How Do You Become a Seller on Amazon? A Complete Guide

How Do You Become a Seller on Amazon? A Complete Guide

Amazon really lives up to it’s name, and sellers on the platform are enjoying their slices of the pie. Believe it or not, the former bookstore now has over 9.7 million sellers, and that number is only growing.

If you’re looking to get in on the action, business is booming, so jump right in. However, you might not know where to even begin. So, how do you become a seller on Amazon? Let’s talk about that.

Benefits Of Selling On Amazon

The first obvious benefit of becoming an Amazon seller is that the platform is nothing if not established. It has the second-highest market cap of any company in the world and it’s run by the richest person on the planet. This comes with its perks.

Selling on Amazon allows you to benefit from their mighty scale when it comes to logistics and the market. Unlike Google or Facebook, people go on Amazon specifically to buy things, offering potentially high conversions when people spot your products on the platform.

You’ll also have plenty of helpful resources available to you, and you’ll get the added benefit of Amazon’s customer-driven services. You may be able to offer 2-day shipping that you wouldn’t have otherwise been able to provide, and your customers will even be able to use Amazon’s top-tier customer service hotline for most inquiries.

All of these well-established moving parts add up to minimize your risk at the initial start. Now, don’t confuse that for saying there is no risk. Every business has risks. However, working with such an established company offers some unique benefits that make it a lot easier to break through than if you were starting from scratch.

However, when we talk about benefits, many of us want to see those benefits with a dollar sign before it. Well, it’s nearly impossible to determine a perfect average, but sellers should expect anywhere in the wide range of $12,000 to $300,000 for their efforts.

How Do You Become A Seller On Amazon?

Alright, you’re probably pretty determined to start selling on Amazon. There have been huge success stories of people building up massive businesses from scratch thanks to the help of the platform.

Well, since so many businesses rely on the platform today, there’s good news for you. There’s a time-tested outline for starting an Amazon seller business, and here’s what you need to know about it.

Figure Out What You Are Selling

This may seem obvious but you need to know what kind of store you are before you jump in. Are you willing to sell anything that you can get your hands on or are you looking to stick to a niche?

In most cases, you will have specific products or services in mind, so now is the time to figure out if you want to limit yourself too much.

For example, let’s say you sell outdoor equipment because you had an excellent idea for a new tent design. There’s no guarantee that people will be interested in your new tent or that they’ll even see it on the store. Because of this, the only way to generate revenue while people are still learning about your amazing new tent is to sell other items.

You could do this as a third-party Amazon seller or your company could introduce more products that are in high demand. These are your two best options for maximizing your chances of generating initial revenue.

If you’re having trouble deciding what to sell, consider the market, demand, and competition. The best place to look for this information, especially as a startup, is to look at the competition. What are they selling, are they profiting from it, how much are they selling it for, and is it feasible to compete with them at this time?

Find Suppliers

Whether you’re making things on your own or selling as a third party, you will need some type of supplier or vendor. Materials, equipment, and merchandise don’t appear out of thin air, unfortunately.

The best thing you can do when searching for suppliers is research, research, research.

This includes getting samples of their products and testing them out, reading reviews of the company, and shopping or negotiating prices to fit your needs.

When reading the reviews on companies, make sure they are legit. If you’re only reading the reviews from the company website, you’re only seeing what they want you to see. Check reviews on other platforms or even at their local Chamber of Commerce.

Be sure to compare prices across businesses and see if you can negotiate a long-term deal. If you find one that’s more expensive but offers a service that you need, talk to them about their competitor’s price and try to work out a deal.

Figure Out The Logistics

If you purchase items from Amazon regularly, you know that some items will offer their standard 2-day shipping and others won’t. Are you going to rely on Amazon’s logistics or ship things yourself? Do you have an alternative?

Your location will likely play a huge role in this, as you could be hundreds of miles away from your nearest Amazon warehouse or you may not be able to afford the scale of delivery out of your area.

The same vetting process you use for your vendors goes for logistics as well. You want to find the best deal possible, so don’t neglect your research. These are critical decisions to make at the start of a business and they could have huge effects on your success.

The most important thing to know about a logistics business is how reliable they are. Your items need to get on-site, on time, all the time. Amazon (as well as their customers) has a low tolerance for harming their reputation on delivery times.

Crunch The Numbers

Starting any business will undoubtedly require capital, and expenses add up a lot quicker than you think. You may have considered inventory, but what happens if your revenue is delayed? Will you be able to cover the other expenses that come up, including the paychecks for new employees?

There are plenty of logistical expenses as well as fees, insurance, and other things to keep in mind. You will have to pay your logistics crew, your vendors, shipping costs, and a lot of fees.

There is a service fee of $0.99 for every item that you sell, then there are 15% referral fees, returns fees, and more. These are all numbers you need to be factoring into your budget. If you need some help with managing the initial finances, check out this Amazon accounting specialist.

Sign Up As A Seller

You will need to register an Amazon seller account and choose what type of seller plan you prefer. There are individual sellers (like Ebay), that will cost the $0.99 fee for every transaction.

There are also professional sellers who pay a fee of $39.99 a month. If you’re planning to sell over 40 items a month, this is the smarter option.

Lastly, there are Amazon Vendors. These companies sell wholesale to Amazon who then sell the items off individually. If you can manage that scale, it can be very profitable. However, professional seller is often more feasible for a startup.

You will need to include your business name, contact information, bank account information, and your “ship from” location. From there, you will set up a seller profile and add your preferences for shipping types and other logistical factors.

Once all of these steps are complete, you will be able to start listing your items for sale!

Read Amazon’s Fine Print

If you’re going to skip anything on this list, don’t let it be this.

You may have heard horror stories of businesses flopping because Amazon dropped them for violating a rule they had never heard of. What’s the best way to avoid this? Knowing their rules.

Like it or not, if you are going to enter this business, you will have to bend to some of Amazon’s regulations and standards to avoid a disaster. Make sure you read the terms of service and understand what it is that can get you kicked off the platform.

Get Selling!

So, how do you become a seller on Amazon? Well, it starts with a passion, some determination, and making wise moves at the start. Make sure your head is full of all the knowledge you need, that you have the right help on your side, and that you don’t give up! Stay up to date with our latest business news and start growing your online store!

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