Part 1 in a 3-Part Series
Are you curious about selling on Amazon and don’t know where to start? Well, you are in luck!
I just put together this “How to Sell on Amazon for Beginners” guide that will help you get started immediately.
This is the most comprehensive step-by-step guide to date that will help any new Amazon seller reach their goals. It is a 3-part series, so make sure to read all 3 parts. And at the end of Part #3, I'll give you my best free and inexpensive resources so you can get even more help!
How to Start Selling on Amazon
Amazon is the largest online retailer in the world generating more than $200 billion in revenue with over 50% of all sales coming from third party sellers.
Millions of shoppers have the opportunity to buy products that you sell in the Amazon marketplace. There will be fees Amazon automatically collect from sellers ("Merchants" or "Third party sellers"), which include a referral fee plus providing services such as shipping products to your customers and handling all customer support on your behalf. (As a general rule of thumb, expect Amazon to deduct ~30% on average in fees from a sale made by a Third Party Seller and shipped to the customer via Amazon FBA (Fulfilled By Amazon).
What Is A Third-Party Seller?
A third-party seller is someone like you and me that decides to sell products that are either already in the Amazon catalog or can be added to the catalog. It is essentially a person outside of Amazon selling products to Amazon’s loyal shopper base.
How this looks on Amazon is the seller will have any name that is not “Amazon”. That name can be found displayed in the “Other Sellers on Amazon” area or even in the buy box.
If you see “Fulfilled by Amazon” after the third-party seller name, then you know they are utilizing Amazon’s customer fulfillment services.
What Is Fulfilled by Amazon or Amazon’s FBA Program?
Fulfilled by Amazon or FBA for short is a service provided by Amazon for third party sellers. For a fee, they will ship customer orders for you and provide full customer support.
You do not have to worry about spending time answering phone calls, nor answering most of customer emails. This also eliminates the time-consuming task of shipping every item you sell daily to individual customers.
This will be key to growth allowing you to scale up your Amazon business quickly.
What Is the Buy Box?
Included in every product page is a box found on the right with a gold button that says “Add to Cart.” Shoppers typically do not check the prices of other third-party sellers. If they want to buy the item, they just click the “Add to Cart” button which adds the product to the online shopping cart.
For that reason, the buy box is very powerful. The seller appearing in the box will collect the most sales. Amazon does rotate third-party sellers allowing them to spend a certain amount of time daily in the buy box.
Your goal as a seller is to try and get into the buy box as much as possible in order to grab the sales. Having good seller metrics that include high seller feedback plus selling products eligible for the buy box are important for how much time you are allowed in the buy box.
Be forewarned that sometimes you will see Amazon.com in the buy box. This means Amazon themselves is selling the product themselves.
Be careful about trying to compete directly with Amazon for the buy box. On some products Amazon will share the buy box with third party sellers and not with others.
An example of this is selling books in new condition. Amazon dominates the buy box for books in new condition. That's why I recommend sellers (who want to sell books) focus on sourcing and selling used books instead.
Where Will My Products Be Displayed?
All third-party sellers will be displayed either in the buy box or in the section called “Other Sellers on Amazon” found on the Amazon product detail page.
There are very few sellers displayed in the “Other Sellers on Amazon” section on the product page itself. Please note this section does not appear in all product pages.
The buyer will have to click on the “Used & New” link found under the product feature bullet points or at the bottom of the “Other Sellers on Amazon” box in order to view all sellers and prices.
Buyers don’t typically do this which is why getting into the buy box as a third-party seller (or appearing as the primary seller on the product page) is so important.
How to Get in the Buy Box
The exact algorithm is not revealed by Amazon, but we do know a few factors that can make a difference based on experience.
Here are 5 key areas that determine how much time you will spend in the buy box:
- Selling FBA
- Minimum 97% seller feedback
- Excellent overall customer metrics
- High inventory performance index
How Is This Different From Selling on eBay?
When selling on eBay, you need to create a brand-new product page for every item you sell in new or used condition. You will be the only seller on your own product page, but it will compete with hundreds of other pages selling the identical item.
With Amazon, all you do is list your item for sale along with other sellers on the same exact product page. There is no need to create a new product page from scratch. However, you will need to sell mostly new products with the exception of books.
In general, selling on Amazon takes far less time while providing more sales. The process is very efficient for ecommerce business owners.
What Is Prime Eligible?
Amazon offers a paid membership for all customers called “Amazon Prime.” The benefits of membership include free shipping within 2 days of purchase, free streaming of movies and music, free Kindle books, and exclusive shopping deals.
People love the Prime member program mostly because of the fast shipping. Customers typically purchase prime eligible products as their first choice because they want to receive their order in 2 days or less with a guarantee.
Amazon has spent years of building trust with customers that you can now leverage.
Selling items that are Prime eligible will allow you to spend more time in the buy box giving you more sales. In order to sell Prime eligible products, you must sign up for the Fulfillment by Amazon (FBA) program.
How Does FBA Work?
Once you are signed up for Fulfillment by Amazon, this is how it works:
- List a product for sale on Amazon and create your shipping plan.
- Prepare the proper FBA product packaging.
- Pack your products in shipping boxes assigned by Amazon for specific warehouses or Amazon Fulfillment Centers.
- Ship your boxes to the assigned warehouse locations using the box labels provided by Amazon and a partner carrier service such as FedEx or UPS.
What Happens at The Amazon Fulfillment Centers?
Once your boxes are delivered to the Amazon warehouses, this is what happens next:
- Your boxes get checked in and go through the receiving process. All items included in your boxes are checked and verified.
- Once the shipment status moves from receiving to closed, all products will be available for sale.
- Your products are then stored in a designated area of the warehouse.
What Happens After A Customer Buys My Products?
I am so glad you asked because this is my favorite part. Here is what happens next after you sell a product on Amazon:
- Once a customer makes a purchase, an Amazon FBA warehouse worker will pack and ship your product to the customer for you.
- All fees will be deducted from the amount paid by your customer depositing the rest in your seller account payments area.
- Funds are automatically deposited into your bank account every 2 weeks.
What is great about the entire FBA program is that you spend most of your time finding products to sell and ship in to the fulfillment centers.
If you're wondering "Can I ship the item to the customer directly", read on...
Are There Any Other Amazon Selling Options Besides FBA?
Merchant fulfilled is another way to sell on Amazon if you do not want to use the Fulfilled by Amazon services. You will need to store the product yourself until it sells and ship it to the customer directly. It is important to note that you are responsible for all customer support as well, but you also won't pay Amazon FBA fees.
Many people sell merchant fulfilled products during times of high-volume sales such as right before Christmas. There just isn’t enough time at that point to ship products into Amazon and know they will be received by customers before Christmas.
For the rest of the year, most Amazon sellers choose to sell FBA because it allows more time to concentrate efforts on scaling up the business with inventory.
Now that you have a quick overview of how to sell on Amazon, head over to Part 2 where we will cover how to get started step-by-step!