How to Sell on Amazon

How to Sell on Amazon : 7 Quick Steps to Success

Amazon is the first name that comes to mind when we say e-commerce. We will discuss the 7 quick steps on how to sell on Amazon since this is the biggest earning opportunity in 2020.

The e-commerce market is slowly expanding globally and Amazon surely holds the peak of it. Amazon has got a super-performing team of suppliers and warehouses for logistical support. For many products, they even guarantee a one-day or two-day delivery as well. Moreover, there are excellent discounts and offers, always prevailing on Amazon that attracts children and adults alike to shopping extensively at Amazon.

Clearly, with such a huge demand, the sellers are earning huge out of Amazon. So why don’t you also try to make a successful career as an Amazon Seller?

Curious! Now can be a part of this phenomenon by learning the tricks of Amazon with us.

Did you know Amazon holds a nearly 49% share of the US e-commerce market? Of course, you can’t beat that number with your own e-commerce portal. So why not be a part of this and earn huge?

Amazon now holds the position of the largest online shopping portal in the world, with nearly 2.5 billion shoppers every month. Earning opportunities are great over here. Learn the new ways of making money over Amazon as a seller and start earning from Amazon’s customer base.

So, how can you sell on Amazon? There are several ways to make that happen. We will go step by step on this

How to Sell on Amazon with FBA?

FBA or Fulfillment by Amazon is a selling program on the platform that allows the sellers to sell products over Amazon without themselves fulfilling the order. The process lies entirely on Amazon. They will pick up your product, pack it, and dispatch the order for you. All you do in the entire process is provide Amazon with the product.

The process definitely looks quite simple. Let’s make it more interesting for you.

FBA only charges a seller for the order that they fulfill and for the storage space of the inventory. In fact, you can pay them even when you are on the go. The best part of using FBA is that their yearly service fee includes all the e-commerce shipping charges. You don’t need to pay the Amazon Prime charges that are otherwise applicable for a 2-day free delivery guarantee.

Another fantastic thing about using FBA is its scalability. you might have started it small, but it will grow in no time. FBA comes with software that gives you an estimate of the sales performance. This helps you to anticipate your future sales and prepare accordingly.

We have understood that Amazon FBA is a great way to make money on Amazon. Now let’s see how.

Getting Started with Your Sales on Amazon FBA

The sales process starts with creating an account first.

Step 1: Go to Amazon Services and sign up for an account as an FBA seller.

Step 2: Once you sign up, you need to scroll down and click on the “Get Started” button to begin the process of Amazon sales. You will now come across a link saying “selling on Amazon”. You need to click on this to begin.

Step 3: The next step is about deciding whether you want to go with the option for “Sell as a Professional” or the option for “sell as an individual”. For the former option, you will be charged an amount of $39.99 per month and the later $0.99 on each of the sales that happen. You can always start as an individual if you don’t have enough sales deal in your hand. You can change later into a professional category when your leads start building up. This makes the profit worthwhile.

Step 4: The last step calls for information input. You will come across a form where you will be required to fill in the below details –

  • First, you need to enter the details of the credit card associated with the company. A credit card is a mandate for international payment or charges.
  • After you have entered your credit card details, you need to enter the bank details. If you are located outside the USA, you will specifically have to enter the details of a bank that supports ACH for wired transfers.
  • Enter your local contact information, like your mobile number with country code, e-mail id, home, and office addresses, fax number, and other details.
  • If you belong to the USA you need to provide Amazon with your EIN (Employer Identification Number) if you are running an LLC. If you are a sole proprietor then your Social Security Number suffices. Those residing outside the USA need to submit their professional tax information.

All these information help you while you claim your money from Amazon account after your sale.

How to Use FBA to Sell on Amazon?

You have covered your first step as a seller on Amazon and have created a seller account on FBA. It’s time you learn how to use the program to make the most of it. Before you get started with your e-commerce business, you need to decide on the product that you will sell through FBA.

The next phase of utilizing FBA to sell on Amazon goes like this-

Step 1: Decide on the product you wish to sell and fill in the product details to your Amazon seller account. The details should typically include-

  • Product title
  • A detailed product description
  • Pricing
  • Any additional information required by Amazon

Step 2: Once your product details are uploaded on the FBA account, it’s time to prepare a list of items, box them, and ship them off to an Amazon FBA warehouse.

Step 3: Once your shipment is received by Amazon FBA, they handle the rest of the fulfillment as a part of their program. The first steps of fulfillment involve a verification process. Verification ensures the correct and safe delivery of your product to the destined person.

Step 4: Once your product and personal details verification s complete, Amazon lists your product on their portal and activates it. Upon product list activation, your product and seller details become visible to the buyers or visitors who open amazon searching for a similar product.

Step 5: From the time of listing, your products are stored in the Amazon warehouse until you have a buyer. they charge you a one-time fee for this warehouse storage purpose.

Step 6: The final step is that of Amazon fulfilling an order in a Prime 2-day delivery process. Once you receive an order, it becomes Amazon’s duty to organize the shipment of the product to the buyer.

Whenever you start doing to sell on Amazon FBA, they pay you 14 days after your 1st sale. The balance is credited to your Amazon seller account. After the first payment, they follow a twice-a-month payment process, i.e. every two weeks, the payment gets released.

The process so far is quite simple and attractive. What do you find the best about Amazon FBA?

We consider FBA as a great selling opportunity because of the ease merchants enjoy with this program. The FBA team handles all the logistic software uses, customer service, delivery, and return, while you focus completely on your sales generation. Furthermore, you give your customers an additional Prime benefit of 2-day delivery without any extra charge.

So far, we have covered the basic steps of Amazon FBA, i.e., understanding the benefits of FBA and how you can start earning with it. Now, we will move on to the next factor to consider – the cost behind this program.

How Much Does It Cost to Sell on Amazon FBA?

We discussed the two selling options you get when you join FBA. Both of them are cheap options depending on the expected number of sales. Either way, you get good deals.

The Professional seller profile costs $39.99 per month, whereas, if you start as an individual seller, you will be charged $1 per item sold. So, if you have a plan of selling 40 or more items, it is always beneficial to go for a Professional seller option. But, if you figure out that you will be selling less than 40 items in a month, we suggest sticking with the Individual plan. By choosing your plan wisely, you can save quite some profit money from your monthly sales.

Apart from the standard membership fee, there is also another fee that you need to pay on FBA – the Amazon Referral Fee. It is a variable amount that depends on what you sell. For example, Amazon charges a 15% referral fee for merchants who sell books. For those who sell consumer electronics, the fee amount is 8%.

You can refer to the below chart to understand the referral fee structure better.

how to sell on amazon

These fees remain hidden until to unearth the details. Go through our chart to understand all charges applicable, otherwise, such fees pile up and ultimately you end up paying amazon a huge amount. This is why we say, use the Amazon FBA platform to display your products in front of their huge client base, but plan your sale beforehand.

It is always better to sell from your own e-commerce platform simultaneously with Amazon. You can link your Amazon listings with your e-commerce platform and sell it from both your website and Amazon without hindrance.

Try some e-commerce platforms as well for simultaneous selling, like Wix, Bigcommerce, Shopify, etc. These platforms will give you the leverage to sell on social media platforms like Facebook, Instagram, etc.

This is called the Omnichannel marketing strategy – the trick you use to sell your product to the target audience through multiple channels.

We have discussed the steps of how to sell on Amazon FBA so far. Now it’s time to determine the process of choosing the right product to sell on Amazon.

Process to Choose Products to Sell on Amazon

Your profitability is dependent on two factors – first, the type of product you wish to sell on Amazon, and second, your capability to create a brand value.

You must remember that it can be difficult to establish a new brand in the market, if you are selling common products like kitchen utensils, electronic goods, etc. Those products are already crowded with many brands.

Just deciding on a product and selling it on Amazon is not enough. You need to adapt the expertise of Amazon SEO to optimize your Amazon listing for higher ranking during people’s search. This brings us to Private Label Products. These are services or goods, that are manufactured by one company, but some other company gives it a brand and sell it.

We recommend choosing private label products for selling on Amazon. These are third-party products, which can you sell under a personalized logo.

Why Should You Sell Private Label Products on Amazon?

So, why do we recommend selling such private label products?

Here we have listed the benefits of selling third-party product.

1. Get relieved of product sourcing:

Private Label Products on Amazon saves you of the stress of procuring products. Plus, there is also the advantage of sourcing multiple product options in small amounts. Slowly you can increase the quantity of procurement to a noteworthy amount.

2. Get control over the product pricing:

When it comes to adjudicating or wholesale merchandise, you will always try to undercut your competition. But with private labeling, you get to complete control of the pricing and become responsible for your amazon listing.

3. Enjoy improved ROI:

If you are using the Amazon FBA program for selling private label products, you get to predict the sales in advance. This will give you a better chance of controlling the brand image, and pricing of your products. Since you have better control now, you will also enjoy a better ROI.

While you understand the reasons behind choosing private label products for Amazon sales, it is time to dig in further with the product pricing.

Suitably Pricing Your Products for Amazon Seller Central

When you successfully choose the right kind of product, you earn a considerable amount of profit. Also, choosing the right product means finding something that matches your expertise and gives you the perfect brand image.

Do you find it difficult to choose a product and price it according to the market?

The best way you can have both is to find a product category that interests you, and look for products that gest sponsored by companies for listing. Once you understand that brands are interested in spending on your product, remain assured that you will have a high ROI.

If you have found the right product idea, the pricing will not take long. You just need to apply these methods.

1. Employ Tools for Product Research:

To have the perfect choice of product for Amazon sales, you need to first choose the perfect tool for product research. These tools help you select product criteria first, then filter out the best-fitted product after thorough research of the market.

When it comes to choosing the best product research tool to sell on Amazon, we always prefer using these three options-

Amazon sellers who don’t do the product research thoroughly are likely to mark their products either too high or too low. Either way, you lose customers. If you have priced your product too high, clients will go with similar options on the platform at a lower price. In case you have priced it too low, you are likely to lose clients over a wrong quality perception—extremely low pricing questions your dependability. Low pricing has other problems as well. It affects your profitability. If you have marked it low and have sold the product to many people, the total margin also turns out to be lesser than the standard amount to run a business.

2. Understanding the Cost of Goods Sold (COGS) and the Gross Margin:

These two factors play a vital role in making your product both profitable and competitive from the price point.

Gross Profit Margin (GPM) or simply Gross Margin is the amount you receive after deducting the Cost of Goods Sold or COGS from the total generated revenue (TR) amount. This amount matters the most when it comes to pricing your product. You need to have a Gross Margin that helps in profitability.

Though the standard formulae of Gross Margin calculation say, GPM = TR – COGS, the equation changes a bit for Amazon. Amazon calculations say-

Gross Profit Margin = Total Revenue – Cost of Goods Sold – Amazon Referral Fee

If you want to earn decent from Amazon, you need to maintain a GPM of 20-30% after deducting all the costs associated with the sale. So, when you make a pricing strategy for your product, don’t forget to use the product research tool for understanding the market, understand COGS, and most importantly, check the referral fee applicable for your product category. Our above-mentioned list of referral fees might help over here.

3. Check Your Competition for Product and Pricing:

Amazon is a highly competitive virtual selling platform. To stay on the top of the list, you need to price your product either same as that of your competition or choose lower pricing.

If you are facing competition with the pricing on Amazon, there is a great way to reduce the same. First, check the competitors’ pricing and product features, then look for cost reduction opportunity, and finally, manipulate your Amazon storage fees to hold your ground.

There is not standard formulae for pricing your product on Amazon. We always suggest you apply a strategy and go for beta testing. This means, testing a pricing strategy with minimal risk association, before using that plan in full boom. Ensure that there is always a balance between sustainability and profitability.

What Investment is Required to Sell on Amazon?

You don’t have to be a millionaire to sell on Amazon.

When you start selling on Amazon, you spend your money on 5 different areas-

1. Your Inventory is Your first Expenditure:

Your journey as an Amazon seller is entirely dependent on your initial inventory. Right from the starting of your inventory, you need to be cautious about the pricing factors and invest accordingly. Choosing the right product is also important here.

We always suggest Amazon sellers begin with an inventory ranging between $150-$500. This helps them to sustain later, and also prevents inventory depletion. You will never lose your business momentum that way. Remember, no inventory is successful if it lacks the substantial potentiality of profit.

The tools that help you with a perfect estimation are the Amazon FBA calculator and the Amazon Seller App.

These tools provide you with almost 18 different pricing options. You need to choose a product inventory wisely, so as not to waste all your capital income on a flop product idea.

2. Amount Spend for the Amazon Seller Account:

We have already discussed the amounts needed for opening your Amazon Seller account. We have also covered the suitable option to go with depending on expected sales. If your sale count is lower than 40, $0.99 per sale would be wise. Otherwise, go with the professional sales plan at $39.99 per month.

3. Charges Applicable for UPC codes:

In order to sell on Amazon, it is essential to procure a barcode for the company. UPC is the fundamental Amazon proprietorship barcode in your product packaging that will be needed to generate the FNSKU. You will also need to acquire GTIN or Global Trade Identification Number to get your FNSKU.

Amazon keeps on modifying their TOS procedures from time to time. According to the latest modifications, one can acquire barcodes only from GS1. The GS1 barcode registration is available to sellers for an initial payment of $250 and an annual renewal fee of $50. You can acquire a maximum of 10 barcodes under one registration.

If you want to spend less, of course, you can procure your UPC from a third-party. However, we will not recommend this under any circumstances since Amazon prefers to avoid third-party barcodes.

4. Product Photoshoot:

Nothing sales better in the market over a high-quality photo of your product. In today’s world, customers are always eager to enjoy a near-real experience from the comfort of your home before they buy a product. An HD quality photo can do that job.

Photos determine your rate of conversion and credibility. A high-quality photo will always enhance your product sale rate and hence, one must never refrain from investing in a good product photoshoot.

5. Company Logo Designing, Trademark, and Branding:

Every private label product seller on Amazon requires to get their own trademark first. You need to invest in branding that helps you stand out amongst your competitors. To get the best job done here, we recommend hiring a professional to design you a relevant logo. Your logo is your image asset and gives you a professional presentation. Hence, you need to choose wisely.

Final Thoughts on How to Sell on Amazon

We always ask people to be a part of Amazon selling since the market is competitive and you can’t really beat the sale rate of Amazon.

Joining the Amazon FBA is always a good way to start your profile. Once you join the FBA program, you get access to the vast client database of Amazon and can expect a handsome share of the $72.5 billion sales the brand enjoys.

If you want the best results of Amazon selling, we suggest using product research tools and optimizing your sales for high GPM.

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