How to sell on Amazon – A Step By Step Guide
Becoming a seller on Amazon is an incredible way to turn into an entrepreneur. Many sellers began from a kitchen table and now run businesses that generate six-figure sales. Founded by Jeff Bezos, a computer scientist from MIT, Amazon is the largest online retail business in the world, with a turnover of $281 billion, employing 800,000 employees. In this blog, we’ll explain in detail how to become an Amazon seller, and start selling like a pro.
How To Start Selling On Amazon?The first question is, do you need Amazon or can you strike out on your own. The advantage with Amazon is you don't have to worry about how to create an online store. All you need to do is master how to sell on Amazon. That is enough to propel your seller revenue north.
Selling ModelThere are four possible selling models allowed by Amazon.
- Private Label
The first is arbitrage. This is merely buying cheap and selling high.
A good example - you find cotton shirts being sold for almost nothing at your local supermarket in a clearance sale.
You buy the entire stock and list it on Amazon. If each shirt was list priced at $40 and sold for $15, you make a profit even if you can sell it for $22 (net). This works great, but you cannot consistently locate products to sell by scouring the web and supermarkets. The supply chain is wobbly.
In this case, you locate a manufacturer and have them make the shirt for you with your brand name. Usually, such manufacturers are located in China, Vietnam, Bangladesh, and Taiwan.
There are numerous private label consulting agencies that would help you out with locating a manufacturer, export/import formalities, customs, taxes, and all other procedures.
However, this requires you to spend upfront since you would likely be visiting your manufacturer abroad at least once or twice, designing the logo, marketing, quality control, and above all, investing cash in huge stock.
Dropship is a model that avoids the upfront investment of a private label. When you get a sale order, you pass it on to a manufacturer who ships it directly to the customer. The customer pays you, and you pay the manufacturer. The logistics are entirely out of your hands.
Whether dropshipping works ideally depends on your expertise at marketing and locating a manufacturer from a site like Alibaba.
In the case of dropshipping, you have to continually research and spot trends, locate manufacturers and negotiate. It is hard work, but remember you are only investing time, unlike a private label seller.
You buy branded products directly from the manufacturer and sell them. Such as purchase garments from Adidas, Lacoste, Levi Strauss at wholesale rates, and sell it through Amazon. This is very close to the brick and mortar retail store model except that it happens over the internet.
Here’s a quick video that talks about all the different ways to get products that you can sell and the implications of each.(Above video is a part of a more elaborate course on Academy by Appy Pie. To access the complete course, please Click Here, or continue reading below.)
Open Seller Account With AmazonUse services.amazon.com to open a seller account. You have to provide the following information –
- Owner's name
- Business name
- Business email address
- Business address
- Tax information (would vary but usually the tax registration number)
- Bank account details/credit card details where payments would be remitted
- Individual Plan – Free accounts restricted to selling in 20 categories and no more than 40 shipments monthly. Meant for those selling old books and similar items occasionally.
- Professional Plan – For $40 per month that allows unlimited sales in all categories. Meant for those who want to be a serious seller.
We have a simple and easy to follow tutorial video that talks about creating seller accounts and uploading your products on Amazon.(Above video is a part of a more elaborate course on Academy by Appy Pie. To access the complete course, please Click Here, or continue reading below.)
ShipmentSecure warehousing and efficient logistics are essential. Let us take an example. You have 5,000 shirts made by Levi – where are you going to store them, and who is going to dispatch them to the customer? There are two alternatives.
- Fulfillment By Merchant
- Fulfillment By Amazon
FBM means you do it personally. In our example, the shirts remain with you. When an order arrives, you package it and ship the parcel. The invoice amount is collected by Amazon and remitted to you after deductions.
The advantage is that you could sell the same stock through multiple physical and online stores using this model. Hence you recover the cost of inventory quicker.
The disadvantage is that you have to manage the sorting, packing, dispatching. Also, you aren't able to participate in Prime unless Amazon approves.
You deliver the goods to an Amazon warehouse and sit back. They take care of everything and remit you the sales amount after deductions. You are automatically Prime eligible.
The difficulty is that you can't have multichannel sales, sell it through your own ecommerce store or own physical shop. Also, there are higher charges from Amazon.
However, also consider that it is far easier for Amazon, delivering a billion packets a year, to haggle a low quotation from parcel services than you.
Both FBA and FBM have advantages and disadvantages, and choosing one would purely depend on your business model.
Product ListingFrom your seller account, you have to describe the goods. The following details are needed –
- Product Name
- Product ID
- Unit Count
- Product Description
- Specifications (in some cases)
Amazon SEOType "shirts for men long sleeves" in Amazon USA > Men's Fashion. It shows 321 pages with 12 products per page. Unless you are in the first few pages, you will lose out. Use tools such as Sonar to locate the most appropriate keywords. Then use long and short tail keywords in title and description much in the same way as search engine optimization (SEO) is done.
Here’s an interesting video that talks about voice search SEO and why it is all the rage today!(Above video is a part of a more elaborate course on Academy by Appy Pie. To access the complete course, please Click Here, or continue reading below.) Of course, this is just the first step, and much depends on your listings and reviews. There are of course Amazon ads to help get more visits.
Let’s try and understand the importance of reviews on Amazon with this video.(Above video is a part of a more elaborate course on Academy by Appy Pie. To access the complete course, please Click Here, or continue reading below.)
What's Next?These were the basic steps. Now that you know how to start an Amazon business, take the plunge. Many who diligently pursue the trade find Amazon a lucrative platform. Of course, you might start out with arbitrage and turn a drop shipper later after you understand the process better. It is not a quick and easy get rich scheme but definitely provides you at least decent middle-class income with few hours work daily and if fate smiles a million-dollar income stream.
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