Guide To Selling On Amazon

Selling on Amazon is a great way for beginners to start an online business with access to millions of potential customers.

After all, Amazon is the biggest online marketplace in the UK, with annual sales of nearly £17.5 billion. The COVID-19 pandemic saw the company boom, with an 82% increase in revenue compared to pre-pandemic levels.

For those looking to start a business without holding inventory, Amazon can be an ideal platform to partner with a dropshipping supplier. On the other hand, regular businesses can benefit from greater control over their operations, such as offering faster shipping times and being able to manage product quality better.

In this guide, we’ll walk you through everything you need to know about getting your business up and running on the Amazon marketplace.

Key takeaways

How to start selling on Amazon: Sign up as a seller and choose your account type (individual or professional). This stage also involves determining your selling method, conducting market research to find in-demand products, developing a marketing strategy, sourcing your products and creating your first listings.
Amazon’s FBA: Allows you to store your products in Amazon’s fulfilment centres. Amazon manages the logistics for you, saving time and effort, especially if you don’t want to handle packaging and shipping yourself. However, it’s important to weigh the costs of using FBA against managing your own fulfilment to determine if it’s the right fit for your business.
Dropshipping on Amazon: Allows you to list and sell products without holding inventory. When an order is placed, the product is sourced from a third-party supplier who ships it directly to the customer. This reduces upfront costs and inventory management but requires more responsibility for customer service and can result in longer shipping times.
Registering products to sell: You’ll need to choose the appropriate category and key details such as product name, brand, ID (UPC, EAN or ISBN), description, images and pricing information. Once ready, you can add your product by selecting an existing listing or creating a new one, and then submit for approval.
Pricing your products: Research competitor prices, factor in all associated costs (including Amazon fees and shipping), and choose a pricing strategy that aligns with your profit goals. Consider using cost-plus, competitive, dynamic or promotional pricing approaches and make sure to regularly monitor and adjust prices based on market trends, competitor activity and sales performance.
Selling internationally on Amazon: Amazon’s Global Selling program lets you expand your business internationally by selling on different Amazon marketplaces worldwide. You can manage listings through Amazon Seller Central, and use tools like Build International Listings for pricing and translation.
Getting paid on Amazon: Make sure you provide a valid bank account in your seller account settings, as payments are made via electronic funds and can take up to five working days to reach your account. Payments cannot be directed to online systems like PayPal.
The benefits of selling on Amazon: Benefits include access to a global customer base, established trust and credibility and the convenience of FBA for streamlined logistics. It also provides scalability for growth, a range of marketing tools for increased visibility, quick set up for new sellers and robust analytics and reporting tools to track performance and make business decisions.

Key areas to consider when selling on Amazon are:

How to start selling on Amazon
Selling on Amazon FBA (Fulfillment by Amazon)
Dropshipping on Amazon
How to register products to sell
How to price your products
Can I sell internationally on Amazon?
How do I get paid selling on Amazon?
What are the benefits of selling on Amazon?
Conclusion

How to start selling on Amazon

Just like starting your own business, you shouldn’t just jump into Amazon selling without careful planning and preparation. That’s why it’s important to have a comprehensive business plan to ensure you approach the Amazon Marketplace with a clear direction and a solid foundation for success.

So, before you market your products, there are a few things you need to do first. This includes:

Setting up your Amazon Seller Account

Sign up as a seller: Go to the Amazon Seller Central website and click “Sign Up”.
Choose your account type: You can either choose an individual plan or a professional plan. Here’s some more info:
Individual plan: Ideal for those selling fewer than 40 items per month, with no monthly costs apart from a per-item fee.
Professional plan: Best for those expecting to sell more than 40 items per month, with a monthly subscription fee but access to additional selling tools and features.
Complete registration: Fill out the registration form with your personal and business information, including your name, email address and bank account details for payments.

Quick tip: seller essentials

Business information: This means deciding on your business structure (e.g. sole proprietorship, LLC, etc.) and gathering any necessary licenses or permits.
Bank account: Create a business bank account ready for Amazon to deposit your sales revenue.
Product ideas: It’s useful to have an idea of the types of products you want to sell, as this will guide your market research.

Determining your selling method

One of the most important decisions you’ll make is choosing the right selling method that aligns with your business goals and resources – whether you’re interested in creating your own brand, leveraging existing products or operating with minimal inventory. Here are some popular selling methods on Amazon to consider:

Private label: Allows you to create your own branded products that are manufactured by a third party.
Retail arbitrage: Purchasing discounted products from retail stores – such as clearance items or seasonal items – and reselling them at a higher price on Amazon.
Wholesale: Involves buying products in bulk from manufacturers or distributors at a discounted rate and then selling them individually on Amazon.
Dropshipping: A fulfilment method where you partner with a supplier to sell products without holding an inventory.
Print on Demand (POD): A variation of dropshipping that focuses on custom-printed products, such as t-shirts, mugs and phone cases.
Handmade products: If you create handmade items – such as crafts, jewellery, or artwork – you can sell them on Amazon through the Handmade at Amazon program.

Conducting market research

The first step to your market research is to find profitable products for your Amazon businesses. Tools like Amazon Best Sellers, Jungle Scout or Helium 10 can help you discover high-demand items with low competition.

Once you’ve shortlisted your potential products, look at competitor listings to understand their pricing, features and customer reviews. This will help you to identify any potential gaps in the market that you can capitalise on and set your offerings apart from others.

Additionally, it’s important to consider customer needs when choosing products. You can find common pain points and preferences through customer reviews, as well as insights into what buyers are looking for.

Developing a marketing strategy

Start by identifying your target audience, as this will help determine your messaging and promotional tactics.

Utilise resources from Amazon Advertising, such as Sponsored Products or Sponsored Brands, to increase visibility on the platform. This will allow your products to appear prominently in search results and on competitor listings, making it easier for potential buyers to discover your offerings.

But don’t solely rely on Amazon’s internal advertising alone, as you should also look into external channels to boost your reach. For example, social media platforms like Instagram, Facebook and TikTok can be effective for showcasing your products through engaging content, such as working with influencers through affiliate marketing.

Moreover, make sure to consistently analyse your marketing efforts through metrics and customer feedback to refine your approach, ensuring that your strategy can evolve with changing market trends and customer preferences.

Sourcing your products

Look for potential suppliers or manufacturers that align with your chosen selling method. For example, if you opted for private labelling, look for manufacturers who specialise in your product category and can accommodate custom branding. For retail arbitrage or wholesale, you can explore online platforms like Alibaba or ThomasNet to find reliable suppliers at competitive prices.

Once you’ve found the right supplier, you’ll need to negotiate terms that work for both parties. Discuss pricing to ensure you can maintain healthy profit margins while remaining competitive in the marketplace. This involves clarifying minimum order quantities (MOQs) to understand the minimum number of units you need to purchase, which can help manage your initial investment.

You should also address shipping arrangements, including lead times, shipping costs and delivery methods, to ensure timely fulfilment and customer satisfaction.

Creating product listings

Optimise your listings with clear and engaging product tiles that highlight a product’s key features and benefits.

Create compelling descriptions that provide detailed information about the product, including specifications, uses and any unique selling points. Ensure to use high-quality images and incorporate relevant keywords throughout your title and description to improve your search visibility on Amazon.

Selling on Amazon FBA (Fulfillment by Amazon)

If you don’t want to manage your own package and shipping process, then you can utilise the Fulfillment by Amazon (FBA) feature – whereby you sell it and Amazon ships it.

With FBA, a customer stores their products in one of Amazon’s 20-plus UK-based fulfilment centres. These centres, also known as warehouses, are tasked with directly picking, packing and distributing your products to customers around the country. Amazon also provides customer support and manages returns on your behalf.

How do I set up FBA?

Setting up FBA is a straightforward process that allows sellers to leverage Amazon’s logistics and customer service. Here’s a step-by-step guide to help you get started with FBA:

Create an Amazon Seller account: If you don’t already have an Amazon Seller account, go to the Amazon Seller Central page and select “Sign up”.
Set up FBA: Once your account is set up, log into Amazon Seller Central and select the gear icon on the top right corner. Select “Account info” and then “Manage” on the seller account information page. There, you’ll see the option to register for FBA.
Create product listings: Go to the “inventory” tab and select “Add a Product”. You can either list new products or convert existing listings to FBA. When adding or editing a product, select “Fulfilled by Amazon” as the fulfilment method, as this will ensure your products are stored and shipped by the company.
Prepare your products: Make sure that your products meet Amazon’s packaging and labelling requirements. This includes using appropriate materials to protect your items during transit. You can choose to label your products yourself or use Amazon’s FBA Label Service, where they label your items for a small fee. If you decide to label yourself, ensure to apply FBA labels to each unit.
Create a shipment plan: Go to the “Inventory” tab, select “Manage FBA Inventory”, and click on “Send/Replenish Inventory” for the products you want to send to Amazon. From there, Amazon will guide you through the shipment process, including your preferred shipping method, product quantity and shipment ID. You should also be mindful of Amazon’s shipping restrictions.
Ship your products: Start packing your products and include the shipment ID on the outside of your packages. Choose a shipping carrier (e.g. Royal Mail, DPD and Evri) to deliver your products to Amazon’s fulfilment centre.

What are the costs involved when using FBA?

According to Amazon’s pricing page, the cost to sell on the platform depends on product category, fulfilment strategy and other variables. However, the typical costs include selling plans, referral fees, fulfilment fees and other costs.

Selling plan costs

Here’s a brief overview of the costs associated with individual or professional selling plans:

You can find out more details on Amazon’s selling plan page.

Referral fees

A referral fee is the cost sellers pay for each item sold. These fees are a percentage of the total sale price and vary based on the product category. Here’s a quick example of how referral fees work:

You can find out more details on Amazon’s referral fee schedule.

Fulfilment fees

Fulfilment fees cover the costs associated with picking, packing and shipping your products to customers. They also depend on whether you’ll ship the products yourself or use FBA to handle your logistics and offer Prime shipping.

Additional selling fees

Inventory fees: If you store inventory in an Amazon fulfilment centre, you’ll have to pay a monthly inventory fee. Other fees might apply as well, including long term storage fees, overage fees and removal order fees.
High-volume listing fees: This will only apply if you exceed 2 million Stock Keeping Units (SKUs) in a month, and will be applied to your highest number of SKUs above 2 million at any time during that month.
Refund administration fee: If you refund a customer for an order that’s already been paid for, Amazon will refund you the amount of the referral fee you paid for the item(s), minus the refund administration fee, which is 20% of the applicable referral fee.

You can find out more details on Amazon’s additional costs page.

Ultimately, using Amazon for your fulfilment needs can be cost-effective. However, it depends on the number of items you are selling and shipping each month. If you are selling low volumes of products each month, it would be more beneficial from an affordability perspective to manage your own order fulfilment.

Either way, to see whether the service would be right for you, we recommend you add up the costs of overheads you could be spending on warehouse space, packing supplies, postage and labour, dealing with customer service inquiries and returns handling. From there, work out whether the Amazon charges will be cheaper.

Dropshipping on Amazon

If you’re interested in starting a dropshipping business, Amazon can be a good place to start.

How is dropshipping different from FBA?

Although the two may appear similar, there are key differences between FBA and dropshipping that you need to be aware of.

With FBA, you send your products to Amazon’s fulfilment centres, where the company will manage storage, packing, shipping, customer service and returns. This allows for faster shipping and the benefit of Amazon’s trusted brand, but it means that you’ll have to purchase and hold any inventory upfront, which can increase costs through fulfilment and storage fees.

On the other hand, dropshipping on Amazon will allow you to list products without holding any inventory. When a customer places an order, you purchase the item from a third-party supplier who ships it directly to them. This reduces upfront costs and eliminates the need for inventory management, but it places more responsibility on customer service and may result in longer shipping times.

Overall, the choice between FBA and dropshipping depends on your business model, budget and how much you want to control inventory and customer experience.

How does dropshipping on Amazon work?

To set up dropshipping on Amazon, you’ll need to sign up as an Amazon Seller with either an individual or professional selling plan. Here’s how the rest works:

Choosing products to sell: You can choose the products you want to sell on Amazon from different suppliers or manufacturers. Make sure to conduct market research to find profitable and in-demand products with low competition.
Creating product listings: Once you’ve selected your products, you can create listings on Amazon. Write detailed product descriptions, add high-quality images and set your prices. You do not need to mention that you are using a dropshipping model in your listings.
Placing orders with suppliers: When a customer makes an order for one of your products, you’ll receive a notification from Amazon. From there, you’ll need to place an order with your chosen dropshipping supplier and provide them with the customer’s shipping information. The supplier will then ship the product directly to the customer.
Managing customer service: As the seller, you are responsible for customer service, including handling inquiries, addressing issues and managing returns. This can involve communication with both the customer and the supplier to resolve any issues.
Fees and profits: When dropshipping on Amazon, you’ll need to account for various fees, including referral fees and potential shipping costs from the supplier. Your profit will be the difference between the selling price on Amazon and the cost of the product from the supplier, minus any fees.

Other important considerations

Make sure to familiarise yourself with Amazon’s dropshipping policy to ensure compliance. Amazon requires that you have an agreement with your supplier where you are the only seller of record on all orders. It also prohibits certain practices, such as purchasing products from other Amazon sellers and shipping orders with package slips that don’t name you as the seller (e.g. using a third-party supplier’s name).

You should also choose reputable suppliers to ensure quality products and reliable shipping times. Delays or poor product quality can lead to negative reviews and account issues on Amazon.

How to register products to sell

Once you’ve set up your Amazon Seller account and chosen your preferred selling method, it’s time to get your products up and running.

First, you’ll need to choose the category that best fits your product. Make sure to check Amazon’s category guidelines so that your product complies with them.

You’ll also need to gather the necessary information before registering your product. This includes:

Product name: The title of your product.
Brand name: The product’s brand name or manufacturer.
Product ID: This can either be a Universal Product Code (UPC), European Article Number (EAN) or International Standard Book Number (ISBN), depending on the product type.
Product description: A detailed description highlighting the product’s features and benefits.
Product images: High-quality images showing different angles and uses of the product.
Pricing information: Your selling price and any shipping costs if applicable.

To add your product listing, log into the Amazon Seller Centre and go to the “Inventory” tab. From there, click “Add a Product” and search for your product to see if it already exists in Amazon’s catalogue. If it does, you can select it and add the relevant information.

If you can’t find your product, select “Create a new product listing” and fill out the required fields, including product title, brand, category and product details.

Once you’ve completed these steps, double-check all the product information you’ve entered for accuracy and compliance with Amazon’s policies. If it all looks good, you can submit your product listing for approval. The time it takes for this approval can vary depending on different factors, including the type of product, what category it falls under and the completeness of the listing.

How to price your products

Determine a competitive price for your product. Consider your costs, fees and desired profit margin. If you’re using FBA, set the inventory quantity that you will send to Amazon, or ensure you have enough inventory to fulfil orders if you’re shipping yourself or that your suppliers have sufficient inventory if you’re dropshipping.

To help price your products effectively, here are a few things to consider:

Researching competitor prices

Check the prices of similar products listed by competitors. Remember – looking at Amazon Best Sellers is a good way to research items with high sales values and understand the pricing landscape in your niche.

You should also determine the average price range for your product category, as this will give you a benchmark to work from.

Considering your costs

You’ll need to factor in all costs associated with your product, including:

Manufacturing or purchasing
Amazon fees (referral, FBA, etc.)
Shipping and handling costs (if applicable)
Advertising and marketing expenses.

You should also decide on your desired profit margin and make sure your price covers all costs while giving you a reasonable profit.

Choose a pricing strategy:

Some useful examples of pricing strategies include:

Cost-plus pricing: Add a markup to your total costs to set your price. This is a straightforward approach but may not always align with market conditions.

Competitive pricing: Adjust your price based on competitor pricing to remain competitive. You may choose to price your product slightly lower or match the market price.

Dynamic pricing: Use tools that allow for automated price adjustments on competitor prices, demand fluctuations and other market factors. This can help you to optimise your pricing in real-time. Some useful tools include Amazon’s Automate Pricing, RepricerExpress and Informed.co.

Promotional pricing: Consider offering introductory prices, discounts or special promotions to attract initial sales. This can help boost your products’ visibility and customer reviews.

Monitor and adjust regularly

Regularly monitor and adjust your prices to maintain a competitive edge. It’s important to consistently review your sales data and pricing strategy. If you notice your sales slowing down, it might be time to reassess your pricing structure or explore new marketing strategies to improve your visibility and attract customers. Analysing metrics like conversion rates, customer reviews and inventory turnover can give you useful insights into how your pricing is affecting sales.

Additionally, make sure to stay informed about market trends, seasonality and competitor pricing. This will allow you to adapt your pricing strategy to respond to shifts in demand or market changes. Whether it’s adjusting prices based on seasonal fluctuations or taking action when competitors change their pricing, being proactive in your approach will help you remain competitive and maximise your sales potential on Amazon.

Can I sell internationally on Amazon?

You can sell internationally on Amazon to expand your business and reach more customers. Amazon also provides you with several tools and programs to help you out. Here’s how it works:

Amazon global selling program

Amazon Global Selling allows you to sell your products on Amazon marketplaces in different countries, such as countries in Europe, as well as the US, Canada, Japan and more.

You can easily manage your international listings through your Amazon Seller Central account and choose which countries you want to sell in. Here’s how it works:

1. Setting up international listings: You’ll need to create product listings in the target country’s marketplace. For example, if you want to sell products on Amazon France, you’ll need to translate your product descriptions to French and ensure compliance with local regulations. Amazon’s Build International Listings (BIL) tool can help you in this process by allowing you to replicate your listings across different countries and adjust the prices automatically based on currency rates and fees.

2. Choosing fulfilment options: If you’re using Amazon’s FBA service, you can use its FBA Export, where Amazon handles international shipping for you. Alternatively, if you prefer to manage your own shipping, you’ll need to arrange for international shipping and handle customs and import duties.

3. Understanding customs and taxes: Selling internationally involves dealing with customs, duties and taxes. Each country has its own regulations surrounding this, so it’s important to familiarise yourself with the tax implications and customs requirements for the countries you want to sell in. For example, in European countries, you’ll need to consider value-added tax (VAT) when selling across borders.

4. Considering currencies: While Amazon supports currency conversions, it’s important to be mindful of exchange rates when setting prices for international customers. Amazon’s Currency Converter tool allows you to receive payments in your local currency, even when selling in other countries.

The benefits of selling internationally

Increased market reach: Opens up new markets and gives you access to millions of additional customers.
Diversified sales: Selling in multiple countries helps you diversify your revenue stream. So if sales are slow in one region, you might see higher demand in another.
Access to Amazon’s global infrastructure: Amazon’s vast fulfilment network and logistical support make it easier for small businesses to sell globally without dealing with the complexities of international shipping on their own.

How do I get paid selling on Amazon?

Amazon transfers payments to your bank account via an electronic funds transfer. For each payment, this typically takes up to five working days for the money to reach your account, from when Amazon initiates payment.

You must provide a valid bank account as your deposit method in your seller account settings. Keep in mind that you can’t receive payments into online systems such as PayPal – if you try to do this, you won’t get paid. To view your orders and transactions, simply:

Go to Amazon Payments
Select “Your Account” at the top of the page and log in to your business account
On the overview page, you can see your account balance and activity

If you need to view a specific transaction, you’ll need to set the date range, click “View” and then “Details” to see the transaction ID and payment method.

What are the benefits of selling on Amazon?

Selling on Amazon is beneficial for businesses wanting to expand their reach and attract a large customer base. The key advantages include:

Access to a huge customer base and global selling opportunities

Amazon has hundreds of millions of customers. Selling on the platform allows you to reach a global audience, giving you access to buyers in multiple countries without the need for your own extensive marketing efforts. Its global selling program also lets you sell in different countries and open up new revenue streams, plus the opportunity to build a global business.

Established trust and credibility

Amazon generally has a good reputation for being a trusted platform, so it’ll give your products good credibility. Many customers feel more comfortable purchasing from Amazon than lesser-known websites, with 70% of UK shoppers using it once a month and 17% using it weekly.

Fulfilment by Amazon (FBA)

The beauty of Amazon’s FBA program is that you can store your products in Amazon’s fulfilment centres, and they’ll handle the logistics for you. This simplifies the selling process, eases your workload and allows for faster delivery, including Amazon Prime shipping.

Scalability

Selling on Amazon makes it easier to scale your business. You can start with a few small products and gradually expand your product range as your business grows. Its infrastructure and resources enable you to manage higher order volumes without the need to invest heavily in your own logistics or customer support.

Marketing and advertising tools

Amazon also offers a good range of marketing tools, such as Sponsored Products, Sponsored Brands and Amazon Stores to help increase your product visibility and boost sales. These pay-per-click (PPC) advertising options will help you target relevant customers and drive more traffic to your product listings.

Quick set up

Starting your business online can be a long process as it requires building a website, setting up payment gateways and managing shipping and customer services. With Amazon, this process is simplified as it provides a ready-to-use platform with built-in infrastructure, making it easier for small businesses and new sellers to get started quickly.

Good analytics and reporting tools

Amazon Seller Central provides you with detailed analytics and reporting tools, giving you quick access for tracking sales performance, customer behaviour and advertising effectiveness. In turn, this data can help you make informed decisions about pricing, inventory management and marketing strategies

Conclusion

Selling on Amazon can be a highly profitable venture, but even with its huge customer base, you can’t just stick your products on there and expect to get sales immediately. Careful planning and strategy are needed, and as competition can be intense, Amazon’s fee structures, advertising costs and strict policies can impact your profit margins if not managed properly.

That’s why conducting market research, optimising product listings and regularly monitoring performance metrics are essential to succeed. Moreover, by utilising Amazon’s tools and resources while adapting to market changes, you can effectively tackle challenges and build a sustainable and successful business.

Selling on Amazon – a Beginner’s Guide

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Key areas to consider when selling on Amazon are: