Amazon is used by businesses of all sizes to market and sell their goods. Amazon is seen by many business owners who are just starting out as the best way to get a head start and be successful. Amazon has changed the way people shop online by letting businesses reach a large number of people.
Many business owners want to be as successful as they are. The good news is that getting started on Amazon is not too hard. Amazon has let online sellers use its platform to find customers and get their businesses more known.
But most people who sell online think about how successful they could be, but they fail when it comes to selling to make money. This article will tell you everything you need to know to sell on Amazon and make money from online sales.
By the time you’re done reading this, you should know the basics of selling on Amazon and be ready to start making money. You’ll find out how to sell things on Amazon.
How it works to sell on Amazon
For a small fee, you can list and sell your product on the platform. Take the case of you trying to sell a used Play Station. We’ll look at the below screenshot to see how your product will look when it’s listed.
- On the right, the red arrow points to the seller. If you are selling, your name or the name of your business will be there. The arrow points to a seller from a third party. (Once you list your products on Amazon, you’ll be considered a third-party seller.
- The PlayStation shown above is in what is called “The Buy Box.” This means that when a customer clicks “Add to Cart,” your item will be added to their online shopping cart. In the picture above, Worldwide Distributors is shown in the Buy Box.
- You also see that the seller’s name is followed by the words “Fulfilled by Amazon.” This means that Amazon is in charge of shipping the item.
- Look at the bottom right and you’ll see a red box that says “Other Sellers on Amazon.” When a customer clicks on it, they’ll be taken to other 3rd party sellers who are selling the same product, but those sellers aren’t in the Buy Box yet because their product hasn’t been chosen.
- You may notice that Amazon.com isn’t in the Buy Box or the section for other 3rd party sellers. There are some products where Amazon is listed in either list. As a 3rd party seller, you have a better chance of making a sale when Amazon isn’t on either list.
Your product can either be in the Buy Box or in the other sellers section. The Other Sellers on Amazon section shows how many different sellers can fill the order. In the example above, there are 168 other sellers. Amazon shows the same item from different suppliers on the same product page.
There are more product pages if there are more products.
How do I get to the box where I can buy something?
When a customer sees your product in the Buy Box, you have a better chance of making a sale. Getting to the Buy Box depends on where your product ranks on the product list. There are four easy things you can do to move up on the product list.
Make your price as affordable as you can.
Make sure the sales you make give you good feedback.
Use Fulfillment by Amazon as your method of fulfillment. The PlayStation in the image above is fulfilled by Amazon, so it is high on the list of products.
How to Use Fulfillment by Amazon (FBA) to Sell on Amazon
When you use Fulfillment by Amazon, your product list rank goes up. How does Amazon’s Fulfillment service work?
- Find something you want to sell on Amazon.
- Put the item up for sale on Amazon. During this time, you will need to set your price. We will talk about how to set the price of your product on Amazon later.
- Prepare your items so they can be sent to the FBA warehouse.
- You will be given a warehouse by Amazon. Put your item(s) in boxes and send them to this point. FBA lets you put together different items. They will repackage the items and ship them to each customer. For example, ten board games can fit in one box. As customers place orders, FBA will repackage the items and send them to the customers.
What happens to your package when Amazon gets it in a Fulfillment by Amazon Warehouse?
- You’ll have to make sure that the items were in good shape when you sent them.
- Amazon makes your product listings live once you’ve checked the condition of the items. Once your item is listed, it will be available for sale, and your name will show up on the product details page or in the Buy box.
- Amazon will keep your item(s) in their warehouse until someone buys and ships them.
- When a customer orders your product, Amazon will send it to them.
- Amazon sends you an email every time an order you made is shipped. After the item has been sent, the money will be deposited into your seller account. Your selling price and Amazon’s fees are already taken out of the payment.
- Every two weeks, the money from your sales will be put in your bank account. The total sales you made in the last two weeks are added to the deposit.
Keep in mind that it’s your job to find things to sell, list them, and send them to an Amazon warehouse. Amazon takes care of the rest of the steps until the item is delivered.
Pros of using the FBA program to sell
When you choose to ship with Amazon, your customers will be happier because they will get more benefits. You will build a reputation for quick delivery, and Amazon will take care of the heavy lifting of your products. For some of these benefits, your customers will need to be members of Amazon Prime.
They can speed up their deliveries, which makes their users happier. If you are a seller and use the FBA, you will get three main benefits.
Fast times for shipping
When your product is on Amazon Prime, your customer will be happy with how quickly they can get it. You’ll have an advantage over other sellers who haven’t put their products on Amazon Prime. When you use Fulfillment by Amazon or Amazon Prime, you can choose from the following shipping times.
- Two-Day Shipping: Most of the time, two-day shipping is free. Customers in the United States and neighboring countries can choose this option.
- Same-Day deliveries: When your customer buys the items, they will see a countdown timer. “Order Within” is the name of the timer, and the timer starts. The same-day delivery option depends on how much you can deliver and how much you have in stock. You won’t be able to do same-day deliveries if you don’t have enough space or if your stock is low. For same-day deliveries to work, your customer must be in one of the eligible zip codes.
- Deliveries in 2 hours: Amazon can also get your packages to you in two hours. On Prime Now, you can choose this option. But the same rules apply to same-day deliveries as well. For two-hour deliveries, your customer must live in one of the eligible zip codes or cities. You also need to have enough inventory to make deliveries in two hours.
- Free Release Date Deliveries: Do you plan to release a new product soon? Is it available for pre-order? With free shipping on the day of release, your customers can get the product on the same day you do. Most electronics, like cell phones, PlayStations, and games, are like this.
- No-Rush Shipping: The customer is also not charged for this option. When they have the patience to wait for their order, they will choose this option. So, No-Rush shipping got its name. With this shipping option, customers can earn points that can be used on future purchases. So, they will be more likely to buy more, and you will have a better chance of making more sales.
- Amazon Day: Do you sell things that customers can buy again and again? They can choose this shipping option and choose a day for delivery. All of the things they bought during the week will be sent to them on this day.
Customers Trust the Return Policy
Amazon has a return policy for items that are broken when they arrive or don’t do what the customer wanted them to do. When they see that your product is being sent by Amazon, they feel good about it. According to the return policy, they have to send the product back within 30 days of receiving it.
Amazon needs between 2 and 5 days to process a refund and show it on a customer’s account. To build a good reputation with the customer, you need to give a return address and be ready to give refunds. You can also be ready to exchange items that are damaged when they arrive.
Amazon does all the hard work.
If you sign up for the Fulfillment by Amazon program, Amazon will handle the hard work of your online business. You can send the products to the Amazon warehouse in large quantities, and they will repackage them so they can be sold as individual retail items.
The program tells you that the only heavy lifting you will do is to pack up the products and send them to the Amazon warehouse.
Other ways to sell than through Amazon FBA
Most of the time, the Fulfillment by Amazon shipping service makes sense. So, what about the remaining 1%? You can choose to send the items straight to the customer. The name for this choice is “Merchant Fulfill.” You are in charge of storing, packing, and sending out the packages.
But we strongly suggest that you use the FBA program unless something else makes you change your mind.
Now that you know how to sell on Amazon and how the business model works, let’s talk about how to get started and set up a successful store.
How to Sell Things on Amazon
The first thing you do is sign up for an Amazon seller account and set it up. You can do a quick search for sellercentral.amazon.com. You will see a button that says “Sign up now.” Just click on it to start. You will be taken to the sign-up page, where you will need to fill in your information.
You will be asked for information like your name, address, and phone number, among other things. It will only take a few minutes to finish, and then your store will be ready to sell. The steps you need to take to set up your store are shown in the picture below.
Once you’ve set up a seller’s account, it’s better to use the Amazon Seller’s App than the website.
Figure out what to sell.
When choosing an item to sell, the general idea of how much money it will make. It would be best if you could find something for cheap or free and then sell it on Amazon for a reasonable amount more. You can look around your house for things that are free or go to a nearby store to find things that are cheap.
Things Made at Home
You can use books or gifts that you haven’t opened or used much from your home. You can also sell things like the PlayStation again. If you look at the PlayStation screenshot we used earlier, you will see that the red box also shows what is new and what is used.
Retail arbitrage is the other choice. Retail arbitrage is when someone buys something at a low price in a store and then sells it on Amazon for more money. It is a great way to get your online business off the ground on Amazon.
Why Would You Use Retail Arbitrage?
First, it doesn’t cost much to get started. A small initial investment could help you make more money. You could even begin with just one item. So, as you level up, you get more items and your earnings go up, too. This also lets you learn more about how to sell on Amazon, especially if you start with just a few items.
You could also use the information to find more products, since you’ll know which ones are more likely to sell.
How do I do retail arbitrage?
Start by looking in the clearance section of stores like Target, Walmart, K Mart, Home Depot, or any other store that wants to get rid of stock quickly. You might find a section with books on sale that you can use to your advantage.
Use the Amazon seller’s app and the camera on your phone to scan the barcode on the book or item. Your scan will show you a screen that shows the details of the book. This kind of detail is shown in the screenshot below.
What to look for when scanning an Amazon item
On your scan, you need to keep an eye out for two important details.
- Eligibility To Sell The Product: You need to make sure you are allowed to sell the item on Amazon. Once your scan is done, you will see a green check mark on the eligibility.
- The Sales Rank Of The Product: If you look at the top left of your scan, you can see the rank of your product. The rank tells you how quickly you could sell your item on the platform. The faster your product could sell, the lower the number. You could limit the rank of your first few items to 250,000. As your business grows, try to sell items that have a lower rank number.
How much will my product bring in on the top line?
You will need to figure out how much the product will bring in before you list it. The section for “gross proceeds” is on the far right side of your app. You will put in some numbers to find out how much money you will make in total.
What you should keep an eye out for
- Selling price
- How much it will cost per pound to ship the item to Amazon
- Cost of Getting.
Let’s look at the picture below to see how you can change the inputs and outputs to make more money.
Rate of Return on Investment
Let us do a little simple math. You figure out your return on investment by adding up how much you make and how much it cost to buy. In the picture above, the item was bought for $10 and made a $7.13 profit.
Divide the profit, which is $7.13, by the cost of the purchase, which is $10, and then multiply the result by 100%. The amount of money made back will be 71.3%. If you are just starting out, you need to keep this percentage above 50%.
If your product meets all of the standards, you should buy more of it. For instance, you should buy at least 5 of these things. Make sure to follow the steps above for each item you want to sell on Amazon. Also, look over as many items as you can. With time, you’ll be able to tell just by looking at a product whether it’s worth listing or not.
Use the FBA Revenue Calculator to figure out your profit.
If you are a registered Amazon seller, the steps above will tell you how much money you made. But people who haven’t joined Amazon yet can still use the FBA revenue calculator to look up an item and figure out how much they can expect to make. You have to put in the price, the shipping cost to Amazon, and the cost of the item.
The expected profit from the product is the result of all of these things. If you haven’t started selling yet, put all of your products through this calculator to get an idea of how much money you can expect to make.
How Much Is It?
Your prices should be in the same range as those of the other sellers on the list who use Fulfillment by Amazon. Click on the link that says “Other sellers on Amazon.” If you look to the left, you’ll see two ways to narrow down the list.
Prime should be chosen for the Shipping filter. Whether your product is New or Collectible will affect the condition filter. The prices of the sellers whose products match the criteria you’ve chosen will be shown next to their products.
We suggest that you either match the lowest price or go 1% or $0.01 higher.
If your price is lower than the price gap, your competitors will also lower their prices. As prices go down, so do your margins of profit.
What Can I Get Out of Selling on Amazon?
You should know that anyone over 18 can buy and sell things on Amazon. Here are some of the benefits you’ll get from having an online store on Amazon.
A huge chance to sell
Amazon has a very large customer base all over the world. As of right now, Amazon has more than 100 million registered users, and that number keeps going up every year. 40% of all Amazon sales come from sales made by people who don’t work for Amazon. Once you put your product on Amazon, you will be able to reach hundreds of millions of people who could buy it.
Access to repeat sales without having to advertise
Amazon Stand stands out from other sites because it has a large customer base. Sites like Shopify spend a lot of money on marketing and advertising. When you sell on Amazon, you won’t need to plan out your marketing.
Your orders can be repacked and sent out for you.
Do you find it boring to package and ship things? You will save both time and money by using the Fulfillment By Amazon (FBA) program. Amazon will package, store, and ship your products for you. Also, the program makes it easier to return items, ship internationally, and help customers.
A study from 2014 shows that 71 percent of sellers who use FBA have seen their sales go up by at least 20 percent since they joined the program.
Referrals You Didn’t Ask For
Customers can see your products on Amazon because of an algorithm that doesn’t favor any one supplier over another. This means that your product has the same chance of getting the attention of your customer. You could also use Amazon’s affiliate network to help potential customers find your products.
Affiliates put ads for Amazon on their websites, and your products may be shown in these ads.
Back-end support that is good
Amazon has support on the back end that makes doing business easy. The help includes taking credit cards, keeping track of inventory, and collecting sales tax. As Amazon is a global company, you will have to pay different sales tax rates in different places.
But you should know that they only help collect the sales tax. They don’t help you file your taxes. It’s your job to file your taxes.
One Last Thing
We’ve talked about how to set up your Amazon account. There are some ways to help you run a successful online business through Amazon that you can figure out. First, decide that selling on Amazon is going to be an investment. It might take some time, but it will be worth it in the end.
You can even begin with just one item. Second, use retail arbitrage as your first and main way to sell your products. With this plan, you buy goods from a store and then sell them on Amazon for a higher price. The best place to start is in the section of your store that is being cleaned out. You should also look around your house for things that you could sell again.
Make sure that your item can be sold on Amazon. The Amazon Seller’s app will tell you if your item is eligible. Next, figure out how much you expect to make. If you have already signed up to sell on Amazon, you can use the Amazon app.
If you haven’t signed up yet, you can use the Fulfillment by Amazon revenue calculator to look for products and figure out how much money you can expect to make. Make sure you make at least a certain amount. You should also be very careful about how you price your goods.
Use the lowest price on Amazon and add a small amount, like 1%. If you go lower, you could cut into the sellers’ profit margins and make them compete with each other more. Fulfillment by Amazon should always be your shipping fulfillment method.
Read this whole article if you want to learn how to sell on Amazon.