroughly, which can lead to account suspension. Not optimizing product listings with strong keywords and high-quality images also severely limits visibility and sales.