Amazon is the world’s biggest online retailer store. And, the marketplace continues to expand by adding more sellers, products, and services, and attract more customers. Companies are increasingly using Amazon to exhibit their product to a global audience and boost their sales opportunities. In fact, over 2 Million businesses are selling on Amazon. If you too are thinking of selling on Amazon, but have no idea how to set up your business, then this is an ideal blog for you. We are highlighting all the aspects that you need to take care of in order to establish a profitable Amazon Business.

1.  Gauge the Capital Requirement

Before you start your Amazon business, you must be aware of the capital requirement that will help you plan your strategies in a more organized manner. This depends on two factors- Where you get your inventory from and the shipping method you prefer. When it comes to acquiring inventory, there three ways-

  • Sourced directly from the manufacturer

You can buy it at a wholesale rate and then resell the product for a profit on Amazon. You might have to make a heavy investment as manufacturers prefer sellers who buy in large quantities.

  • Source from retail outlets

This is the most popular product sourcing option among Amazon sellers. You can go to a retail store and buy products at a discounted price and resell it.

  • Creating your Own Brand

You can design and sell your own product or get products manufactured under your brand name. You will be responsible for all the operational aspects. It is also known as Private Label.

So the initial inventory cost would be between USD 200 to USD 8000 depending on the product and its sourcing. Then you can add Amazon’s selling fees of 39.99 along with other overheads including shipping fees, branding costs, photography charges, etc. On the while, you can start your Amazon business with a minimum initial investment of USD 350- USD 600.

2.  Set Up An Amazon Seller Account

The first step is to sign up as an Amazon Seller; for that, you need to-

  • Go to services.amazon.com, and then click on the “Start Selling” at the top right corner of the screen.
  • You will be redirected to sellercentral.amazon.com, where you have to click on “Create Your Amazon Account”
  • You will be taken to sellercentral.amazon.com. Here you have to select the location, and business type ( state-owned business, publicly listed business, privately-owned business, or individual)
  • Then fill in all the necessary information and you will become an official Amazon seller.

You don’t need to be a business owner to start your Amazon business; you can set up an account through your personal information as well.

3.  Choose the Right Product Category

With more than 20 product categories on Amazon, choosing a niche can be perplexing. However, if you fail to choose the right product, then it is just a waste of your time, effort, and money. Following are some tips that will help you find the right products to sell on Amazon –

  • Look out for popular selling items

Check out Amazon’s Best Sellers List to identify the products that have been trending on this platform. This will provide you with 100 products that top-selling on the marketplace.

  • Consider Relevant Criteria

Considering that you are just starting out, below are following criteria that you should keep in mind-

  • Pick product is small and lightweight (a couple of pounds), it will help you save shipping cost.
  • Look out for products that you can sell for above USD 10 and have a minimum of 30% profit margin.
  • Find a product that can be easily manufactured, and doesn’t break easily
  • Select a product that you also have an interest in promoting and selling.
  • Analyze the Competition

Once you have selected a couple of products that you wish to sell on Amazon, analyze the competition. Check out the reviews of the products and the kind of quality your competitors are delivering. If your competitors have tons of reviews, then it will be extremely challenging for you to compete. The goal is to find products that have a decent amount of review (around 100) so that you have less competition to deal with.

When it comes to choosing the right product, you can leverage tools to boost your Amazon business. Tools like JungleScout, SellerMotor, SellerApp, AmzScout, etc. that can help you determine the right keywords, research products, analyze competition, etc. and help you choose a profitable product.

4.  Choose Fulfillment by Amazon

After you have selected the product to sell, you must think about how are going to deliver it to your customers. Either you can handle the shipping by yourself or you choose Fulfillment by Amazon. Typically, Amazon fulfillment is an ideal option for sellers. This is because packaging and shipping are a lot of work, and often very hard to manage. You will need an additional workforce for the same, otherwise, it will result in shipping delay, customer dissatisfaction, lost sales, poor customer reviews, etc. If you don’t have a strong experience and the right resources to ship a high quantity of products, it is better to let Amazon handle your shipment.

5.  Start a Strong Advertising Campaign

You are competing with thousands of sellers across the globe; evidently, there is a dire need for a strong advertising campaign. 70% of the Amazon sale occurs on the first page of the Amazon search results, and in order to become a profitable seller, your product must appear on the first page. There are multiple types of Amazon advertising that include –

  • Amazon Sponsored Products

These are the ads that direct the shoppers to a particular product on Amazon. They typically appear on top of the search result or at the product detail section. Sponsored ads are keyword-centric ads where you have to choose the word or phrase that you want to optimize.

  • Headline Search Ads

These are the ads that are placed on the search result page as a headline ad banner. Headline search ads are cost per click and direct the customers and a specific product page. These ads take customers to the customized branded page. They are keyword-targeted and you can promote more than 3 products together

  • Amazon Product Display Ads

Contrary to the above two ads, the Amazon Product Display ad is not keyword centric. They imply a cost-per-click approach and drive the buyers to the product detail page. They generally appear as “related products” at the bottom of users’ search results, top of the listing page or customer reviews page.

Final Thoughts

There you have it, a complete guide on how to become a profitable seller on Amazon. If you apply the aforementioned steps properly, you can establish an Amazon business that will help you generate better sales and profit in the future.

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