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How to Become an Amazon Seller: Guide to Navigating the Process

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Selling on Amazon has become an exceptional method of getting a steady stream of passive income. You may want to get in on the benefits but can’t seem to understand the responsibilities behind the role.

The process can be long and requires ample research, brainstorming, and budgeting before implementing it.

If you’re wondering how to become an Amazon seller for quick money, sorry to disappoint. Making a profit on the platform requires laying a solid foundation of trial and error.

An Overview of Selling on Amazon: A Primer

As an Amazon Seller, you’re taking your business to a giant platform offering a level playing field. Unlike several sites prioritizing reviews to garner more views, Amazon gives every seller, no matter how new, a chance to shine and build their sales.

You also reap the Fulfillment By Amazon (FBA) benefits and avoid shipping hassles. Starting your Amazon selling path involves creating an initial strategy, whether you want to resell products or list your brand’s products.

The online retail company offers subscription plans that’ll cater to your strategy. You’ll then create an Amazon seller account, list your products, and pull in your customer base.

How Much Do Amazon Sellers Make?

Amazon sellers can make between $500 to $500,000 per month. With such a significant gap, your salary can depend on your products, selling strategy, location, and warehouse capacity.

The national annual income average of an Amazon seller is approximately $40,630. About 17% of sellers can make $1,000 to $5,000 monthly, and another 17% make under $500.

Close-up of a female Amazon Seller working at home and holding a box

Approximately 14% of small to medium businesses (SMBs) on Amazon generate over 16 to 20% profit margin. Only 4% can accumulate a massive 51 to 100% profit margin.

What You’ll Need to Become an Amazon Seller (& Associated Costs)

After hearing about all the benefits of becoming an Amazon seller, you’re likely wondering, but at what cost?

  • Amazon Seller Account: You can pick a professional or individual seller subscription plan. Each of the costs varies. A professional account requires a $39.99 flat fee, and an individual, a $0.99 charge per sale.
  • Government ID: Selling in North American marketplaces necessitates government identification.
  • Brand Registry: Using this feature is critical for a brand. It imposes no fee as long as you have a professional seller account.
  • Internationally Chargeable Credit Card: It’s needed for account verification.
  • Bank Account: Amazon will send your earnings to this account.
  • Product: Choose an item to sell, depending on your budgetary restrictions or brand.
  • Warehouse: If you’re not enlisted in the FBA program, you’ll likely need a warehouse to store your products. Monthly rent can cost between $0.85 to $3 per square foot.

How Much Does it Cost to Become an Amazon Seller?

The costs of becoming an Amazon seller significantly vary depending on your selling product and selling plan. The costs include:

  • FBA Fees: The amount covers picking, packing, shipping, and returns. It varies based on your product’s weight. It can be as low as $3.22 to as high as $208.3 for 4 oz and 150 lbs, respectively.
  • Selling Plan: It depends on whether you choose the individual or professional plan.
  • Referral Fees: These fees depend on your product’s category. They usually range between 8 to 15%.

The average cost of selling on Amazon ranges between $2,000 to $2,500. Some sellers can start from as low as $500.

You could start by purchasing 200 to 500 units of a product from Alibaba. After listing, you can inject other costs, such as advertisement and optimization, which average $300.

Is it Hard to Become an Amazon Seller?

Even though being an Amazon seller is considered one of the best gig jobs, it can be initially challenging. One of the more difficult parts is finding the right product due to the fierce competition on the retail site.

Sellers also have to take the high costs into consideration. Amazon, product, and other fees tend to accumulate. After selling your units, you may not be left with a satisfying return. For this reason, you need to do your homework before approaching the role.

Aside from finding a product, listing it doesn’t guarantee a sale. You should focus on your marketing efforts and build a solid business model. All these may require product research and experience to perfect.

How Long Does it Take to Become an Amazon Seller?

Once you’ve entered and submitted your information on the Amazon seller account, it’ll take a day to get approved. The sourcing, inventory, and listing process can take around three months.

warehouse of an online Amazon Seller

How to Become an Amazon Seller in 6 Steps

Whether you’re an individual seller or SMB, selling on Amazon is straightforward. It offers a flowing passive income solution. Despite that, it’s not an easy-money scheme. It requires time before you can generate an adequate profit.

Step 1: Decide Which Product to Sell

How I Find Winning Products To Sell On Amazon FBA in 2023

With over 1.11 million sellers on Amazon, finding the right product can be challenging.

Demand and Competition

Your goal is to find an item with low competition and high demand. Some metrics of a high-demand product include a high search volume and multiple Amazon customer reviews.

Signs of low competition can include a poor-quality product description and fewer similar products.

Profit Margin

You need to find an Amazon product with a decent profit margin. If a product’s costs are overbearing, they likely won’t lead to a profit for a while. Over 14% of Amazon sellers haven’t generated their profit yet.

Price

As a rule, keep your product priced between $15 to $50. Selling higher than that would mean your customers will further scrutinize your product against competitors. A lower price wouldn’t garner a profitable outcome.

Product Capacity

Your product’s size can affect your turnover. The larger they become, the higher their shipping and maintenance costs.

Capacity aside, you also want to consider product variations. For instance, you wouldn’t want to sell potato chips if you’re only providing two or three flavors. Other giant brands may have 10 to 15, dominating the market size.

Step 2: Create a Strategy and Research

After picking your product, you need to dive into comprehensive market research. Ask questions, such as:

  • What type of fulfillment will suit your product?
  • How will you find your audience?
  • Which marketing strategies will you deploy?
  • What are the costs involved in warehousing and selling your product?
  • How long will it take for your product to generate profit?
  • Where will you source your funds from?
  • What is your budget?
  • How will you price your products?

All these hard-hitting questions will get you one step closer to building a successful Amazon business. We suggest creating a business plan and competitor analysis to cultivate your industry knowledge.

Understand Your Business Model

As you navigate your market research, you’ll want to formulate a solid business model suiting your product and vision. To do so, answer two questions.

  • How are you going to source your products?
  • How will you ship your products to customers?

Answering the first question involves choosing between dropshipping, retail arbitrage, private label, wholesalers, and manufacturers.

As for the second, you can choose Fulfilled by Merchant (FBM) or FBA. FBM is likely the costlier option since it requires you to manage the storage and shipping independently.

Step 3: Setup Your Account

Setting up an Amazon selling account involves choosing between a Professional or Individual seller account.

Individual

The individual plan is ideal for first-time sellers using the account as a side gig. Fortunately, the account setup is free, but you’ll pay $0.99 per sale. Your sales are also limited to 40 per month. Product category options are also restrictive for this plan.

Professional

A professional seller plan is perfect for SMBs. It boosts growth potential and provides you with a broader target audience reach for your brand. You can sell more than 40 products per month. The plan will charge you a monthly flat rate of $39.99.

Besides subscription fees, Amazon also charges referral and FBA program fees.

Step 4: Source and List Your Products

During your research phase, you’ve decided on a sourcing strategy. Now’s the time to implement it. If you’re dropshipping, get your Alibaba items in order. If purchasing from a wholesaler, send the products to an Amazon warehouse for the FBA route.

Next is going live. Choose a product category that fits your items’ description. For example, sheet music will go under books.

Then, fill in the necessary information, like product dimensions, name, ID, and color. Add a high-resolution image. Optimize your listing by using relevant keywords and enticing call-to-action.

Don’t list your product just yet. You need to add the wow factor. Why should people buy your product? Add best-selling benefits to heighten your sales chances.

Step 5: Advertise Your Products

Aside from optimizing your SEO performance, you should use your advertising budget on Amazon’s selling tools. Pay-per-click (PPC), Sponsored Products, Sponsored Brands, and audio ads will push your product’s recognition.

You can expand your advertisement reach to social media platforms. Invest your time in building a brand website to foster reliability. Engage with customers to stimulate positive reviews.

Step 6: Maintain Growth

Being an Amazon seller is a great gig for people with anxiety. You can access your performance metrics, inventory information, and other resources through one portal, Amazon Seller Central.

After completing the seller steps, you’ll regularly visit Amazon Seller Central to monitor your product’s growth. You can do several tasks, such as:

  • Responding to customer inquiries and complaints
  • Downloading KPI metrics and reports
  • Checking FBA restock limit
  • Update product listings
  • Troubleshoot seller account issues

Reasons to Consider Becoming an Amazon Seller

A smiling female Amazon Seller working in her office

Being an Amazon seller comes with a great work-life balance. The position offers several benefits.

  • Low Investment Costs: Compared to starting your business, an Amazon selling account costs much less, offering less risk.
  • Wide Reach: The Amazon Marketplace has over 310 million customers globally. Your chances of a sale are much higher than selling on other platforms.
  • FBA Benefits: You don’t need to look for a warehouse to store your products. Your hands are clean of any shipping and return hassles as well.
  • Convenience: You can work from anywhere, anytime, as an Amazon seller.

Frequently Asked Questions

What is the Minimum Quantity to Sell on Amazon?

There is no minimum quantity requirement when selling on Amazon. You can list one product and place it in the FBA warehouse.

How Do I Calculate My Amazon Profit?

Calculate your Amazon profit by subtracting the costs per unit, such as fulfillment and referral fees, from your product’s selling price.

Similar Gigs to Check Out

If becoming an Amazon seller isn’t for you, you can browse other similar alternatives below.

Wrapping Up

Selling on Amazon is a profitable idea but requires stable groundwork. It starts by deciding on which product you’d like to sell, before veering into comprehensive research into it, the competitors involved, and your budgetary analysis.

Once your plan is solidified, you can implement it by sourcing your products and setting up an account. List your products and use a fool-proof advertising method to gather more sales.

Overall, being an Amazon seller is like owning a mini-business on the side. It’ll become easier as you sell more and establish a workflow.

Let us know what you think in the comments below and don’t forget to share if you liked the article.

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