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Starting to sell products on Amazon can be an exciting venture, but it often comes with a multitude of questions and uncertainties, especially for those new to the platform. Whether you're a budding entrepreneur looking to start your own Amazon business or an existing seller seeking to expand your horizons, understanding the fundamentals is key.
In this comprehensive guide, our Amazon consulting experts will address some of the most common questions that Amazon sellers encounter, providing you with valuable insights and practical answers to help you navigate the world of e-commerce effectively.
How much does it cost to sell on Amazon?
The cost of selling on Amazon varies depending on several factors, including the type of seller account you choose, the fulfillment method, the product categories you sell in, and the volume of products you list. Here's a breakdown of the costs you might incur:
Initial setup and operating costs:
Most new sellers spend between $2,500-$5,000 to start selling on Amazon, which includes product costs, Amazon fees, and other initial investments.
Seller account fees:
Professional seller account: $39.99/month. Suitable if you plan to sell more than 40 items per month.
Individual sellers account: No monthly fee, but you're charged $0.99 for each item sold. Ideal for selling fewer than 40 items per month.
Product costs:
Initial product inventory might cost around $2,000, assuming a cost of $4 per unit and an initial purchase of 500 units.
Fulfillment costs:
Fulfillment by Amazon (FBA): Fees depend on the size and weight of your products, with various tiers for standard and oversized products. Additional fees apply for products listed in specific categories like apparel and dangerous goods, and for services like multi-channel fulfillment.
Fulfillment by Merchant (FBM): You handle storage, packing, shipping, and service, incurring costs for storage, packaging materials, and shipping. This option generally has fewer Amazon fees but doesn't offer Prime shipping, potentially affecting sales.
Additional fees:
Referral fees: A percentage of the sale price or a minimum referral fee, whichever is higher, is charged by Amazon for each sale. The percentage varies based on the product category.
Closing fees: A variable closing fee for sales in the media category (Books, Music, Video, and DVD), ranging between $1.35 and $1.80 per transaction.
Miscellaneous fees: These may include fees for high-volume listings, dangerous items, and repackaging for certain returned items.
How can I start selling on Amazon?
Starting to sell on Amazon in 2024 involves several steps and strategic decisions. Here's how you can get started:
Choose a sales strategy: Before creating your Amazon seller account, decide on a sales strategy that suits your business model. Options include private labeling, drop shipping, wholesale trade, online arbitrage, or selling handmade products.
Create your Amazon Seller account: Sign up for an Amazon Seller account. You can choose between an Individual or a Professional account. Individual accounts are suitable for sellers who plan to sell fewer items, while Professional accounts are better for higher volume sellers. Both account types have their fee structures and benefits.
Understand Amazon's policies and fees: Familiarize yourself with Amazon's seller policies, fee structure, and other requirements. Amazon charges referral fees which can range from 8% to 45% depending on the product category, with the average being around 15%. Also, be aware of any additional selling fees, such as variable closing fees for media listings.
Create your product listings: Once your account is set up, you can either add your product to an existing listing or create a new listing from scratch. Make sure to have all the necessary information, including GTIN, SKU, product details, and shipping options. Optimize your listing with a compelling title, high-quality images, and a detailed product description that highlights your product's unique selling points.
Choose your fulfillment method: Decide how you want to fulfill orders. You can choose Fulfillment by Amazon (FBA), where Amazon takes care of storage, packing, and shipping, or Fulfillment by Merchant (FBM), where you manage these aspects yourself. Consider the pros and cons of each method, including costs, time, and potential sales benefits. FBA might offer advantages like Prime eligibility and better search rankings, but it comes with its own set of fees and policies.
Optimize and manage your listings: Regularly review and update your product listings to ensure they are compelling and up-to-date. Use relevant keywords to improve search visibility, and consider using tools like Jungle Scout’s AI Assist Listing Builder for help in writing and optimizing your listings. Pay attention to customer engagement and reviews to build a positive reputation and drive sales.
How long does it take to verify your Amazon Seller account?
Usually, it takes around 24 hours but the time it takes to verify your Amazon Seller account can vary based on several factors, including the completeness and accuracy of the information you provide, and Amazon's current processing times due to their verification checks.
Typically, third-party sellers are given a 10-day window to comply with the verification process once it goes into effect. However, it's been noted that the process can be expedited or delayed based on how quickly you submit your information and how busy Amazon is at the time of your application. Therefore, it's advisable to submit your documents as soon as possible to avoid potential account suspension or funds withholding. It's also recommended to regularly check your Seller Central for any messages or updates regarding the verification process.
How does Amazon pay the sellers?
Amazon typically pays its sellers through the following methods:
Electronic Funds Transfer (EFT)/Direct Deposit (ACH):
The most commonly used method for transferring funds.
Sellers provide their bank account information (routing number and account number) in their Amazon Seller Central account.
Payments are then electronically transferred to the specified bank account on a regular schedule, usually every two weeks.
Amazon.com Gift Card (for Disbursement):
In some cases, Amazon may offer sellers the option to receive disbursements in the form of Amazon.com gift cards. This is typically used for sellers in regions where direct bank transfers are not supported.
Check (Limited Use):
Checks are typically reserved for sellers with specific account issues or those in regions where electronic transfers are not feasible.
Currency Conversion (International Sellers):
International sellers may have their earnings converted into their local currency and transferred to their bank accounts.
Amazon's payment cycle varies by marketplace but is usually every two weeks. Payments are made after a short holding period to account for returns and refunds. Sellers need to ensure their bank account information is accurate in Seller Central to avoid payment delays.
Please note that Amazon does not make payments to PayPal, Venmo, or other non-bank payment methods for disbursements to sellers. Sellers should have a valid bank account for receiving payments from Amazon.
How do I contact a customer about their order?
If there's a conflict or issue that requires resolution, buyers have the option to initiate a conversation with you through Amazon's messaging system. Amazon takes steps to ensure the privacy of both buyers and sellers during these interactions. When a buyer contacts you through Amazon, their email address is anonymized, and all communication occurs within your Amazon Seller Central inbox.
This approach allows for a secure and private channel for addressing customer inquiries, concerns, or disputes related to their orders. As a seller, it's essential to respond promptly and professionally to customer messages to provide assistance and resolve any issues to the best of your ability. Effective communication with customers can contribute to positive feedback and a strong reputation as a seller on Amazon.
Can I start selling on Amazon with no money?
While it's technically possible to begin selling on Amazon with no initial fees by opting for an Individual selling plan and handling fulfillment yourself, it's essential to consider that you will still require capital for various aspects of your business. This includes purchasing products to sell, covering packaging expenses, and handling shipping costs.
Starting an Amazon selling business without any money at all can be challenging, as you'll need resources to acquire inventory, create product listings, and effectively market your products. Therefore, having some capital at your disposal can significantly benefit your venture and increase your chances of success on the platform.
Do I need a business license to sell on Amazon?
Typically, no. When you start earning income as an entrepreneur, whether through online or in-person sales, you are automatically considered a sole proprietorship by the government without the need for extensive paperwork. While it's not mandatory to have additional business structures or licenses to sell on Amazon, some sellers opt for an LLC or another legal structure for added seller protection.
Just to be safe, always check with a tax professional before starting a business or selling online. They know all the official details.
What can I sell in Amazon’s store?
Amazon's marketplace offers a diverse array of product categories, making it a prime platform for sellers to showcase their goods. From physical items such as electronics, clothing, books, and home essentials to handcrafted creations through Amazon Handmade, the possibilities are vast. You can also explore private labeling, wholesale distribution, and digital products like eBooks and software. Whether you're into selling physical goods, unique handcrafted items, or digital content, Amazon provides a dynamic marketplace for all types of products.
What items can’t be sold in Amazon’s store?
While Amazon offers a wide range of opportunities for sellers, certain items cannot be listed due to legal or policy restrictions. These restrictions may apply to products such as prescription drugs, unauthorized copyrighted materials, or items that violate Amazon's policies, such as crime scene photos.
Sellers must review the specific restrictions and seek approval when necessary, especially for products in certain categories. For more detailed information on what can and cannot be sold, you can refer to Seller Central Help and explore the approval process for specific categories.
What sells the most in Amazon’s stores?
The top-selling products on Amazon's platform often vary over time and across different categories. However, some consistently popular categories include electronics, books, clothing, and home and kitchen items. Best-selling products can range from gadgets like smartphones and tablets to everyday essentials such as household cleaners or personal care products.
To get a more up-to-date and specific list of the current best-selling products, you can check Amazon's "Best Sellers" section within each category on their website. This can help you identify trending items and potentially profitable niches for your own Amazon business.
How do I sell with Amazon Handmade?
To get started with Amazon Handmade, begin by setting up a selling account on Amazon. Afterward, apply to join the Amazon Handmade program through Seller Central. Once your application is approved, you'll gain access to several valuable features. You can create your own store and list your handmade products using the Professional selling plan, allowing you to showcase your creations effectively.
Additionally, Amazon Handmade offers the option to customize your store's URL, making it easier for customers to discover and remember your brand. It's important to note that for each sale made through Amazon Handmade, a 15% referral fee will be deducted to support the platform's services and resources.
How do I manage my selling account?
Managing a seller account on Amazon can be a complex and time-consuming task. From product listings and inventory management to marketing and customer service, the responsibilities can become overwhelming.
However, with the assistance of a professional Amazon agency like eStore Factory, the process becomes significantly more manageable. Their expertise and support can help streamline the entire operation, allowing sellers to focus on what they do best – delivering quality products to customers. Whether it's optimizing product listings, devising effective marketing strategies, or ensuring top-notch customer service, our Amazon seller experts are here to simplify the journey and help sellers achieve success on Amazon.
