How to Become an Amazon Seller in 8 Easy Steps
Did you know that 74% of third-party sellers on Amazon earn more than $1,000 per month? Also, 39% of third-party sellers see more than $10,000 in sales per month.
Selling on Amazon is an excellent opportunity for everyone to build a sustainable passive income stream.
However, you are absolutely wrong if you think selling on Amazon is a "Get Rich Quick" tactic. It takes time and money to sell successfully on the Amazon marketplace.
If you want to learn step-by-step how to become a successful Amazon seller, you've come to the right place.
Here are the contents of this guide:
- How to Find Products to Sell on Amazon
- How to set up your Amazon business
- How to optimize your listing to increase sales
- How to launch a new product on Amazon
- How to get customer reviews on Amazon
Let's dive right in.
How to Find Products to Sell on Amazon
If you're a beginner, you first need to know what to sell on Amazon. So, let's talk about a strategy to find great products for your Amazon business.
First of all, you've to realize that selling on Amazon – like any other ecommerce business – costs you lots of time and money.
85% of sellers agree – selling on Amazon isn't a get-rich-quick tactic. Here's a chart showing the average time it takes Amazon sellers to turn a profit:
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When you start selling on Amazon, the chances are high that you won't be profitable right from the start.
You need to spend money on Amazon advertising to make sales. Sometimes, you need to spend more money than you get back.
When you constantly make sales, you'll automatically rank higher in search results and make passive sales.
From that moment on, your business will (in most cases) be profitable. But you can't ignore the costs to get there.
We will look at the best strategies to promote your product later in this post. For now, bear in mind that you need time and money to promote your Amazon product.
Then, read through the following research strategy to find the right types of products for your Amazon FBA business:
Sign up for Helium 10
Sign up for a free Helium 10 Account. You can also use this 50% discount code to use all tools.
Head over to Black Box and open "KEYWORDS":
Open ADVANCED FILTERS:
You're now able to filter keywords with exactly those parameters you're looking for.
What you need to do is to enter the parameters that indicate high demand and low competition.
If you're just starting, you can use the values below. You can also modify them by +/- 10%:
- Search Volume: 200 - Max
- Revenue: $5000 - Max
- Price: $15 to $50
- Reviews: 0 - 100
- Variations: 0 - 1
- Competing Products: 0 - 200
Now, go through the results and sort out keywords that refer to a big brand. Only search for general keywords.
The first keyword I saw was this one:
What you can see is that top-ranking products for this keyword only have 41 reviews and a rating of 4.1 on average.
When you head over to Amazon, you can see that there are only 36 competing products.
Next, check the whole niche with Helium 10 XRay. You can see that all products have a low review count and a decent revenue:
Looks GREAT!
But you shouldn't stop here. You've to run all products through Helium 10 Cerebro.
Cerebro is a tool that checks all keywords that products are ranking for on Amazon:
What you need to do is to check if all these keywords are competitive or not.
For example, "lock picks kit" has a total search volume of 354 and 353 competing products.
According to CPR 8-Day Giveaways, you only have to give away 8 products a day for 8 days to rank on the first page of Amazon search results.
Although this strategy is super useful, you should check out our complete guide on what to sell on Amazon.
Calculate Profits
Using our strategies to find great Amazon products, you should create a comprehensive list with all your product ideas. Then, you have to calculate the exact profit margin for each product.
No matter what you want to sell, the profit margin is crucial to the success of your Amazon business. Here's a chart showing the average profit margins of Amazon sellers:
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Only 8% of sellers say that their Amazon business isn't profitable yet. Most sellers make profits between 6% and 50%.
That's GREAT!
Aim for a profit margin of at least 10% for the start.
And here's how to find out the profit margin of an Amazon product:
1. Sign up for a free Helium 10 account
2. Download Helium 10's Chrome Extension here
3. Choose a product
4. Check Profitability
5. Make sure that the profit margin is higher than 10%.
Calculate Costs for Promotion
Next, you need to calculate the costs to rank a product on the first page of Amazon search results for its main search term.
You can use the Helium 10 CPR 8-Day Giveaway Score to do that. It shows you how many sales you have to make per day for eight days to rank on the first page of search results.
You need to use Helium 10 Cerebro to get this score:
You can sign up here for free or use this 50% discount:
For example, assume the Helium 10 CPR 8-Day Giveaway Score is 8. Accordingly, you need to make 64 sales in 8 days. To be on the safe side, you should calculate your costs for 16-32 days.
To calculate your costs, you need to know how much you've to pay per sale for Amazon advertising.
If you run ads on Amazon, you have to pay per click (CPC). The average CPC is $0.97, while the average conversion rate is 9.47%.
Here's a great infographic showing these average values:
You need to divide your CPC by your conversion rate to get the cost per sale. Then multiply this cost by the number of sales you have to make to get your product on the first page of search results.
Of course, you also make revenue when generating sales. You get your real costs if you deduct your costs from your revenue.
Create a Better Product
Amazon's primary goal is to make the most revenue. They mainly take three criteria into account to determine a product's ranking:
- Click-Through-Rate
- Conversion Rate
- Customer Feedback
To get a better Click-Through-Rate and Conversion-Rate, you need to optimize your Amazon listing.
We'll talk later about the best listing optimization strategies. However, to get better customer reviews, you'll need a better product. Customer feedback is the key to long-term success.
Great product = Great customer feedback = long-term success
It's not enough to sell an "OK" product. You need to sell a product that blows customers' minds away.
To achieve that, you need to understand the kano-model. It consists of five attributes that influence customer satisfaction:
- Must-be-Attributes: Basic features that customers only become aware of when they're not fulfilled.
- One-dimensional-Quality-Attributes: Customers know them. They eliminate dissatisfaction or build satisfaction.
- Attractive-Quality-Attributes: Provide satisfaction when achieved, but don't cause dissatisfaction when not.
- Indifferent-Quality-Attributes: Irrelevant. Customers don't care if they're fulfilled or not.
- Reverse-Quality-Attributes: Lead to dissatisfaction if present and customer satisfaction if absent.
While Must-be-Attributes and One-dimensional-Quality-Attributes are important, Attractive-Quality-Attributes are the ones that blow customers' minds away.
The best way to find these attributes is to analyze the problems of your competitor's products. Here's a great strategy to do that:
1. Sign up for a free Helium 10 account
2. Download Helium 10's Chrome Extension
3. Choose a product
4. Start Review Downloader
4. Choose "Only Verified Purchase" and <3* reviews
5. Go through the results and find all problems
If you're really want to beat your competition, fix these problems with your product. It'll only make your life easier in the coming months.
How to Set Up Your Amazon Business
Create an Amazon Seller Account
Creating an Amazon Seller Account is very simple. However, there are some essential things to consider.
First of all, here's what you need to create an Amazon Seller Account:
- The legal form of the company
- Trading license (valid trade license)
- Proof of identity (identity card/passport)
- Bank account
- Credit card
- Valid phone number
Ensure that you have these things when creating your Amazon Seller Account.
Furthermore, there are two types of seller accounts. The Individual Seller Account and the Professional Seller Account:
Individual Seller Account
- You can sell up to 40 items per month
- There is no monthly flat fee
- You need to pay a fee of $0,99 per item sold
Professional Seller Account
- You can sell as many products as you want
- There's a monthly flat fee of $39,99
- You don't have to pay a fee per item sold
I highly recommend choosing the professional plan. The basic selling plan is only worth it if you sell less than 40 items per month.
Choose Your Fulfillment Method
After creating your Amazon Seller Account, you need to choose a fulfillment method.
There are two options: You can go for Fulfillment by Merchant (FBM) and store, pack, and ship products on your own. Or you can use Fulfillment by Amazon (FBA) and outsource all these tasks to Amazon.
You only have to send your products to an Amazon fulfillment center, and they handle the order fulfillment for you.
If you take advantage of Fulfillment by Amazon, you've to pay more fees than an FBM Seller. Every seller has to pay referral fees and fees for the Amazon seller account. FBA Sellers additionally have to pay storage fees and FBA fees (fees for packaging and shipping).
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Here's a comprehensive guide about Amazon fees.
Finally, you need to figure out which fulfillment method is more profitable. Therefore, you should use Helium 10's Profitability Calculator, as shown in the section Calculate Profits.
Keep in mind that you have lots of opportunity costs when you choose Fulfillment by Merchant. These costs are losses that result from not taking advantage of an existing opportunity. For this reason, you have to consider your own hourly rate in the calculation.
Set Up Your Listing
Your listing describes your product to customers. You've probably seen hundreds of product listings in your life so far.
Here is how it looks like:
Overall, there are 3 billion product listings on Amazon.
Thus, you need to create a product listing that stands out. As a new seller, you will do ten times harder to succeed with a bad listing.
We will talk about the best listing optimization strategies later in this post. For now, you only need to know how to set it up.
First of all, you need a Fulfillment Network Stock Keeping Unit (FNSKU).
To get this number, you need a UPC. A UPC is a barcode, as you have probably seen it thousands of times in your life:
You can buy a UPC on the official site of the GS1. I highly recommend not to buy your UPC Code elsewhere – it only makes problems.
When you have your UPC, you can create a listing on Amazon, and you'll get an FNSKU.
While we will discuss later in this post how you can optimize your listing to increase sales on Amazon, here are the basic elements of every Amazon listing:
- Every product page has a product title. Usually, the title includes further details like size or brand.
- Bullet Points are the place where you should convince your customers to buy your product. Clearly explain the benefits of your product.
- Answer customers' most important questions in the product description and explain technical product details.
- Present your product from different angles with your product images.
- Backend keywords don't appear in your listing. Add them to your listing so that customers can find your product in the Amazon search results.
Order Your Product
If you don't manufacture your own products, you need to find a supplier. Alibaba is an excellent point to start your search for manufactures, and there are also great Alibaba alternatives to find quality products.
Let's say you want to sell drinking bottles. Head over to Alibaba and search for drinking bottles:
You will find thousands of manufactures:
Go through the list and search for the ones that are best suited for your product. You can also contact suppliers and negotiate with them.
When searching for a supplier on Alibaba, make sure to choose suppliers that have a Gold Supplier Membership.
Also, check how many companies the supplier works together with and what these companies say about the supplier.
If everything is fine, you can talk about product changes. Do you want a blue bottle or a red one? Do you need other changes? You have to clarify everything and then order one or two samples.
Once you know all costs, go back to the Helium 10 Profitability Calculator and check your profit margin.
If everything is okay, you can place a bulk order. I recommend ordering inventory for two months.
Why?
Because if your inventory management fails and you're out of stock, you'll lose all the rankings you gained through promotion. Accordingly, you will lose all your sales, and your hard work will be wasted.
Optimize Your Listing to Increase Sales
Most Amazon customers don't look past the first search results page when searching for a product on Amazon. So, it's critical that your product ranks highly in the search results. With listing optimization, you can make your product more visible and increase your sales.
Keyword Research
First of all, you need to do extensive keyword research. Amazon only indexes your product for a keyword if you mention it in your listing.
That's why it's uber important to know every keyword that can generate sales.
You should also use Helium 10 Index Checker to check if you're indexed for an important keyword or not.
To find out which keywords are important for your product, you can use the following strategies:
Use Helium 10 Magnet
1. Sign up for a free Helium 10 account
2. Start Helium 10 Magnet
3. Type in a seed-keyword, e. g. "drinking bottle"
4. Get hundreds of keyword suggestions
Read this article here to learn exactly how Helium 10 Magnet can help you find keywords.
Use Helium 10 Cerebro
1. Sign up for a free Helium 10 account
2. Start Helium 10 Cerebro
3. Type in one of your competitor's ASIN
4. See for what keywords your competitors are ranking for
Here's also an article to learn exactly how to find your competitor's keywords.
When you've researched all the important keywords, it's time to optimize your listing:
Optimize Your Title
It's important to make your title descriptive. Tell customers what they'll get from you. If you sell something for which technical details are important, include them as well.
For example, if you sell a drinking bottle, you might include the capacity.
To get all this information, you've to study your niche.
Here are just a few starting points to do that:
- Product-specific blogs
- Forums
- Your competitors
Optimize Your Bullet Points
Bullet points are the place to convince potential customers to buy your product.
So, it would be best if you mention the benefits of your product in the bullet points. You can talk about technical details later in the product description.
Customers see the bullet points first, and they want to hear their benefits, not technical details.
According to Marketingexperiments, only 2.2 % of businesses have a useful value proposition.
I think this number won't be much higher on Amazon. Thus, this could be a great opportunity to separate your listing from the competition.
Optimize Your Product Description
Here's the place to talk about technical product details.
In a retail store, people can always ask someone if they have questions.
But on Amazon, there aren't any employees. If people don't find the information they need, they will look for it elsewhere.
Accordingly, they will also buy somewhere else.
Thus, it gets even more important to study your niche. Here're a few advanced strategies to do that:
- Check Q&A on Amazon
- Check negative reviews of competitors
- Use Helium 10's Review Downloader
Optimize Product Photos
75% of Online Shoppers rely on product photos when they decide to buy a product or not.
Furthermore, 22% of returns occur because the product looks different in person.
Thus, optimizing your product photos is especially important.
If you've great photos, you'll not only make more sales, you also will get fewer returns.
To get the most out of your pictures, focus on these three points:
- Make sure your images are of high quality
- Focus on Value
- Make dominant pictures
You should also check out our article on how to increase your sales on Amazon to learn more about optimizing product images.
Use A+ Content
Using A+ Content, you can include images to your product descriptions or upload a video to your listing.
Here's how it looks like:
Imagine if you had to choose between two similar products.
Would you take the one with video or without video?
For sure, you would buy the product with video content.
Video content can improve your conversion rate by up to 144%.
However, to use A+ Content, you need to enroll your trademark in Amazon Brand Registry.
How to Launch a New Product on Amazon
The most crucial success factor is promotion. That's why we wrote an entire article on how to launch your product on Amazon.
However, here are the three strategies that have the most impact on your product launch:
Amazon Advertising
Amazon Advertising is crucial to your product launch. Keep in mind that your campaign hasn't always to be profitable. Sometimes you will spend more than you will earn.
But your rankings will increase due to growing sales. Consequently, you will automatically make more sales in the future.
Before starting an Amazon advertising campaign, make sure you have a few reviews. Usually, the fewer ratings you have, the worse your conversion rate will be.
Deal Pages
One of the best ways to promote your product is to list it on deal pages. If you offer your product with a 70% or 90% discount, it will be easy for you to sell it.
A great way to list your product on a deal page is to use Jungle Scout.
Like Helium 10, Jungle Scout shows you how many products you have to give away every day for ~ two weeks to get in the top 3 of search results.
Here's what to do:
2. Go to Launch > Promotions tab
Then, Jungle Scout takes you to a dashboard on which you can see all your products. Here's what to do next:
Facebooks Ads
Facebook is still the leading social media channel. According to Statista, Facebook has 2.6 billion active monthly users.
Here's the development of Facebook users from 2009 to now:
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Facebook's targeting options are very comprehensive. Yet, you should keep in mind that Facebook advertising is push advertising.
Compared to Amazon and Google, people don't intrinsically search for a product on Facebook. You push them with ads.
However, Facebook Ads can have an ROI of 450%.
Using Facebook Ads, you should pay attention to the design of your ad. A boring ad only destroys money instead of generating sales.
Here are average Facebook advertising CPCs according to Wordstream:
Since we can't cover everything about Facebook advertising in detail, here's a complete guide that teaches you all the basics.
How to Get Customer Reviews on Amazon
You get more reviews if you have a better product than your competition.
It's that simple.
If you can surprise customers with product quality, they will automatically leave more positive reviews.
We wrote a great guide about how to get reviews on Amazon, which you should check out.
Anyway, here are two strategies you can implement right from the start:
Use Helium 10 Follow Up
Helium 10 Follow Up is an email automation tool for Amazon Sellers. You can set up an automated email campaign that contacts customers after they make a purchase.
You can make sure everything is okay and ask them for a review. You will get more positive feedback and be able to reduce the amount of negative feedback.
You can learn more about Helium 10 Follow Up here.
Utilize Product Inserts
An easy way to get more reviews is to use product inserts. If you want to do so, keep these things in mind:
- Give customers helpful information about your product
- You can ask for reviews, but you've to stay neutral. You're not allowed to encourage people to leave a five-star review.
- You can tell people to join your newsletter or follow you on social media. This will also help you with future product launches.
In Conclusion
To summarize what you've learned, here are the most important points of this article:
- Selling on Amazon isn't a get rich quick tactic
- You must sell products with high demand and low competition
- You need to have a budget to promote your Amazon product
- Promotion is important for success
- Selling a better product than your competitors makes your life a lot easier
- You need to investigate whether FBA or FBM is better for your business
- You've to create a much more attractive listing than your competitors
