Selling on Amazon is relatively straightforward, but takes time and effort. Find out How to Get Started Selling on Amazon here.
My Experience so Far
I’ve been selling on Amazon since October 2016, I thought now would be a good time to write a post on it, to share my experiences and tips with this article on How to Sell on Amazon for Beginners.
I have had an Amazon Seller account for over a year now, but never got around to using it until October last year. I do a mixture of FBA (Fulfilled by Amazon) and FBM too (Fulfilled By Merchant) – each have pro’s and con’s and I recommend trying out both.
I started out with FBM but soon saw the appeal of FBA and started researching how to do it. Since my journey began, I have shipped 15+ shipments to Amazon FBA totalling over 1800 units. I started out with one every week, but I want to be sending 2 a week at least with 400-500 units minimum in each shipment.
My total sales since I started (both FBM and FBA) are over £10,000 with almost 2,000 units sold:
Selling on Amazon takes a lot of work and time to get going, just like any business – but once it get’s going, the Sky’s the Limit.
What is Amazon FBA?
FBA stands for Fulfilled By Amazon.
What this means is, that you send your stock to Amazon in bulk, and they handle the dispatch process for you when you make sales. Amazon charges you more fees for FBA, as they are storing your products, but it can still be a very lucrative proposition.
You still have to create listings in Seller Central (Amazon’s Marketplace back office), but Amazon handle the packing and dispatching of your products, as well as any returns/refunds as well, which is awesome. In fact, the buyer notices no difference at all when buying from your FBA stock, than if the item was from Amazon themselves.
In the above image, you can see the item is sold by DOMU UK (The seller account name), but it is Fulfilled by Amazon. So at some point, DOMU UK sent this item to an Amazon warehouse and is now waiting for it to sell.
FBA is great for people who want to take a step back from Selling Online – it is simply more hands off. Imagine packing one huge shipment every few weeks, shipping to an Amazon Warehouse and then forgetting about it and watching the Money roll in. That’s FBA.
Sound great? It Can be great – but it still takes time, effort, research and focus – like any business. The difference between FBA and FBM (Fulfilled By Merchant) is the work is spent preparing bulk shipments to one location, instead of individual ones to different places. Check out this Timelapse Video I made of a recent FBA Shipment showing 50 minutes of packing condensed into 55 seconds:
If you put the effort and time in, there is huge potential to make a life changing amount of money with Amazon FBA. But know this – it will take time, focus effort and the willingness to reinvest your profits into more stock.
How to start an Amazon Business – Broken Down into 3 Steps
1 – Setup
If you do not have a Seller Account with Amazon, this is the first step. Join Amazon as a Seller and get your seller account setup by clicking Here.
Note – You will require a UTR number, this is a UK Tax reference given to you when you declare yourself as Self Employed with HMRC. Sign up for Self Assessment and create yourself a trading name.
Once your Amazon account is approved, there are a few other bits to sort out.
Choose where to Ship to. You will need to setup shipping profiles to determine where you will be sending your items to. Amazon offer a European marketplace Syncing system which makes it easy to List your items on Amazon France, Germany, Italy and Spain.
Choose a Seller Name. This can be whatever you want really, although if you are selling in one Niche specifically it would make sense to choose one which is related to it.
Link your Bank accounts. You need to tell Amazon what bank account you want your payments in. Amazon pay you every 2 weeks from the total gross sales minus their fees.
Other than that, there isn’t much else left to set up, moving on to the fun part…
2 – Product/Niche Research
The next step is researching the products you are planning on selling. You will need to consider whether you are going to tie yourself to a particular Niche (interest), or be a jack of all trades. Either way, there is still a huge market to join.
My advice here is to not limit yourself to one Niche – even if you have branded yourself around one particular Niche, you are now a Seller. A Seller will sell anything if it turns a profit. This is the trade you are in now, get used to that mentality!
Note – There are some categories in which you cannot sell immediately on Amazon. These are called “Gated Categories”. These categories require approval from Amazon before you are allowed to sell in them. For a list of these Categories, click Here.
Further to those, the Toys and Games Category over the Christmas Period is limited to only those sellers who have met a certain Criteria. So avoid starting out in this category if it is close to Christmas because Amazon will disable those listings From November to January.
There are two main routes with product selection – White Label, or Non White Label.
This is where you have your own product. A product you have had manufactured and does not exist anywhere else. With these products, you need to create the Listings on Amazon from Scratch, which means you will need a Barcode (UPC/EAN). If the Manufacturer has not given you a barcode, here is a good place to buy them.
Non White Label
This is if you sell a product which is already for sale on Amazon and is a generic product which you buy to resell. In this instance, the listing already exists, so you match your listing to the one there already. There is a chance the product isn’t for sale on Amazon in this situation too, which means you will need a barcode to create the listing for it. This is an easier route to take than White Label, because you can research products which are currently on Amazon, and then source them at the right price.
Picking a product which can be sent at minimal cost and with minimal risk of damage is a huge advantage. Ideally, if you are new to this, I highly recommend picking a product in this category. Anything under 100 grams, and under 6 x 4 inches is ideal, and try to avoid moving parts.
Although larger items can be relatively straightforward to deal with if you are going to send them to Amazon for FBA, for FBM orders you want to try avoid large items as they cost more to post. Also, if you send small items you can post them as Large Letter which means you don’t end up queueing in the post office as you can pop them straight into a post box!
These two sites are pretty much the same company. They offer a Marketplace for Manufacturers and Distributors to come together and sell their products. You can even have a product of your own created by opening a dialogue with the manufacturers at Alibaba.
Alibaba is geared more toward larger wholesale orders, with a lot of suppliers there imposing a minimum order of 100 units in a lot of cases. Because of this, the prices do tend to be better than Aliexpress.
Aliexpress, although slightly more expensive, do not have a minimum order, with almost all sellers offering single unit ordering. Time frames for orders to appear on your doorstep vary, but in my experience can be as quick as 10 days, or as long as a month. Once you get a steady flow of orders coming in, this no longer is a big problem, although you do have to plan purchasing carefully.
Another important if not THE most important factor – Price. If you cannot source products at a price which will yield a profit, then you will fail. After all, you are doing this to make money, not lose it or break even.
I try to find a product which I notice selling on Amazon for at least 3x times the price I can obtain it for. However, this does not always guarantee a profit is made after Amazon’s somewhat greedy fees. This is where the Amazon Profit Calculator comes in. ALWAYS use this tool before making a buying decision. Once you have a regular seller which turns profit, it is a case of fine tuning it’s price to stay competitive.
Amazon recently introduced their own repricing software which you can access within Seller Central, this will come in extremely useful to stay on top of your pricing.
Amazon Sales Rank
If you are a seasoned eBayer but new to Amazon – one of the most confusing this to get your head around is how Amazon group sellers to listings. If you have a product you are selling on Amazon and it is already being sold on Amazon, Amazon want you to match your listing to that Product entry. It’s called ASIN Matching, and it helps keep the Amazon Catalogue clean with no duplicated listings.
It can be good, and it can be bad. It can be bad because if you are the first to list an item, a newbie can come along and “hijack” your listing. It is good because if you are the Newbie, you can “take over” other seller’s successful listings and be very successful yourself. This is perfectly within Amazon’s rules, in fact they encourage it.
One important factor you want to consider if you are matching your listing to one that exists already – is the Best Sellers Rank:
The above screenshot shows a product with a Best Sellers Rank of 1,477 and is ranked #4 in Toys and Games->Keyrings – which is good, very good. It also has 12 reviews with 5/5. If you can win the Buy Box for this product, you will have no problem making sales. In fact, even if you don’t obtain the Buy Box, if your price is right you could be very successful also. This is because not everybody buys the item in the buy box, some people look at the other offerings and choose their purchase on various factors.
If your product is nowhere to be found on Amazon, you will need to create the listing. This means starting at the bottom as the listing has no reviews, no sales rank and no real audience yet. You will also need a barcode to do this, if you are not provided one from your Supplier, you can buy them in various places, I buy mine Here.
What is “The Buy Box”?
The Buy Box is where you want your listing to be. The more time in the Buy Box your listing spends, the more sales it will make.
In the image below, you can see DOMU is currently in the Buy Box, but there are 2 sellers who sell this item.
There are a number of factors which decide who gets the Buy Box, such as the age of the seller account, customer experiences, amount of feedback etc. Here is a handy info-graphic from Feedvisor explaining it better than I ever could:
At first you will obsess over obtaining the Buy Box, but over time and with the right repricing setup, you will rest assured in the knowledge that you needn’t spend as much time dwelling on it.
So you have a product listed on Amazon, and you just made your first sale – Nice Work!
But how do you dispatch the item to your customer?
This is really quite simple, but the more your business scales can become a bit more complex.
Amazon offer a postage purchase system based on Royal Mail pricing which can be done direct through Seller Central. This is fine for those just starting out, but once your business grows you may want to consider speaking to Royal Mail (or a courier of your choice) about opening a Business Account.
A Business account gives better pricing and other perks, such as invoices on credit, free supplies and priority information.
I personally went with Royal Mail and set up an OBA Account (Online Business Account). I then linked it to another service they offer – Click and Drop.
Click and Drop is excellent as it links to your Amazon (or eBay and more) stores and the orders feed into one central location where you can apply your postage before printing Postage Labels. You can also print packing slips/invoices and loads more.
Click and Drop means you can send Parcels without waiting in line at the post Office, you simply drop them off at any Royal Mail branch. I like this a lot, because I hate standing in line, especially in a Post Office!
3 – Scale
Okay, so now you have everything in place, what’s left? 2 things:
1 – Keep up the good work!
2 – Scale the business
How can you Scale the business?
Well the first way is to buy more stock, start low and build up your orders, start ordering more of what is selling the best. Research new products. Keep doing this, every single day.
Buy different Products. Delve into new Niches, or higher ticket items. To truly grow the business, you want to start introducing new items, and larger profit per sale items. This creates growth in your business by increasing your turnover and net profit.
My very first order when I started out was for 50 units. I had no idea whether they would sell or not. I received them, and I created the listing on Amazon. They all sold!
I repeated this order, and I ordered 50 units of another product. And guess what? They all sold!
I carried on, and I found myself spending more and more money (from my Day job) on stock. It wasn’t long until I found myself surrounded in boxes and stock, and sending almost a thousand units per week to FBA with a turnover of over £4,000 per month.
Complicated huh? I probably made it sound more than it is. In a Nutshell, the process is as follows:
- Open a Seller Account
- Source Products
- Get them at the Right price
- Get a Barcode (If needed)
- Get Them listed
- Wait for Sales
Just Do It
My advice to you if you have a Full time Job and are interested in Starting out on Amazon – Just Go For It!
Spend every spare penny, every spare minute you have from your day job to build it up! Spend a good 3+ months working hard on it, and when you are making enough money you can go Full Time.
I no longer have my day job, I am far too busy with Amazon selling now.
Thanks for reading this longer than planned post! Please let me know in the comments below if I have missed anything, your thoughts or experiences with Amazon selling – or if you want to just say Hi, that’s cool too 🙂