As a major driving force behind the emergence of online sales, Amazon is one of the most popular e-commerce sites out there. While Amazon directly sells some products to consumers, third-party sellers – including nearly 2 million small- and medium-sized businesses – account for a significant portion of sales on the platform.
Selling on Amazon is relatively easy: You set up a seller account, list your products and ship them either directly to the consumer or to Amazon, depending on the type of account you set up. While the overall process is simple, there are some important details to cover and decisions to make before you get started.
It takes only a few steps to set yourself up as a third-party Amazon seller.
This can be your personal Amazon login, or you can set up a new Amazon seller’s account with your business email. In addition to your email address (and password, if you are using your personal account), you will need a credit card, government-issued ID, tax information, phone number and bank account.
Amazon breaks its Marketplace plans down into Individual and Professional. The Individual Selling Plan does not have a monthly subscription fee. Amazon will collect a fee of $0.99 per sale in addition to other standard sales fees.
The Professional Selling Plan has a monthly subscription fee of $39.99, but there is no per-sale fee. This plan, like the Individual Selling Plan, is subject to other Amazon referral and closing fees. Amazon recommends signing up for the Professional Selling Plan if you plan to sell more than 40 items per month.
Amazon divides its product categories into two major groups: categories open to all sellers and ones open only to Professional seller accounts. There are more than 20 open categories for selling on Amazon, where third-party sellers can list products without specific permission.
The Professional categories require approval from Amazon to “help ensure that sellers meet standards for product and listing quality as well as other category-specific requirements.” If you want to sell products in a professional category, you’ll have to sign up for a Professional Selling Plan and get approval from Amazon to list your product.
You will need a product identifier such as a SKU, GTIN, UPC, ISBN or EAN. If you are selling a product that another seller already offers, some of this information will already be in place. Then, fill in the product details, such as price, product condition, available quantity, shipping options, name, brand, description and keywords.
Once you decide which plan is right for your business, you can either list your products and sell them directly to buyers or enroll in the Fulfillment by Amazon program. Selling directly to customers involves posting your products, making sales and then sending them to customers. You’ll be responsible for the shipping and handling of your products, and your customer will always have additional shipping costs for the sale.
With Fulfillment by Amazon (FBA), you send your products to Amazon, and it handles shipping to the customer. It also means your products are eligible for two-day delivery, free shipping and other Amazon Prime perks. Enrolling in FBA can make you stand out from other third-party sellers. Customers want to use their Prime perks, and free two-day shipping can be a powerful purchasing motivator. Many Amazon sales experts recommend opting for FBA unless it’s financially impractical.
FBA is a great service, but it does come with fees. Amazon provides a full breakdown of its fulfillment fees, but the basic structure is also important to understand. Amazon will charge you a monthly inventory storage fee per cubic foot (starting at $0.87 per cubic foot from January through September and $2.40 per cubic foot from October through December for standard-sized products) and a fulfillment fee for each unit. These are flat rates per package and are based on the size and weight of the package. Fulfillment fees start at $3.22 per package and can exceed $150 for heavy oversized packages.
Amazon also charges fees for referrals and closing sales. It breaks down its fees by category, but just about every item will have a referral fee, and some items will have a closing fee. Referral fees are a percentage of the purchase price and range from 8 percent to 45 percent, depending on the type of product. Most referral fees are between 8 percent and 15 percent. Media items, such as books, software, video games, movies and music, also have a closing fee of $1.80.
Now that your Amazon store is set up, people can buy from you on the site. But if you wait until potential customers stumble upon your product listings, you are not going to be successful. Here’s how to market your business to attract some of Amazon’s hundreds of millions of users to your product pages.
When you buy a sponsored ad, Amazon displays your product information on shopping results pages or competitive product detail pages. These are pay-per-click ads, meaning you pay for traffic to your product page. If your product’s description, pictures, shipping and price are compelling, you have a good chance of getting a sale. There are several types of Amazon advertising.
Amazon has its own internal search engine, and when your product listing has the keywords Amazon users are searching for, your page will climb the rankings. Do some research to find out what terms Amazon shoppers are using. Then put those keywords on your page in titles and descriptions. Relevant Amazon listings will also show up when people use general search engines like Google.
Promoting your Amazon listings on YouTube, TikTok, your blog or any other social media platform can drive traffic and sales. While social media followers dislike direct product promotions, you can get some subtle visibility with the following tactics:
You can also harness the power of influencer marketing by developing a relationship with an influencer in the demographic for your product and asking if they would review or recommend it to their followers.
Having better reviews than a competing product can make all the difference, so work on getting a high number of reviews and the best possible star ratings. Make sure your item description is accurate, provide excellent customer service, and immediately respond to and resolve customer complaints. Many Amazon sellers proactively reach out to all customers, thanking them for the sale and reminding them to leave a review.
Customer reviews also impact your seller rating, along with factors such as your response time to customer inquiries, on-time shipping (if you are not using FBA), chargebacks and order accuracy. Amazon uses your seller rating to determine how often your products get exposure, and customers use it to decide between you and your competitors.
It’s important to expand your retail operations wherever possible, especially when you can access Amazon’s huge audience. Setting yourself up to sell on Amazon is a straightforward process and a great way to expand and grow your business.
Amazon’s Seller University has plenty of resources to help you navigate selling successfully on Amazon. Creating a Marketplace account can also be a great way to connect with Amazon’s Stores program, which focuses on fostering small business growth. It’s easy to begin, so why not start today?
Rebecca Neubauer and Jennifer Dublino contributed to this article.