Selling on Amazon is a fantastic way to make extra money or turn your passion into a lucrative business. All you need is some start-up capital and the time it’ll take you to conduct proper research so that your offering matches up to the competition.

With our quick guide, you’ll be selling on Amazon in no time at all.

Step 1) Budgeting for your business launch

You should treat selling on Amazon as a business. We would recommend spending 40% of your capital on actually buying your inventory the remaining 20% on advertising and then an additional 20% to restock your sold inventory.

Be prepared to make a loss on your first/second stock run as you are building up reviews and moving up the organic rankings. It is therefore important that you give your product the necessary boost and not give up too quickly.

Step 2) Choose your products (Most Important)

There’s more to selecting products to sell on Amazon than selling products you like and would buy. You need to conduct research to see what’s in-demand from customers around the world and what the level of competition is for that product.

The best way to find in-demand products is to use product finding software, which is a marketing tool that usually allows you to search by category, how in demand a product is, brand, average number of reviews and so on. That way, you can find out how many people are searching for products each month, get a better understanding of potential margins and select your products.

Helium10 and Jungle Scout are two of the most powerful tools that would help you find the right product to sell on Amazon . We would recommend you spend more time on this area than any other as finding the right product to sell on Amazon is crucial to the success of your Amazon account.

Step 3) Choose your sales model

Before you select the products you want to sell, you must decide on your sales model, which is usually determined by how much start-up capital you have. The three leading sales models include:

  • Retail arbitrage (RA), which involves buying significantly discounted products from an established retailer and re-selling them online. For example, you could buy heavily discounted TV sets and re-sell them via your Amazon store.
  • Private label, which is like creating your own brand. You purchase products directly from a manufacturer who can make it in bulk. The manufacturer adds your logo and information during production and you then sell it under your label.
  • Wholesale is how most retailers work. You purchase products from an established brand, like Adidas or Clarins, for a fraction of the retail price and then mark-up the products and sell them on Amazon. You might, for instance, buy a pair of trainers for £15 at wholesale and sell them for £50 in your Amazon store.

If you don’t have much capital to work with, RA is the best way to trial an Amazon store. However, if you have a chunk of cash for stock and want the best chance to make considerable profit, the wholesale model is your best bet.

Private label can be difficult until you’ve established yourself and profit margins are often lower than wholesaling as you don’t have an established name to leverage.

Step 4) Source your products

It’s all well and good knowing what you’re going to sell, but you need to know where to get the product in the first place.

You can use popular marketplaces such as Alibaba to find manufacturers of your products. Compare prices, discuss your needs directly with the manufacturer, and even order samples.

If you’re opting for the wholesale method, you can contact the sales team of the brand you’re looking to sell and, in most cases, request a catalogue.

Once you’ve found products you’re happy with and that you know you can make a reasonable amount of profit on, you can create your Amazon seller account.

Step 5) Sign up to become an Amazon seller

Now you know what sales model you’re using and have selected and sourced your products, you can sign up to become an Amazon seller. You have the option of selling in the following marketplaces:

  • North American marketplaces
  • European marketplaces
  • Japan
  • China
  • India
  • Middle East & North Africa (coming soon)

When signing up, you’ll need to provide a business name and address, telephone number, bank information and tax information.

As a new business owner, you should register as a sole trader or incorporate a company. It would also help if you have your brand trademarked. That way you can take advantage of Sponsored Brand Campaigns, Enhanced Brand Content and create a storefront.

If you’re planning to sell less than 40 items per month, you can get a free Amazon seller account. However, there is a monthly subscription fee for the Professional plan – designed for larger stores making more than 40 sales every month. We always recommend opting for the professional seller account regardless on how many items you aim  to sell.

Other fees to consider when selling via Amazon include per-item fees, which is a small fee for non-professional sellers on every item sold, as well as referral fees, which is a fee for having your product listing appear in searches. Closing fees and shipping fees also apply.

Step 6) Choose your fulfilment method

Fulfilment includes the storage, picking, packaging and shipping of your products. There are two fulfilment options available as an Amazon seller:

  • Fulfilment by Amazon (FBA) is Amazon’s fulfilment offering, which allows you to send your products to be stored in Amazon’s fulfilment centre. Then, when a customer places an order, Amazon will pick, pack and ship the order for you. This is an effortless solution that requires minimal effort on your part, but there are additional costs involved.
  • Fulfilment by Merchant (FBM) is when you manage all aspects of fulfilment, including storing your products, packing them and getting them to the customer.

The main benefit of FBA vs. FBM is that when Amazon handles your fulfilment, they will also manage any customer service issues and returns on your behalf, which is ideal if you’re not familiar with the regulations – although you should familiarise yourself with them. If you choose FBM, you are responsible if orders are late, don’t arrive or arrive damaged, which can be a headache.

Step 7) Order your stock

Now you know which fulfilment method you’re using; you can order your stock from the manufacturer or brand of your choice and have them deliver the products to either your premises or Amazon’s fulfilment centre. Initially, order two months’ worth of stock and see how you go.

Step 8) Upload your products

You can start uploading your products to Amazon. During the upload process, you’ll need to fill out all the details related to your product, so make sure you have your products’ specifications, provided by the manufacturer, to hand. Accuracy is essential.

Amazon will assign each of your products a Fulfilment Network Stock Keeping Unit (FNSKU) number. However, to attain this, you need to have a universal product code (UPC) for each product. You can request a UPC from GS1 and other barcode providers. We recommend using https://barcode1.co.uk.

When filling in the rest of the details for your product, be sure to include:

  • a searchable title that incorporates relevant keywords
  • bullet points in your description to make features easy to digest
  • a detailed product description
  • high-quality photos of your product (three images minimum)

Make sure your listing is search optimised so that it gets picked up when customers are searching.

Moving forward

That’s all there is to it.

Now you’ve created your Amazon store and uploaded your products, you can start thinking about marketing them. Consider pay-per-click (PPC) campaigns and collaborate with the press, including bloggers, to get the word out there about your products – especially if you’ve created a brand.

Amazon selling takes patience, but remember: keep your offering fresh, make sure your products are competitively priced and optimise your listings. That way, you’ll see a return on your investment.

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George
George
George is the Founder of Clear Ads Ltd. Clear Ads Limited was first set up in January 2011 with the soul purpose of helping small and medium sized companies advertise through Google Adwords. Over the last few years through word of mouth, our account managers have managed to help over 200 different companies gain better exposure to their website through Google Adwords.

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