How To Sell On Amazon For Beginners: The Definitive Guide

by Moritz B.

Published on

24.11.2019 0

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Amazon sells $4,722 worth of products every second. That's $283,000 a minute. Unbelievable, isn't it?

External sellers are responsible for a large part of this turnover.

You can also sell products on Amazon. You can even build a multi-million dollar business.

In this detailed guide, you'll learn how to sell products on Amazon successfully.

These are the contents of this guide:

How can you sell products on Amazon? (What are your options?)
What is Amazon FBA?
What are the best Amazon tools?
How can you find a product that you can sell on Amazon?
The step-by-step guide to selling on Amazon
Other Resources

Let's start ...

How Can You Sell Products On Amazon?

There are many ways to make money on Amazon. Yet, Amazon offers five options for selling products.

In this chapter, you will learn about these different alternatives.

Sell Private Label Products

Selling private label products on Amazon is one of the most lucrative ways to make money on Amazon. But what does private labeling mean?

Private label means nothing more than a trademark. Private labeling means selling products produced for a particular merchant. These Products are sold under that merchant's unique brand.

The seller can coordinate certain product characteristics with the manufacturer. Thus, the retailer can define the characteristics of his own product.

Private labeling is popular among entrepreneurs who want to establish their own brand.

Tesco Value's Baked Beans is an example for a Private Label Products as opposed to Heinz Baked Beans.

Tesco Value's Baked Beans:

Heinz Beaked Beans:

But where do you get private label products from? You have to buy white label products and resell them under your brand (private label). Then you created a Private Label Product.

You can find these White-Label-Products on Alibaba, the world's largest B2B marketplace.

On Alibaba, you can contact manufacturers from all over the world and order your products.

But, some experts from the industry do not recommend Alibaba. However, there are some good Alibaba alternatives.

Selling private label products can earn you between $100 and $100,000 a month. There are no limits.

Sell Wholesale Goods on Amazon

Selling wholesale goods on Amazon is a little bit like selling private label products.

However, there is a small difference. You do not sell private label products branded by your brand. You sell products from other (well-known) brands on Amazon.

The wholesale business on Amazon has an advantage. You don't have to worry about production, branding, certificates or other tedious tasks.

That's great because it saves you a lot of time and you can focus on growing your business.

But there are also some disadvantages. The competition in this field is much bigger. You are not so flexible and the business model is not as scalable as when selling private label products.

With the sale of wholesale products, you can make between $100 and $10,000 a month. Again, there are no limits.

Retail Arbitrage

Retail Arbitrage is based on the principle of buying items in so-called retail stores such as Walmart, Target, Barnes & Noble etc... and then selling them again on Amazon for a more expensive price.

For example, you go to Walmart and buy a product for $5. After that, you sell it on Amazon for $20. After deducting all fees you get a profit of $5.

On eBay (65.91 million monthly visitors) you will also find a lot of retail arbitrage sellers. However, it's proven that selling on Amazon is the most lucrative way.

On Amazon, you can reach a much larger target group than on other online marketplaces.

Amazon has 209.7 million monthly visitors.

Online Selling Experiment claim they made $2 million in revenue by retail arbitrage.

Online Arbitrage

Online arbitrage also works a little bit like retail arbitrage. However, there is also one important difference.

You do not buy your products in retail stores, but on other online marketplaces such as eBay. You can also find a detailed article on online arbitrage at Online Selling Experiment.

Sell Books on Amazon

Selling books can be a particularly easy way to start a business on Amazon. Especially because Amazon is a great place to sell books.

There are a few things that work differently from selling private label products or wholesale goods. I recently wrote a very detailed article explaining how to sell books on Amazon.

Amazon Handmade

Amazon Handmade is probably less interesting for most who read this article. For completeness, I will briefly introduce Amazon Handmade.

The program allows creative craftsmen to sell their homemade products through Amazon. According to Jungle Scout, a talented craftsman can earn about $30 a day.

If you want to know more about Amazon Handmade, this article is your first port of call.

What Is Amazon FBA?

In the last chapter, we looked at the opportunities you have to sell products on Amazon.

In this section, we'll look at what options you have and how you can sell your products on Amazon.

There are three ways to sell your products on Amazon.

Fulfillment by you (FBM):

You list your products for sale on Amazon. As soon as a customer orders one of your products, you pack and ship it yourself.

Amazon Vendors (AMZ):

You sell your goods to Amazon via the central merchant services. This is often useful for entrepreneurs who need to get rid of a lot of inventory.

Here you can learn more about it.

Fulfillment by Amazon (FBA):

Amazon FBA is probably the most interesting option for most people. That's why we're going to cover this topic in detail in this chapter.

FBA means Fulfillment by Amazon. In fact, Amazon takes on the following tasks for you:

Storage of products
order processing
Shipment of products
returns
customer support
Other logistic activities

As a seller, you no longer have physical contact with your products when you use Amazon's FBA service.

Amazon does all the hard work for you. You only have to take care of selling and marketing your products, Amazon doesn't do that for you.

But let's get down to the Amazon FBA process first. Better said, how does Amazon FBA work?

First, you have to order your products. For this task, you can use Alibaba or Aliexpress. Alibaba and Aliexpress work great. You can contact your suppliers, negotiate with them and then order your products. These marketplaces like Amazon, except they are B2B marketplaces. If you're looking for a specific product on Alibaba, enter a keyword in the search bar. You can discover thousands of different manufacturers on Alibaba or Aliexpress.
Did you find your product, negotiate the price and are ready for your first order? You can have your products shipped to an Amazon fulfillment center.
Once your products reached a fulfillment center, Amazon adds them to their inventory. They are well taken care of. And if one of your products gets damaged, Amazon will refund you the full retail price.
As soon as a customer orders one of your products from Amazon, Amazon takes care of the transaction for you. This is an automated process.
An Amazon employee commissions your product, packs it and ships it to your customer.
Then, Amazon makes sure that everything is ok and take care of customer satisfaction. If the customer isn't satisfied or wants to exchange the product, Amazon will also take care of it.

Okay, that sounds great. But what else do I have to do as a seller? After all, Amazon does all the work for me?

These are your tasks:

Find a suitable product/niche

You have to decide what to sell on Amazon. That's the first hurdle. If you offer a product that already exists 1000 times on Amazon, then your item will not sell. So you have to do some research to find out which niche is suitable.

To do this task, the following article introduces you to the best Amazon tools that can help you with your work.

Make sure your inventory is full

Amazon will ship your goods to your customers. But only if your products are available. You have to ensure that your inventory reaches the Amazon Fulfillment Center.

Once you're out of stock, you're no longer able to sell products. Also, your search engine rankings will drop very fast.

That's because Amazon is interested in making money. If your inventory is no longer available, Amazon can't make money.

Because of that, they will place your product at the bottom of the search results. On the other hand, they will place you competitors at the top.

Promote (sell) your procuts on Amazon

Just because Amazon does the shipping for you doesn't mean they sell your products for you.

You have to make sure that customers are aware of your offers yourself.

For example, you can do this with Amazon PPC, or you can run external ads, such as Facebook ads.

Over a longer period, you should fight for organic rankings. These are essential to your success on Amazon in the long run.

Without good rankings in organic search, you won't be successful for a long time.

How much does Amazon FBA cost?

Of course, you have to pay a fee for Amazon's services. These fees depend on whether you have an individual seller account or a professional seller account.

Also, you have to pay Amazon FBA Service fees besides the fees you have to pay depending on your account.

Fees depending on the form of the seller account

Individual seller account

Sale of less than 40 items per month
No monthly subscription fee (basic fee)
Fees per item sold: 0.99 € (per item) + Percentage Sales Fees (Amazon FBA Fees)

Professional seller account

Sale of more than 40 items per month
Monthly subscription fee (basic fee): 39 € (excl. VAT)
Fees per item sold: Percentage of sales fees only (Amazon FBA fees)

Amazon FBA Fees

Amazon FBA brokerage fees

Amazon charges an average commission of 15% on all your sales. The referral fee depends on the category.

You can find out more here.

Amazon FBA Shipping Fees

Amazon also charges a fee for logistics services. But keep in mind that you will probably have more costs if you ship your products yourself.

Click here to find out more.

Amazon FBA storage fees

Amazon charges a storage fee for the storage of your products. The storage fees are different in the summer and winter months.

Here you can learn more about Amazon's storage fees.

What Are The Best Amazon FBA Tools?

Helium 10

When it comes to finding products to sell on Amazon, you won't find a better tool than Helium 10.

With an innovative feature set, Helium 10 is the most comprehensive tool on the market.

With a total of 12 different Amazon Seller tools, Helium 10 is very versatile and affordable.

Helium 10 is a popular tool for competitor analysis. You can choose between many different ways to find out what your competitors are doing.

Jungle Scout

Jungle Scout is a tool that helps you make informed decisions to find suitable products.

Jungle Scout uses key metrics such as the bestseller rank, monthly sales or sold units to determine the potential of a specific niche.

Jungle Scout also offers keyword research, product tracking and many other great features.

This year, Jungle Scout launched two new tools called Supplier Database and Launch.

With the use of the Supplier Database, Sellers can quickly find potential suppliers.

Jungle Scout Launch takes your product launch to the next level.

Learn more about Jungle Scout and its features in our Jungle Scout Review.

How Do You Find A Product That You Can Sell On Amazon?

The characteristics of a good Amazon product

Over the years I have developed many strategies to find products that sell well on Amazon.

In this chapter, you will learn which products you can sell on Amazon and what strategies you can use.

Let's start with the characteristics of a product that you can sell on Amazon.

From a business perspective, a product has a lot of potential when demand is high and competition low.

Let's look at Amazon as an isolated marketplace. Customers are looking for products, and there are sellers offering products.

If we are looking for products that we can sell on Amazon, then we need to focus on Amazon.

It would be different if we wanted to start our online shop. Then we should not only consider Amazon, but also the complete E-Commerce market.

Of course, Amazon would also play a big role in this analysis. That's because Amazon is responsible for almost 50% of all e-commerce sales in the US.

Let's focus on what's important again. To find a product for Amazon FBA we focus on Amazon.

In short, you can sell any product on Amazon that has a high demand and low competition.

Too theoretical?

Let's put that knowledge into practice. On Amazon, there are certain indicators that we take into account for our analysis.

I have divided these indicators into demand indicators, supply indicators, normal indicators, and fluctuation indicators.

Demand indicators:

Units sold per month
Units sold per day
Monthly turnover
Daily turnover

Supply Indicators:

Number of dealers
Number of products

Normal indicators:

Price
Number of reviews
Average rating
bestseller rank
Number of images
Number of product variations
Size

Fluctuation indicators:

Change in sales/price compared to the previous year
Period of most sales

You can use these values to determine whether a product is suitable for selling on Amazon or not.

In the following, I will explain these indicators in more detail. I will also explain which values the indicators should have.

Units sold per month

Since the demand should be high, the units sold per month are decisive. An exact number is difficult to define, but we make it later with turnover.

Units sold per day

The same applies here as for the units sold per month. These values are defined by sales. However, it pays to have the units sold per month and per day on the screen.

Monthly sales

The monthly turnover should also be over $3000 for your first product. Depending on how much your items cost, the number of units sold will vary per month or per day.

Daily sales

You can determine the daily turnover based on the monthly turnover. Also for your first product, your daily turnover should exceed $100.

Number of merchants

The number of dealers gives information about the competition level. If there are many vendors in a particular niche, then you should look for another.

The largest number of dealers should be 20.

Number of products

The number of competing products is a very important indicator. Do you want to sell a product that already exists 20,000 times on Amazon?

I strongly advise against this. I can assure you that this strategy will not work.

You should look for products that have less than 500 search hits. The less, the better.

Of course, you shouldn't lose sight of demand. A product that is only offered five times on Amazon may not generate sales.

You can find out more about this in the further course of this article.

Price

The price should be between $15 and $50. There are two reasons for this: For products that cost more than $50, buyers think twice before making a sale. For products that cost less than $15, your margin is too low.

Number of reviews

You should not enter a niche where the products have many ratings. This usually means MUCH CONCURRENCES. Make sure that your competition has less than 40 ratings.

Average rating

Of course, if your competition has poor ratings, it is nice for you. That's because you can then convince customers faster of your product.

bestseller rank

The BSR or Bestseller Rank is a rating that assigns Amazon items based on their sales and historical sales data and is updated hourly. It essentially shows you how your product compares to other products within the same category.

Number of images

If each of your competitors uses the maximum number of images available (9), then you can assume that these merchants have optimized their complete listings on Amazon. (Which is bad for you)

Number of product variations

In the beginning, you should bet on products that have few product variations. This is because your budget will not be enough to buy 5 different product variations.

Size

The bigger your product, the more transport and storage costs you will pay.

Change in sales/prices compared to the previous year

These indicators show you how the product develops over time, maybe it makes sense to sell an item that is only recently on the market because there aren't so many retailers?

However, you should be careful, because trends can also go into your pants.

Period of most sales

You should sell products that sell well all year round. Thus, be careful not to offer articles with large fluctuations.

How do you find these values?

You might be wondering how you find all these values.

In short, you need Amazon Tools. These tools give you the insight and information you need.

You can find the following indicators with the Jungle Scout Chrome Extension or with Helium 10 XRay:

Units sold per month
Units sold per day
Monthly turnover
Daily turnover
Number of reviews
Average rating
bestseller rank

Jungle Scout Chrome Extension (Jungle Scout Chrome Extension Review):

Helium 10 XRay (Helium 10 XRay Review):

You can find out the following indicators with Helium 10 Black Box:

Number of dealers
Number of images
Number of product variations
Size
Change in sales/price compared to the previous year
Period of most sales

Number of products

A good way to find out the number of products (search results) is to enter the most general search term in Amazon, and see how many search hits you get.

There's one better way, though. With Helium 10 Cerebro you can find out for which keywords a product is listed on Amazon.

Let's say you've found a great product that you want to sell. Enter the ASIN of this product in the tool. Helium 10 Magnet 3

You can assume that a large part of the turnover comes from the keywords where the article has a better ranking than ten.

Now all you have to do is check if there are many alternative products or not.

Strategies To Find Good Products For Amazon FBA

In this chapter I will briefly introduce you to the strategies with which you can begin your research.

With keywords #1

One way to find products for Amazon is to search using keywords. The procedure works as follows:

1. you choose a product from the bestsellers or Amazon in general

2. open Jungle Scout

3. press the keyword tool

4. the Jungle Scout keyword tool will continue to suggest terms that are more frequently searched for

5. repeat these steps until you have found a real niche product

Then check the values with Jungle Scout or Helium 10.

Amazon Tools #2

With Amazon Tools, you can make your product search much more efficient. With Jungle Scout and Helium 10 you can filter the entire Amazon marketplace according to certain criteria.

The search can be narrowed down by the filter criteria that should apply to the indicators discussed above.

Helium 10 Black Box:

Jungle Scout Product Database:

Offline #3

Sometimes the best ideas come to you when you go around the world with your eyes open.

Good places for inspiration are:

Fairs
advertising leaflets
DIY stores
shops

Visit Amazon Review Websites #4

A very effective method to get product ideas quickly.

The best websites where new Amazon products are regularly tested are:

Vipon
JumpSend
snagshout
Product Elf
giveaway service
Dollar Deals Review
I Love to Review (DealHustl)
VIP Power Club
Honest Few
Loot Hoot
ProductTesting.co
Secret Deals Club
Oz Naturals

FBAMaster has written an interesting article about this.

Amazon Search #5

The ABC method is old but effective.

You enter any letter in the Amazon search and see what Amazon suggests to you.

Then check the criteria with Jungle Scout or Helium 10 Black Box.

Out-of-the-Box #6

Search for exactly those product categories for which there are high entry hurdles.

High barriers to entry = less competition

These niches have the following characteristics:

High purchase price
outsizes
Striking shapes / colours
Extravagant products

Amazon FBA: The Step-by-Step Guide

1. Find a profitable niche or product

The first step is to find a profitable niche or product that you can sell at Amazon.

To do this, use the tactics described in this article. Think about the features a good Amazon FBA product should have and add Jungle Scout or Helium 10.

Product research requires hard work. That's justified, because without a really good product, you don't stand a chance on Amazon.

So really invest a lot of time in your research and don't take the first product.

Be sure about your product choice.

2. Find a supplier

Once you know which product you want to sell, the next step is to find a supplier.

Go to Alibaba, browse all available items, choose a product, check with your manufacturer for any action you need to take and order a sample.

The sample usually comes by air freight.

Pay attention:

Quality
price
Available capacity
Possible changes

The supplier must be able to label the goods with your private label.

If the sample is in order, you can place your order.

To simplify this process you can get Jungle Scout.

Jungle Scout offers a supplier database that makes searching for suppliers incredibly easy.

3. Take care of the legal aspects

Many forget the legal aspects. You can find a good summary can in this article by Jungle Scout.

4. Create your product labels, packaging and photos

Next, you need to create your product labels, packaging and product photos.

To simplify this process, I recommend Fiverr or Upwork.

5. Create your Amazon product listing & send your goods to Amazon

Have you paid your suppliers? Your products are ready for shipping?

Then you need to create an Amazon Listing.

You have already included product images, but your listing consists of several components, among others:

Title
Description of the
bullet points

You can learn more in the article Amazon Listing Optimization.

6. Start selling

Now you can start selling your products on Amazon. The time has come for the business to start properly.

Now it's time to market your product. Invest in Amazon PPC and in improving your organic search.

This is the only way to be successful.

You can find everything else in other resources.

Other Ressources

Selling at Amazon for beginners: Conclusion

In this detailed article, you have learned how to sell at Amazon. But what happens now?

You have to apply the knowledge you have learned and work hard for your success. I can promise you that the more seed capital you have, the faster you will be successful.

Without seed capital, you can't start a business on Amazon. So make sure you save a small sum. The more, the better.

In this case, companies have it easier. That's because most of them have enough capital to launch a product on Amazon successfully.

Amazon is a marketplace where you can earn a lot of money, even a lot of money. But it's not a marketplace where you get rich overnight, definitely not.

Moritz B.

Moritz Bauer studied business management and industrial engineering at the University of Applied Sciences in Constance. He built his first Online Store when he was 16 years old. Now he teaches companies how to establish their business online.

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