You must have heard of someone who’s selling on Amazon and earning huge sums. This sounds fascinating. Are you still confused if it’s the truth or a lie?
Yes, this is possible through selling on Amazon. Keep in mind that selling on Amazon is not an easy feat – but if you have someone to assist you in the process, it can get much convenient.
We have compiled an extensive guide for beginners to learn about Amazon and how you can earn from it. Let’s begin without any delay!
Is Selling on Amazon Worth It?
Selling on Amazon is one of the most profitable online business opportunities. With over 2.5 billion monthly visitors and $600 billion in annual sales, Amazon dominates e-commerce. Around 65% of U.S. shoppers start their product searches on Amazon, showing the trust and convenience it offers.
Third-party sellers make up nearly 60% of all Amazon sales, proving that individuals and small businesses can succeed. In fact, over 140,000 sellers made more than $100,000 in sales last year, and about 65,000 sellers crossed $1 million in revenue. With the right product and strategy, achieving high profits is possible.
Amazon FBA makes it easier for sellers by handling storage, shipping, and customer service. 73% of sellers use FBA, and most report increased sales because of Prime eligibility. However, costs like referral fees, FBA storage fees, and advertising must be managed carefully. The average profit margin for Amazon sellers is 10-30%, with 26% of sellers making over $25,000 in monthly revenue.
Amazon vs. eBay
Both Amazon and eBay offer great opportunities for online sellers, but they work differently. Amazon is a more structured marketplace where customers expect new, high-quality products with fast shipping. It’s best for sellers looking to build a long-term business with private-label or wholesale products. eBay is an auction-based platform where people often sell used, collectible, or unique items. It allows more flexibility in pricing and listing styles.
Amazon has a stricter seller policy with Fulfillment by Amazon (FBA) making it easier to store and ship products. However, this comes with additional fees. eBay gives sellers more control over their shipping and customer service, making it ideal for those who want a hands-on approach.
When it comes to competition, Amazon favors established brands and private-label sellers. eBay allows individual sellers to stand out more, especially with rare or vintage products. Fees also differ – Amazon charges referral and fulfillment fees, while eBay primarily takes a percentage of each sale.
Overall, Amazon is better for scalability and brand-building, while eBay is great for resellers and those who deal with unique or second-hand products. The best choice depends on the type of items you plan to sell and your long-term goals.
What is Amazon FBA?
Amazon FBA, or Fulfillment by Amazon, is a service that allows sellers to store their products in Amazon’s warehouses. In this situation, Amazon handles storage, packaging, and shipping. This model makes selling on Amazon easier because it removes the burden of logistics from the seller’s shoulders. When a customer places an order, Amazon picks, packs, and ships the product on behalf of the seller. It also takes care of customer service and returns. Simply, it is a hands-off strategy for many businesses.
How Amazon FBA Works?
FBA is popular because it gives sellers access to Amazon Prime customers. Products stored in Amazon’s fulfillment centers are eligible for Prime shipping, meaning they get delivered to buyers faster. Since Prime members are more likely to purchase products with fast delivery, this can immensely skyrocket your sales. Research shows that nearly 76% of Prime members prefer buying products with the Prime badge. This way FBA has a strong advantage for sellers who want to get more conversions.
One of the highly regarded benefits of FBA is that it allows businesses to scale without worrying about storage space. No matter if a seller has 100 or 10,000 units, Amazon takes care of inventory management. This is useful for those who don’t have warehouses or the ability to handle large shipments on their own. The pay-as-you-go storage and fulfillment fees mean that sellers only pay for the space and services they use. Take notes that this fee can add up for slow-moving products.
Amazon FBA Costs
Amazon charges FBA sellers for storage and fulfillment separately. Storage fees depend on the time of year. You can notice an increase during the holiday season. Fulfillment fees are based on product weight and size. For example, a small standard-sized item costs around $3.22 to fulfill, while a larger item may cost $5 or more. These costs should be factored into pricing strategies to guarantee your profitability.
Here is another notable feature: FBA is Amazon’s customer service. Since Amazon handles inquiries, complaints, and returns, sellers don’t have to spend time dealing with customer issues. This is a helpful hand for those who sell in high volumes. Yet, relying on Amazon for returns also means higher return rates in some categories, as Amazon is lenient with refunds.
Surprising Fact: Jungle Scouts proves that 82% of Amazon sellers were dependent on FBA in 2023, while the profits from third-party sellers grew by 18%.
What is FBM (Fulfillment by Merchant)?
FBA is suitable for sellers who want a passive tactic for fulfillment. But it’s not always the best option for every business. Those selling low-margin products or oversized items may find FBA fees too high. In such cases, another fulfillment option called FBM (Fulfillment by Merchant) can be adopted.
FBM allows sellers to store, pack, and ship products themselves. Instead of using Amazon’s warehouses, sellers keep their inventory in their own facilities or third-party warehouses. This means they have more control over storage costs and shipping methods. FBM products don’t get the Prime badge by default, yet some sellers qualify for Seller Fulfilled Prime. This permits them to grant Prime shipping to align with managing fulfillment independently.
FBA vs. FBM: Which One is Better?
The main advantage of FBM is lower costs for certain products. Since sellers don’t have to pay Amazon’s storage fees, they can cut back on expenses. It is precious for the large or slow-moving items. Handling fulfillment independently demands more effort. Sellers must manage shipping, returns, and customer service on their own, so you will need a lot of time.
For many businesses, FBA and FBM work best when used together. Some sellers use FBA for fast-moving products while handling fulfillment for items with lower demand. This hybrid tactic will keep the costs under control.
Which Amazon Business Model Is the Best?
Amazon has a plethora of options to sell products. You may find it confusing, but these are quite simple to understand. Every business model has a specific way of working, along with some plus points and drawbacks. There is no strict answer to “what’s the best Amazon business model? It is dependent on your budget, risk tolerance, and long-term expectations. In this section, let us highlight the six main Amazon business models: Retail Arbitrage, Online Arbitrage, Wholesale, Private Label, Dropshipping, and Amazon Handmade. By the end, you’ll have a clear understanding of which model your business demands.
1. Retail Arbitrage
Retail arbitrage is one of the easiest ways to start selling on Amazon. It involves purchasing discounted products from retail stores such as Walmart, Target, or clearance sections. Next, you can resell them at a higher price on Amazon. Sellers find these products through scanning apps such as Keepa or SellerAmp to inspect their profitability.
The main plus point of retail arbitrage is its low startup cost. You don’t need thousands of dollars to begin. Many sellers start with just a few hundred. There’s also no need to create a brand or develop a product. You’re simply reselling existing items. A huge burden if off your shoulders.
Yet, retail arbitrage has limitations. It demands constant product hunting since stores frequently change their stock. Competition is immense. Above all, Amazon may restrict certain brands from resale. Profit margins lie in the range 20% and 50%, but they vary depending on product availability. While it’s a great way to test Amazon selling, scaling up is nearly impossible without shifting to another model.
2. Online Arbitrage
Online arbitrage follows the same concept as retail arbitrage but with a minimal difference: instead of sourcing products from physical stores, you buy them from online retailers. It can be Best Buy, Kohl’s, or eBay. This model permits sellers to work from anywhere without having to visit stores.
Online arbitrage brings up numerous advantages. First, it saves time since you can find deals from your computer. Second, there are more sourcing opportunities, as you’re not limited to local stores. Many sellers use software such as Tactical Arbitrage to automate product searches, and get better outcomes.
Even after these benefits, online arbitrage has some hurdles. Competition is intense, and price fluctuations can affect profitability. Since products ship to you before reaching Amazon’s warehouses, you must handle logistics. Some sellers are making thousands per month, but success depends on constant research and sourcing.
3. Wholesale
Wholesale is a step up from arbitrage. Instead of hunting for individual products, sellers buy in bulk directly from manufacturers or authorized distributors. These products are purchased from well-known brands already in demand on Amazon.
The biggest advantage of wholesale is consistency. Since you are selling recognized brands, marketing efforts are minimal. You also get bulk pricing, and this translates to better profit margins. Wholesale sellers achieve margins of 15% to 30%. This model is scalable because you can reorder products easily instead of constantly searching for new inventory.
Wholesale requires more upfront investment. Many suppliers have minimum order requirements ranging from $500 to $5,000. Gaining approval from major brands can also be an obstacle for new sellers. Despite these barriers, wholesale is an incredible option as a long-term Amazon business.
4. Private Label
Private label is thought of as the best Amazon business model for long-term growth. It involves creating your own brand by manufacturing products and selling them under a custom label. Many private label sellers source products from China through Alibaba and customize packaging to distinguish their brand.
This model will bring up numerous benefits. First, you have full control over pricing, branding, and marketing. Unlike wholesale or arbitrage, you’re not competing directly with other sellers on the same product listing. Plus, private label businesses are scalable. Many successful sellers build brands that generate six or seven figures annually.
Take notes that private label requires a huge investment. A proper launch, including inventory, marketing, and product research will cost between $3,000 and $10,000. Ranking a new product on Amazon also takes time. You’ll need to invest in Amazon PPC advertising to attract your audience. Even though private label has high potential, it carries risks if you pick the wrong product.
5. Dropshipping
Dropshipping is a business model where you list products on Amazon without holding any inventory. When a customer places an order, the supplier ships the product directly to them. Sellers don’t need to handle storage or shipping. In simple terms, it is a low-investment option.
The well-praised advantage of dropshipping is its low startup cost. You don’t need to buy inventory upfront, so you can neglect the financial risk. The model is also easy to set up, as you can find suppliers through platforms such as AliExpress, or Spocket.
Despite these benefits, dropshipping has major downsides. Profit margins are low, usually between 10% and 20%, since suppliers set base prices. Shipping times can be long, which in turn dissatisfies the customers. Amazon also has strict policies against dropshipping from unauthorized sources. Violating these rules can result in account suspension. While some sellers make money with dropshipping, it’s not as sustainable as other business models.
6. Amazon Handmade
Amazon Handmade is designed for makers who create handcrafted goods such as jewelry, home decor, and clothing. It’s similar to Etsy but with the plus point of Amazon’s vast customer base.
The biggest perk of Amazon Handmade is exclusivity. Unlike other business models, Amazon only allows verified artisans to sell in this category. There’s no monthly selling fee, and Amazon takes a 15% commission on each sale.
Scaling a handmade business is not an easy feat. Each product takes time to create, so there’s a limit to how many orders you can fulfill. Some sellers make a full-time income, yet most treat it as a side business. If you love to create handmade products and it’s your hidden talent, it’s time to get some dollars through it.
Which Amazon Business Model Should You Choose?
Every Amazon business model has its strengths and weaknesses. The best one depends on your experience, budget, and goals.
- If you want to start with a little investment, retail or online arbitrage is the easiest way to begin.
- If you have capital and want stability, wholesale provides consistent sales with less effort.
- If you aim for long-term growth and high profits, private label is the most scalable option.
- If you want to test the waters without inventory risk, dropshipping may work, but it has limitations.
- If you create handmade products, Amazon Handmade is the right choice.
What to Sell on Amazon FBA?
Picking the best products is a highly regarded step for success on Amazon FBA. Not all products perform well. Some can even lead to losses due to high competition, low demand, or high fulfillment costs. To skyrocket your profits, sellers must find items with strong demand. They must have healthy profit margins, and low competition.
What to Consider When Selecting a Product?
- Demand: Any product that you pick must have consistent demand throughout the year. Seasonal items do give high profits at one time. However, they come with long storage requirements and high fees.
- Competition: If you are selling a highly competitive product, it implies that you will struggle to rank on Amazon. New sellers must try to find niches with less competition.
- Profit Margins: Products should have enough margin to cover Amazon’s fees, and advertising costs. Thus, a product must have at least 30-50% profit margin after excluding all expenses.
- Size and Weight: Small and lightweight products will be cheap in terms of storage and shipping. FBA costs should be as low as possible. Large or heavy items result in high fulfillment fees.
- Regulations and Restrictions: Some products require special approvals or certifications, such as supplements, or electronics. Dont sell restricted items without approval as the outcome is account suspension.
Best Product Categories for Amazon FBA
Do you want to know what are the best products to sell on Amazon? Here is a highlight of product categories that have witnessed good outcomes in recent years on Amazon FBA. Let’s take a look at their pros and cons as well.
| Category | Pros | Cons |
| Home & Kitchen | High demand, and a huge collection of products that give good margin | Some niches have high competition |
| Health & Personal Care | Strong demand, along with repeating customers | Demands approval for some products |
| Toys & Games | Seasonal hikes are good for Q4 sales | High competition, but you must have strict safety regulations |
| Electronics Accessories | Small and lightweight, thus the profits are high | High return rates, and frequent product updates |
| Sports & Outdoors | Evergreen demand as it is popular with all age groups | Some items are bulky and expensive to ship |
| Beauty & Skincare | Repeat purchases that result in high-profit margins | Requires approval, and may result in brand restrictions |
| Pet Supplies | Strong customer loyalty | Many big brands dominate some niches |
| Office Supplies | Year-round demand and easy to source | Some items have low profit margins |
What NOT to Sell on Amazon FBA?
This was just the positive side. You must know that all products are good for Amazon FBA. Some have high risks, or strict selling regulations. Here is a highlight for these:
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- Heavy and bulky items – High storage and shipping costs can cut back your profits.
- Fragile products – Items such as glassware and ceramics have a high risk of breakage. The outcome is refund.
- Seasonal products – Items that go out of fashion in a short time will result in excess inventory.
- Saturated products – If a product has thousands of sellers, it will be hard for your products to get sales.
- Restricted categories – Some items demand approvals and certifications. They are hard for new sellers to tackle.
Items that are Restricted on Amazon
Amazon has strict guidelines on what sellers can and cannot list. Some products are completely prohibited. On the other hand, some products demand special approvals before you can list them on Amazon. These restrictions have been put into action to guarantee product safety for the trust of their audience.
Why Amazon has Restricted Some Items?
Amazon has a collection of restrictions to:
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- Guarantee customer safety (e.g., hazardous materials).
- Follow laws and regulations (e.g., prescription drugs).
- Prevent replica products (e.g., branded luxury items).
- Keep intellectual property rights safe (e.g., copyrighted media).
Prohibited Items
Some products are banned from Amazon. You cannot sell them under any circumstances. If you sell any of these, you will be bombarded with immediate account suspension or ban. These include:
- Illegal or stolen goods
- Explosives, and weapons
- Drugs and drug paraphernalia
- Alcohol
- Live animals
- Pornographic elements
- Human body parts or remains
Restricted Categories (Approval Required)
You must know that multiple products on Amazon require a special approval. It implies that they are gated or protected. Sellers must have Amazon’s approval before listing these elements. Here are a few restricted categories that you should be aware of:
- Grocery & Gourmet Foods – Sellers must provide invoices from approved wholesalers. Plus, they must follow labeling requirements.
- Beauty & Personal Care – Demands adherence to safety regulations for skincare and cosmetics.
- Health & Medical Supplies – Multiple over-the-counter medications and medical devices must have an FDA approval.
- Toys & Games – Restricted during the holiday season to prevent replica products.
- Fine Jewelry & Watches – You must have a proof of authenticity and follow their strict quality control measures.
- Branded Electronics & Luxury Goods – Many premium brands (Nike, Adidas) demand direct authorization from the manufacturer.
How to Check If a Product is Restricted?
Are you still unaware if your product is restricted or not? You can check it through the following procedure:
- Log in to Amazon Seller Central.
- Go to “Add a Product” and enter the ASIN or product name.
- If you see “Approval Required” or “Restricted”, you will need to apply for approval before selling.
How to Get Ungated on Amazon?
Amazon restricts some elements to pay attention to their quality control, and safety. The satisfaction of their customers is their priority.. If you want to sell in these gated categories, you must go through an ungating process to get approval. You can assume that it’s a time-demanding process – but dont stress out! It is simpler than you may assume it.
If you want to sell restricted items, you must prove to Amazon that your products are legitimate. They must be safe, and sourced from authorized suppliers.
Steps to Get Ungated on Amazon
1. Move to a Professional Seller Account
You must have a Professional Seller Plan ($39.99/month) to apply for ungating. Individual seller accounts are not able to request approval for restricted categories.
2. Get Products from Authorized Suppliers
Amazon will ask for invoices from legitimate distributors or wholesalers. Follow these steps:
- Find an Amazon-approved wholesaler. You must avoid retail stores such as Walmart or Target.
- Buy at least 10 units of the product you want to sell.
- Confirm that the invoice includes your business name, and contact details.
3. Prepare Required Documents
Different categories have different requirements. Yet, here is what Amazon will ask for:
- A purchase invoice from an authorized wholesaler.
- Product photos that show labels, and barcodes.
- Compliance certificates are only required for some categories such as supplements, and electronics.
4. Apply for Approval
Once you have the documents:
- Go to Seller Central and find the gated product.
- Click “Request Approval”.
- Upload your invoices and supporting documents.
- Submit the application and wait for Amazon’s response (usually within 24–72 hours).
When Amazon Can Reject Your Application?
Amazon rejects ungating requests for many reasons. Here is a common mistake: using an unverified supplier. Amazon only accepts invoices from authorized wholesalers. So, retail store invoices do not work. Another issue is insufficient purchase quantity. Amazon requires invoices for at least 10 units of a product. If you submit fewer, they will reject your request.
Blurry or incomplete invoices also cause problems. Amazon needs clear proof of authenticity. Any mistakes in formatting can lead to rejection. Using retail receipts instead of wholesale invoices is another common error. Amazon only accepts documents from approved distributors.
If Amazon denies your request, don’t worry. You must read their feedback carefully. Fix the issues and submit a new request. Many sellers can get approved after making corrections.
Faster Ways to Get Ungated
Speeding up the ungating process is possible. First of all, you must use trusted distributors. Some good options are EE Distribution, Frontier Co-op, and GreenDropShip. These suppliers have a good track record that will make the approval process faster.
They provide the required documents that will increase the possibility of approval. Some sellers even receive instant approval. Amazon checks account performance and sales history. Sometimes, no extra paperwork is needed.
If the process seems difficult, you can hire an ungating service. These agencies help sellers get approved. However, they charge $200 to $500 per category. This is a good investment for serious sellers as it saves time and frustration. You can start selling restricted products much faster.
How to Find Products to Sell on Amazon
You must select a good category of products as it is very important. The wrong choice can cause slow sales and high competition. It can even lead to account suspension. An intelligent decision at this stage can result in steady sales and long-term success. The secret weapon for this is market research. You must study trends and use data-driven strategies.
What is the Market Demand?
Before picking a product, check its demand. Low-demand items sit in inventory for too long. This ties up money and increases storage fees.
High-demand products with too much competition are also risky. It is hard to stand out in a crowded market. A good product has steady demand with manageable competition. Use Amazon Best Sellers and Movers & Shakers lists. These help identify trending products.
Keyword research tools like Helium 10 and Jungle Scout are also useful. They show how often customers search for a product, and here the best products have consistent searches all year. Seasonal spikes can be risky so we always recommend a steady market as a safe option.
Customer Reviews Show Market Demand
Customer reviews are an incredible way to measure the demand of any product. A high number of reviews will show a strong sales history. Keep in mind that too intense competition will be a barrier for your success. You must avoid generic, and high-demand products. Instead, search for market gaps. This strategy will level up your chances of success.
The best tactic is to find products with demand but fewer strong competitors. Less competition will make it easier to grow on Amazon.
Check Competition Strength
If you want to be successful on Amazon, you must know that competition is just as important as demand. If big brands dominate a product, it will be nearly impossible for you to get your position in the market. You must select products where small brands are also successful as it is a better strategy. If top sellers have thousands of reviews, breaking into that market is tough.
You can try to find any products where the best-sellers have fewer than 500 reviews. This makes entry much easier. Don’t forget to think about its charges. If sellers lower prices too much, your profits will be cut back. Check if competitors are providing some bundles, or extra features that you can also include. You should improve the product to create an advantage.
Use Product Research Tools
Manually searching for products demands a lot of time. This is why multiple sellers use product research tools. Platforms such as Helium 10 and AMZScout will give tons of precious data that you can utilize. They show monthly sales, average prices, and competition levels. These tools help sellers make better decisions for their profiles. Another useful tool is Keepa that keeps an eye on price changes and sales trends over time.
If a product has consistent demand instead of sudden spikes, it’s a reliable market choice. These tools also filter products based on profitability, weight, and customer interest. This makes research faster and more precise.
Avoid Restricted and Saturated Products
Some product categories demand Amazon’s approval before selling. These gated categories include beauty, electronics, and the list goes on. Selling in these categories will require some extra paperwork and approval. This implies that you must have enough time for these approvals. New sellers should start with unrestricted categories to stay away from complications. The outcome will be a speedy selling process.
Oversaturated markets are another risk. Some products attract too many sellers, so it is hard to get profits. You must inspect the historical sales data to avoid these markets. Products like fidget spinners and silicone rings were once popular, but in a short time they became overcrowded. Many sellers ended up with unsold stock because they didn’t analyze trends properly.
Pick Products with Good Profit Margins
Profit margins will have a huge impact on how much money is left after expenses. A product may sell well but not be profitable due to high costs. Your product should have at least a 30% profit margin after Amazon fees. Amazon charges referral fees, fulfillment fees, shipping and storage fees. Take note that these costs are variable for all products.
The FBA Revenue Calculator is a useful tool where you can estimate possible profits before picking a product. The best products are small, lightweight, and easy to ship. Large or heavy items increase shipping costs.
The charges of sourcing products can render a huge impact. You must find noteworthy wholesale suppliers or manufacturers to cut back your expenses. Ordering directly from Alibaba or using local wholesalers can increase the margins. Some sellers buy from clearance sales or liquidation events to get inventory at low prices.
Test Product Viability
Even if a product looks promising, you cannot neglect the testing procedure. Always get a small batch of product in your first time to test their sales. Listing the product on Amazon is the only real way to check its demand. If sales are slow or customer reviews are negative, you must make some modifications.
Amazon PPC (Pay-Per-Click) ads can speed up this process. Run small ad campaigns that provide real-time data about sales of products. These ads help measure customer interest and sales potential. If a product performs well with ads, you can safely get more stock for it.
Find Distinguished Opportunities
The best products come from solving common problems in your homes or any other place. You must read through the customer reviews and complaints to reveal frequent issues. If many customers mention the same problem, you should fix that feature. It will make you better than your rivals.
Trends will bring golden opportunities with them. Products such as eco-friendly household items, reusable goods, and personalized gifts are growing in demand. So, instead of running beyond the short-term trends, you must pay attention to long-term consumer needs. This guarantees steady and consistent sales.
How to Source Products to Sell for Different Business Models
You must have realized that sourcing products is one of the most sensitive steps before you launch any successful Amazon business. There are 6 categories of Amazon business models that we talked about in the earlier sections: Private Label, Wholesale, Retail Arbitrage, Online Arbitrage, Dropshipping, and Handmade. All of these categories have a different sourcing strategy. Learn about the best sourcing methods for every model to guarantee profitability, and long-term success.
Private Label
Private Label means selling a product under your own brand. The well-liked sourcing method for this model is working directly with manufacturers such as Alibaba, and ThomasNet. These are highly regarded platforms where sellers can find reliable suppliers.
Dont forget to bargain with the manufacturers – it is paramount. Many suppliers have set Minimum Order Quantities (MOQs), that go from 200 to 1,000 units. Ordering samples before committing to bulk purchases guarantees that quality standards are being fulfilled.
Once a supplier is chosen, you must pay attention to branding. Custom packaging, and logos, will differentiate the product from all rivals. Many successful sellers also use third-party inspection services to check product quality before shipment.
Production timelines are immensely variable, so you must plan before you can sell anything. Manufacturing and shipping from China will demand 30 to 60 days. To avoid running out of stock, sellers must be capable of predicting the demands and reorder in advance.
Wholesale
Wholesale sourcing implies purchasing products in bulk from authorized distributors or brands. Then, they resell them on Amazon. It is different from the Private Label, as Wholesale sellers don’t create their own brands but are selling highly demanded existing products.
You cannot neglect the research efforts to find a noteworthy seller. Many sellers start with trade shows, or direct brand contact. Some immensely popular wholesale platforms are Faire, and Tundra. Numerous brands have restrictions and may not permit new sellers to list their products on Amazon.
Don’t forget to cultivate a meaningful connection with the distributors – it is highly recommended. Some companies require sellers to provide a resale certificate or business license to purchase at wholesale prices. Bulk discounts will improve profit margins, so in this situation the direct negotiations are helpful.
Retail Arbitrage
Retail Arbitrage implies buying discounted products from retail stores and reselling them on Amazon for a profit. Sellers visit stores like Walmart, Target, TJ Maxx, and Ross to find clearance items or limited-time discounts.
Using scanning apps like Amazon Seller App or Scoutify helps identify profitable products. These tools show real-time data on sales rank, competition, and estimated profits. A product is considered good for arbitrage if it has a high demand and a price difference between the retail store and Amazon.
Retail Arbitrage requires patience. You must understand that every store visit will not result in profitable finds. Some sellers focus on specific categories, such as toys, or beauty products, where discounts are more common.
Even though this model has low startup costs, it comes with some drawbacks. Large-scale growth is difficult because inventory depends on store availability. Some brands also restrict resellers so it may get your products eliminated.
Online Arbitrage
Online Arbitrage follows the same principle as Retail Arbitrage, but here you have to source products from online retailers instead of physical stores. Sellers can find discounts, and clearance deals on a plethora of websites. It can be Walmart.com, or Overstock. Then, you can resell them on Amazon.
Utilize deal-finding tools such as Tactical Arbitrage or Keepa to identify online listings that are granting good profits. These tools scan multiple e-commerce sites and compare prices with Amazon to find price differences.
Online Arbitrage will not demand any in-person store visits. This is why it’s more scalable than Retail Arbitrage. Competition can be intense, and some online retailers cancel bulk orders from resellers. You must utilize multiple sources to maintain the flow of inventory.
Dropshipping
Dropshipping allows sellers to list products on Amazon without holding inventory. Sounds fascinating? Yes, this is possible. When a customer places an order, the supplier will ship the item directly. AliExpress, and CJ Dropshipping are the prominent ones in this category.
Here is the central hurdle with Dropshipping: guaranteeing fast shipping times and reliable suppliers. It gets a big issue for the movie. Many suppliers are based in China. Ultimately, the delivery times will be too high. In this case, the end result is negative customer feedback. To avoid delays, some sellers work with US-based suppliers or fulfillment services.
Profit margins in Dropshipping are generally lower than other models because sellers don’t buy in bulk. Still, it is an attractive option for beginners so you can start it without any massive investment.
Amazon has strict rules for Dropshipping. Sellers must guarantee that all shipments follow Amazon’s fulfillment policies. It means that orders should not arrive with third-party branding or invoices. Violating these policies will end up in account suspension.
Handmade Items
Handmade sellers create their own products. In this situation, sourcing is highly different from other business models. Products can include jewelry, clothing, home decor, and handmade crafts. Here, you will not work with suppliers. Handmade sellers need to source raw materials.
Local craft stores, and online platforms such as Etsy Wholesale and Michaels are some incredible ways to find cheap raw materials. Handmade products are made to order, so in this case inventory management is easier. Scalability is the foremost hurdle as every item is custom-made.
Amazon Handmade has an approval process that requires sellers to prove that their products are genuinely handcrafted. This model is best for anyone with creative skills who want to create their unique place.
How to Open an Amazon Seller Account?
If you want to sell an Amazon, the first thing you must have is an Amazon seller account. It is the first step toward selling products on the platform. This is an easy to follow process that will not take a lot of time. You must understand every step before you apply for it. This way, you can guarantee a smooth setup. Amazon has millions of active sellers. If you get a proper setup, you can join this remarkable market with a huge audience.
Pick a Suitable Seller Plan
Amazon will give you two selling plans: Individual and Professional. There is no strict answer on what to select here as the selection depends on your business. Numerous serious sellers will select the Professional plan because it grants better control over your business.
- Individual Plan: This is appropriate for anyone who wants to sell fewer than 40 items per month. Amazon will take a small fee per sale in the place of a monthly subscription.
- Professional Plan: This is for anyone who will sell more than 40 items per month. It has a monthly fee that you must pay. Here, you will get ultra-morden tools, and access to advertising features.
How to Create an Amazon Seller Account?
If you desire to set up an account, you must visit Amazon Seller Central. Follow the below highlighted registration process. Amazon will ask for basic business and personal details, such as:
- Business Name: This can be a legal business name or a personal name if you are an individual seller.
- Email Address: A special email for the Amazon business to keep your business organized.
- Phone Number: Amazon will send verification code during the setup process.
- Bank Account Details: Any account where you will get the payments from sales.
- Tax Information: Amazon must check your tax details to determine if they follow the demands.
- Credit Card Information: This is vital to determine if you can cover Amazon fees and possible refunds.
Whenever you enter these details, Amazon will verify the information. The process will demand a few days. The time is variable for every country and the type of business model that you pick.
Business Verification
Amazon requires identity verification to prevent frauds on their platform. Sellers must upload a valid government-issued ID, such as a passport or driver’s license. A recent bank statement or utility bill can possibly verify your business address.
If you are a business, Amazon will demand extra documents. It will include a business license or tax registration certificate. Double-check that all documents are clear and match the registered details, which speeds up approval.
Learn Amazon’s Seller Policies
Before selling, you must be aware of Amazon’s policies. The platform has strict rules regarding product quality, and prohibited items. If you violate these policies, you will end up with an account suspension. Some of the policies are:
- Product originality: Selling counterfeit items is strictly banned.
- Customer Service Standards: Sellers must respond to customer inquiries on time.
- Shipping and Returns: Orders must be shipped within the promised time. Plus, customers should be allowed to return items if needed.
Set Up Payment and Tax Information
Amazon pays sellers every two weeks. When you wish to receive payments, your bank account must be linked correctly. Amazon may hold payments temporarily if account details are incorrect. Sellers must also share their tax details. In the U.S., Amazon will demand a W-9 form for tax reporting. In other countries, different tax documents are paramount.
Mistakes that you Must Avoid
Many new sellers make mistakes that will be an obstacle for your success. The most common ones include:
- Picking the wrong seller plan and paying unnecessary fees.
- Listing products without researching demand or competition.
- Ignoring Amazon’s policies that cause account suspension.
- Ignoring Amazon’s fees results in low profits for you.
Individual vs Professional Seller Plans:
| Feature | Individual Plan | Professional Plan |
| Monthly Subscription Fee | No monthly fee$0.99 per item sold | $39.99 per monthno per-item fee |
| Best For | Small sellers with less than 40 items/month | High-volume sellers with more than 40+ items/month |
| Referral Fees | Standard referral fees apply | Standard referral fees apply |
| Access to Advertising | Lack of access to Amazon PPC ads | Full access to Amazon PPC ads |
| Bulk Listing Uploads | Not available | Available |
| API Access | Not available | Available for automation & reports |
| Featured Offer (Buy Box) | Not eligible | Eligible |
| Reports & Analytics | Basic sales reports | Advanced sales reports |
| Ability to Create Promotions | Not available | Available as discounts, and coupons |
| Categories Available | Restricted categories | Access to all categories |
| Third-Party Tools | Limited support | Full access to third-party tools |
| Amazon FBA (Fulfillment by Amazon) | Available | Available |
| Gift Services | Not available | Available |
| Tax Calculation Services | Not available | Available for taxes |
| Shipping Options | Only standard shipping rates | Customizable shipping rates |
| Brand Registry Access | Not available | Available for trademarked brands |
| Inventory Management Tools | Limited | Advanced inventory tools |
Benefits of Professional Plan
The Professional Plan will bring up a plethora of advantages that help sellers grow their business on Amazon. This will come with a monthly fee, but the benefits will surpass the cost you make. It is for those who are selling more than 40 items per month.
- Lower Selling Costs
It is different from the Individual Plan that charges $0.99 per item sold. The Professional Plan eliminates this per-item fee. If you sell in high volume, you will save a lot of money and improve the profit margins.
- Access to Amazon Advertising
Advertising is far and away the best way to increase your sales, and in turn your revenue. With the Professional Plan, you can run Amazon PPC (Pay-Per-Click) campaigns. Ads will push your products in top search results. So, the possibility of sales is high.
- Eligibility for the Buy Box
The Buy Box is paramount to land more sales. When multiple sellers list the same product, Amazon selects one to appear as the default seller. Only Professional sellers are eligible for this. This implies that you will have a higher possibility of getting sales.
- Bulk Listing and Automation
If you are selling multiple products, the ability to upload listings in bulk saves time. The plan also provides API access. This way you can automate tasks such as inventory, and sales tracking.
- Advanced Business Information
The Professional Plan includes detailed analytics and reporting tools that show sales trends, and inventory performance. This precious information will help sellers make intelligent decisions and optimize their strategies.
- Access to More Product Categories
Some product categories, such as Health, and Grocery, will need an approval from Amazon. With a Professional Account, sellers can apply for restricted categories. This way, you can expand your product range and sales possibilities.
How Much Does It Cost to Sell on Amazon?
Selling on Amazon comes with various costs that depend on the type of products you sell, your business model, and the fulfillment method you choose. Understanding these costs helps sellers calculate profit margins and avoid unexpected fees.
Amazon Seller Plans
Amazon offers two types of seller accounts: Individual and Professional.
- The Individual Plan has no monthly fee, but sellers pay $0.99 per item sold. This is suitable for those selling fewer than 40 items per month.
- The Professional Plan costs $39.99 per month. It removes the per-item fee and provides access to advanced selling tools, Amazon advertising, and the Buy Box.
Referral Fees
Amazon charges a referral fee on every sale. This fee is a percentage of the product’s total selling price, including shipping charges. The percentage varies by category.
For example:
- Most electronics have a 15% referral fee.
- Beauty and personal care products have an 8% to 15% fee.
- Clothing and accessories have a 17% fee.
Sellers must factor in referral fees when pricing their products to ensure they maintain a profit.
Fulfillment Costs (FBA vs. FBM)
Sellers can choose to fulfill orders themselves (FBM – Fulfilled by Merchant) or let Amazon handle shipping and customer service (FBA – Fulfilled by Amazon). Each has different costs.
FBA Fees
With FBA, Amazon stores, packs, and ships the products. This service comes with two main fees: fulfillment fees and storage fees. FBA is convenient, but these fees add up. Sellers must ensure their products have enough profit margin to cover these costs.
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- Fulfillment fees cover picking, packing, and shipping. These depend on the product’s size and weight. For example:
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- A small standard-size item (under 16 oz) costs around $3.22 per unit.
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- A large standard-size item (1-2 lb) costs around $5.15 per unit.
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- Storage fees are charged monthly based on how much space the inventory takes up in Amazon’s warehouses.
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- January to September: $0.87 per cubic foot.
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- October to December (peak season): $2.40 per cubic foot.
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FBM Costs
With FBM, sellers store and ship products themselves. They avoid FBA fees but need to cover packaging, shipping, and handling costs.
- Shipping rates depend on carrier fees and product weight.
- Amazon may charge shipping commission fees depending on the category.
FBM works well for sellers with their own logistics system or those selling low-margin products that do not justify FBA fees.
Closing Fees
Certain product categories, such as books, DVDs, and video games, have a fixed closing fee of $1.80 per item sold. This is in addition to referral fees.
High-Volume Listing Fees
Sellers with 100,000 or more SKUs in their inventory may be charged $0.005 per SKU per month. This mostly affects large-scale sellers.
Refund Administration Fees
If a seller refunds a customer, Amazon keeps 20% of the referral fee (up to a maximum of $5). This means sellers lose money even when issuing refunds.
Long-Term Storage Fees
Products stored in Amazon’s warehouses for more than 365 days are charged an additional long-term storage fee of $6.90 per cubic foot or $0.15 per unit, whichever is greater. Sellers should monitor inventory levels to avoid this fee.
Advertising and Promotions
Many sellers use Amazon PPC (Pay-Per-Click) ads to promote their products. The cost varies based on competition, keywords, and ad placement.
- The average cost per click (CPC) is around $0.81, but this varies by category.
- A well-optimized campaign can cost $300 to $1,500 per month for small businesses.
Product Sourcing Costs
Sellers must pay for inventory upfront, whether they buy from manufacturers, wholesalers, or use private labeling.
- Alibaba manufacturers often require bulk purchases, which means an initial investment of $500 to $5,000 depending on the product.
- Wholesale suppliers may allow smaller purchases but at higher prices per unit.
Returns and Customer Service
Amazon has a customer-first policy, which means sellers often need to accept returns. High return rates increase losses, so choosing products with fewer return risks is important.
Costs of Selling on Amazon: A Breakdown of the 6 Business Models
1. Retail Arbitrage
Retail Arbitrage involves buying discounted products from local stores (like Walmart or Target) and reselling them on Amazon for a profit.
- Product Sourcing: Depends on retail store discounts. Initial investment can range from $100 to $2,000.
- Amazon Seller Plan:
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- Individual Plan: $0.99 per sale (if selling fewer than 40 items/month).
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- Professional Plan: $39.99/month.
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- Referral Fees: 8% to 17% per sale, depending on the product category.
- Fulfillment Costs:
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- FBA: Storage + fulfillment fees (starting at $3.22 per item).
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- FBM: Shipping costs depend on carrier rates.
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- Return Costs: If a customer returns a product, you may have to issue a refund and pay Amazon’s refund fee (Amazon keeps 20% of the referral fee).
- Taxes & Miscellaneous Fees: Vary based on location and regulations.
2. Online Arbitrage
This model is similar to retail arbitrage but involves buying discounted products from online stores instead of physical stores.
- Product Sourcing: Typically higher than retail arbitrage due to shipping costs. Initial investment: $500 to $3,000.
- Amazon Seller Plan: Same as retail arbitrage ($0.99 per item or $39.99/month).
- Referral Fees: 8% to 17% per sale.
- Fulfillment Costs:
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- FBA: Fees depend on item size/weight (starting at $3.22 per unit).
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- FBM: Seller covers packaging and shipping costs.
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- Shipping Costs from Supplier: Can be high depending on supplier location.
- Returns & Refunds: Amazon may deduct a refund fee (up to $5 per item).
3. Wholesale
In wholesale, sellers buy bulk products from manufacturers or distributors and resell them on Amazon at a higher price.
- Product Sourcing: High initial investment (typically $2,000 to $10,000 for bulk purchases).
- Amazon Seller Plan: The Professional Plan ($39.99/month) is recommended for bulk sellers.
- Referral Fees: 8% to 15% per sale.
- Fulfillment Costs:
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- FBA: Fees vary by size and weight.
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- FBM: Storage + shipping costs.
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- Storage Fees: If using FBA, monthly fees range from $0.87 to $2.40 per cubic foot.
- Marketing & PPC Ads: $500 to $5,000 per month (varies by competition).
- Barcode Costs: Wholesale sellers often need GS1 barcodes, which cost $30+ per year.
4. Private Label
Private labeling involves creating a branded version of an existing product. Sellers customize products and sell them under their own brand.
- Product Manufacturing: High upfront cost ($3,000 to $15,000) for production and branding.
- Amazon Seller Plan: Professional Plan ($39.99/month).
- Referral Fees: 8% to 15%.
- Fulfillment Costs:
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- FBA: Recommended for private-label sellers. Fees start at $3.22 per item.
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- FBM: Requires warehouse/storage if fulfilling orders manually.
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- Product Packaging & Design: Can cost $500 to $5,000 for logo, labels, and branding.
- Amazon Brand Registry (Optional): Costs $250 to $500 (one-time fee).
- Advertising: Private label sellers rely heavily on Amazon PPC ads ($1,000 to $10,000 per month).
5. Dropshipping
With dropshipping, sellers list products on Amazon without holding inventory. When a customer places an order, the supplier ships directly to the customer.
- Product Sourcing: No upfront inventory cost, but higher per-unit pricing from suppliers.
- Amazon Seller Plan: Professional Plan ($39.99/month) is required.
- Referral Fees: 8% to 17%.
- Shipping Costs: Suppliers usually charge $5 to $15 per order.
- Fulfillment Costs: No FBA fees, since Amazon does not store the products.
- Return Handling: If the supplier does not handle returns, the seller may need to cover return shipping costs.
- Legal Compliance & Risks: Amazon has strict dropshipping policies; failure to follow them can lead to account suspension.
6. Handmade
Amazon Handmade is a marketplace for artisans selling handmade products. This model is best for sellers making custom items like jewelry, clothing, or home decor.
Costs Involved
- Product Materials: Costs vary by item, typically $50 to $5,000 for supplies.
- Amazon Seller Plan: No monthly fee, but Amazon takes 15% per sale.
- Referral Fees: 15% on all sales.
- Fulfillment Costs:
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- FBA: Fees depend on size and weight.
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- FBM: Sellers handle shipping and packaging costs.
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- Custom Packaging & Branding: Optional but can range from $100 to $1,000.
- Marketing: Handmade sellers rely on social media marketing (cost varies) instead of PPC ads.
How to List a Product on Amazon
Listing a product on Amazon is simple, but each step matters. Whether you are selling an existing product or creating a new listing, following the right process ensures better visibility and sales. Here’s how to do it.
1. Sign in to Your Seller Account
The first step is to log in to Amazon Seller Central. If you don’t have an account, you must create one. Signing up is straightforward—you’ll need to provide basic details like your business information, bank account details, and tax information. Once registered, you can access the dashboard, where you’ll manage all your product listings.
2. Pick Your Listing Type
Amazon allows sellers to either list an existing product or create a new one. If the product you are selling is already available on Amazon, you can simply add your offer under that listing. This is a faster method and helps you compete with other sellers for the Buy Box. However, if you are introducing a new or private-label product, you will need to create a fresh listing from scratch, including adding images, descriptions, and pricing details.
3. Find the Right Category
Choosing the correct category is crucial for product visibility. Amazon organizes products into different categories and subcategories, making it easier for customers to find what they need. To select the right category, you can use the “Add a Product” tool in Seller Central. If you’re unsure, search for similar products and check where they are listed. Placing your product in an incorrect category can make it difficult for customers to find and may even lead to Amazon removing your listing.
4. Enter Product Details
Once you’ve chosen the category, you must fill in important details about your product. The title should be clear and include relevant keywords to improve searchability. The brand name and manufacturer details help customers recognize your product. If you are selling a unique product, you’ll need a UPC, EAN, or GTIN barcode to list it. Additionally, a well-written product description and bullet points highlighting key features are essential for attracting buyers. You should also add search terms (keywords) to improve your product’s ranking in Amazon search results.
5. Set Your Pricing
Setting the right price is key to making sales. If you are selling an existing product, pricing competitively increases your chances of winning the Buy Box, which drives more sales. If you’re introducing a new product, researching competitor prices can help you find the right balance between affordability and profit. Keep in mind that Amazon charges a referral fee, which usually ranges from 8% to 15% depending on the category. Make sure to factor in these fees before finalizing your price.
6. Choose Fulfillment Method
Amazon provides two fulfillment options: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). With FBA, Amazon handles storage, packaging, and shipping for you. This option can save time and improve delivery speed, but it comes with additional fees. FBM, on the other hand, allows you to handle shipping and inventory yourself. While it can be more cost-effective, it requires you to manage logistics efficiently. Choosing the right fulfillment method depends on your business model and available resources.
7. Upload High-Quality Images
Images play a major role in influencing purchase decisions. Amazon requires sellers to use high-quality images with a white background for the main image. The recommended resolution is at least 1000 x 1000 pixels to enable the zoom-in feature, which helps customers see product details clearly. Additional images showing different angles, packaging, or real-life use can improve conversion rates. Avoid using watermarks, text overlays, or low-quality pictures, as they do not meet Amazon’s guidelines.
8. Set Inventory Levels
Inventory management is essential to ensure smooth order fulfillment. If you are using FBA, Amazon will track your stock levels automatically. However, if you are using FBM, you must update inventory regularly to prevent overselling. Running out of stock can negatively impact your ranking, while excess inventory may lead to storage costs. Keeping a balanced inventory ensures you never miss out on potential sales.
9. Review and Submit
Before submitting your listing, review all details carefully. Any mistakes in the product title, description, images, or pricing can lead to lower sales or listing removal. Ensure there are no typos, that the images meet Amazon’s quality standards, and that the product category is accurate. Once you’re confident that everything is correct, click “Save and Finish” to publish your listing.
10. Optimize Your Listing for Sales
Once your product is live, you should optimize it to improve sales performance. Using the right keywords in the title and description helps your product appear in more searches. Running Amazon PPC ads can drive traffic to your listing and boost sales. Encouraging customer reviews by providing excellent service can increase credibility and attract more buyers. Keeping an eye on competitors’ pricing and making adjustments when needed ensures you stay competitive.
Amazon Inventory Management
Managing inventory on Amazon is crucial for maintaining steady sales and avoiding stock issues. If you run out of stock, your product ranking may drop, leading to lost sales. On the other hand, overstocking can result in high storage fees, especially if you use Fulfillment by Amazon (FBA).
To manage inventory effectively, sellers should monitor stock levels regularly using Amazon Seller Central. The Inventory Performance Index (IPI) helps track how well you’re managing stock. A high IPI score means better storage optimization and fewer penalties.
For FBA sellers, Amazon provides tools like Restock Inventory Reports, which suggest when and how much stock to send. Fulfillment by Merchant (FBM) sellers must track their own inventory and ensure timely restocking.
Using automated inventory management software can help prevent overselling and stockouts. Regularly analyzing sales trends and seasonal demand ensures you always have the right amount of inventory available. Effective inventory management improves cash flow, reduces costs, and keeps your business running smoothly.
How to Ship to Amazon FBA
Shipping to Amazon FBA
As an Amazon Seller, when setting up your account under FBA (Fulfilled by Amazon), ensure that all tax and payment details are correctly filled. Carefully check Amazon’s restricted products list. After that, focus on the labeling and packaging instructions. Remember to check for size and weight limitations so that you do not face any complications later.
Preparing Your Shipment
Proper preparation is essential. In this step, each product requires an FNSKU label, which must be clear, scannable, and applied in the correct position. Labels cannot be handwritten. Also, pack them in sturdy duty boxes to avoid breakage. Items must be secured with bubble wrap or poly bags. Remember that Amazon has strict rules with a maximum weight limit of 50 lbs per box.
After this, log in to Amazon Seller Central. There, go to the “Send/Replenish Inventory” section and input the required details. After you select the shipping method, don’t forget to print and attach the labels before shipping them out.
Choosing a Shipping Carrier
Amazon offers two shipping options.
- First are the Amazon Partnered Carriers, where you can find UPS and FedEx with discounted pricing. Tracking is however only on Amazon.
- The second option is Non-Partnered Carriers. With this, you will have to find a shipping provider outside of Amazon’s services. Make sure they provide tracking numbers.
Shipping to Amazon Fulfillment Centers
Providing information about box content is helpful before shipping as it reduces the time taken to process it. Using the 2D barcode will make identifying multi-SKU boxes easier too. If the shipment is large, pallet shipments (LTL/FTL ) may be needed so follow Amazon’s pallet size rules. You can then schedule a carrier appointment for delivery.
Tracking and Confirming Shipments
Use the Amazon Seller Central tools to check your shipment’s delivery status. Fix shipping issues right away. As soon as you receive the items, contact Seller Support to report any missing or damaged items as Amazon scans every shipment on arrival.
Common Mistakes to Avoid
Incorrect labeling causes inventory errors, so always check FNSKU and shipping labels. Likewise, poor packaging of goods can lead to damage, so always follow all the Amazon packaging rules. Failing to adhere to guidelines will cause rejected shipments, so make sure to follow Amazon’s FBA policies carefully.
Optimizing Future Shipments
You can also save on costs with Amazon’s Restock Tool by sending bulk shipments. Pay attention to extra FBA storage fees to avoid extra costs. Efficiently managing your inventory can prevent the risk of running into long-term fees.
How to Prepare Products for Amazon FBA
Proper preparation ensures products meet Amazon’s guidelines. Following these rules prevents delays, rejections, or extra fees.
Packaging Requirements
All items with an FNSKU label should be labelled carefully and bundled following the Amazon rules to prevent any damages. Make sure barcodes are not covered with tape or any folds.
Different products require specific packaging:
- Poly Bags: Necessary for items that are not bundled. They should be see-through. If it is more than 5 inches, it must include a suffocation warning.
- Bubble Wrap: Used for fragile items to protect against impact. Secure with tape to prevent movement.
- Boxes: Used for multiple items. Must be sturdy. Reinforce with strong tape.
For liquids, use leak-proof packaging and use tape on the cap to seal it. If there are any sharp items, then carefully cover all sides and use thick padding to prevent any type of punctures.
Do not overpack too. A reasonable amount is definitely acceptable, however, too much can end up increasing the costs. Amazon may also reject shipments that do not meet guidelines, so follow them carefully.
Box and Weight Limits
Amazon has weight and size restrictions and a single box must not exceed 50 lbs. Spread weight evenly in multiple boxes. Oversized items also may need extra handling or fees.
Follow these weight guidelines:
- Boxes under 50 lbs: Standard shipments.
- Boxes over 50 lbs: Allowed only for single heavy units. Must have a “Team Lift” sticker.
- Boxes over 100 lbs: Requires a “Mechanical Lift” label.
Make sure not to put all the heavy items in one box. You can always use multiple smaller boxes if needed.
Size matters too. Boxes must be less than 25 inches on all sides and therefore should not exceed that. It can only increase in case of oversized items. Large boxes need extra handling. This can delay processing too.
By following these guidelines, shipments arrive safely. Amazon processes them quickly, reducing storage or rejection risks.
Tools for Preparing Your Amazon Shipments
Labeling Tools
Proper labeling is crucial for Amazon FBA shipments. Label printers like DYMO and Zebra help print FNSKU labels quickly and efficiently. Barcode scanners ensure that labels are correctly applied and scannable. As mentioned before, Amazon requires each product to have a unique FNSKU label, which must be clear and readable.
Weighing and Measuring Tools
Shipping scales accurately measure the weight of boxes. Amazon has a 50 lb weight limit per box, so ensuring compliance is essential. Measuring tapes and box sizers confirm that box dimensions meet Amazon’s size guidelines. Keeping within size limits helps avoid extra fees or shipment rejections.
Packaging Materials
Proper packaging prevents damage during transit. Essential materials include:
- Poly bags – Protect small or loose items.
- Bubble wrap – Provides cushioning for fragile items.
- Packing tape – Secures boxes and prevents openings.
- Box cutters – Speed up the packing process and ensure clean cuts.
Shipping Software
Managing shipments manually can be time-consuming. Shipping software like InventoryLab and ShipStation streamline processes. These tools help:
- Print shipping labels.
- Track shipments.
- Manage inventory efficiently.
Amazon’s Seller Central also provides tools to create and manage shipments directly.
Cost Estimation Tools
Avoid unexpected costs by using pricing tools. Amazon’s FBA Calculator helps estimate fulfillment costs before shipping. RestockPro monitors inventory levels and suggests restocking strategies to prevent stockouts.
Pallet and Bulk Shipping Tools
For large shipments, pallet jacks and stretch wrap help secure bulk items. Amazon has specific pallet size requirements, so ensuring compliance prevents rejections. 2D barcode labels are essential for multiple SKU shipments, speeding up Amazon’s receiving process.
Benefits of Using the Right Tools
Using the right tools reduces errors. It speeds up the shipping process and makes sure Amazon’s requirements are met. Investing in proper equipment helps avoid delays, damaged goods, and additional costs.
Preparing Amazon shipments efficiently leads to smoother operations and better seller performance.
How Can a New Seller Compete on Amazon?
Researching the Market
As a new seller, competing can be quite a challenge. However, market research is crucial for every business campaign. Use tools like Jungle Scout and Helium 10. Look for emerging trends and analyze active competitors, their prices, and customer reviews to find any potential weaknesses. You can also view the top selling listings to understand how to create even better ones. Try finding products that are strong in demand but are not saturated in the market.
Optimizing Product Listings
A strong listing boosts visibility so use relevant keywords in the title. Write compelling bullet points and add a clear product description. High-quality images are a must, and use multiple angles and zoom features. Videos also build trust and demonstrate use. Sponsored Ads can increase traffic too. PPC campaigns provide an initial boost and A+ Content improves engagement.
Enhancing Product Visibility
Change the keywords on the backend and optimize titles with relevant terms, keywords, or phrases. Avoid keyword stuffing and use a mix of short and long-tail keywords. For better results, execute split tests and update descriptions as per search trends.
Pricing Your Products on Amazon
Setting Competitive Prices
Sales are highly influenced by the price set. Analyze the price of competitors to determine an effective range. Keeping price too high will deter buyers, while too low will cut profits. Also bear in mind pricing psychology. Round numbers or odd pricing can impact decisions, so try out different strategies and see what works best for your product.
Using Amazon’s Pricing Tools
Amazon’s pricing tool adjusts prices automatically. It responds to competitor changes and this helps stay competitive. Discounts and coupons attract buyers and bundling products can also increase value. FBA (Fulfilled by Amazon) improves sales potential. Price monitoring tools help track trends, and running limited-time offers can also boost urgency.
Managing Profit Margins
The fees set by Amazon must not be ignored. Be sure to factor in charged advertising and shipping costs. Price set should not deter sales while ensuring the profit margin is achieved. Carry out testing on a variety of pricing tiers and adjust the price based on demand.
The Amazon Buy Box and Why It’s So Important
Understanding the Buy Box
The Buy Box increases sales as it makes purchasing easier. Winning the box means to have an increase in sales and visibility. Customers, and therefore sellers, rely on page visibility and trust the product sighted to them. Certain sellers are given preferential treatment and are automatically updated through the algorithm specializing in the Buy Box.
Factors Affecting Buy Box Eligibility
Competitive pricing is the single most essential factor and is perhaps the primary one. It also requires fast shipping. Low order defect rate helps too, and positive seller ratings are crucial likewise. While high stock levels also safeguard against loss, order fulfilment speed affects ranking too.
Ways to Improve Buy Box Chances
Outstanding customer service and fast shipping should be given. As mentioned earlier, competitive pricing increases eligibility. FBA enrollment is another divisor. Monitoring seller activity metrics is crucial too. Better ratings lead to success, so keep return rates low. Reduce negative feedback and maintain a high seller performance score.
How to Optimize and Promote Your Products
Improving Search Rankings
To increase the scope of required research, consider including the relevant terms within the title. In the description, try using these phrases as bullet points. Make backend search terms more appealing, but avoid stuffing keywords. Improve click-through rates with engaging copy. Rankings can also be increased by using high quality images.
Using Amazon PPC Campaigns
Traffic is beneficial, and PPC excels in this regard. Sponsored product ads work perfectly. Increase your branding using Sponsored Brand ads. Display ads not only raise your brand awareness targets, but also help increase conversions. Test different ad types and then adjust bids based on performance. You can also use negative keywords to refine targeting.
External Promotion Strategies
Social media marketing attracts visitors, while influencer partnerships enhance reach. Receiving traffic from other sources increases ranking positions, which helps build credibility. Campaigns can also be executed using emails. Offer exclusive discounts to attract buyers and run giveaways to boost visibility.
Building Customer Loyalty
Follow-up emails encourage feedback. Retargeting ads re-engage buyers and providing excellent service retains customers. Repeat buyers improve sales consistency, so try offering subscription-based purchases for recurring sales. Use customer data to personalize offers. High engagement also leads to higher lifetime value. Using these strategies helps new sellers grow. By using these efforts and optimization, you can make your first 100 sales possible.
How to Start?
By this time, you are already aware of what you should do before you think of selling on Amazon. First of all, you should find out what you want to sell and where you will get this product from. Then, work to setup your seller account. You are free to pick any business model that fits your goals.
You must pay attention to the product research and try to find profitable items. They must have a high demand items with low competition. Once you have a product, get it from reliable suppliers and list it on Amazon. Don’t forget to include some attractive descriptions and images. You must start through small steps and learn the process on your way. This way you can gain experience.
