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#Amazon US

The Ultimate Beginners Guide to Selling on Amazon

You want to make a living from the comfort of your own home or wherever you are in the world and turn it into a multi-million empire?

As unrealistic as it sounds to some, we are actually living in an era of self-made entrepreneurs, where with all the available online resources you can pretty much make anything happen.

I'd say it's a good era to be alive.

More than ever, people are looking to start their own business. Not only do they want the freedom and flexibility that come with being their own boss but it has also become easier to start a profitable business with the growth of the online marketplace.

Online platforms make it incredibly profitable for individuals to sell products from their own home, set up their working hours that match their lifestyle, or even make money while they are out traveling the globe ( I am looking at you, digital nomads ). 

Amazon alone has over 160 million active customers, 95 million unique monthly visitors, two million sellers — more than a third of which are independent third-party sellers — and worldwide sales of $100 billion.

And Amazon’s FBA program has made it even easier to fulfill orders with a simplified shipping program that makes it so sellers only need to focus on finding items to sell and getting them to Amazon.

But easier does not automatically mean that it is easy to start and run a successful Amazon business. There are still basic principles and steps that must be followed in order to enjoy success, and they often come with their own learning curve.

When it comes to finding success in the Amazon marketplace, the good news is that you can expedite the learning process and start selling with the right dose of solid direction.

Here at Judolaunch, we help individuals and businesses launch new and existing products on Amazon on a regular basis and have simplified the process to focus only on what works.

We understand that getting started can be the hardest part for many hopeful online entrepreneurs.

That is why we have created this article outlining the basic principles you’ll need to master in order to successfully start your business selling on Amazon.   

No excuses now.

We’ll start with the simplest task of setting up your Amazon account, then take a look at how to find the right product to sell, how to source your product and how much it will cost to get started; we’ll also go over how to determine if you can make a profit and then cover how to find suppliers, list your product, and fulfill your orders. 

For a visual step-by-step guide, scroll down for our Infographic on how to start you Amazon business.

How to Set Up Your Amazon Seller Account

 

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Creating your Amazon Seller Account is a very simple process.

All you have to do is go to sellercentral.amazon.com and click the “Register Now” button.

Once you do, you will be taken through a guided process to set up your account that should only take a few minutes.

The bigger issue is choosing between the two available Amazon seller plans.

The Individual Seller account is presented as a free account, but Amazon will charge you $0.99 for every item that you sell.

This per item fee is in addition to the product fees that apply to both the Individual and Pro accounts.

If you plan on selling less than 40 items a month, the Individual account could save you money upfront. However, if you plan on selling more than 40 items, you will get much more bang for your buck by signing up for a Pro Seller account for $39.99 a month.

The Pro plan comes with many additional perks.

For example, you can sell in at least 10 additional categories that Individual Sellers cannot for a total of 30 categories.

You can also add new products, your listings will be eligible for the Buy Box, and you can offer coupons, shipping specials, and gift wrap.

You can apply to sell in restricted categories and have the option to bulk upload product listings and feeds to your Amazon seller dashboard.

Additionally, you will have access to inventory reports and you will be able to connect with third-party services and product feeds.

In a nutshell, you will have access to many sales-driving features with a Pro Seller account that you will not have access to as an Individual Seller, but the Individual account may make sense for people just dabbling in selling on Amazon.

How to Find the Right Product 

 

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Many people who are considering selling on Amazon begin their research by asking how much money they need to get started?

The answer to this question may not be the one that they are looking.

Here's why.

It really depends on various factors, but two in particular: what your product is and where and how you are sourcing that product.

In general, you can get started with well below $5,000 in capital, and there are even ways to start with $250 or less if you’re just looking to dip your toe in to see if it’s really for you.

The bottom line is that you have no business without a profitable product.

Having a quality product is your number one key to success as an Amazon seller.

We can not emphasize this enough.

If you don’t have a quality product and you don’t do the research going in or make the necessary relationships with the suppliers, then there is no way that your product launch is going to be successful long-term.

If you invest in a product that people don’t actually want, it will never take off.

And if your product is poorly made — even if it’s something in high demand — the customers are going to eventually find out and that will affect your sales no matter what tactics or tricks you use to try and boost yourself back up.

The good news is that finding the right product is usually the only place you will get stuck in the whole process.

Once you know what to sell, the rest is rather simple. 

So, while we’ll dive deeper into the different ways to source your products and the corresponding costs in just a moment, let’s first examine the basics of what constitutes a good product.

What is a good product?

 

First, your product should be something that you are interested in at some level.

A profitable product is the perfect blend of your interests and your profit margin. You will be spending a lot of time working with your product, so it should at least appeal to you.

Second, aim for a product that sells for between $10-$200 an item.

It can become very risky and capital intensive if you start selling higher-ticket items. More expensive items are usually difficult to ship and almost always require some level of quality control, adding to your costs and management demands.

Along those lines, it is also smart to choose a simple item that is small and light. You don’t want anything that is mechanical, fragile, or requires intense preparation. It should be simple to manufacture and cheap and easy to ship.

Finally, avoid trademarked items, products that are sold in large volumes on a daily basis on Amazon (aim for items that sell 10 units per day or more), and items that you personally buy on a regular basis like electronics, clothes, and food since there will be too much competition in those markets.

You need to niche down, but don’t go so niche as to sell seasonal items that can only be sold within a small window of time. 

Once you have narrowed down your search to a handful of products that you like, look at the reviews to see what people are saying about the product. 

In the video above, Chris covers his Amazon product research method that he is using for his own successful brand, so if you are still in doubt on how to go about it- steal it!

You need to make sure that it is an item that people like and that is trending positively. When you have selected your first product, the next step is to determine how you will source the item.

How to Source Products to Sell on Amazon

 

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From traditional business models to more creative tactics, there are five main ways you can source your products to sell on Amazon:

1. Retail Arbitrage- (Cost to Start = Low)

This method is best for small sellers and people who are just getting started. It is less profitable than other methods, but a great way to dip your toe in and start making money since it does not require a lot of upfront costs. 

Retail arbitrage entails buying retail products for drastically reduced prices at retail clearance and inventory reduction sales in stores and online and reselling them on Amazon.

There are scouting apps that allow you to scan an item’s barcode and review its current selling price, competition, and potential for profit (including shipping costs) right there in the store.

This way, you can know if the item on sale is worth purchasing before you ever invest in a product.

2. Reselling Wholesale Goods- (Cost to Start = Medium to High) 

This method is best for established sellers and follows a more traditional business model of buying products from a wholesale distributor or directly from the manufacturer and reselling at a markup.

It usually requires that you buy in larger volumes, which can give you low wholesale prices and extra room for profit, but it also means that you’ll need to invest more capital upfront.

For this reason, you will need to do thorough product research before taking a chance on a large shipment.

3. Private Label- (Cost to Start = Medium to High)

This method is also best for established sellers since private label sellers also purchase products from manufacturers.

The difference is that they package and market the items under their own brand. You will have the same upfront costs that come with reselling wholesale goods, but you have the distinct advantage of building your brand as you do it. You can private label a number of different product types.

While you do not have to register your brand right when you begin selling private label products, you will eventually need to do so in order to stay in compliance with Amazon. You must have a registered trademark and brand logo in order to enroll.

You can register your brand and read more about the requirements by going to Amazon’s brand registry.

4. Handmade- (Cost to Start = Low, Medium, or High)

This method is best for artisans. You will need to comply with Amazon’s seller fees for handmade goods and ensure that you can keep up with demand if your handmade product becomes popular.

5. Dropshipping- ( Cost to Start = Low)

This can be a good method to get started, but is really only recommended for experienced dropshippers. Dropshipping involves listing an item for sell even though you do not have it in your personal inventory; when the item is ordered, the drop ship vendor ships it and then charges you for the item.

Dropship goods tend to have lower profit margins which doesn’t make it a great fit for Amazon thanks to their seller fees. It is also difficult to manage product quality and quantity when you are not in control of the supply.

Calculating Costs and Profits from Selling on Amazon

 

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If you search on Google Amazon related topics, you will most likely find the common question:

''How to make money on Amazon?''

But when it comes to profit, you will need to take several costs into account, from seller fees to the product cost to marketing and customer acquisition to your time value for sourcing products, creating listings, managing inventory, and shipping orders.

Amazon provides a free profit calculator tool that allows you to enter many of these costs and determine how much profit you can expect to make. The calculator accounts for your purchase cost of the item, the price you will charge consumers, the shipping costs to send the product to Amazon, and the fees you’ll be charged by Amazon.

Beyond Amazon’s free tool, there are more advanced Amazon seller tools for product research and competition analysis.

Tools like Amachete will show you current sales data to inform you of the kind of daily sales your competitors are doing before you launch. It is an excellent tool that works in every Amazon country.

Amazon has a reinforcing feedback loop that demands an aggressive launch so you that don’t get stuck at the bottom of the ocean of products available on the platform.

To stay on top, you will need to aim for a specific ranking and make initial daily sales levels that exceed the amount your competitors in that spot are doing.

This will get you in the right position and give you the opportunity to remain there.

Examining your competition’s daily sells is one step many sellers do not take into account because it is more than just calculating the costs of selling a product, it is calculating the cost of successfully selling the product long-term. 

In general, you want to focus on products that have an ROI of at least 50% or higher and that have a minimum net profit of $3.

For the most part, you will want to scale up slowly and keep inventory risk low.

You will want to test several samples from different suppliers to help you determine the costs of producing the product and assess the market demand.

You can usually test out a product with an initial sample of 10 to 50 units. For an order this size, you can expect to pay an average of $100 to have the item shipped to you. You do not want to spend $1000 on products only to find out that no one wants to buy them, so this step can help you avoid any costly failures.

Plus, if you ship the items to your home, you won’t have to worry about customs, duty, or freight forwarder fees.

The US raised the de minimis value for e-commerce parcels to $800 in 2016, which means that international courier shipments and international parcel deliveries — especially for small test samples — can be delivered to you both duty and tax-free.

How to Find Suppliers

 

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Do NOT start with this step.

Many sellers focus on finding cheap products instead of focusing on what people are buying first.

Demand is the most important part of the formula, so do not make the mistake of investing in a product right off the bat just because it is cheap.

However, once you know what people are looking to buy, you’ll need someone to supply the product.

Alibaba is the largest supplier network on the planet. While there is always a chance of being scammed on any platform, Alibaba is the most reputable source for quality suppliers you can find.

You can also use AliExpress.com for smaller orders, but you will get similar prices on Alibaba if you can successfully communicate with suppliers.

To avoid any scams or bad suppliers, you will need to set specific limitations on the types of suppliers you will work with.

On Alibaba, only work with Gold Suppliers who have on-site check, accept PayPal and Alipay, and have Trade Assurance. By following these rules, you will not only avoid 99% of scams but you will also ensure better quality products and service.

You want to find a supplier who is easy to communicate with and who is willing to create a partnership with you.

To find the right one, you will need to reach out to many different suppliers at first and then narrow your options down based on price, quality, and communication.

After examining your options, email up to 20-30 different suppliers and then go from there.

In the end, you’ll want to get samples from 2-5 different suppliers.

Pro tip


Don’t let a supplier convince you that they can’t ship you a small sample order.

When the samples arrive, seriously go over each one, apply some stress and examine every aspect of the product. Think about how your customers will use it and make sure it will be able to perform. You need a quality product, so find something you will be proud to sell.

Ordering several samples will also give you an opportunity to check shipping times, costs, damage from shipping, etc.

Once you find a supplier that you like, you can put in another order, but do not buy in bulk until you have done a couple of sample tests with the product.

How to List Your Product on Amazon

 

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Successful Amazon sellers focus on having an optimized listing.

A successful listing comes down to doing your homework in regards to keywords and making sure that your listing is optimized on the front and back end for those keywords. After that, you’ll want to ensure that your copy sells.

Every listing has two parts: one that speaks to an algorithm and one that speaks to people.

Both need to be on point for your listing to be successful. If you mess up either one, you will seriously jeopardize the success of your launch and long-term sales growth.

1. Speak to the algorithm ( robots)

This part of the listing is what makes doing keyword research essential because it is what determines whether or not your product will show up when shoppers search for a particular item.

While you will want to cross reference Amazon to know which major keywords you should use, this is another area where advanced software has a pronounced impact. Google Keyword Planner is a step up from manually searching Amazon, but one of the top tools we prefer here at Judo Launch is Seller Tools.

This app gets its data, not from scraping Google or public resources, but from the same sources that Amazon uses. Because of this, it can tell you exactly what keywords get the most searches and make suggestions based on the keywords you search.

For example, if someone wants to buy an eye mask, they may write in “eye mask for mom in silk bag” and there is no way that you will know that unless you use these tools. So, it’s important to do your research beforehand and not just wing it.

2. Speak to humans ( your customers)

More than literally anything else when you have an e-commerce business, your images are the most important component of the decision-making process of the customer.

You could write the most amazing sales copy, but if your images are terrible or in the wrong order or you are missing one or two key photos, you could completely botch your conversion rates. And, even if your algorithm is good in the beginning, if your conversion rate is low, that speaks to the algorithm and sends you back down the search rankings.

So, speaking to the people then speaks to the algorithm. There are so many people who don’t do the images the right way, so just doing this right will give you a huge advantage and put you in the top 10%.

In regards to the words, you have to speak to the emotional reason the person is buying your product — not the logical reason.

Speak to that first and then jump into the features and why your product is better than the competition. People buy because they feel something, so tap into that. Show them how your product will solve their pain or be to their benefit.

If you don’t know how to do that, ask “why” they are buying your product at least 20 times until you get to the emotional foundation for your customers’ reasons for buying.

Once you do that, speak to the pain and the passion and then speak to their logic.

The elegance of this comes into play when you have to speak to the algorithm and the person at the same exact time with the same exact copy.

It’s an art and a science.

Talk about the benefits of your product and make sure to include many of your keywords. You can then discuss the features that support those benefits and then get into the features themselves. At that point, you can focus less on sprinkling in the keywords.

Also note that you have to be really careful that you follow Amazon’s copy guidelines or you could have your account taken down or suspended.

You can’t mention a money-back guarantee or say that you treat any disease, even if you have a supplement that is meant specifically for people with that disease.

You can create product listings in two different ways: you can add your items to existing product lists or create an entirely new product listing for an item.

If you are selling an item that is identical to a product already being sold on Amazon, you can select the top-ranked listing with the best information and images and simply add your product to that listing.

You will have more competition for sales this way, but it is a relatively easy way to list your products, especially if you are not ready to invest in quality photos and paid copywriting.

Amazon Pro Sellers have the option of creating a completely new product listing for items that are not currently sold on Amazon.

This is where you can use your own keyword research, images, and sales copy. If you need to create numerous new listings, there is an option to bulk upload your listings with a spreadsheet or do a product feed from your own website.

How to Fulfill Your Amazon Orders

 

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Some people get overwhelmed by shipping and tend to complicate it. The truth is that much of Amazon’s success has come from its ability to simplify the fulfillment process.

Amazon’s number one priority is the customer, which means that they expect high standards from anyone who chooses to sell on their platform. You will be expected to fill orders in a timely manner and, if you don’t, your seller rating will suffer.

This is one reason why managing your inventory is key to your success on Amazon.

If you only sell on Amazon, then Amazon will automatically reduce your inventory count as your items sell. If you sell on more than one site, however, Amazon’s tracking methods will not be enough to follow your inventory levels.

When you launch your product, you will want to make sure that the same number of items that are sold on any given day are shipped out that day so that Amazon knows that your product is the one that people are not only buying for the particular keyword in your product category but that it is the product that they can rely on to arrive in a timely manner.

If you can do this, you will give you product its best chance to stay in the top rankings.

FBM vs. FBA


When it comes to actually fulfilling your order, you have two options which basically boil down to you fulfilling the order (FBM) or letting Amazon do it for you (FBA).  

Fulfillment By Merchant, or FBM, is when e-commerce sellers ship all their Amazon orders from their own warehouse. You will need to handle shipping boxes, packing tape, packing fillers, a shipping scale, and package drop-off and/or pickup.

If you use a fulfillment partner, this is also considered Fulfillment By Merchant. If you sell outside Amazon in considerable amounts, then this may be a good idea. Otherwise, your best option is to go with Amazon’s FBA program and they will do the heavy lifting for you.

With Fulfillment By Amazon or FBA, Amazon stocks, packs, and ships your products for you. All you are responsible for is sourcing the product, listing it, and shipping it to one of Amazon’s warehouses.

This will add FBA fees on top of your Amazon seller fees, but it will greatly reduce the complexity of fulfillment on your end and give you many sales-driving perks.

As an FBA seller, you will be eligible for Prime product listings, free two-day shipping to Prime buyers, higher rankings for product listings, more Buy Box listings, and the trust factor of customers knowing that their product will arrive on time. For all of these reasons, FBA sellers have a higher sales potential on their products.

Using the FBA program saves you time and puts you above the competition.

You will need to prepare your products correctly for Amazon’s warehouses by printing barcode labels for your products and bagging or packaging them according to Amazon’s requirements.

However, instead of having to package and ship every package ordered on a daily basis, you can complete this task once or twice a month. Amazon will also handle your customer service.

Overall, it’s a great deal that works well for sellers, for Amazon, and for the customers. A win-win-win.

Conclusion

 

Amazon is an extremely powerful platform for anyone looking to sell a quality product, whether you are making a couple-dozen sales per month or running a multi-million-dollar product empire.

There are many ways to sell on Amazon and the competition can be intense, but the opportunity is there and the door is wide open for anyone willing to put in the effort to make it work.

We summed up all the steps for you in our infographics to make sure you do not skip one.

Now the question is:

Dare to try?

 

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