How to Sell on Amazon

Selling on Amazon offers entrepreneurs and established businesses a massive opportunity to reach millions of potential customers. But for those new to the platform, navigating the steps to start selling can be a bit overwhelming. From setting up your seller account to listing your first product and mastering fulfilment, this comprehensive guide will walk you through the entire process. Whether you're a small business owner or looking to scale an ecommerce venture, understanding how to sell on Amazon is key to growing your business effectively.

1. Setting Up Your Amazon Seller Account

The first step to selling on Amazon is setting up your seller account. You’ll need to decide between two types of accounts:

• Individual Seller Account: This is ideal if you’re selling fewer than 40 items a month. Amazon charges a £0.75 fee per item sold, plus additional selling fees. This is great for casual sellers or those who want to test the waters before committing to larger volumes.

• Professional Seller Account: For larger operations, the Professional account costs £25 (plus VAT) per month, but it allows you to sell unlimited items and provides access to advanced selling tools, such as bulk listings and advertising options. If you plan to scale your business, this account is usually the better option.

Steps to Create an Account:

1. Go to Amazon Seller Central and click “Register now.”

2. Provide necessary business information such as your business name, address, VAT number (if applicable), and bank account details.

3. Verify your identity with a valid ID and, in some cases, a credit card statement.

4. Set up your seller profile, including your brand name, shipping methods, and payment details.

Once registered, you’ll be granted access to the Seller Central dashboard, your primary hub for managing listings, tracking orders, and accessing performance data.

2. Choosing the Right Products to Sell

Deciding what to sell is one of the most crucial aspects of becoming a successful Amazon seller. Focus on products that meet the following criteria:

• High Demand: Use Amazon tools like the Best Sellers List or third-party software like Jungle Scout to identify products that have high sales volumes.

• Low Competition: Look for opportunities in niches where there’s demand but fewer sellers. You’ll need to find a balance between popularity and market saturation.

• Good Profit Margins: Calculate the costs involved in product sourcing, shipping, and Amazon’s selling fees. Aim for products that provide a 30% profit margin or more after all expenses.

Selling on Amazon is highly competitive, so selecting the right products—those that align with market demand but aren't oversaturated—is essential.

3. Listing Your Products

Creating a compelling product listing is key to attracting buyers on Amazon. Your listing should include detailed, accurate information and high-quality images to help customers make informed purchasing decisions. Here’s how to create a successful product listing:

• Product Title: Include your main keywords and describe the product concisely. For example, instead of simply saying "Bluetooth Headphones," use “Wireless Bluetooth Headphones with Noise Cancelling & Built-in Microphone.”

• Bullet Points: Highlight the top features and benefits of the product in a clear, easy-to-read format. Focus on features that differentiate your product from others.

• Product Description: This is your chance to provide more detailed information, including technical specs and a more thorough explanation of why the product stands out. Use persuasive language but remain factual.

• Images: Use high-quality images (preferably 7-9) that show the product from different angles. Include lifestyle images showing the product in use. Images should be clear, well-lit, and professionally presented.

• Search Terms: Use the back-end section to add relevant search terms that help your product appear in Amazon’s search results. These keywords aren’t visible to customers, but they influence search ranking.

Once your listing is live, continuously monitor its performance, adjust your keywords, and improve your images or copy based on customer feedback and sales trends.

4. Fulfilment Methods: FBA vs. FBM

When selling on Amazon, you have two main fulfilment options: Fulfilment by Amazon (FBA) or Fulfilment by Merchant (FBM). Each has its own advantages, so it’s important to understand which is best for your business.

• Fulfilment by Amazon (FBA): With FBA, you send your inventory to Amazon’s fulfilment centres. Amazon handles everything from storing your products to picking, packing, shipping, and customer service. Using FBA makes your products eligible for Amazon Prime, giving you access to millions of Prime members who prioritize fast shipping. This option is ideal if you want a hands-off approach to logistics and want to benefit from Amazon’s trusted delivery service.

• Fulfilment by Merchant (FBM): With FBM, you manage your own storage, shipping, and customer service. This gives you more control over the fulfilment process but requires more time and effort. FBM is often preferred by sellers with lower sales volumes or those who sell oversized or custom products that don’t fit within Amazon’s FBA guidelines.

Choosing between FBA and FBM depends on your resources, the volume of sales, and your business model.

5. Pricing Your Products

Pricing your products competitively on Amazon can be a balancing act. You need to set a price that covers your costs and offers a healthy profit margin, but it should also be attractive enough to compete with other sellers.

Key Factors in Pricing:

• Competitor Analysis: Regularly monitor your competitors' prices. Use Amazon’s Automated Pricing tool or third-party repricing tools to stay competitive without having to manually adjust prices.

• Amazon Fees: Amazon takes a referral fee (usually around 15% of the sale price) and additional fees for FBA or storage costs. Make sure to factor these fees into your pricing.

• Dynamic Pricing: Consider offering seasonal discounts or special promotions during peak shopping periods (such as Black Friday or Prime Day) to increase sales.

By monitoring the marketplace and adjusting prices strategically, you can ensure your products remain competitive while maintaining profitability.

6. Marketing and Advertising on Amazon

To increase visibility and drive sales, take advantage of Amazon’s advertising tools and marketing strategies:

• Amazon Sponsored Products: This is a pay-per-click (PPC) ad service that promotes individual listings in relevant search results or product pages. Sponsored Products can help new or low-ranking products gain visibility.

• Sponsored Brands: For those with a registered brand, Sponsored Brands ads allow you to promote your brand and multiple products in a banner at the top of search results.

• Deals and Coupons: Running limited-time offers, such as Lightning Deals or coupons, can encourage purchases and help you clear stock faster.

Utilizing Amazon’s built-in advertising options can help increase traffic to your listings and boost sales. Monitoring the performance of these ads is crucial—adjust your bids and targeting based on what’s performing well.

7. Managing Customer Service and Returns

Customer service is a crucial part of maintaining a successful Amazon business. If you’re using FBA, Amazon will handle customer inquiries, returns, and refunds on your behalf. However, if you use FBM, you’ll need to take care of these issues yourself.

Best Practices for Customer Service:

• Fast Response Time: Amazon expects sellers to respond to customer messages within 24 hours. Failing to meet this requirement can negatively impact your seller rating.

• Efficient Returns Management: Amazon customers expect a smooth return process. Make sure you clearly outline your return policy and process returns quickly to avoid negative feedback.

• Handling Feedback: Reviews and feedback are vital on Amazon. Encourage happy customers to leave positive reviews, and address any negative feedback promptly and professionally to maintain a good seller rating.

Good customer service can lead to positive reviews, repeat customers, and higher overall seller ratings, which will help your listings rank better in Amazon’s search results.

8. Monitoring Performance and Growing Your Amazon Business

After launching your products, it’s important to continually monitor your performance using Amazon’s built-in analytics tools. The Seller Central Dashboard offers detailed insights into your sales, customer behaviour, and performance metrics.

• Key Metrics to Track: Keep an eye on metrics such as conversion rates, traffic, and keyword performance. Regularly adjusting your listings based on this data can help improve sales.

• Inventory Management: Ensure you keep track of your stock levels to avoid running out of inventory, which can hurt your ranking and sales momentum.

• Customer Feedback: Continuously monitor reviews and feedback to identify areas for improvement.

As your business grows, you can consider expanding your product range, entering new marketplaces, or exploring other fulfilment options.

Conclusion

Selling on Amazon can be highly rewarding, but it requires careful planning and execution. From setting up your seller account and choosing the right products to marketing and managing customer service, each step plays a vital role in your success. By following this comprehensive guide, you'll be equipped to navigate the Amazon marketplace, grow your sales, and establish a thriving business.