How to Sell and Earn Online Income on Amazon in 5 Simple Steps

Amazon Selling

The Amazon Marketplace is one of the most well-known marketing channels for online retailers. To list products on the Amazon Marketplace, sellers are required to set up an account, and send Amazon a product feed. There are millions of third party sellers on the Amazon Marketplace worldwide, generating more than 50% of Amazon’s total sales.

You need 5 things to start selling on Amazon: A product to sell, an Amazon seller account, product listings, a way to manage inventory, and a process to ship orders. Overall, learning how to sell on Amazon is pretty straightforward and we’ll show you how to start selling on Amazon.com in 5 easy steps.

 

Step 1

 

Find Products to Sell on Amazon

 

There are many ways to source profitable products to sell on Amazon. Some sellers follow traditional business models, like selling products they make themselves or reselling wholesale goods. But many sellers reach beyond traditional means and source products in a variety of creative ways.

Here’s a quick look at 5 more popular Amazon product sourcing methods. We’ll explain each in detail below.

5 Ways to Source Products to Sell on Amazon

Sourcing MethodBest forCost to start
Retail ArbitrageStartup and small sellersLow
Reselling Wholesale GoodsEstablished sellersMedium to High
Private LabelEstablished sellers or brandsMedium to High
Manufacturing & HandmadeArtisans and established manufacturing businessesLow to High
DropshippingStartups or experienced dropshippersLow

Now let’s see how you can use these sourcing methods to kick-start selling on Amazon.

Retail Arbitrage

This is a big-sounding term for a very simple process: Buy products in retail stores at drastically reduced prices and resell them on Amazon. Sellers who do this keep a sharp eye out for retail clearance and inventory reduction sales both online and in retail stores. When they find a product that looks like a great deal, they use Amazon price scanning apps to check for profit potential. Scouting apps have a real-time link to Amazon and let you see what the same item is currently selling for, weighs the competition, and tells you if there’s room for profit. These apps even include fulfillment and shipping costs in the profit outlook.

Many successful small sellers got started just this way and now make reselling clearance goods their full-time job. But you have to know how to make it profitable. At first, you’ll likely spend a lot of time researching products that have no profit potential, but over time you’ll learn the tricks. On the plus side, also don’t have to invest much up-front using retail arbitrage.

Reselling Wholesale or Manufactured Goods

This is a more traditional method where you purchase goods in bulk from a wholesale distributor or direct from the manufacturer, then resell them at a markup. On the plus side, you can get low wholesale pricing that leaves plenty of room for profit. But, a serious downside is that you usually have to buy goods in volume. You really need to do your product research homework before taking the plunge on a large shipment from a wholesaler or manufacturer. If you don’t, you could lose money and be stuck with unsold stock. One of the main reasons that sellers get stuck with unsold stock is that their pricing is not competitive, so be sure to offer reasonably competitive prices.

Selling Private Label Products

This is a very popular option for many Amazon sellers. Private label sellers purchase products from manufacturers but package and market them under their own brand. This has many advantages, the main one being you actually build a name for yourself by selling a branded item that “belongs” to you. You can private label a huge assortment of goods, including cosmetics and skincare products.

Like reselling manufactured items, selling private label products has upfront costs because you have to buy these goods in some volume. But if you’re trying to build brand recognition beyond Amazon, private label products are a great way to do it.

Manufacturing & Handmade Goods

If you already make something yourself, then you know what you’re going to sell on Amazon. Your biggest challenges are understanding Amazon’s seller fees for handmade goods to make sure you can sell your products profitably and keeping up with production in the lucky event that your product is a hit.

Dropshipping Products

Selling dropship products on Amazon is another low-cost way to get started, but it’s not for everyone. With drop shipping, you list an item for sale and, when ordered, your dropship vendor ships it for you, and only then are you charged for the item. It sounds like a sweet deal but there are several potential pitfalls with this model, especially when selling on Amazon.

Dropship goods tend to have low profit margins which leave little for you after figuring in your Amazon seller fees. Also, you can face product quality complaints, inventory shortages, and late shipment issues with drop shippers, which you have no control over. These can quickly sink your fledgling Amazon operation. Unless you can find a drop shipper that can meet Amazon’s stringent requirements, drop shipping really isn’t a top choice for new Amazon sellers.

Product Pitfall Alert! Always be Mindful of Your Profit

No matter how you source your products, doing your product research homework is key to success on Amazon. Products that sell like hotcakes elsewhere sometimes slog along on Amazon, while others fly off the shelf at a higher price than you’d ever imagine. And you must understand how Amazon seller fees impact the profit of every product sold.

Amazon has a free profit calculator tool, shown below, that you can use to estimate profits. But power sellers generally turn to more advanced Amazon seller tools to conduct thorough product research and competition analysis before spending a dime. And if retail arbitrage is appealing to you, start strong with a low-cost product scouting app to spot profitable finds.

How to Sell on Amazon - FBA Calculator

After you have an idea of what types of products you want to start selling on Amazon, and how to source them, it’s time to see which Amazon seller account is the best fit for your selling needs and budget.

 

Step 2

 

Select and Set Up Your Amazon Seller Account

 

You can choose between two types of Amazon seller accounts, an Individual Seller account, and a Pro Seller account. Pro accounts give you access to far more features than Individual plans but have a $39.99/mo. fee. Individual accounts are $0/mo. but charge 99¢ per-item fees. Plus, both accounts pay product fees when items sell.

Most sellers opt for Pro accounts because of the many sales-driving features you get as a Pro Seller. But you can always start out with an Individual account, then upgrade. For example, if you’re just dipping your toe into Amazon using retail arbitrage an Individual plan can get you started with minimal costs. But, if you’re investing money in wholesale or private label products, the Pro plan is the best from day one.

Here’s are highlights of what you get, and what you can do, with each Amazon seller plan:

A Comparison of Amazon Pro Seller & Individual Seller Plans

Feature
Amazon Pro Seller
Amazon Individual Seller
Monthly Fee
$39.99
$0
Product listing fee – charged when sold
None
99¢
Number of product listings/sales
Unlimited
40 per month
Amazon product-related fees
Same
Same
Access to Fulfillment by Amazon
Access to Amazon Seller App
Sell existing Amazon products
Add new products to Amazon
Listings eligible for the Buy Box
Offer coupons, shipping specials, and gift wrap
Can apply to sell in restricted categories
Bulk upload products or feeds to Amazon
Access to inventory reports
Connect with 3rd-party services & product feeds

To set up your seller account, select your Seller Plan, then follow Amazon’s account setup wizard. This is the wizard for the Pro plan:

How to Sell on Amazon - Sign up for an Amazon seller account

Once you complete this, you’ll have access to your Seller Central Dashboard and can start listing products to sell on Amazon. Now let’s look at all the ways you can do that.

 

Step 3

 

Create Your Product Listings on Amazon

 

As an Amazon seller, you can create product listings in two ways—either add your items to existing product listings or create a new product listing for an item. Either way, you’ll want your product to show up in the top results when customers search for it. With keyword research, you’ll know the exact words potential customers type in when looking for a product like yours.

Adding items to existing listings is by far the easiest of the two, and this is how most new sellers get started on Amazon. So we’ll begin here.

Manually Add Your Product to an Existing Listing

A quick Amazon shopping search will show you if other sellers already sell your product on Amazon. For example, the Rodeo Bracelet we want to sell has an existing listing with another seller, as shown below:

 

How to Sell on Amazon - existing sellers

If at first selling something already listed for sale seems like a waste of time because of competition, remember that sellers often have just a few items in stock. As competitors sell out, your listing will be the one available, and the one shoppers buy. Of course, you can also lower your price, offer free shipping, or use FBA (discussed below) to make your listing shoppers’ top pick, too.

Manually adding your product to an existing listing is easy in your Seller Central Dashboard. Simply search for the item under List a new product using the product name, Amazon product ID, or item SKU:

 

How to Sell on Amazon - Sell on an existing listing

If it’s already for sale on Amazon, you’ll see existing product listings in the next screen:

 

How to Sell on Amazon - Quick Add an Item

Click on Sell Yours, and you can add your item information, like your price and quantity available, by filling in a few fields on the next screen, shown below. Required fields have an asterisk (*), others are optional:

 

How to Sell on Amazon - Add an item

Once complete, hit Save & Finish. Now you have a live listing on Amazon, ready to sell. That’s all there is to it! Here are a few things to keep in mind when you add products to existing Amazon listings:

Pick the Best Listing

You might find multiple listings for the same item. To start out, look for the top-ranked listing with the best information, images, and product reviews. Adding to multiple listings can create inventory problems if you don’t closely watch your numbers.

Prime Helps You Sell

You’ll notice that the top sellers on any listing tend to be those that are Prime-eligible. These sellers probably use Fulfillment by Amazon (FBA) to store and ship products. And even small and Individual sellers can do this, we’ll show you how in Step 5.

Want step-by-step instructions for creating this type of Amazon product listing? Visit Amazon’s Seller Tutorial.

If you have a Pro seller account, you can also add new product listings to Amazon manually, or through bulk methods. We’ll explore those now.

Manually Create a New Product Listing

Amazon Pro sellers can create completely new product listings for items not already sold on Amazon. This takes more time than adding products to an existing listing, but you can create a high-quality listing that sells by using your own keyword research, product images, and detailed item description.

Adding new products manually takes can be very time-consuming, as can manually adding many items to existing listings. Manual entry is fine if you sell just a few items, but if you have a large or changing collection, you’ll need a bulk upload solution. We’ll explore those now.

Use a Bulk Upload or Product Feed to Add & Manage Listings

If you’re a Pro seller, you also have the option to add many product listings at once by uploading all of your product data using a spreadsheet. And, if you also sell on own website, or plan to, you can directly connect your products to Amazon, too. Here’s how both of these options work:

Bulk Product Listing Upload Using a Spreadsheet

You can add your product to existing listings and create new ones using a bulk upload. To do this, you’ll build your Amazon product data file in a spreadsheet using Excel or similar software, save it as a CSV file, and upload it to your Amazon Seller Central dashboard.

Note, Amazon has several category-specific templates that you can use. There’s definitely a learning curve if you go this route, but the time saved in the long run can be worth the effort.

Bulk Product Listing Upload Using Product Feeds

If you sell, or plan to sell, on your own website, some ecommerce platforms support Amazon product feeds from your ecommerce store. This makes adding and maintaining product listings quite easy. Plus it streamlines inventory and order management, too. If you only sell on Amazon but want to better-manage your listings, there are systems for that, too.

Here are some top ecommerce platforms and listing management solutions to consider if you’re going this route:

Amazon-ready Ecommerce & Listing Management Solutions

PlatformBest forPrice
ShopifySellers using a website and AmazonFrom $29/mo.
BigCommerceSellers using a website, Amazon and eBayFrom $29.95/mo.
EcomDashSellers needing to streamline listing products on AmazonFrom $50/mo.
SellBriteVolume Amazon or sellers or ecommerce sellersFrom $230/mo.

If you’re looking to sell on your own website and on Amazon, try using Shopify as your eCommerce platform. Shopify allows you to synchronize products on your website with Amazon listings and streamline inventory management and orders from multiple sales channels, all in one place. Pricing starts at just $29/month. Click here to get started.

 

Step 4

 

Manage Your Inventory on Amazon

 

Managing inventory accurately is key to your success on Amazon. Amazon will lower your Seller Rating for not shipping an order for an item that you show in-stock. Like product listings above, you have several choices when it comes to inventory management. Whichever method you choose, keep inventory updated to keep your Amazon seller ratings high.

Note, Amazon automatically reduces your inventory count as your Amazon items sell. If you sell only on Amazon, this should keep your counts correct. But if you sell the same stock on your own website or in a retail store, you’ll probably need a better solution.

Manually Adjust Inventory

You can manually adjust inventory levels within your Seller Central dashboard inventory screen. If you sell just a few items on Amazon, manual adjustments can be made by changing the Available units, as shown below. This isn’t too time consuming if you sell just a few products.

 

How to Sell on Amazon - Manage inventory

Manage Inventory Using a Bulk Upload or Inventory Feed

If you manage a number of products, reorder products, or need to balance inventory between Amazon and your website or store, you really need a better solution than manual adjustments. Like adding listings, you also have several options for managing inventory.

Bulk Inventory Upload Using a Spreadsheet

You can make inventory adjustments to some or all of your Amazon products using a bulk upload. To do this, you’ll build or change your Amazon inventory file in a spreadsheet using Excel or similar software, save it as a CSV file, and upload it in your Amazon Seller Central dashboard.

Inventory Management Using Ecommerce Platforms or Inventory Software

The ecommerce platforms and listing management tools listed in the previous section also manage and update your Amazon inventory. So, if you’re already using a tool that uploads products to Amazon, you can manage inventory the same way.

After you have your Amazon listings in place and inventory in-hand, it’s time to watch those orders roll in. And when they do, you’ll need to get products to your buyers. Next, we’ll see how you can handle that task.

 

Step 5

 

Fulfill Your Amazon Orders

 

The last major step in selling on Amazon is shipping orders. Here, you must remember one thing. Amazon is all about the customer. Amazon demands that you fill orders in a timely manner. If you don’t, your Seller Rating will suffer. So, to sell on Amazon, you must be prepared to ship orders yourself or outsource this task.

Ship Amazon Orders Yourself: Fulfillment by Merchant (FBM)

Many Amazon sellers start out shipping Amazon orders themselves. Plus, many established ecommerce sellers ship all Amazon orders from their own warehouse. Amazon calls this Fulfillment by Merchant or FBM.

If you choose to go this route but are new to shipping, Amazon makes it pretty easy to handle on a small scale. You can choose to charge for shipping products or offer free shipping. Plus, you can print orders and print both US Postal and UPS shipping labels right from your Seller Central dashboard. You’ll need to have packing materials ready-to-go, too, including:

  • Shipping boxes
  • Packing tape
  • Filler such as paper or bubble wrap
  • A shipping scale
  • Easy access to shippers for package drop-off, or a secure place for pickup

Let Amazon Fill & Ship Your Orders: Fulfillment by Amazon (FBA)

With Fulfillment by Amazon (FBA), you ship your products to Amazon, and they stock, pack, and ship your products for you. Of course, this comes with added FBA fees on top of your Amazon seller fees, but it also comes with many major sales-driving perks, including:

  • Prime-eligible product listings – Most FBA items are listed as Prime products on Amazon
  • Buyers look for Prime – 60% of US Amazon shoppers are Prime members, totaling $80M buyers in 2017, and they ALL look for Prime products to buy
  • Free shipping to Prime buyers – FBA makes your products eligible for Prime free 2-day shipping
  • Higher rankings for product listings – Amazon gives FBA sellers preference in rankings
  • More Buy Box listings – When prices are the same, FBA sellers with the tie for the Buy Box
  • Trust factor – when buyers sell it’s Fulfilled by Amazon, they trust it will arrive as expected
  • Higher sales potential – All of the above reasons combine to equal higher sales

Using FBA can set your products higher than the competition, not to mention the time saved by not having pack and ship orders yourself.

As an FBA seller, you’ll have to prepare your products correctly for Amazon’s warehouse, then send them to Amazon. This includes printing barcode labels for products, bagging or packaging items per Amazon requirements, and shipping them to Amazon. But for many smaller sellers, this is a once- or twice-monthly task and more manageable that filling orders day-to-day. Plus, Amazon’s inbound shipping costs are very inexpensive, so that cost isn’t a great concern for small sellers.

Use a Third-Party Fulfillment Partner

Another option that takes fulfillment tasks off your plate is using an outside fulfillment company. Like FBA, these businesses store, pack, and ship your products for you. However, it’s considered Fulfillment by Merchant (FBM), since you use a company of your choosing. And, since it’s not FBA, you don’t get the sales-driving perks listed above.

A fulfillment partner is really geared for higher-volume multichannel ecommerce companies that sell in many places, including websites, Amazon, and other marketplaces. It’s rarely a good choice for a low-volume Amazon startup. But, you should be aware of this option in case your growth takes you beyond strictly selling on Amazon.

 


 

That’s it!

 

Amazon is an incredibly accessible platform that welcomes all kinds of sellers, from individuals selling a few items per month to power sellers moving thousands of products each day. There are many ways you can sell on Amazon, but the competition is fierce and Amazon is a demanding marketplace.

You need to approach every Amazon product opportunity from a profit perspective. This means you must figure your seller fees and the cost of the goods you sell and add to that the time value for sourcing products, creating listings, managing inventory, and shipping orders. Once you understand your costs, you can make decisions to help balance efficiencies, increase net profits, and find ways to grow.

 

Author – FitSmallBusiness

 

Further Reading – Amazon Selling Guides on Income Rankings

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