You are likely aware of Amazon’s reputation by now. No one wants to sell on Amazon because they just stumble across it one day. People who want to get into the game on Amazon want because they know how lucrative the opportunity is if they do a good job. The key is figuring out the right way to sell on Amazon to set yourself up for success.
Amazon dominates the online selling (and shopping) business. In 2017 Amazon shipped over 5 billion products just to its Amazon Prime customers alone. That means customers who ordered a few items throughout the year and don’t have Amazon Prime weren’t even considered in that figure. That’s an insane amount of potential business.
Making good decisions and establishing good habits early on in the process is important. For those who are new to Amazon selling it’s good to have an idea of what the entire process looks like. If that’s what you’re looking for, you’re in the right place. Here is what your amazon selling journey will look like, from A to Z.
1. The Research Phase
Researching how things work for an Amazon seller is a vital part of your process of becoming the most successful seller you possibly can. You’ll need to understand how Amazon fees work, how listing an item works, and what resources are out there for you to use. To understand all of these things you need to invest some time in the research phase of your journey.
There’s a lot to learn and some of the things you need to learn as an Amazon seller can be done after you’ve made a listing, but not everything. This isn’t the most fun part of your Amazon journey but it’s essential to your future success that you don’t skip this step. The research phase shouldn’t be rushed just so you can put your first listing up.
Amazon’s profits since 2008, now at an all-time high. Good research will get you set up for successful selling on their platform.
Spending time learning about everything that’s out there before you actually put a listing up will result in you creating better listings from the get-go.
Amazon has been around for over 25 years at this point. The guesswork to being an Amazon seller has been done by many sellers who have gone before you. Use their tips, and anything else you can research to avoid the mistakes other sellers made during their early days.
Here are some important resources and things to learn about in the research phase of selling on Amazon:
Amazon Seller Central
Amazon Seller Central is the interface sellers use to create listings and sell on Amazon. It’s also where Amazon stores a lot of helpful information like how listing fees work, and definitions of various terms Amazon sellers need to be familiar with.
You can view a lot of the information from Amazon themselves without having a seller account. It’s a helpful resource you’ll need to utilize quite a bit as you’re learning how things work. Seller Central is a one-stop solution for all your questions.
No matter what you want to sell on Amazon there will be fees associated with each listing and each item you sell. Remember that Amazon wants to make money too, so you’re paying them for things like their built-in customer base. You will need to understand how Amazon assess seller fees before you even create a listing.
If you don’t understand the fees and monthly seller plans then you’re going to risk losing money on your venture instead of turning a profit. No one wants to end up owing money to Amazon unexpectedly. Make sure you’re spending an ample amount of time researching fees and how they work so you can avoid unwanted surprises.
When you’re selling on Amazon you can expect to deal with the following types of fees:
Amazon offers 2 different types of seller plans. These are fees you’re going to pay no matter what you sell. They are just part of the cost of doing business on Amazon’s website. You can choose between the individual seller plan and the professional seller plan.
For individual plans, you will not have a monthly fee, but you will have to pay .99 cents per item you sell. Keep in mind this .99 cent per item fee is in addition to other fees associated with your listing. It’s easy to get confused and mix this up but important to keep separated in your mind. Forgetting about this fee could mess up your bottom line if you aren’t careful.
For professional seller plans, you will not have to pay the .99 cents per item sold, but you will have a monthly fee of $39.99 instead. If you’re planning to sell more than 40 items per month the professional seller plan is going to be the cheaper option. After the 40 item mark, you can see that not having to pay per item sold will be saving you money on fees.
Sellers selling via FBA ship their items to an Amazon warehouse and Amazon handles things from there. And they need to pay fees to Amazon to use their FBA (fulfillment by Amazon) service. As an FBA seller, you can expect to have increased interest in your listings.
Amazon Prime customers want to be able to take advantage of their shipping benefits as much as possible. With FBA services you can use that to make better profits. You won’t have to charge for shipping and Prime customers have the option of using their benefits because Amazon is handling your items.
There are over 95 million Amazon Prime customers in the US alone so becoming an FBA seller is something you’ll want to give some heavy consideration to. Just remember that much like your seller plan, the fees associated with FBA listings are specific to your FBA listings only.
FBA fees take numerous things into account. Amazon charges you for how long items are sitting in their warehouse, and even how much space those items take up. The best way to account for your FBA fees is to use an FBA fee and profit calculator. There are just too many variables included in your FBA fees to rely on your own mental math.
You can (and should) read about how FBA fees are assessed, but to make good decisions about how to price listings you’ll still want to use an FBA calculator once you get going. Without an FBA calculator, you’re bound to forget an aspect of your fees and that means you could lose some money.
This might seem like too much information in your research phase but it’s not. It’s important to understand how to figure out potential FBA fees before you make your first listing. If you decide to become an FBA seller right off the bat, you’ll have to plan for that. Knowing how the fees work is part of learning about the process and a key part of your research phase.
Every time you list an item there will be several different fees you have to pay when the item sells. Amazon’s fee structure can seem pretty daunting at first but again, you can find breakdowns for the fees through Seller Central or from other Amazon sellers who now help new sellers get started.
Referral fees are based on the total cost of your item plus shipping (unless you’re an FBA seller). If you’re going to sell something for 4 dollars and the customer also pays 3 dollars in shipping fees, your referral fee will be based on the $7 final price. Again, if you are an FBA seller you do not include shipping in your referral fee.
The amount of the referral fee depends on the category your item is listed/sold in. You’ll want to make sure you’re aware of the cost associated with each category as you start researching further. It will affect your decisions on what to sell so you should be using your time researching to make sure you’re making the best possible choice about what to list first.
Referral fees and FBA fees aren’t the only things you’ll need to be aware of. There are several other fees you’ll need to know about while you’re still in research mode. Just keep in mind that knowing about the fees is a good thing. It shouldn’t deter you from selling on Amazon, it’s just a way to be more informed about what to expect when you do start selling.
Refund Administration Fees:
Every time someone returns an item they purchased from you you’ll get a Refund Administration Fee assessed by Amazon for the return. This is something you should keep in mind as you’re looking at what products you want to sell. Products that are more difficult to explain in the description or harder to use once delivered are more likely to be returned.
This is another fee you’re going to need to know about. It’s something that’s charged in addition to your seller plan fees, your FBA fees, or your referral fees (if you’re using the professional seller plan closing fees are included as part of your referral fee.) Closing fees are different depending on which seller plan you use.
As an individual seller, you can expect to pay variable closing fees ranging from .45 to $1.35 depending on the item sold. Professional sellers can expect to pay a percentage of their total sales in a combined referral and closing fee scale. It can range from 6% to 25% depending on the category and total sales amount.
High Volume Listing Fees:
This fee is only assessed in a very specific situation but it is still something you should be aware of. It’s unlikely to affect you early on but if you become an Amazon genius seller and have tons of listings this one could sneak up on you.
This fee is something Amazon will charge you if you have over 100,000 ASINs (Amazon Standard Identification Numbers) that are active and have an offer on them. If they were listed over 12 months ago and have not had any sales in the past 12 months, Amazon will charge you a high volume listing fee.
The Overall Approximate Cost Of Launching An Amazon Store:
There are four main costs involved in getting your shop up and running. You’ve already read about the seller plan fee and the listing fees. You’re also going to have to consider the cost of your inventory as well as any shipping and handling costs you may have.
When all is said and done, the average cost to launch your Amazon store is going to be around $500-$1000. This is just a rough estimate but it gives you a good idea of what to expect. It also should calm any fears you have that the costs to start are going to be exorbitant and unattainable.
Identifying Profitable Items To Sell On Amazon
3rd party sellers are now outselling Amazon on their own website. Finding a profitable item to sell is the key to cashing in.
A huge part of your research phase should be dedicated to finding profitable items to list on Amazon. There are a lot of things to consider when you’re thinking about what to sell. You should take your own interests into account, but there are other factors to consider as well.
First of all, you’ll want to look at Amazon’s Best Sellers list. Amazon has a list of the best sellers in each category and that list can help steer what you decide to sell. Look at what’s selling well and what’s outselling everyone else in the category. You might not be able to compete with the big companies that are at the very top of the list but you can still use the list to see what ideas you have that might not sell well at all.
Sometimes the reason something isn’t found on Amazon is because many other sellers have tried to sell that item and not ever seen a single sale. The best sellers list will be able to guide you both away from choosing an item that’s already dominated by a big brand, as well as away from items that just aren’t ever going to sell.
This is also the part of your selling journey where you’ll start looking at what tools are out there to help you along the way a little more. You already know about FBA fee calculators but that’s not the only tool at your disposal. You can also use sales rank tools during your research phase.
Using Sales Rank Tools
Sales rank tools help you to track ranking of your product and competitors. That means they’re more up to date than Amazon’s list sometimes. They also give you more information than using the bestsellers list alone.
Sales rank tools show you where a product is ranking within their category overall. They can help you identify trends that are happening right now. That means you can figure out if something is on an upward or downward trajectory. Always choose a product to sell based on sales rank tool. They tell you how sustainable the product is.
Put together all the information you have collected from sales rank tools and decide. Remember that some items are only going to be popular for a little while. Fidget spinners were hot at one point and then died down, for example.
You’ll also want to take seasonal items into account as you’re looking at a sales rank too and the best sellers list. Something that sells well in July isn’t going to be as popular in November if it’s related to warm weather. The same goes for holiday-related items. You can make a good profit with them but it’s not something you should plan on selling well year-round.
You’ll also want to weigh the benefits of a niche market item into your decision-making process. If you’re hoping to bring in a natural flow of as many customers as possible you probably don’t want to narrow the field too much. That means choosing items that have the widest appeal possible within your category.
If you’re okay with spending some time advertising and adjusting your listing to bring in a more narrow group of people a niche item could be a great decision. You’ll be able to have less competition and you might even be able to win the buy box if you do everything right. That’s a huge way to increase the profits you’re pulling in with your listings.
What Is “Winning The Buy Box?”
The “buy box” is the section on the listing where customers can add an item to their cart or buy a product instantly. It’s not a guarantee that your item will be the one in that box if Amazon has several listings for the exact same thing. Winning the buy box is an important part of beating out your competition.
Customers are far more likely to hit “add to cart” than they are to look through a list of sellers all offering the same product at the same price. Once again they’re going to trust Amazon’s reputation and choose whatever is in the buy box just like they trust FBA sellers more because Amazon is handling the shipping and customer service.
When you’re looking at how well an item is selling and who the big players are in a category remember that you’re going to compete for that box. Choosing items that will sell well and aren’t crowded out with large companies could mean you win out the buy box more often and end up with better profits in the end.
Spending time figuring out what items are going to be profitable to sell is going to take some of the most efforts during your research phase. Using a sales rank tool and looking at the bestsellers list should be two of the ways you make sure to really dig into the information available in a useful way.
No one is going to be able to guarantee you that an item will sell but you can make more educated decisions to minimize the risk. Remember to keep in mind the fees you’ve already learned about. Minimizing the risk of returns by choosing items that are customer-friendly is another thing to think about in terms of your bottom line.
Those fees can add up quickly especially if you aren’t yet selling a large enough volume to absorb some of those costs. The best thing you can do is use the tools at your disposal and decide to make some smaller leaps of faith that a product will sell well. There’s no crystal ball, true, but you’ll still have a lot of indicators that you’re going to be selling a good item if you put in the work and research with what you’re thinking of selling.
You also need to know how to optimize your Amazon listings. You will need to optimize your title, description, content, images, and videos so that Google can find you. Optimizing your listings can be a bit tricky to understand, so here is a video that can help you step by step.
2. The Active Listing Phase
Once you’ve made it out of the research phase it’s time to list your item or items. This is where the game changes again. You’re still going to want to continue to stay up to date on research and sales tips but you’re going to shift your main focus to your active listings and making sure they do well.
There are some key things you’ll want to consider when your listings are live.
- Keep using your sales rank tool to see how you’re doing in comparison to other sellers.
- Watch for how your listings are performing and the traffic they’re pulling in.
- Make sure you’re providing top-notch customer service.
While you’re dealing with active listings don’t get lulled into feeling like you don’t have to provide good service because you’re selling online. Sometimes the screen can make you feel like that personal touch isn’t as important but it’s still something customers pay attention to.
Make sure you’re answering questions about your listing quickly and accurately. If there’s a problem make sure you’re reaching out to the customer with workable solutions. Customers on Amazon really pay attention to the reviews other customers have already left. If something is going wrong you’ll want to take care of that quickly so negative reviews don’t stack up.
How To Get Good Reviews
Good reviews are an essential part of being the best Amazon seller you can possibly be. That means you’re going to have to put in some work to get those reviews. Amazon sellers cannot incentivize reviews in any manner (or directly request a positive review) but you also don’t have to sit back and just hope good reviews appear out of nowhere either.
After you’ve made a sale the follow-up you do is going to directly affect how many reviews you get and what kind of reviews they are. You can reach out to customers who have made purchases with you through your Amazon interface, and you can ask them to leave an honest review about their experience.
Customers are busy people just like you, so sometimes they forget they’ve just recently made a purchase. That reminder email goes a long way in helping them remember that they intended to leave a review and haven’t done that yet. If they weren’t intending to leave a review the follow-up email can prompt them to leave a review they hadn’t even considered leaving yet.
You also have the chance to stop negative reviews before they happen if you’re being proactive about your follow-up emails. Sometimes a customer isn’t happy with a product. There’s no way to avoid an unhappy customer even if you provide the best service possible. If you’re diligent about follow-up emails you might be able to encourage a customer to contact you directly with an issue instead of leaving a poor review.
Again, when they do reach out make sure you’re professional and quick about handling the complaint. Respond with ways you can fix the problem and try not to take the complaint personally. The same goes for any negative reviews you might see out there. They aren’t a personal attack even if it feels like they are in the moment.
Amazon customers have up to 60 days to change their review so you still have time to fix things. You can use a review tracker tool to make sure you’re matching up your reviews with the correct customer information. (Sometimes the reviewer will use a different name than the name you shipped the item to.) After that reach out and offer to fix things. If the situation is resolved and the customer is happy they can change their review to reflect that.
As you start monitoring your live listings you’ll want to expand on the tools you’re already using. You can keep using your sales rank tool and your FBA fee calculator. (And you should keep using those the entire time) But you can also add on to the list of tools you use. There are some great things out there to help you succeed as an Amazon seller.
You should be aware of, and start using these sales tools as the need arises:
Split Testing Tools:
Split testing is something you should do when you see that an item is not performing as well as you anticipated. Maybe there’s a problem with the pricing or maybe you need to change up your listing title and the keywords you use. That’s where split testing can help you out.
You can split up the changes you make to a listing to see what brings in more traffic and converts to more sales by changing one thing at a time. Split testing tools let you test out those changes in a mock Amazon sales environment so the risk is minimized as much as possible.
The tools predict how a change will affect your listing’s performance. You can play around with everything until you find the right combination of changes and then use those changes in your live listing.
You just read about how important reviews are to your success on Amazon. As you’re already aware, sometimes customers leave a review with a different name than the item was shipped to. It’s usually not an issue but if you need to reach out to the customer to try and solve a problem it can be a stumbling block.
Review tracking tools help you track your reviews and match them up with the right order number. This is a real time-saver for you because it means you can reach out to the right person quickly. You won’t have to worry about not knowing who left the review or digging through records to find their information.
Keyword tools should be something you check every time you create a listing. You want to see what words customers are searching to get to a product like yours. Keyword tools help you figure all of that out. Sometimes a customer isn’t using the same wording you would use to find your product.
Use a keyword tool to find the best way to title your listing so you aren’t missing out on customers because you used the wrong wording. If your listing is underperforming a keyword tool should be your first stop before heading over to your split testing tool. Split testing won’t be effective if you’re still guessing at keywords.
Watching Competitor’s Listings
Another way to gain information about better pricing strategies and keywords or product descriptions is to watch what your competitors are doing. They’ve been selling their items for a reason so see what’s different about their listings. You can check their reviews, their pricing, and their keywords.
If they’re using a significantly different approach see how you can adjust your approach to be more like theirs. You can use their strategy to overtake them if you do it the right way. Again, you can use this information in the split testing environment to see what will work for you.
3. The Growth Phase
After you’ve been selling on Amazon for a while you’ll want to consider what happens next. If you’re happy with what you’re doing that’s great. You can continue on to the maintenance phase and stick with what you’re doing. If you want to continue to grow, however, you’ll want to work into the growth phase of your Amazon journey.
In this phase, you’ll revisit some of the research you did initially. You’ll want to start looking at what else you might be able to sell. Maybe there are items out there that will complement what you’re already selling. There could also be something entirely different in another category that you want to try selling too.
If you haven’t become an FBA seller yet, the growth phase is definitely the time to start moving towards that change as well. Remember that with FBA listings you can reach Amazon Prime customers who want to use their Amazon Prime shipping benefits as much as possible. This is a big deal because Amazon Prime customers spend more than those who don’t have a Prime membership.
Growth as an Amazon seller ensures you’ll continue to entice buyers to purchase your items over competitors. The percentage of people buying on Amazon is only increasing yearly.
On average an Amazon Prime customer will spend about $1,400 a year on Amazon which is over double the amount that regular Amazon customers will spend. Missing out on those customers because they’ve gone with an FBA seller is seriously going to hinder your growth as an Amazon seller.
Using Bundles To Increase Profits
Amazon bundles are sets of items that you can sell together. They have to be items that complement each other and are not exactly the same item as well. If you want to sell three of the exact same item together, that’s not a bundle, that’s a multi-pack. It’s an entirely different type of listing.
With bundles, you give your customers a chance to buy several things together for an overall discount on the items. To be effective your bundled items need to save the customer some money in the end.
Yes, the bundle itself is going to be more expensive than one item on its own. But if they’re going to buy all of the items in your bundle anyhow, offering a bundled listing is a great way to increase your profits.
Bundles help you to sell more to the same customer and increase the average order value(AOV). For instance, if you’re selling shampoo. you can bundle it with conditioner. They can buy both from you and get what they want while saving a few dollars.
Bundles also save you some money as a seller. Remember those fees you read about? By this point in your journey, you’re going to be very familiar with how all of them work. Since you’re paying a fee based on the final sales price you can save money by selling 2 or 3 items together.
Think about the shampoo and conditioner example again. If a customer buys both of those items then you’re going to pay a fee for each item they buy. With a bundle you pay a fee on the lower cost you’re offering to the customer when they buy both items as a set. It might not seem like a huge savings amount at first but it will add up quickly.
Bundling also gives you a chance to win out that buy box once again. If no one else is offering the exact same bundle as you that means you don’t have any competitors to deal with. The buy box is yours with that bundle. Just make sure you’re following all the rules Amazon has set with bundle selling.
Using AMS Campaigns Effectively To Increase Your Sales:
Amazon offers sellers the chance to advertise within their own platform using various types of ad campaigns. While this used to just be called an AMS campaign it has been rebranded as “Amazon Advertising” and the AMS (Amazon Marketing Services) section is now called “Advertising Console.”
Regardless of the names, the ideas remain the same. Sellers can run campaigns to highlight their products
- In search results as sponsored products
- Make their campaign into a headline search ad, or
- Place an ad in other product listing pages
The best thing about these campaigns is, you can put as much as you want into the campaign. The results you get may vary depending on the type of campaign you choose to use. You’ll want to think about your goals and what you need most.
If you’re hoping to draw traffic into your listing then a sponsored product ad is probably a great fit. It will show up when customers search using particular keywords and buy intent of user will be high. This is the best profitable ad type on Amazon. Start with this type and slowly expand to other ad formats.
With a sponsored product ad, your customer only has one item to click and one page to land on. You will not be able to highlight multiple items using this method.
Sponsored listing is product specific and we can show only one product at a time. Headline search ads are better to showcase multiple products from your portfolio. Choose the right type of ad type based on your need.
Product display ad allows you to add your logo and showcase your product at the same time. It will be targeted to display on items that are related to what a customer is already buying. For example, if a customer is buying an iPad, you may want to place a display ad for iPad cases.
Amazon Advertising campaigns can work really well if you pay special attention to what your goals are. Choosing the right campaign type will be essential to you during the growth phase of your Amazon journey.
4. The Maintenance Phase
In this journey at some point, you’ll reach a point where you just want to maintain what you have. You won’t want to sell more items or continue to search for new ideas. That’s when you’re hitting the maintenance phase of your selling journey. This is a great place to be. It means you’re bringing in the profits you wanted and it’s time to reap those rewards.
There are still things you’ll need to continue to do in this phase. You’ll still want to make sure you’re providing top-notch customer service. You won’t want to let your reviews slip either. These are still going to be important to make sure you stay on top as a seller. You’re going to be actively maintaining your listings, not letting them fall to pieces because you neglected them.
During this phase, keep monitoring the changes Amazon makes to the fee structure or seller guidelines. You’ll also want to make sure you’re still using your sales tools as needed. If you start to see a decline in traffic, then figure out why and stop it as quickly as possible.
Remember that you can always go back to the growth phase if you decide you want to start another listing. It’s entirely up to you. As an Amazon seller, you can choose to maintain your listings or grow your listings at your own pace. It’s all about what’s going to work best for you.
Your journey as an Amazon seller is not going to be a short one. There is no short cut, you still have to go through the entire journey. You won’t be able to jump for research to maintenance without some work and serious effort.
Your journey might get a little overwhelming at times and you can always look for other seller’s help. They’ve already done what you’re doing so you can learn a lot from them. Use the resources and tools you have learned here to make your journey easier. But remember that you’re always going to be learning something new and growing as a seller.
The amount of time spent researching or maintaining your listings is going to show up in your profits. All the initial effort you’ve put in will be well worth it when you see the dollar signs adding up. Good luck and happy selling!