Selling on Amazon: Beginner’s Guide for 2019
Hello, dear beginner Amazon sellers! In this article, we’ll teach you how to get started with your own online business. We congratulate you with opening new opportunities with the world’s largest marketplace. Grab your chance to become a successful entrepreneur!
Honestly speaking, selling on Amazon is not difficult, but needs some knowledge and skills.
Let’s take a closer look at them!
Many people wondering how to start a business with minor investments look at Amazon and are not sure whether it is a good idea. According to the statistics, more than 50% of overall Amazon sales come from individual and private label sellers.
How Much You Can Earn on Amazon
The good news is that you can earn as much (or as little) money as you like. Some sellers are happy with a couple of hundreds of dollars, some work hard on their businesses and make millions. The real average numbers are somewhere about $2000 and $10000. Everything depends on what you sell and how you do that.
As for the latter, here are 2 methods of selling on Amazon:
- Retail (online) arbitrage. This means getting things from offline stores and selling them online. We’d recommend using this method for those sellers who want to practice and learn how everything works on Amazon. Your profit is the difference in the prices.
For instance, you buy 500 random items in Walmart for $1 per piece. Next, you sell each of them for $10 on Amazon. Sure, Amazon will charge some fees, which are approximately $3.50, that means that your net profit will be $4.50. For 500 items, you’ll receive $2.250 profit!
Another great example: let’s pretend you’ve bought a used textbook for $10 and sold it on Amazon for $50. Without shipping costs and Amazon fees, you’ll get around $27 profit. - Private labeling or wholesaling. This is about ordering bulk products from vendors or manufacturers. This method is more costly and requires more homework to be done, still, the results can be much better. It works the following way: you make a large purchase, which is cheaper, and sell all these units for a long time.
For example, you order 5000 iPhone cases for $0.10 per item. You sell them for $10 each on Amazon. Let’s calculate the final profit without shipping and Amazon fees… That’d be around $5.50 per unit. That’s how you’ll get more than $27K profit for all 5000 cases. Keep in mind that you need to sell only 93 cases to reach the break-even point.
Here’s another example. Let’s imagine that you decided to manufacture your own author’s product, let’s say, a flask for whiskey, which costs around $4 per one item. There are 500 such flasks. You sell them for $25 each, pay Amazon fees, and so on. Your profit will be nearly $14 per item. So, they pay off after selling the 141st flask, and in the end, your profit is more than $7000!
Who Can Start a Business on Amazon?
Everyone! Even if you don’t have experience with selling on other marketplaces such as eBay, Facebook Marketplace or Craigslist, you can do that on Amazon. Start with arbitrage, as it requires fewer investments.
What You Need for Selling on Amazon
There are no barriers to start selling on Amazon. You will need only:
- A computer, a laptop or a phone with an internet connection.
- A credit card to pay for subscription and advertising fees.
- A bank account to receive payments from Amazon.
- You also have to live in a country allowed to sell on Amazon.
Selling with the FBA program
FBA means ‘Fulfilled by Amazon’. You might have heard that Amazon has plenty of warehouses across the world - they are called ‘fulfillment centers’. Products of Amazon and third-party sellers are stored there.
Once such product is sold, Amazon’s fulfillment team gets it from their warehouse, packs the product and ships it to the customer. As you can see, sellers do nothing but pay a fee to Amazon for this.
Also, the FBA program offers the following benefits to entrepreneurs:
- Sending orders with FBA is much cheaper than doing everything yourself.
- You don’t need to have all your inventory stored at home or in your garage.
- You let Amazon do the customer service, so there’ll be no headaches related to returns and refunds.
- Your products are shipped as Prime ones. Your customers can get their orders in 2-3 days after the online purchase!
- Everything is done at the professional level, as Amazon cares about customer experience most of all.
However, if you want to pack and ship your items manually, there is an FBM (Fulfillment by Merchant) option.
Finally, Here’s How to Start Selling on Amazon
We hope you are eager to start your business activities. So, here are the basics:
1. Sign up and get a seller account on Amazon
Head to Amazon’s Seller Central and click on ‘Register Now’.
Next, pass the registration process.
You now will be able to choose whether you’ll be an individual or a pro seller. Professionals perform 40+ sales per month, so if you’re planning to do more, choose this option.
The plan costs almost $40, and it doesn’t require to pay for each sold item. The number of sales is unlimited!
If you are just starting, we would recommend you choosing an individual account. That means that there are no flat fees, but you pay for each sale. This is beneficially for users who are practicing and sell 10-20 items per month.
You might also have to scroll the page down and find a separate sign-up link for individual sellers. It looks like in the image above.
2. Choose a product to sell on Amazon
Congrats! You are now an Amazon seller! You now need to find a product for further selling in the online marketplace. How to do that?
First, you can look around and see what you can sell from what you have at home. Books, comic books, household items you don’t use, etc.
Also, you can use BSR to help you. Amazon’s BSR is the number given to any product, which can tell about their popularity among customers. The lower the product’s BSR is, the more sales it’s going to bring.
Search for a product which is interesting to you and find its BSR in the ‘Product Details’ section.
As shown on the picture above, there are different BSRs for different categories. You will need the first one, as this is the parent (main) category.
Four-digits scores mean that is is a real bestseller - dozens of copies are sold every day!
Do the initial research to find out how well the product will sell. At Seller Nexus, we have such guides, browse our blog to find out more details about BSRs and Private Labels.
For example, check this out: 10 Things to Know about Sales Rank on Amazon
3. List your first product
You are now an Amazon seller, you have a product, so you need to list it for a customer to buy this product. This is easy, especially if someone has already listed similar products. All you need to do in this case is to go to the already existing listing - you don’t have to recreate it like on Facebook, eBay or Craigslist.
Find the same product to the one you want to sell and find the button ‘Sell on Amazon’. It is located right under the purchase button.
Specify all the necessary information, set your price and specify the condition.
Choose the price according to the condition of your product, especially is this is a used book.
As for the condition, here are Amazon’s guidelines for you to know what to specify. By the way, products in a very nice condition can be specified as new ones. Please, make sure that everything is good before listing it like a new item.
After you list your item, wait for a couple of minutes - it will appear on the Amazon marketplace. That’s it! Wait for your customers! ;)
4. Fulfill the product after its sale
Finally, someone finds your product and decides to purchase it. Amazing! Now, there are 2 scenarios:
- If you are an FBA user, Amazon will handle all the work. By the time you notice the sale, Amazon might have already picked it up, packed and sent to your customer. They are incredibly fast guys!
- If you work as an FBM user, you need to ship the product in the next 24 hours. Amazon will provide you with all the necessary data and even USPS labels, so you could just go to the post office and ship it.
How to Make More with Amazon
Good news! You have learned the basics for selling on Amazon and can practice and learn more!
You might agree that everything sounds simple. Believe us, selling on Amazon is not rocket science. You just have to master its main aspects: high quality of products, excellent customer experience, and scaling your business, finally.
For more information, check out other articles for beginners on Seller Nexus: