Amazon ships more than 5 billion items around the world every year through its Prime program. Some of those items are sold by Amazon sellers, not the company itself.
If you want to sell products online, teaming up with Amazon is often a smart move. The marketplace is competitive, though. You need to know what you’re doing if you want to succeed.
Wondering how to get started? This how to sell on Amazon for beginners guide is exactly what you’re looking for.
Understanding How to Sell on Amazon for Beginners
To start selling on Amazon, you will need to register for a seller account. Once you’ve done that, you can start selling almost anything in your new online store.
If you want, you can also register for Amazon’s Fulfillment by Amazon program. FBA allows you to take advantage of Amazon’s fulfillment and shipping capabilities.
For most sellers, this makes perfect sense. Amazon has an amazing and extensive network.
If you try to handle fulfillment on your own, you may find yourself backlogged with orders. You may also run into trouble with inventory, shipping costs, and even the speed of shipping.
With FBA, some of your inventory may be eligible for Amazon Prime. This lets 105 million people in the US alone take advantage of two-day shipping. There are some advantages for you, as you’ll see an increase in sales.
If that was all there was to selling on Amazon, though, our guide would be a lot shorter. Before you make your first sale, there are several other tasks you should check off your to-do list.
Creating a Business Plan
Before you start listing products on Amazon, you should take some time to develop a business plan. After all, Amazon is a competitive marketplace. Without good research and strategy, you won’t achieve success as a seller.
The first thing to do is to discover your niche. What is it that you want to sell on Amazon?
If you already have a retail store, you may be able to answer this question quickly. You may also have recently decided to become a distributor for a new product. Selling on Amazon may be a good idea.
Your business plan should identify what products you want to sell, and who you plan to sell them to. Is there a niche for your product? Who buys these items, and is there a demand for them?
If you’re selling novelty socks, then your demographic may be “everyone.” Demand for novelty socks may be highest around holidays and lower through the rest of the year.
Next, you’ll want to take a look at suppliers. Where will you get these novelty socks?
Once you’ve decided on your suppliers, you can set about defining your brand. What makes you unique among other novelty sock sellers on Amazon? Why should people buy from you and not someone else?
Managing Inventory the Right Way
Once you’ve selected your suppliers and identified your niche, it’s time to place an order. This will be your inventory, or what you have to sell.
It’s important for a new Amazon seller to manage their inventory. This is especially true if you plan to take advantage of the FBA program.
FBA sellers have to pay for storage of their inventory in Amazon’s fulfillment centers. If you have too much stock, you’ll end up paying quite a bit for storage space.
If you decide to handle fulfillment yourself, you’ll still have to store your product. You may need to rent space. Again, you may end up paying too much if you keep too much stock on hand.
Not enough stock can cause even bigger problems for Amazon sellers. If you don’t have enough stock, orders will get backed up. You may lose sales.
The best thing you can do is plan to monitor your inventory carefully. There’s specific software you can invest in to help you manage your Amazon inventory. Amazon updates inventory in real-time, so you can see when your stock is getting low.
Keep in mind production and shipping times from suppliers. You’ll also need to keep an eye on any ads or promotions you’re running. Try to plan your stock levels accordingly, and re-order sooner rather than later.
Creating an Amazon Compliant Store
Next in our beginner’s guide to selling on Amazon is compliance. Amazon maintains some fairly high standards for sellers, so you’ll need to pay attention to the rules.
As you create your store, you’ll want to make sure everything you sell is in line with Amazon’s product guidelines. The FBA program has its own set of restrictions.
Some of the products are obvious. You can’t sell prescription medications on Amazon, for example. There are also restrictions on composite wood products and cosmetics.
You’ll also need to determine if a product can be shipped internationally. It’s your responsibility to make sure anything you ship to another country meets all regulations.
You may need to get pre-approval from Amazon for some products. You may also have to provide extra information in some categories.
If you plan to sell a new product, you should take a look at the rules around Amazon trademark registration. Counterfeits are common on Amazon. Trademarking your product can help you fight back against knock-offs.
Preparing for Costs
The final topic in our Amazon seller beginner’s guide is the start-up costs.
You can choose to sell as a professional or an individual when you open your Amazon seller account. Individuals are charged per transaction. Professionals are charged at a flat rate per month.
If you’re not sure what your sales will look like, it’s best to open an individual account. You can always upgrade it to a professional account later. Once you exceed about 40 transactions a month, it will make financial sense to switch.
You’ll also need to pay for account registration. This is a one-time fee. To succeed on Amazon, you’ll also want to create a logo for your new business.
Don’t forget to factor in UPC codes and the cost of your initial inventory. You may also want to set aside some funds to get professional product photography.
One-Click Your Way to Sales
Now you know how to sell on amazon for beginners. There are plenty of other tips and tricks to learn, though. Marketing and writing great product descriptions can help you sell more.
Not sure selling on Amazon is right for your business? Check out our library for more great business ideas. With so many options, it’s easier than ever to become your own boss.