Becoming an Amazon Seller: A Comprehensive Guide
Are you interested in becoming an Amazon seller? It's not something that happens overnight, but with the right strategy and knowledge, you can begin selling products on Amazon and create a consistent income stream. In this guide, we'll cover everything you need to know to get started, from choosing your business model to setting up your Seller Central account and creating your product listing.
Table of Contents
1. Introduction
2. Choosing Your Business Model
1. Private Labeling
2. Wholesaling
3. Retail Arbitrage
4. Online Arbitrage
3. Choosing Your Selling Plan
4. Setting Up Your Seller Central Account
5. Fulfillment Methods: MFN vs. FBA
6. Product Research
7. Estimating Fees and Margins
8. Branding Your Product
9. Sourcing Your Product
10. Creating Your Product Listing
11. Upgrading to a Professional Selling Plan
12. Amazon Pay-Per-Click Advertising
Choosing Your Business Model
Before doing anything else, you need to choose your business model. There are four common business models for Amazon sellers: private labeling, wholesaling, retail arbitrage, and online arbitrage. Private labeling is when you create a trademark brand name and apply it to a manufactured product. Wholesaling is when you resell an existing branded product that you purchase at a wholesale rate. Retail arbitrage is where you find discounted products at brick and mortar stores and resell them at market value on Amazon. Online arbitrage is nearly identical to retail arbitrage, except you purchase discounted products online versus physically in stores.
Out of these four business models, we recommend going with private labeling as the number one business model for beginners. It gives you the best opportunity to create a consistent income stream and has the highest margins out of any of these business models.
Choosing Your Selling Plan
There are two selling plans on Amazon: the individual and the professional selling plan types. For individual sellers, you will pay 9 cents for each sale that you make. For professional sellers, you will pay a membership fee which is a fixed rate each and every month of $39.99. The professional selling plan type offers you an opportunity to use Amazon pay-per-click advertising, unique selling features, global selling programs, and much more. However, we do not recommend starting as a professional seller because it will take you at least 2 to 3 months before you can actually begin selling a product. The lead time to procure your product usually takes 4 to 6 weeks depending on how you ship them to the United States.
Setting Up Your Seller Central Account
Seller Central is the seller interface which allows you to manage orders, view your inventory, view payments, and so much more that really enables you to be a seller on Amazon. You can access important account settings like your seller plan, tax info, bank account info, and much more. Make sure to download The Seller Central app from the App Store to manage your store on the go.
Fulfillment Methods: MFN vs. FBA
There are two different ways to fulfill your orders: Merchant Fulfilled Network (MFN) and Fulfillment by Amazon (FBA). MFN is where you are responsible for fulfilling each order, packaging the product up, and shipping it to the customer who places an order. FBA is where you will ship your products to Amazon, they'll store their products for you, and then when orders come in, they'll actually go ahead, take your products out of storage, package them, and ship them to the customer. We recommend using FBA for just about any independent seller because it totally eliminates you from the fulfillment process which is by far the most tedious part of becoming an Amazon seller.
Product Research
To find in-demand niches, we recommend using Jungle Scout to find these products. After finding these product ideas, we need to go ahead and toet some of them by looking at the margins for each one of these specific niches. To calculate this, we need a margin calculator, the cost of goods sold, and the product's dimensions and weight. We recommend using an app called Seller Buddy which is a free margin calculator that you can use as well as much more.
Branding Your Product
Branding is when you take a trademark name, place it on your product, and begin selling that branded product on Amazon. There are three options when it comes to listing your product in brand names: selling generically, branding your product, or selling on an existing listing. We recommend branding your product and creating your own listing. This will give you the best opportunity to succeed as an Amazon seller by branding your product and it'll also give you complete control of your listing.
Sourcing Your Product
We recommend searching for products on Alibaba.com for overseas suppliers or Wholesale Central for US-based suppliers. Make sure to review the supplier's credentials prior to reaching out to them. After finding your supplier and sourcing your product from them, you need to make sure that your supplier set up everything correctly as far as labeling and the address that it's going to.
Creating Your Product Listing
Creating your listing content like your title, bullet points, and product description can be tedious and time-consuming. To save time, we recommend using Seller Buddy's AI feature to do all of this for you. Barcodes are another common topic that a lot of beginners tend to get confused about. We recommend purchasing a barcode from GS1 if you're going to sell on other platforms such as eBay or Etsy. If you're going to sell this product only on Amazon, there's no need to purchase a barcode.
Upgrading to a Professional Selling Plan
We recommend upgrading to a professional selling plan type when you're either selling more than 40 units or you're ready to begin advertising. Amazon pay-per-click advertising is Amazon's integrated advertising platform that allows you to artificially place your detail page in your listing in front of millions and millions of customers.
Becoming an Amazon seller takes time and effort, but with the right strategy and knowledge, you can create a consistent income stream. Good luck on your journey!
Resources
- Alibaba.com
- Wholesale Central
- Jungle Scout
- Seller Buddy
- GS1
FAQ
Q: What is the best business model for beginners?
A: We recommend private labeling as the number one business model for beginners.
Q: What is the difference between MFN and FBA?
A: MFN is where you are responsible for fulfilling each order, while FBA is where Amazon will store your products and fulfill orders for you.
Q: How many units should I start out with?
A: Most beginners start out with at least $1,000 if not $2,000 on their first order or around 200 units.
Q: When should I upgrade to a professional selling plan?
A: We recommend upgrading to a professional selling plan type when you're either selling more than 40 units or you're ready to begin advertising.
Q: What is Amazon pay-per-click advertising?
A: Amazon pay-per-click advertising is Amazon's integrated advertising platform that allows you to artificially place your detail page in your listing in front of millions and millions of customers.
