Amazon has become one of the most competitive and complex online marketplaces in the world, which is why most newbie sellers tend to search online ‘how to become an Amazon seller’.
Such a search query on how to sell on Amazon for beginners is a valid question due to the competitive nature of the industry and the current COVID-19 pandemic.
To help you understand the dynamics of the Amazon marketplace, here are some tips and insights on how to become an Amazon seller in 2021.
Amazon FBA and FBM Made Simple
When it comes to Amazon fulfillment methods, sellers may choose from Amazon FBA and Amazon FBM.
Fulfillment by Amazon (FBA) is when sellers or their suppliers send the products directly to the Amazon warehouse to form part of the seller’s inventory. From the Amazon warehouse, items will be shipped directly to the customers who ordered from the Amazon platform.
On the other hand, the Fulfillment by Merchant (FBM) means that sellers will manage the storage, shipping, and customer support of the products listed on Amazon.
In terms of popularity, the majority of the sellers are using Amazon FBA. According to Jungle Scout’s breakdown on fulfillment usage:
- FBA only: 57%
- FBM only: 9%
- FBA and FBM: 34%
Each of the fulfillment methods has its advantages and disadvantages. Whether you use Amazon FBA or Amazon FBM, you will likely encounter some of the steps and tips mentioned below to help you become a successful Amazon seller in 2021.
Overview on How to Become an Amazon Seller
1. Have a Business Plan
An Amazon business plan is a document that can help you smoothly launch your Amazon business. In fact, it is considered by many as an indispensable tool for entrepreneurs in achieving their short-term and long-term objectives.
In summary, a business plan’s components include but are not limited to the following:
- Executive Summary
- Company Description
- Marketing Plan/Analysis
- Operational Plan
- Management & Organization
- Financial Plan
When an Amazon business plan is properly implemented, it will help Amazon sellers make sound decisions, identify any potential business weaknesses, and easily communicate ideas with staff or stakeholders.
To craft a strong business plan for your Amazon FBA business, you should know your competition and target audience. Additionally, you should have conservative financial estimates and projections, along with a realistic sense of time and resources.
2. Amazon Niche Research
Discovering your Amazon niche is crucial in order to begin your journey. Since you are wondering how to become an Amazon seller, the term niche might be new to you.
An Amazon niche is simply a specialized category within Amazon in need of a particular product. Identifying your Amazon niche means discovering the underserved customer segment in the market and providing a product.
To help you determine your niche, you should consider your competition as well as your audience. Hence, giving emphasis on the importance of an Amazon business plan.
Aside from that, you should identify products that are in high demand and do not solely depend on the season for sales. It would also help to make use of available Amazon seller tools to narrow down your niche. The use of a product research tool is highly suggested.
A reliable product research tool should be able to help you identify market trends, check on competitors, showcase high-ranking keywords, product sales history, and potential sales performance. For convenience, choose a product research tool that offers functionality both through app and browser extension.
3. Perform Market Research
To supplement your niche and product research, you should also perform market research. Market research will help you avoid slow-moving products and minimize risk while maximizing sales potential.
When doing market research, always check whether your product is gated or restricted. Take time to check whether Amazon allows you to sell your item on their platform.
As part of the market research, you should also check on your competition as well as a reliable supplier of your item. Similarly, Amazon fees and other relevant expenses should likewise be considered when carrying out market research.
You will have a more realistic grasp of your chosen Amazon niche and product by performing the necessary market research steps.
4. Create an Amazon Account
Perhaps the most direct answer to your question, how to become an Amazon seller is to create an Amazon account. Here is a simple guide on how to create an Amazon FBA account in 2021.
STEP 1: Go to https://sell.amazon.com
STEP 2: Once redirected, scroll down and look for the Make Money section. Click the SEE PRICING button below it.
STEP 3: Once redirected to another page, scroll down past Selling Plans until you find the SIGN-UP BUTTONS for individual and Amazon FBA accounts.
STEP 4: Once redirected, click on CREATE YOUR AMAZON ACCOUNT button.
STEP 5: On the create account page, fill in the required information.
STEP 6: After submitting the information, you will be redirected to another page for email verification.
Check your email for the OTP number and enter it in the designated section of the page to proceed with the Amazon Seller Account registration. Make sure to keep the OTP private when creating an actual Amazon seller account.
STEP 7: Select business location and business type, then click AGREE AND CONTINUE. Note that if you are an individual, choose NONE, I AM AN INDIVIDUAL from the selection and input your full name.
After filling in the required information, click AGREE AND CONTINUE.
STEP 8: Once redirected to another page, you will have to complete the information required for each section:
(1) Individual Information
After filling in the required information, click NEXT.
After filling in the required information, click NEXT.
After filling in the required information and choosing the option that suits your business status, click NEXT.
The verification process varies depending on your area. Those living in the United States will receive mail delivered to their business address.
The mail will contain a code that you will have to enter in your Amazon Seller Central account to fully verify your address and account in its entirety.
Once you have received the postcard, you may use this link to enter the verification code.
An alternative method for verification, especially those outside the United States is the uploading of a passport and bank or credit card statement showing your complete address. These documents will serve as an alternative to the postcard verification process.
You may upload documents on both IDENTITY DOCUMENT and ADDITIONAL DOCUMENT sub-sections as shown above. The details of your uploaded documents will be showcased on the right side of each sub-sections.
If you have any questions about each process, you can refer to the FAQ section on the right portion of your screen.
5. Find a Product Source
As well as how to become an Amazon seller, another crucial question from newbie sellers is – where to get inventory to sell on Amazon.
With the help of the internet, finding products to sell on Amazon has become more convenient. Currently, the top destination for product sources is Alibaba.com.
Alibaba.com is the world’s largest B2B eCommerce marketplace. The company connects numerous suppliers and manufacturers in China with buyers across the globe on its unique online platform.
As an Amazon FBA seller, you can directly conduct business with suppliers, manufacturers, or approved agents. What makes Alibaba.com an ideal product sourcing destination for online sellers is suppliers’ lowest price or factory price offers.
6. Place Inventory Orders
After finding a supplier for your Amazon FBA, you should prepare to place your orders. When placing an order from a supplier overseas, it would be best for your first order to be in small amounts or quantities.
You can use your small order as a test order to scrutinize the product and get relevant feedback from potential customers.
When ordering overseas, always remember to be in constant contact with your supplier. Relay the instructions to avoid misunderstandings, which also means that key specifications should be stated clearly.
Always remember to do your due diligence when dealing with suppliers or manufacturers overseas. To keep your transaction smoother, you can also draft a purchase order (PO) for your supplier to check. This document will also set clear standards and expectations for your orders.
7) Determine Business Model
There are several business models for Amazon sellers. Selling on Amazon for beginners includes an understanding of some of the most popular business models for Amazon, such as:
To help you evaluate which fulfillment method suits your business goal, check relevant posts about FBA vs. FBM.
8. Select Your Fulfillment Method
As mentioned above, you can choose between Amazon FBA and Amazon FBM. If you want to take advantage of the services offered by Amazon, the FBA program is ideal for you.
On the other hand, if you want to take charge of your business from storing, packing, and shipping, then the Amazon FBM program is right for you.
9. Create and Optimize Product Listing
Once you have decided which fulfillment method to use, you are ready to list your product on Amazon.com. You can list your product individually, or you may also upload a spreadsheet containing each of your items if you have multiple products to list.
Aside from that, proper product listing optimization will aid in a higher search result ranking of your product. Hence, you need to become familiar with keyword usage, high-quality product imagery, and optimized description.
Listing your product according to Amazon guidelines is critical to avoid being penalized by Amazon.
10. Perform Listing Price Optimization
Knowing how to become an Amazon seller is not enough; you should likewise know how to succeed in the business. One of the key factors in having a successful Amazon FBA business is to have a competitive pricing strategy.
To have a competitive edge when it comes to price optimization, the use of an Amazon repricer is highly beneficial. With an Amazon repricer, you can increase the chances of winning the Amazon Buy Box at a higher price point and avoid Amazon price wars.
11. Manage Your Inventory
As an Amazon FBA seller, you should always be on top of your Amazon inventory. Your inventory levels should be closely monitored to avoid instances of products being out of stock.
Properly manage and replenish your inventory to ensure that you have enough Amazon products to sell, especially on peak seasons, such as Amazon Prime Day, Black Friday, and Cyber Monday.
To ensure that you are on top of your inventory levels, you can use inventory management tools to overview your inventory status.
12. Consider Amazon Global Marketplaces
Currently, there are 18 Amazon marketplaces available globally. Amazon sellers are free to sell their products in any marketplace. However, experts recommend following these important guidelines:
- It is best for US sellers to sell on the US marketplace
- Sellers in the UK or EU, sell on the Amazon EU marketplace
- More so, if the seller lives elsewhere in the world, sell on the US marketplace.
Expanding to another Amazon global marketplace is an option if you have achieved successful sales in your current Amazon marketplace.
The question of how to become an Amazon seller is not only relevant to Amazon FBA sellers. As well as Amazon FBA, you may also choose to incorporate the Amazon FBM program into your business. The processes mentioned above are likewise applicable with Amazon FBM, but with minor changes, especially pertaining to the shipping method.
Amazon sellers need to consider product size, carrier, and method to ship products with FBM. Most carriers require sellers to have their own shipping supplies. Some of the supplies that are needed are:
- Box, Envelops
- Packing Materials
- Mailing Labels
- Packaging and Scotch Tapes
Amazon will notify the seller if the order is ready to ship, the seller will have 24 hours to confirm the order. After this, choose a trusted carrier. Remember, the carriers have different shipping rates.
Become an Amazon Seller Today
Both Amazon FBA and FBM provide sellers with successful fulfillment options. The size of your operation and the weight and size of your products is often a deciding factor for sellers.
When it comes to your Amazon business, profits or how to sell products on Amazon should not be your only concern. The approach should be holistic, which is why the overall discussion about selling on Amazon for beginners should not be overlooked.