Sell on Amazon: 10 Key Things to Know

Sell on Amazon: 10 Key Things to Know

Step 1: Understand the Amazon Selling Landscape

Research Amazon’s Business Models

Before diving in, understand the two primary ways Amazon operates its retail business: as a direct seller (Amazon Retail, where they buy and resell products) and as a marketplace for third-party sellers (Amazon Marketplace). As a new seller, you will be operating on the Amazon Marketplace. Within the Marketplace, distinguish between Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). FBA means you send your products to Amazon’s fulfillment centers, and they handle storage, picking, packing, shipping, customer service, and returns. FBM means you store and ship products directly to customers yourself. Researching these models helps you decide which fulfillment method aligns best with your business resources and product type. For instance, bulky or perishable goods might be better suited for FBM initially, while small, high-volume items often thrive with FBA.

Familiarize Yourself with Amazon’s Policies and Fees

Amazon has extensive policies covering everything from product safety and intellectual property to prohibited content and customer service standards. Navigate to Amazon Seller Central’s “Help” section and search for “Selling Policies and Seller Code of Conduct.” Pay close attention to restricted product categories, product authenticity guidelines, and communication guidelines with buyers. Simultaneously, thoroughly review Amazon’s fee structure. This includes referral fees (a percentage of the sale price, varying by category), per-item fees (for Individual selling plans), FBA fulfillment fees (based on product size and weight), monthly storage fees, and potentially long-term storage fees. Use Amazon’s FBA Revenue Calculator (search for “FBA Revenue Calculator” on Seller Central or a search engine) to estimate profitability for specific products, factoring in all relevant fees.

Step 2: Set Up Your Amazon Seller Account

Choose Your Selling Plan

Amazon offers two primary selling plans: Individual and Professional. The Individual plan is suitable for sellers who expect to sell fewer than 40 units per month, as it charges a $0.99 per-item fee in addition to referral fees, with no monthly subscription fee. The Professional plan costs $39.99 per month but waives the per-item fee, making it more cost-effective if you sell more than 40 units monthly. The Professional plan also grants access to advanced selling tools like bulk listing, inventory management reports, advertising options, and eligibility for the Buy Box. When deciding, consider your initial product volume projections and your budget for monthly subscription fees. You can upgrade from an Individual to a Professional plan at any time.

Gather Necessary Documentation

Before initiating the registration process, ensure you have all required documentation readily available to avoid delays. This typically includes:

• Your business email address or Amazon customer account.
• A valid, internationally chargeable credit card (Visa, MasterCard, American Express, Discover).
• A valid government-issued ID (e.g., passport or driver’s license).
• Tax information (e.g., U.S. Tax ID for U.S. sellers, like a Social Security Number or Employer Identification Number).
• A phone number where you can be reached during the registration process for verification.
• A bank account number and routing number for Amazon to disburse your earnings.

Ensure the names and addresses on your documents precisely match the information you provide during registration to prevent account verification issues. Amazon’s verification process is rigorous to maintain trust and security on its platform.

Step 3: Source and List Your Products

Identify Profitable Products to Sell

Product sourcing is critical. Begin by researching product categories with high demand and relatively low competition on Amazon. Utilize tools like Keepa, Jungle Scout, or Helium 10 to analyze product sales history, average selling prices, BSR (Best Seller Rank), and competition levels. Look for products with consistent demand (stable BSR) and a healthy profit margin after factoring in all Amazon fees and your cost of goods sold. Consider niche products or bundles that differentiate you from competitors. Attend trade shows, explore wholesale directories (e.g., Faire, Alibaba for B2B), or consider dropshipping suppliers (though this has higher risks and lower margins on Amazon). Always order samples to verify product quality before placing large orders.

Create High-Quality Product Listings

Your product listing is your digital storefront. Each listing needs:

• Compelling Product Title: Include primary keywords, brand name, product type, and key features (e.g., “Brand Name 100% Cotton Queen Size Bed Sheet Set – 4 Piece, Soft & Breathable, Deep Pockets”).
• High-Resolution Images: Use at least 6-7 images, including a main image with a pure white background, lifestyle shots, infographics highlighting features, and images showing product dimensions. Ensure images are at least 1000px on the longest side for zoom functionality.
• Detailed Bullet Points: Write 5-7 benefit-oriented bullet points highlighting key features, uses, and unique selling propositions. Start each with a capitalized benefit or feature.
• Comprehensive Product Description: Expand on features and benefits, tell your product’s story, and address potential customer questions. Use HTML formatting (like <b> for bolding) for readability if you don’t have A+ Content enabled.
• Relevant Search Terms (Backend Keywords): Input additional keywords that customers might use but aren’t visible on the listing. Avoid repeating keywords already in your title or bullet points.

Optimize your listings for Amazon’s A9 search algorithm by incorporating relevant keywords naturally throughout the title, bullet points, and description. Regularly review and update your listings based on customer feedback and competitor analysis.

Step 4: Manage Orders and Optimize for Success

Fulfill Orders Efficiently

Efficient order fulfillment is paramount for customer satisfaction and maintaining a healthy seller performance metric.

• For FBA: Ensure your inventory levels are always sufficient at Amazon’s fulfillment centers. Monitor your inventory dashboard on Seller Central to avoid stockouts, which can lead to lost sales and decreased search ranking. Create accurate shipping plans and label your products correctly before sending them to Amazon. Regularly reconcile your inventory to address any discrepancies.
• For FBM: Establish a reliable shipping process. This includes promptly picking and packing orders, using sturdy packaging materials to prevent damage, and purchasing shipping labels with tracking numbers from reputable carriers (USPS, UPS, FedEx). Ship within your stated handling time (usually 1-2 business days) to meet Amazon’s on-time shipping requirements. Confirm shipment in Seller Central immediately after sending the package.

Regardless of the method, prioritize speed and accuracy to minimize customer complaints and negative feedback.

Monitor Performance and Seek Customer Feedback

Continuously monitor your seller performance metrics via the “Performance” tab in Seller Central. Key metrics include:

• Order Defect Rate (ODR): This includes negative feedback, A-to-Z Guarantee claims, and credit card chargebacks. Keep it below 1%.
• Late Shipment Rate (LSR): For FBM, keep this below 4%.
• Pre-fulfillment Cancel Rate (PCR): Keep this below 2.5%.
• Valid Tracking Rate (VTR): For FBM, aim for 95% or higher.

Poor performance can lead to account suspension. Actively seek customer feedback and reviews. After a positive transaction, use Amazon’s “Request a Review” button (if available for your selling plan) or a compliant third-party tool to politely ask for product reviews and seller feedback. Respond promptly and professionally to all customer inquiries and feedback, both positive and negative. Address negative feedback constructively and offer solutions to resolve issues, as this can often lead to feedback removal or a revised rating.

FAQs

Q1: How much does it cost to start selling on Amazon?

A1: The initial costs vary significantly. If you choose the Individual selling plan, the monthly subscription fee is $0, but you pay $0.99 per item sold. The Professional plan costs $39.99 per month. Beyond subscription fees, you’ll incur referral fees (a percentage of each sale, typically 8-15%), FBA fulfillment fees (if using FBA, based on product size/weight), and storage fees. Your largest initial investment will likely be in product inventory. It’s possible to start with a few hundred dollars for a small test batch of products, but a more realistic budget for a serious start might be $1,000-$5,000, depending on your product’s cost and quantity.

Q2: Can I sell used products on Amazon?

A2: Yes, you can sell used products on Amazon, but with significant restrictions. Many categories, especially new electronics, clothing, and beauty products, are restricted to “New” condition only. Other categories like books, media, and collectibles often allow “Used” conditions. For used items, you must accurately describe the condition (e.g., “Used – Like New,” “Used – Very Good,” “Used – Good,” “Used – Acceptable”) and adhere to strict guidelines regarding wear and tear, missing parts, and functionality. Always check the specific product’s listing page or Amazon’s condition guidelines for the category before listing a used item.

Q3: How long does it take to get paid by Amazon?

A3: Amazon typically disburses funds to your bank account every two weeks (14 days). However, your first payment may be held for a longer period (up to 21-28 days) to ensure all sales are legitimate and to cover potential returns or chargebacks. After the initial period, Amazon initiates a transfer to your bank account every 14 days, provided your account balance is positive. The actual time it takes for the funds to appear in your bank account after disbursement depends on your bank’s processing times, usually 3-5 business days.

Q4: What is the Amazon Buy Box and why is it important?

A4: The Amazon Buy Box is the white box on a product detail page where customers can add items to their cart. It’s crucial because the vast majority of sales on Amazon occur through the Buy Box. If multiple sellers offer the same product, Amazon’s algorithm determines which seller “wins” the Buy Box based on factors like price (including shipping), fulfillment method (FBA sellers have an advantage), seller performance metrics (ODR, shipping time, valid tracking rate), and customer feedback. Winning the Buy Box significantly increases your product’s visibility and sales potential. Only Professional sellers are eligible to compete for the Buy Box.