How to sell on Amazon in the US (2024 Guide)

Amazon remains the dominant ecommerce giant with over 200 million Prime members. It provides sellers with an excellent platform to reach global customers every year. But where can you start from?

Although getting started on this platform may look hard, it's easier than expected. Despite millions of sellers striving for the top spot, you can start and stand out from this competitive marketplace. Whether you're new to the platforms, a seller, or a pro, Foundeck in this guide will help you understand how to sell on Amazon and everything you must know to make it.

How to sell on Amazon

Here are steps to guide you on how to start selling on Amazon:

1. Do research

It is crucial to read of the restricted products list before proceeding to the selling process on Amazon. Specific categories of products need approval for selling, such as jewelry or DVDs, and some categories are wholly banned due to federal laws.

When looking for a product to sell, try private labeling a highly selling item. This involves having a manufacturer produce an item and tag it with your brand. Begin by considering some popular and trending items.

After choosing the product or niche, take some time to look at the top entries in your chosen category.  

You should focus on a product that many people need, though the competition is not very stiff. Once you have chosen your product, research a supplier and then approach them and ask for a sample, insisting on quality goods since a subpar item would be a defeat.

Finally, compute your cost per unit to check that your profit margin is adequate to make the product successful. If the margins are too low, it may not be worth it, and you will have to choose a different material. Second, gross profit margins should help provide discounts, coupons, or free offers. It is recommended to experiment with several possibilities before choosing your first offering.

Click here to learn more about Amazon-restricted products. 

2. Choose your selling strategy

1. Retail arbitrage

Retail arbitrage (RA) means purchasing products from one or more physical stores, such as Walmart, and reselling them on Amazon. The free Amazon Seller App allows you to scan an item, determine its profitability, and determine whether it can be sold on Amazon.

RA is suitable for starting because it has low start-up costs compared to other methods. If RA works for you, you can move to higher strategies such as Wholesale or Private Label.

RA has a clear advantage over Online Arbitrage in that you only compete with local sellers, and that can be a big selling point for many people who like to see the merchandise they are purchasing.

2. Online Arbitrage

Online Arbitrage (OA) is buying products online and reselling them at Amazon stores. Reflecting retail arbitrage, it is still a form of online selling, selling, and sourcing products from the comfort of your home, making it easier to scale up.

Purchases are brought to your doorsteps or an Amazon prep facility before going to a FBA warehouse. In OA, software tools are needed to identify profitable products to sell because doing it manually is inconceivable.

3. Private label

Amazon Private Label is the practice whereby a vendor obtains a rather generic item, mainly from China, through the Alibaba platform, repackages the item, and sells the item on Amazon. Another way is to start from scratch to develop new products in line with your target market. Unlike models like researching, manufacturing, and the initial launch, Private Label does not consume as much time once the products have been set up because you are not constantly searching for new merchandise.

Private Label needs a higher upfront cost of $1,500 and other costs incurred in marketing and using Amazon Pay Per Click to get sales. You can work with a single product, make money, and later expand to a full brand.

However, private labels are becoming even more competitive, with products from different brands overlapping. Chinese manufacturers are shifting to direct selling on Amazon, sometimes at relatively cheaper prices.

4. Wholesale

To reduce competition on Amazon FBA, get your products from wholesalers or distributors. To open an account with a reputable wholesaler, you must be an established, registered business person.

They are not necessarily cheap and, at times, are more expensive than what is available in the retail stores. However, wholesalers are providing different products, promotional offers, and bulk offers.

Amazon wholesalers offer official invoices, essential when selling restricted brands or in gated sections of the platform. The wholesale selling model is common among many successful Amazon merchants, especially those selling big-ticket items.

5. Dropshipping

Selling on Amazon is dangerous, as a few delayed shipments or missing orders can generate account termination. This model relies on third parties, most of which are located in China, and they are generally untrustworthy.

If you must dropship on Amazon, trust local wholesalers with fast shipping and update your inventory and prices to avoid order fulfillment mishaps. Do not engage with Chinese suppliers to protect your account from being threatened. However, dropshipping is usually more effective on eBay, Shopify, or your own store since you have more control over it.

3. Develop a business plan

Create a strategic business plan detailing elements vital for your business success. Your plan should include:

1. List of products to sell
2. The product's pricing
3. Your marketing plan
4. A plan for inventory management
5. Pick out your ecommerce business model

4. Create a seller account

You need the following to set up a seller account on the Amazon:

1. Government-issued national ID, e.g., Driver's license
2. Credit card
3. Tax information
4. Phone number
5. Bank account and routing number

After collecting all the pertinent information, log into Amazon at Seller Central and choose a selling plan. The Individual plan is best for those who move less than 40 units a month because it operates on a per-sale basis at $0.99 per sale.

The Professional plan is ideal for businesses that sell over 40 units per month and require more robust reports and API integration. To sell on Handmade or Launchpad you need a professional account. This plan costs $39.99, a flat monthly fee, meaning that it does not matter how many sales are made; the fee has to be paid.

5. Choose a way to sell on Amazon

You can sell on this platform in two ways, and you can use both methods simultaneously. You can arrange the shipping of slow-moving, large, or heavy products while leaving Amazon to ship your small, high-turnover products.

The two methods include:

1. Ship by yourself (fulfilled by the merchant)

In Fulfilled by Merchant (FBM), you are in charge of your products, from storage and shipping to customer relations. You must ensure a proper line of dealing with complaints about the products or any other questions people might have.

FBM is used for large, heavy, and slow-moving products since sellers must pay to store them within Amazon's fulfillment centers. The argument is that the longer a product stays in an Amazon warehouse, the higher the cost due to holding costs.

2. Fulfilled by Amazon (FBA)

Fulfillment by Amazon, commonly referred to as FBA, entails shipping your products to Amazon warehouses. When a product is sold, Amazon takes responsibility for the delivery. However, the service comes with a fee—you pay a monthly subscription fee plus the monthly inventory storage fee.

Amazon also assumes complete customer service responsibility for FBA sellers. FBA might work if you have limited space for stock storage and do not mind Amazon being in total control of your inventory. This service is especially suitable for small-sized and light products that are quickly moving off the shelves.

6. List products

You can add products on Amazon by using an existing listing on Amazon to create your new list or using a new listing.

Listing a Product with an Existing Amazon Listing:

1. Find ASIN: Find the ASIN in the "product details" part of the existing listing.
2. Add Product: go to Seller Central, press on Catalog, then add products
3. Search Product: Go to the Amazon website and enter the ASIN number in the search bar, which will lead to the specific product's page.
4. Describe Condition: Select the product's condition: New, Used, Used — Very Good, etc.
5. Set Price and Fulfillment: With FBA, click 'Sell this product' and enter your selling price. Choose your preferred fulfillment method, FBA or FBM.
6. Enter SKU: you can input additional information, such as the SKU number for your item.
7. Save Listing: click on "Save and finish." Your listing will be on the "Manage Inventory" page.

Listing a New Product Not Sold on Amazon:

1. Start Listing: To upload a new product, go to Seller Central, click "Add product," and then choose "I am adding a new product that Amazon does not sell."
2. Choose Category: Choose your product sector.
3. Enter Details: Enter all necessary information about your product, including title, pricing, description, images, and available fulfillment methods.
4. Submit for Approval: press "Save and finish" to submit the item for approval.
5. View Listing: After approval, your product goes live; Amazon assigns it an ASIN and lists it. Your listing can be found on the page "Manage inventory. "

Making your product descriptions search engine optimized or SEO friendly is essential. This entails the identification of relevant keywords that customers may search for. Avoid using irrelevant keywords that may hurt your online visibility. If you do not have the writing skills, request a copywriter from a freelance platform like Fiverr to provide optimized descriptions.

Your product images are no less important. These must be on a white background 500 x 500 pixels and above. As a rule, choose images that are 1000 x 1000 pixels in size for better-quality listings. Some sellers use a lightbox to take photos of their products, and others contract professional photographers to take photos of their products.

When your product detail page is live, shoppers can discover it through Amazon. If your product is appealing and you have used appropriate marketing techniques, you will soon start receiving orders.

7. Set competitive pricing

Pricing the product is a crucial factor that attracts shoppers, gives you a competitive edge, and reaps profits. You can set your price, but it should remain relatively moderate and fair, and you should monitor the profit margins.

Measures all the expenses for acquiring and distributing your products, including stocks, promotions, fees, and taxes. Use these expenses to determine your price margins and adjust your prices.

Here are three strategies for setting competitive prices:

1. Research: Navigate to the Amazon Search directory to search through categories, look at shorter competing products, and check out the relative prices.
2. Monitor: Utilize the Amazon Seller app to monitor competitors' prices, such as with Match low price and Featured Offer price.
3. Automate: Take advantage of Amazon's Automated Pricing feature, which allows you to change your prices to reflect market trends.

Assess your products vis-à-vis' competitive position in terms of value vis-à-vis similar products. Based on this analysis, you may reduce prices, thus maintaining low-cost customers, improve the product, for instance, through additional colors, or devise a package deal to increase the price.

8. Monitor customer feedback, reviews, and ratings

Customer feedback is based on the general shopping experience, while reviews and ratings are more pertinent to the product and are located on the product's description page. Each can be used for pure business purposes, that is, business growth and business improvement.

Customer reviews are critical, as 52% of buyers depend on them before purchasing. They give confidence and represent the quality of a specific product, and even a complaint may be valuable for a company.

Responding to feedback can help you amplify your brand's distinctive features. Another critical aspect of Amazon is the Customer Review Insights tool, which helps to understand consumer feelings and improve product niches.

To further facilitate buyers, the Amazon Vine program enables you to generate product reviews, thus providing potential shoppers with free product samples and helping them make informed choices.

What's Amazon's Selling Fee?

As a newcomer to selling at Amazon, you should know that you have to consider several Amazon selling fees. Most Newcomers to Amazon do not pay attention to these fees and later discover that their profit margin is considerably lower than expected.

Let's explore Amazon's common fees:

1. Referral fees: Amazon charges fees for selling on the marketplace, as it takes a cut of the sales made. The fees vary from one category to the other. The most common referral fee is 15%, but it can also be as low as 8% or as high as 45%.
2. FBA fees: If you choose Fulfillment by Amazon, you will pay a single fee for picking, packing, shipping, and customer service. The price varies depending on your product type, size, and weight, but it even starts at just a few dollars.
3. Closing fees are $1. 80 per unit sold for products in media categories that include books, DVDs, music, software, computer and video games, video game consoles, and accessories.
4. Additional fee: Amazon also charges for inventory stocked in its fulfillment centers and an additional fee for items stored for more than 181 days. Furthermore, you can pay for inventory returned, damaged, or unsold, relayed to you, or disposed of by Amazon.

FBA vs. FBM: Which one should I use?

It is advisable for all sellers, especially novices in the system, to employ fulfillment by Amazon (FBA). It's cheaper than Fulfilled by Merchant, meaning the sellers make more profits. Furthermore, the FBA takes responsibility for packing, sending the consignments, and dealing with consumer complaints.

Once you send your inventory to Amazon, your FBA business runs independently, and most tasks are automated. This means you can save time and engage on other issues, such as searching for more products and growing your company.

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Final Thought

The steps of selling products on Amazon are straightforward; however, success lies in choosing the right products and optimizing your listings. You must invest your time and energy to earn full-time on Amazon. Do you have any question on how to sell on Amazon in the US? KIndly contact one of our Foundeck experts for help today.